GEORGIA PSC v. Sawnee Elec. Membership Corp.

• Decision Date: 01 February 2000
• Docket Number: No. A99A1861., No. A99A1860
• Citation: 529 S.E.2d 186,242 Ga. App. 156
• Parties: GEORGIA PUBLIC SERVICE COMMISSION v. SAWNEE ELECTRIC MEMBERSHIP CORPORATION. Georgia Power Company v. Sawnee Electric Membership Corporation.
• Court: Georgia Court of Appeals

529 S.E.2d 186

242 Ga. App. 156

GEORGIA PUBLIC SERVICE COMMISSION v. SAWNEE ELECTRIC MEMBERSHIP CORPORATION.

Georgia Power Company v. Sawnee Electric Membership Corporation.

Nos. A99A1860, A99A1861.

Court of Appeals of Georgia.

February 1, 2000.

Certiorari Granted July 5, 2000.

Thurbert E. Baker, Attorney General, Robert S. Bomar, Deputy Attorney General, Harold D. Melton, Senior Assistant Attorney General, Alan Gantzhorn, William R. Phillips, Assistant Attorneys General, for appellant (case no. A99A1860).

Troutman Sanders, Kevin C. Greene, Susan P. Wilkerson, Atlanta, for appellant (case no. A99A1861).

Sutherland, Asbill & Brennan, James A. Orr, Charles B. Jones III, Atlanta, for appellee. McCullough Sherrill, John A. Sherrill, Corin M. McCarthy, Atlanta, amici curiae.

SMITH, Judge.

In separate appeals, the Georgia Public Service Commission ("PSC") and Georgia Power Company challenge an order issued by the Superior Court of Fulton County reversing a decision by the PSC. The PSC had determined that under the "large load customer choice exception" to the Georgia Territorial Electric Service Act, OCGA § 46-3-1 et seq. ("Territorial Act" or "Act"), Georgia Power was properly selected as the electric supplier of a particular apartment complex. The trial court found otherwise. At issue here is whether the trial court erred in finding that this apartment complex did not qualify as a customer choice location within the meaning of the Territorial Act.¹ Because the trial court failed to accord proper deference to the PSC in concluding that the large load exception did not apply, we reverse.

This case originated when Sawnee Electric Membership Corporation ("Sawnee EMC") lodged a complaint against Georgia Power with the PSC alleging that Georgia Power was violating the Territorial Act by unlawfully providing service to Aylesbury Farms Apartment Complex, an apartment complex located entirely within Sawnee EMC's assigned service territory.

Georgia Power defended its actions by claiming it had a right to provide electric service to this complex under the large load exception to the Territorial Act which permits a customer to select its electric provider rather than having to receive service from the electric provider assigned to that particular territory.² OCGA § 46-3-8(a). Under the large load exception, the consumer may choose an electric supplier different from the one assigned if "service [is] to one or more new premises (but if more than one, such premises must be located on the same tract or on contiguous tracts of land) if utilized by one consumer and having single-metered service and a connected load which ... is 900 kilowatts or greater." OCGA § 46-3-8(a).

During the construction phase of the complex, Georgia Power and Dominion Development Corporation ("Dominion"), the general contractor, entered into an arrangement by which electric usage for the whole complex would be measured at a master or pass-through meter. The electric usage of the individual apartments would be measured by separate meters, one for each apartment. This master/submetering arrangement was proposed by Georgia Power which installed the on-site electric distribution system except for the submeters.³ Dominion had the submeters installed and at all times retained ownership of them.

After construction was completed, no single apartment or apartment building had a connected load of 900 kilowatts or more. Georgia Power billed Dominion based on the total electric usage indicated on the master meter, the only meter it reads. Dominion contracted with an outside company, Argen Billing Systems, to perform meter-reading services on the submeters. Argen reads the individual meters every month and computes each tenant's bill. Each tenant is billed for his unit's electric use as reflected on the individual meter, plus additional charges, including electricity for common areas. Argen also billed the tenants for their water and sewer usage. The tenants then paid Argen and not Dominion.

Georgia Power considers Dominion its customer and does not bill the tenants for electric service. The president of Dominion, Chris Driskell, testified that Dominion "is the user of electricity until a tenant moves into an apartment." Elliot Lewis, the president of Dominion Holdings, a related company, testified that the arrangement with Georgia Power enabled Dominion to purchase electric power on a bulk basis "at commercial rates," resulting in savings for the residents. Lewis felt that purchasing electricity in this manner enabled the apartment complex to be more competitive in the residential marketplace.

