Charles W. Cole & Son, Inc. v. Indiana & Michigan Elec. Co.
Citation | 426 N.E.2d 1349 |
Decision Date | 27 October 1981 |
Docket Number | No. 2-281A53,2-281A53 |
Parties | CHARLES W. COLE & SON, INC., and David P. Schenkel, Appellants-Intervenors, v. INDIANA & MICHIGAN ELECTRIC COMPANY, Appellee-Petitioner. |
Court | Court of Appeals of Indiana |
Robert L. Thompson, Robert L. Thompson, P. C., Fort Wayne, for appellants-intervenors.
Thomas W. Yoder, Livingston, Dildine, Haynie & Yoder, Fort Wayne, for appellee-petitioner Indiana & Michigan Electric Co.
David S. Richey, Parr, Richey, Obremskey & Morton, Lebanon, for appellee-petitioner City of Fort Wayne, Indiana.
Intervenors-appellants Charles W. Cole & Son, Inc., and David P. Schenkel seek judicial review of an order of the Public Service Commission of Indiana establishing the amount of a refund to be paid by petitioner-appellee Indiana & Michigan Electric Company to its retail ratepayers. We reverse.
This action for judicial review has its origin in a petition for a rate increase filed by Indiana & Michigan Electric Company ("I&M") with the Public Service Commission of Indiana ("PSC"). The PSC granted I&M the authority to increase its rates, and that order was brought to this court for review. In Citizens Energy Coalition, Inc. v. Indiana & Michigan Electric Company, (1979) Ind.App., 396 N.E.2d 441, trans. denied, the court reversed the granting of the rate increase and remanded the case to the On remand, the PSC considered the matters of I&M's effective income tax rate during the test year and the amount of any refund which I&M should pay to its retail ratepayers for the period during which the new rates were in effect. After holding a hearing and admitting additional evidence, the PSC issued its order on January 21, 1981. Included in the order were the PSC's findings, which state, in pertinent part, as follows:
PSC for a reasonable and just determination of the tax savings which accrue to I&M as a result of its participation with other subsidiaries of American Electric Power Co., Inc., ("AEP") in the filing of a consolidated federal income tax return. The decision in that review was based upon the uncontroverted evidence that for a number of years, including the test year, 1 1976, neither I&M nor AEP had incurred any federal income taxes and would not incur any in the foreseeable future. The PSC, on the other hand, had allowed I&M a rate increase of $21,435,229 per year in addition to an increase for net operating income to allow for federal income tax expense calculated at the 48% statutory maximum corporate income tax rate in effect at the time.
Although the intervenors present three issues for our review, we deem the first of those issues to be dispositive of this case, i.e., whether the PSC's order is contrary to law because the PSC failed to enter findings setting forth I&M's federal income tax expense and the factors, procedures, and policies which were considered and adopted in determining such expense, I& M's effective federal income tax rate, and the amount of the refund.
The sufficiency of the PSC's findings of fact is a matter appropriate for review by this court. Ind.Code 8-1-3-1. Our review of the PSC's factual determinations is governed by a two-tiered standard. At the first level, we examine the PSC's decision in order to ascertain whether it contains specific findings of basic facts on all factual determinations material to the PSC's ultimate conclusions. At the second level, we determine whether, in light of the whole record, there is substantial evidence to support the PSC's findings of basic facts. L.S. Ayres & Co. v. Indianapolis Power & Light Co., (1976) 169 Ind.App. 652, 351 N.E.2d 814, trans. denied (1977); Citizens Energy Coalition v. Indiana & Michigan Electric, supra.
Our review in this case involves the first level. The purposes behind the requirement of specific findings of basic facts were aptly stated in L.S. Ayres & Co. v. Indianapolis Power & Light Co., supra :
169 Ind.App. at 662, 351 N.E.2d 814.
A distinction needs to be drawn between basic findings (or specific findings of basic facts) and ultimate findings (or ultimate conclusions), both of which are essential to judicial review of PSC orders. Basic findings are less detailed than a summary of the evidence, and they are not merely a recitation of testimony given or other evidence introduced. Basic findings are statements of those facts which the PSC determines, after considering the evidence introduced, to be true and relevant to factual determinations which must be made in order to properly decide the case. Ultimate findings are determinations or conclusions which flow rationally from the basic findings and are usually expressed in the language of a statutory standard. Ultimate findings are less detailed than basic findings. Moreover, unlike basic findings, ultimate findings are conclusions of law or mixed conclusions of law or policy and fact. Perez v. United States Steel Corp., (Ind.) 426 N.E.2d 29 (1981)...
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