Detroit Edison Co. v. Mich. Pub. Serv. Comm'n
| Decision Date | 01 November 2013 |
| Docket Number | No. 145750.,COA No. 302110.,145750. |
| Citation | 495 Mich. 884,838 N.W.2d 701 |
| Parties | In re Application of the DETROIT EDISON COMPANY to Increase Rates Association of Businesses Advocating Tariff Equity, Appellant, v. Michigan Public Service Commission, Appellee, and The Detroit Edison Company, Petitioner–Appellee. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
On order of the Court, leave to appeal having been granted, and the briefs and oral arguments of the parties having been considered by the Court, we AFFIRM the result reached in the July 26, 2012 judgment of the Court of Appeals. The Michigan Public Service Commission (PSC) was not obligated by MCL 460.6a(1) to order a refund based on the actual amount that each customer overpaid, and the PSC did not abuse its discretion in approving the refund methodology at issue. We note, however, that the Court of Appeals erred by concluding that MCL 460.6a(1) is ambiguous because it is subject to reasonable but differing interpretations. The standard for determining ambiguity is whether a provision of the law “ ‘irreconcilably conflict[s]’ with another provision ... or ... is equally susceptible to more than a single meaning.” See Lansing Mayor v. Pub. Serv. Comm., 470 Mich. 154, 166, 680 N.W.2d 840 (2004), and Klapp v. United Ins. Group Agency, 468 Mich. 459, 467, 663 N.W.2d 447 (2003).MICHAEL F. CAVANAGH, J. ( concurring ).
I concur in the order affirming the judgment of the Court of Appeals. However, I write separately to note that I continue to adhere to my past position regarding the standard for determining ambiguity. See Lansing Mayor v. Pub. Serv. Comm., 470 Mich. 154, 173–185, 680 N.W.2d 840 (2004) (MICHAEL F. CAVANAGH, J., dissenting).
I respectfully dissent from the Court's decision to affirm the judgment of the Court of Appeals. In my view, the Michigan Public Service Commission (PSC) approved a refund methodology contrary to the language of MCL 460.6a(1). Of course, this Court owes respectful consideration to an agency's interpretation of a statute that it is charged with administering.1 But that interpretation does not bind the judiciary, and this Court must step in when the agency's interpretation conflicts with the statutory language. I would therefore reverse the Court of Appeals' decision that deferred to the PSC's erroneous interpretation.
MCL 460.6a(1) governs electric rate changes, including the procedure for effectuating a temporary rate increase:
A gas or electric utility shall not increase its rates and charges or alter, change, or amend any rate or rate schedules, the effect of which will be to increase the cost of services to its customers, without first receiving commission approval as provided in this section.... If the commission has not issued an order within 180 days of the filing of a complete application, the utility may implement up to the amount of the proposed annual rate request through equal percentage increases or decreases applied to all base rates.... If a utility implements increased rates or charges under this subsection before the commission issues a final order, that utility shall refund to customers, with interest, any portion of the total revenues collected through application of the equal percentage increase that exceed the total that would have been produced by the rates or charges subsequently ordered by the commission in its final order. The commission shall allocate any refund required by this section among primary customers based upon their pro rata share of the total revenue collected through the applicable increase, and among secondary and residential customers in a manner to be determined by the commission. [Emphasis added.]
In 2009, relying on MCL 460.6a(1), Detroit Edison applied for an increase in rates of $378 million. When the PSC failed to issue an order within 180 days, Detroit Edison elected to self-implement an increase of $280 million. But the PSC ultimately approved an increase of only $217,392,000, so MCL 460.6a(1) required Detroit Edison to refund the excess revenue that it had collected—$26,872,231 after interest. Detroit Edison proposed to allocate this refund among its customer classes on the basis of each class's share of total revenue. The refund would then be allocated within each class to individual customers using a formula created by the PSC and would be provided as a credit on a future bill. The Association of Businesses Advocating Tariff Equity (ABATE) objected to this methodology as applied to primary customers on the basis that the plain language of MCL 460.6a(1) required a refund based on the exact amount each primary customer had paid.2 The PSC rejected ABATE's contention, concluding that an allocation based on rate class complied with the statute and that calculating the exact refund amount for each primary customer would be overly burdensome and costly.
The Court of Appeals deferred to the PSC's decision because it determined that MCL 460.6a(1) was ambiguous and “cogent reasons” existed to support the PSC's interpretation.3 In my view, the Court of Appeals erred twice. First, as stated in the Court's order today, the Court of Appeals applied the wrong standard for discerning ambiguity in a statute. Second, no matter what standard of ambiguity is used, MCL 460.6a(1) unambiguously requires a utility to refund a precise amount to primary customers that overpaid and curtails the PSC's discretion to fashion an alternative refund methodology. Thus, the PSC abused its discretion by approving a refund methodology that is contrary to the statute's language.
The Legislature's carefully chosen language supports my understanding of the statute. First, the Legislature said that any refund should be divided “among” the primary customers. The appropriate definition of “among” in this context is “with a share for each of[.]” 4 Thus, rather than the whole class being allocated a share of the refund, each primary customer is entitled to a particular share of the refund. The Legislature also instructed the PSC how to calculate each primary customer's...
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