Dixie Elec. Membership Co-op. v. Louisiana Public Service Com'n
| Decision Date | 30 June 1987 |
| Docket Number | No. 86-CA-2331,86-CA-2331 |
| Citation | 509 So.2d 1002 |
| Parties | DIXIE ELECTRIC MEMBERSHIP COOPERATIVE v. LOUISIANA PUBLIC SERVICE COMMISSION. |
| Court | Louisiana Supreme Court |
Marshall B. Brinkley, La. Public Service Com'n, Baton Rouge, Michael R. Fontham, Paul L. Zimmering, Noel J. Darce, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, for defendant-appellant.
John Schwab, Schwab & Walter, Baton Rouge, for plaintiff-appellee.
On November 20, 1984, the Louisiana Public Service Commission ordered Dixie Electric Membership Cooperative to refund 1 to its members some $766,842.86, 2 a sum which it had received in 1980 by way of a refund from its wholesale supplier of electricity, Cajun Electric Power Cooperative, Inc.
Dixie Electric filed a "Petition for Appeal and Judicial Review" of the order, in the Nineteenth Judicial District Court. After hearing additional evidence presented by Dixie, the district court, pursuant to La.R.S. 45:1194, ordered the matter remanded to the Louisiana Public Service Commission for reconsideration. Thereafter the Commission affirmed its original Order (U-16281) by ex parte Order U-16281-B. When the matter was returned a second time, the district court reversed the orders of the Commission and enjoined them from implementing and enforcing the two orders. Pursuant to La. Const. art. IV, § 21(E), the Commission has appealed the matter to this Court.
For the reasons which follow we find the refund order to be reasonable and proper and within the ratemaking authority of the Commission. The district court judgment will therefore be reversed, and Orders U-16281 and U-16281-B reinstated.
Dixie Electric Membership Cooperative, 3 organized under the Louisiana Electric Cooperative Law, was a customer of Cajun Electric Membership Cooperative, which in turn purchased wholesale power from Louisiana Power and Light Co., at the times pertinent to this suit. In 1974, LP & L filed a tariff at the federal level to govern wholesale sales to its customers. LP & L sold electricity to Cajun Electric pursuant to this tariff and Cajun Electric resold electricity to Dixie Electric. 4 The Federal Energy Regulatory Commission ultimately found that the tariff filed by LP & L was excessive and ordered LP & L to refund approximately $4.7 million to Cajun, relating to overcharges during the period October, 1974 through September, 1977. Cajun received this refund in 1978. Of the $4.7 million, $766,842.86 related to overcharges earlier passed on by Cajun to Dixie (and absorbed by Dixie's customers).
During the 1974-1977 period when the overcharges were assessed, Dixie was recovering its purchased power costs through purchase power adjustment clauses, filed with and approved by the Louisiana Public Service Commission. These clauses provided for the flow through to customers of increases and decreases in the average monthly purchase power costs incurred by Dixie. Pursuant to these provisions, the purchase power costs had been passed on to Dixie's customers.
In June, 1980, Cajun Electric refunded $896,020.32 to Dixie, representing the overcharge of $766,842.86 and net interest payment of $129,177.46. The refund was accomplished by issuing to Dixie a credit memorandum for that amount, which reduced Dixie's purchase power bill for the month of June, 1980. Dixie did not thereupon (or at any time thereafter) reduce its customers' monthly utility bills to reflect the credit. Dixie Electric's purchase power cost for June 1980 was $1,561,417.59. Given a credit of $896,020.32 on that bill, Dixie's net bill was $665,397.27. Thus, Dixie flowed through to its customers in the month of June 1980 the entire purchase power cost, 5 notwithstanding their actual cost for that month had been reduced by the credit.
Pertinent to the issue in this case are the constitutional and statutory provisions relative to the ratemaking jurisdiction of the Louisiana Public Service Commission over electric cooperatives. Under La. Const. of 1921, art. VI, § 4, 6 the Commission was invested with plenary power to "supervise, govern, regulate, and control" specified types of common carriers and public utilities, not including electric cooperatives. That article, however, conferred upon the Legislature the authority to place "other public utilities" under the Commission's authority. Prior to 1970, this Court held that electric cooperatives were not under the regulatory control of the Public Service Commission because the Legislature had not exercised its prerogative to give such regulatory authority to that body. See, for example, Central Louisiana Electric Company v. Louisiana Public Service Commission, 251 La. 532, 205 So.2d 389 (1967).
