City of Wheeling v. The Pub. Serv. Comm'n of W.Va.

• Decision Date: 24 April 2023
• Docket Number: 21-1001
• Parties: CITY OF WHEELING, Defendant Below, Petitioner v. THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA and THE CITY OF BENWOOD, Respondents.
• Court: West Virginia Supreme Court

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CITY OF WHEELING, Defendant Below, Petitioner
v.
THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA and THE CITY OF BENWOOD, Respondents.

No. 21-1001

Supreme Court of Appeals of West Virginia

April 24, 2023

Rehearing Granted September 20, 2022.

Submitted Upon Rehearing January 10, 2023.

Appeal from the Public Service Commission of West Virginia Case No. 21-0372-S-WI

Robert R. Rodecker, Esq.

John R. McGhee, Esq.

KAY CASTO & CHANEY PLLC

Charleston, West Virginia

Counsel for Petitioner

Rosemary Humway-Warmuth, Esq.

Office of City Solicitor

City of Wheeling

Wheeling, West Virginia

Counsel for Petitioner

Jessica M. Lane, Esq.

Jeffrey A. Foster, Esq.

Natalie E. Thomas, Esq.

Public Service Commission of West Virginia

Charleston, West Virginia

Counsel for Respondent

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JUSTICE ARMSTEAD and JUSTICE HUTCHISON dissent and reserve their rights to file separate opinions.

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SYLLABUS BY THE COURT

1. "In reviewing a Public Service Commission order, we will first determine whether the Commission's order, viewed in light of the relevant facts and of the Commission's broad regulatory duties, abused or exceeded its authority. We will examine the manner in which the Commission has employed the methods of regulation which it has itself selected, and must decide whether each of the order's essential elements is supported by substantial evidence. Finally, we will determine whether the order may reasonably be expected to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable. The court's responsibility is not to supplant the Commission's balance of these interests with one more nearly to its liking, but instead to assure itself that the Commission has given reasoned consideration to each of the pertinent factors." Syllabus Point 2, Monongahela Power Co. v. Public Service Commission of West Virginia, 166 W.Va. 423, 276 S.E.2d 179 (1981).

2. "The detailed standard for our review of an order of the Public Service Commission contained in Syllabus Point 2 of Monongahela Power Co. v. Public Service Commission, 166 W.Va. 423, 276 S.E.2d 179 (1981), may be summarized as follows: (1) whether the Commission exceeded its statutory jurisdiction and powers; (2) whether there is adequate evidence to support the Commission's findings; and, (3) whether the substantive result of the Commission's order is proper." Syllabus Point 1,

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Central West Virginia Refuse, Inc. v. Public Service Commission of West Virginia, 190 W.Va. 416, 438 S.E.2d 596 (1993).

3. "'In the absence of any specific indication to the contrary, words used in a statute will be given their common, ordinary and accepted meaning.' Syl. pt. 1, Tug Valley v. Mingo Cty. Comm'n, 164 W.Va. 94, 261 S.E.2d 165 (1979)." Syllabus Point 7, Wheeling Park Commission v. Dattoli, 237 W.Va. 275, 787 S.E.2d 546 (2016).

4. "It is well established that the word 'shall,' in the absence of language in the statute showing a contrary intent on the part of the Legislature, should be afforded a mandatory connotation." Syllabus Point 1, Nelson v. West Virginia Public Employees Service Board, 171 W.Va. 445, 300 S.E.2d 86 (1982).

5. The 120-day dispute resolution period set forth in West Virginia Code § 24-2-1(b)(6) (2021) commences on the date a request for investigation is filed with the Public Service Commission pursuant to that statute.

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OPINION

WALKER, CHIEF JUSTICE:

The City of Wheeling sells wholesale sewage treatment service to the City of Benwood. In April 2021, Wheeling increased the wholesale rate it charges to Benwood by 45%. Benwood complained to the Public Service Commission about the rate hike in May 2021 under West Virginia Code § 24-2-1(b)(6) (2021). That statute requires the Commission to resolve complaints like Benwood's "within 120 days of filing," although that period may be tolled to permit the Commission to gather information. The Commission entered the final order resolving Benwood's complaint in November 2021, after issuing three tolling orders the prior June, July, and October. Wheeling now asks us to vacate that final order, arguing that the Commission exceeded its statutory authority by entering that final order more than 120 days after Benwood filed its complaint. We agree based on the plain language of the statute and so vacate the Commission's order of November 12, 2021.^[1]

I. FACTUAL AND PROCEDURAL BACKGROUND

Wheeling contests the November 2021 final order of the Commission on jurisdictional grounds. Wheeling doesn't challenge the substance of that order in this

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appeal, so the following discussion is limited. We first outline the context of this dispute, then detail pertinent procedural events before the Commission.