In an initial decision, a hearing officer agreed with Sawnee EMC that the large load exception did not apply and ordered Georgia Power to cease and desist from providing electric service to the apartment complex. While recognizing that this court's decision in City of Norcross v. Ga. Power Co., 197 Ga. App. 891, 399 S.E.2d 725 (1990), was physical precedent only, the hearing officer felt that "the decision should be given substantial weight" because of its "remarkably similar" facts.

Georgia Power sought and obtained full commission review of the hearing officer's initial decision. After conducting a hearing, the PSC found that the hearing officer had erred in concluding that the large load exception did not apply. The large load exception requires: the electric service be to one or more new premises; the premises be utilized by one consumer; the premises have single-metered service; and the premises have a connected load of at least 900 kilowatts at the time of initial full operation. OCGA § 46-3-8(a). Since the complex receives electric service by means of one meter and has a connected load that exceeds 900 kilowatts, the dispute between Sawnee EMC and Georgia Power focuses on the first and second requirements of the Act. The PSC reached its decision after resolving two interconnected questions: (1) whether this apartment complex constituted one "premises" as defined by the Act and (2) whether the premises were being "`utilized by one electric consumer ... having single-metered service'" within the meaning of the Act.

In refusing to embrace the initial decision of the hearing officer, the PSC expressly found: "that it is evident that the Aylesbury Farms complex qualifies under the Act as a `premises.' Aylesbury Farms does consist of multiple buildings or structures located on one tract or contiguous tracts of land." The PSC struggled, however, with the second question of whether the landlord, Dominion, met the requirement of being "one electric consumer" as contemplated by the Territorial Act. The PSC reasoned that when deciding which entity is the "electric consumer" within the meaning of the Act, the "focus should be on the relationship of the entity in question to the electric supplier." The PSC noted that Dominion "takes service from [Georgia Power Company] at a single metering point. Electric service is then provided to the individual units. Each unit has an individual meter. Tenants are billed their pro-rata share of the landlord's electric bill, based upon their individual consumption." The PSC noted that "[t]he tenants do not have any obligation to or relationship with [Georgia Power]." It is undisputed that Dominion, not the tenants, was the party responsible for paying Georgia Power for the electric service. The PSC found: "[t]he method that Dominion has chosen to allocate its electric bill among the tenants does not make the tenants `consumers' as the Commission envisions the Territorial Act intended." The PSC found: "[i]t is the determination of this Commission that the entity which has the direct relationship with the electric supplier is the one who meets the definition of `consumer.'" The PSC decided that since the large load exception applied, it was permissible for Georgia Power to provide electric service to the apartment complex.

Under OCGA § 50-13-19, Sawnee EMC petitioned for judicial review of the PSC's order. In seeking review, Sawnee EMC designated the PSC and its five members as respondents to its action. After the trial court reversed the PSC's decision, the PSC and Georgia Power filed separate appeals. Because we find the trial court erred, we reverse.

Case No. A99A1860

1. In its sole assertion of error, the PSC contends that the trial court erred by applying an incorrect standard of review to the decision by the PSC. We agree.

As a general rule, decisions of administrative agencies are to be afforded great deference. City of Atlanta Bd. of Zoning Adjustment v. Midtown North, Ltd., 257 Ga. 496, 499(4), 360 S.E.2d 569 (1987). Here, as the agency charged with the enforcement and administration of the Territorial Act, the PSC's interpretations of that Act are entitled to great deference. Colquitt Elec. Membership Corp. v. City of Moultrie, 197 Ga.App. 794, 796, 399 S.E.2d 497 (1990); North Ga. Elec. Membership Corp. v. City of Calhoun, 195 Ga.App. 382, 384, 393 S.E.2d 510 (1990); City of LaGrange v. Ga. Power Co., 185 Ga.App. 60, 63, 363 S.E.2d 286 (1987). Because the PSC is in a better position than the courts to determine the appropriate extent of regulation needed under the Act, much weight must be accorded to the PSC's interpretations of the Act. Id.; see also Bd. of Zoning Adjustment of Atlanta v. Fulton Fed. Sav. &c. Assn., 177 Ga.App. 219, 221(1), 338 S.E.2d 730 (1985).

The Georgia Administrative Procedure Act confines a court's review to the record established at the agency level unless application is made for leave to present additional evidence and the court orders that additional evidence be taken before the agency. OCGA § 50-13-19(f), (g). A reviewing court is expressly prohibited from substituting its own judgment for that of the agency as to the weight of the evidence on questions of fact. OCGA § 50-13-19(h). And upon judicial review, reversal is not warranted unless the substantial...