In 1970, La.R.S. 45:121 7 was amended to include electric cooperatives in the definition of "electric public utility." Also, in that same year, and perhaps simultaneously, La.R.S. 12:426 was amended to place electric cooperatives under the jurisdiction of the Public Service Commission. 8 So when the present Louisiana Constitution was adopted in 1974, the Public Service Commission was exercising regulatory control over electric cooperatives. And it was in that historical context that La. Const. art. IV, § 21(B) and its provision for regulation of "all common carriers and public utilities" was adopted:
Powers and Duties. The commission shall regulate all common carriers and public utilities and have such other regulatory authority as provided by law. It shall adopt and enforce reasonable rules, regulations, and procedures necessary for the discharge of its duties, and shall have other powers and perform other duties as provided by law.
(La. Const. 1974 Art. 4, § 21(B)).
In 1978, La.R.S. 45:1163, 9 which provides for the regulation of rates and service over public utilities by the Public Service Commission was amended so as specifically to dispense with need for the Commission's approval of the rates of an electric cooperative. However, control over Dixie was regained in October, 1984 when Dixie, pursuant to La.R.S. 12:426, 10 elected to come under the regulatory jurisdiction of the Commission.
Thus, on October 4, 1984 the Public Service Commission, which had ceased regulating the rates charged by Dixie and other electric cooperatives in 1978 following the 1978 amendment to R.S. 45:1163, commenced again regulating the rates charged by Dixie. In the years intervening between 1978 and 1984, the Public Service Commission had not exercised regulatory control over Dixie. And it was during that lapse of regulatory control that Dixie received the disputed refund from Cajun. However, the refund was for power purchased from Cajun by Dixie (and passed on to Dixie's customers) during the years 1974 through 1977 when the Public Service Commission was exercising ratemaking jurisdiction over Dixie. And the disputed orders of the Commission were rendered in 1984 when the Commission clearly had, and was, exercising ratemaking jurisdiction over Dixie.
As was recited earlier in this opinion, the district court reversed the Public Service Commission and ruled in favor of Dixie, specifically finding that the action of the Commission in ordering Dixie to make the refund to its member customers was "arbitrary and capricious." In reaching this conclusion, the district judge emphasized that the Public Service Commission did not have ratemaking jurisdiction over Dixie in 1980, when Dixie received the refund from its wholesale supplier, Cajun Electric.
The Commission first takes the position that it had regulatory authority over Dixie in 1980 notwithstanding the 1978 amendment to La.R.S. 45:1163, and notwithstanding the Commission's having chosen not to regulate electric cooperatives between 1978 and 1984, because that jurisdiction is vested in them by the Constitution ( [the Commission] "shall regulate all common carriers and public utilities" La. Const. art. IV, § 21(B); and in 1974 when the present Constitution was adopted, electric cooperatives were by statute public utilities in fact regulated by the Commission).
While we find persuasive the argument that the Commission's constitutional authority could not have been, and was not, interrupted between 1978 and 1984, we need not make that determination and resolve the issue in this case on that basis, for there is a resolution of the legal dispute which does not require a constitutional interpretation. That resolution follows.
In response to Dixie's contention that the Commission had no ratemaking authority over Dixie in 1980, when Dixie received the refund from Cajun, the Commission argues that the refund was for overcharges made for the years 1974 through 1977 (when the Commission was regulating Dixie). And, furthermore, the 1984 order was based upon "current circumstances and conditions," i.e. those existing in 1984. Dixie's refusal to flow the refund through to its customers was a continuing one, a condition which persisted in 1984, and a condition upon which the Commission could validly base a ratemaking decision, the Commission contends. We agree.
The trial judge was simply wrong when he concluded that the refund order was not "a ratemaking determination based on 'current conditions' at that time, November 20, 1984." That money should have been refunded to Dixie's customers, in November, 1984, or at some point in June, 1980, or thereafter. Those funds, refunded to Dixie by Cajun, had earlier been collected from Dixie's customers between 1974 and 1977 on billings in accordance with rates allowed by the Louisiana Public Service Commission. The continuing failure of Dixie to refund this money to its customers (albeit money received by Dixie at a time (1980) when the Public Service Commission was not exercising ratemaking authority over Dixie) is certainly a "current condition," or existing reality which justified the Commission's regulatory orders in the exercise of its plenary ratemaking authority. 11
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