Wheeling is what is known as a "locally rate-regulated" utility (LRR). LRRs are "political subdivisions of this state providing separate or combined water and/or sewer services and having at least 4,500 customers and annual combined gross revenues of $3 million . . . ."^[2] In 2015, the Legislature circumscribed the Commission's jurisdiction over LRRs, specifically finding that they "are most fairly and effectively regulated by the local governing body with respect to rates, borrowing and capital projects."^[3] The Legislature detailed the Commission's jurisdiction over LRRs in West Virginia Code § 24-2-1. In this case, we are concerned with § 24-2-1(b)(6) (2021), which we discuss in detail, below.

Wheeling sells sewer service to Benwood. On April 6, 2021, Wheeling raised the rate charged to Benwood for that service by 45%, effective May 21, 2021. Wheeling filed that ordinance with the Commission on April 14, 2021. On May 3, 2021, Benwood filed a complaint with the Commission under § 24-2-1(b)(6). Benwood asserted that the increased rate was "unfair, unreasonable, [and] discriminatory . . . ."^[4] Benwood

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also alleged that the increased rate-adopted by Wheeling to fund capital projects-was not based on Benwood's proportionate share of the project's scope of work.

Wheeling sent a letter to the Commission on May 27, 2021 (24 days after Benwood filed its complaint). In that letter, Wheeling acknowledged Benwood's complaint and suggested that, as of May 27, the Commission had issued neither an order to investigate Benwood's complaint nor an order requiring Wheeling to answer the complaint.^[5] Wheeling included its answer to Benwood's complaint with the May 27 letter. The Commission entered an order noting Wheeling's May 27 answer on June 2, 2021 (30 days after Benwood filed its complaint). There, the Commission concluded that Wheeling "ha[s] not filed sufficient support for the rates, fees and charges in its municipal ordinance to facilitate Commission evaluation" of Benwood's complaint. The Commission concluded that § 24-2-1(b)(6) empowered it to "toll the running of the statutory period for resolution of Benwood's complaint pending the filing of necessary supporting information of a municipal ordinance." It then ordered Wheeling to file the requested information- including a class cost of study (CCOS)-no later than 30 days from the order date. The Commission then tolled the "running of the statutory period of resolution of the complaint

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for a period of 45 days, resulting in a statutory decision due date of Friday, October 15, 2021."

Wheeling filed the information requested by the Commission in the June 2 order, including the CCOS, on July 2, 2021. On July 14, Commission staff notified Wheeling of an error in the CCOS. Wheeling submitted a revised CCOS the next day, July 15. On July 19, Commission staff moved the Commission to "exercise its statutory authority under Code §24-2-1(b)(6) and toll [the Benwood-Wheeling dispute] for an additional thirteen (13) days from October 15, 2021, or until October 28, 2021" to put staff "in the posture that [they] should have been in on July 2, 2021, but for the flawed [s]tudy filed by Wheeling." The Commission granted that motion on July 22, finding that (1) the then-current statutory deadline was October 15, 2021, (2) it was "reasonable to toll the running of the statutory deadline . . . and Staff Report due dates for 13 days," and (3) "ORDERED that the running of the statutory deadline is tolled until September 28, 2021."

The administrative law judge issued a recommended decision on September 13, 2021, in which he recommended that the Commission adopt the rate passed by Wheeling the prior April. Benwood and Commission staff filed exceptions to the

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recommended decision in late September.^[6] Wheeling replied to Benwood and the Commission in early October.

The Commission filed a third order tolling the statutory, 120-day deadline to resolve the Benwood-Wheeling dispute on October 26. In that order, the Commission stated that

[g]iven the complexity of this case and need for additional time for Commission consideration and review, the Commission will invoke its authority under W.Va. Code § 24-2-1(b)(6) to toll the statutory period 120 days from the date Wheeling filed a Revised [CCOS], being July 15, 2021. The statutory deadline in this case

...