Consumers Power Co. v. Michigan Public Service Com'n
| Decision Date | 08 December 1982 |
| Docket Number | 62884,Docket Nos. 62883,No. 11,11 |
| Citation | 415 Mich. 134,327 N.W.2d 875 |
| Parties | CONSUMERS POWER COMPANY, Plaintiff-Appellee, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant, and Frank J. Kelley, Attorney General, and Michigan Retailers Association, Intervening Defendants-Appellants. Frank J. KELLEY, Attorney General and City of Wyoming, Plaintiffs-Appellants, and Michigan Retailers Association and City of Grand Rapids, Intervening Plaintiffs-Appellants, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant, and Consumers Power Company, Intervening Defendant-Appellee. (Calendar). |
| Court | Michigan Supreme Court |
Lawrence B. Lindemer, Allen B. Bass, David A. Mikelonis, Consumers Power Company, Jackson, Loomis, Ewert, Ederer, Parsley, Davis & Gotting, George W. Loomis; Harvey J. Messing, Michael G. Oliva, Lansing, for Consumers Power Company, plaintiff-appellee.
Arthur E. D'Hondt, Asst. Atty. Gen., Lansing, for defendant Michigan Public Service Com'n.
Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Hugh B. Anderson, Roderick S. Coy, Asst. Attys. Gen., Lansing, for plaintiff-appellants and intervening defendant-appellants.
City of Wyoming, William J. Garlington, Wyoming, for plaintiff-appellant City of Wyoming.
City of Grand Rapids, Philip A. Balkema, Grand Rapids, for intervening plaintiff-appellant City of Grand Rapids.
MacLean, Seaman, Laing & Guilford, by Kenneth Laing and Kathleen Opperwall, Lansing, for intervenor, Michigan Retailers Ass'n LEVIN, Justice.
The Michigan Public Service Commission determined that Consumers Power Company was entitled to an annual increase of $16,514,000 in operating revenue for electric service. In a departure from past practice, the commission, before entering a final order adopting new rate schedules allocating the annual increase among Consumers' customers, ordered a public hearing to determine the reasonableness of the proposed rate schedules.
Consumers asked the commission to implement the proposed rates under bond with any excess collected to be refunded after the commission issued its final rate order. The commission denied this request. It said that it "was unaware of any statutory authority empowering it" to provide such immediate relief.
Consumers applied to the circuit court for a preliminary injunction authorizing it to implement the proposed rates under bond. The court granted the preliminary injunction and Consumers collected $7,762,873, of which $39,855 was later refunded to a class of customers for whom lower rates were set in the final commission order.
The Court of Appeals affirmed the action of the circuit court as a proper exercise of the court's statutory appellate jurisdiction, finding it unnecessary to determine whether the circuit court could, in the exercise of its general equity jurisdiction, issue such an injunction.
We reaffirm this Court's decision in Michigan Consolidated Gas Co. v. Public Service Comm., 389 Mich. 624, 209 N.W.2d 210 (1973), that the general equity jurisdiction of the circuit court has not been superseded by statutory procedures. In an appropriate case the circuit court can, in the exercise of general equitable powers, provide injunctive relief permitting a public utility to collect revenues in excess of those approved by the commission, subject to refund if, after final commission action and appellate review, an excessive amount has been collected.
We conclude that, under the circumstances of the instant case, including that the commission did not regard itself as having the authority to provide immediate relief, the circuit court acted properly in entering an injunctive order. The commission's subsequent action making the proposed rate structure effective as of the date that the injunction became effective confirmed Consumers' right to retain substantially all the money collected pursuant to the injunctive order. 1
A public utility has a substantive right, set forth in the statutes and rooted in the constitution, to rate relief where the revenue produced by an existing rate structure is less than the amount required by the statutes or the constitution. 2 A public utility has, as a corollary to that substantive right, a right to immediate relief where compelling circumstances indicate that such relief is necessary. 3
The power to decide whether any rate relief should be provided and whether immediate relief shall be provided is vested in the commission. Because the authority to set utility rates is vested in the commission The circuit court may, however, provide relief from an erroneous order of the commission. And, where statutory or administrative procedures inadequately protect the substantive rights of the utility, the circuit court can, in the exercise of its equity powers, provide a remedy to avoid irreparable harm to the substantive rights of the utility.
and statutory procedures must be observed, the judicial role is limited.
The substantive right to rate relief includes the right to a determination, following a hearing if necessary, whether immediate or permanent relief shall be granted. Adequate statutory procedures must be observed. In the instant case, however, the commission was of the opinion that the statute did not authorize it to grant immediate relief. In those circumstances, a court of equity can fill the procedural gap and enter a protective order subject to the commission's ultimate determination whether relief (immediate or permanent) was warranted.
If the commission had ultimately determined that relief was not warranted as of the time it was secured by the circuit court injunction, Consumers would--because a court is not empowered to fix or make permanently effective a rate not approved by the commission--be required to refund so much of the money collected not authorized by the final order.
In the instant case, the commission's final order provided that Consumers was entitled to collect the new rates as of the time the injunction became effective, thereby determining that relief as of that date was warranted. It is thus the commission's action and not the court's which, in the instant case, authorizes Consumers' retention of the money collected pursuant to the temporary injunction.
The circuit court, sitting as a court of equity, preserved the status quo, the commission having taken the view that it was unable to do so, until the commission determined whether relief should be granted as of the time it was secured by the injunction. Absent an injunctive order, Consumers would have suffered irreparable harm because it may have been impossible to later implement the higher rates authorized by the commission.
Some fourteen months after Consumers filed an application, on July 15, 1968, for rate increases for gas and electric service, the commission issued an order, on September 29, 1969, which authorized an annual increase of $16,514,000 in operating revenue for electric service. The order also directed Consumers to submit a proposed rate structure allocating the revenue increase among its customers. Prior to issuing the order, the commission had given notice of hearing to Consumers' customers and had conducted rate proceedings involving 17 days of public hearings in which the Attorney General and other persons participated. 4
Under then prevailing practice, unless a question involving specific rates and schedules was raised, the commission made findings regarding operating revenue and expenses, and rate base and rate of return, and then directed a utility to file a schedule of new rates in compliance with the findings. Filing procedures regarding specific proposed rates and schedules included staff review of the new rates and determination by the commission that the new rates were appropriate.
The commission conceded in its answer to the complaint filed by Consumers in the circuit court that theretofore ex parte approval of proposed schedules had followed the filing of such schedules, and that the commission had not considered a public In the instant case, however, on October 1, 1969, the Attorney General requested a public hearing to determine the reasonableness of the rate schedules proposed by Consumers to implement the $16,514,000 increase in revenue. The commission departed from the established practice and granted the request. On October 3, 1969, Consumers asked the commission to permit it to implement the proposed new rates under bond subject to refund of any excess collected. The commission refused the request, although its staff had found that the proposed rates would generate the additional revenue authorized by the commission, were reasonable, and equitably distributed the additional charges among the various classes of customers. The commission said that it was unaware of any statutory authority empowering it to grant immediate relief.
hearing on proposed rate schedules mandatory and had made schedules effective without further hearings.
On October 6, 1969, the day on which the commission issued a notice of hearing scheduling an October 16-17 hearing on the proposed rates, Consumers sought injunctive relief in the Ingham Circuit Court, alternatively in equity and as a statutory appeal. On October 21, 1969, the circuit court issued a preliminary injunction authorizing the collection of the increased revenue under bond, stating that it found that Consumers had demonstrated that it would otherwise suffer irreparable harm. The Court of Appeals affirmed.
Six months later, on April 20, 1970, the commission entered a rate order fixing final rates to be effective October 22, 1969, one day after the date on which the preliminary injunction issued. The commission's final rate order authorized the rates collected by Consumers in accordance with the injunction except for one class of customers. Consumers refunded the excess collected. 5
In the circuit court and the Court of Appeals, the commission maintained that Consumers...
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