Grindstone Butte Mut. Canal Co. v. Idaho Power Co.

• Decision Date: 26 January 1978
• Docket Number: 12023,Nos. 11860,s. 11860
• Citation: 98 Idaho 860,574 P.2d 902
• Parties: GRINDSTONE BUTTE MUTUAL CANAL COMPANY and Farm Development Corporation, Appellants, v. IDAHO POWER COMPANY, and Idaho Public Utilities Commission, Respondents.
• Court: Idaho Supreme Court

Page 902

574 P.2d 902

98 Idaho 860

GRINDSTONE BUTTE MUTUAL CANAL COMPANY and Farm Development Corporation, Appellants, v. IDAHO POWER COMPANY, and Idaho Public Utilities Commission, Respondents.

Nos. 11860, 12023.

Supreme Court of Idaho.

Jan. 26, 1978.

William F. Ringert, of Anderson, Kaufman, Anderson & Ringert, Boise, for appellants.

Wayne L. Kidwell, Atty. Gen., and Robert L. Jones, Asst. Atty. Gen., State of Idaho, for respondent Idaho Public Utilities Commission.

William R. Fleming, Boise, and Thomas G. Nelson, of Parry, Robertson, Daly & Larson, Twin Falls, for respondent Idaho Power Co.

McFADDEN, Justice.

Respondent Idaho Power Company is a public utility supplying electrical power to various portions of southern Idaho. Appellants Grindstone Butte Mutual Canal Company and Farm Development Corporation are Idaho Power customers who purchase electricity to power irrigation pumping facilities. Appellants seek review of an Idaho Public Utilities Commission order granting electrical rate increases to Idaho Power and allocating the spread of that increase. We set aside the orders of the Idaho Public Utilities Commission in Case No. 11860. The orders in Case No. 12023 are affirmed.

Idaho Power filed an application with the Public Utilities Commission seeking an increase in electrical rates. The Commission conducted hearings in 1974, and on October 4, 1974 issued Order No. 11636. That order concluded that Idaho Power would experience revenue deficiencies and authorized it to revise its rates, charges and special contracts to increase revenues in the amount of $6,840,000. It also directed the company to submit new rate schedules sufficiently increased to meet the deficiency. The order also provided that the allocation of the increase among various classes of users would be subject to further proceedings.

At subsequent hearings, Idaho Power submitted a revised schedule of rates and tariffs reflecting uniform rate increases of 9.65% For all customers. The Commission staff then presented evidence showing possible rate structures which would include no increase for various classes of low quantity residential users. On November 27, 1974, the Commission entered Order No. 11694 (the subject of appeal No. 11860), which denied the schedule submitted by Idaho Power, and ordered the company to submit revised schedules reflecting no increase for the first 400 kilowatt hours of monthly use for residential users, and providing a 16% Increase for Schedule 24, Irrigation and/or Soil Drainage Pumping Service. The order provided that the new schedules when approved would become effective on one day's notice. Finding No. V of that order indicated that as there was some question as to the reasonableness of existing rate structures, the order was to be considered an interim order and the hearings would be kept open pending a final decision. At that point, Grindstone Butte and Farm Development Corporation, as intervenors in the Commission proceedings, filed a petition for rehearing, particularly challenging the 16% Increase for Schedule 24 service. That petition was denied by Order No. 11738, dated January 10, 1975, and the appellants perfected an appeal, Supreme Court No. 11860.

Approximately three months later, the Commission held further hearings on the rate structure. At a prehearing conference the Commission advised intervenors that the burden would be upon them to establish that the rate structure created in Order No. 11694 was unreasonable, improper or unjust. At the hearing, appellants submitted evidence showing the economic climate in the agricultural community, and documenting the potential impact of rate increases in the cost of electrical power on irrigation pumping. The Commission staff submitted Exhibit 75, which showed that rates paid by irrigation pumpers were yielding a substantially lower rate of return than other users.

On June 13, 1975, the Commission entered Order No. 11949, adopting the interim rate schedule as final. After filing a petition for rehearing, which was denied (Order No. 12013, dated July 28, 1975), the intervenors perfected a second appeal, Supreme Court No. 12023.

The two appeals have been consolidated. Appellants assign as error several procedures employed by the Commission; they charge that the Commission lost jurisdiction to further consider the matter after eleven months, that the Commission lacks authority to enter an interim schedule, and that the Commission failed to give adequate notice that it intended to consider special rate increases for irrigation pumpers. Appellants also charge as error that the Commission lacked a basis in evidence for allocating proportionately higher rate schedules for irrigation pumpers.

I

Appellants first argue that the authority of the Public Utilities Commission to act on a rate case is limited by the provisions of I.C. § 61-623. ¹ The interpretation of that statute urged by appellants is that after a maximum of eleven months, the Commission must order permanent rates and that further inquiry and changes in rates are thereafter barred. In the instant case, Idaho Power's application for rate increase was filed on December 17, 1973. Appellant contends that as of November 17, 1974, the authority of the Commission to alter those rates ceased. At the time of the alleged cessation of authority, Order No. 11636 was in effect, granting a $6,840,949 increase in revenue, and Idaho Power had filed a schedule reflecting an across the board increase to provide that amount. Thus, appellants contend that the uniform increase as originally sought by Idaho Power should be considered the final order.

This court considered I.C. § 61-623, then I.C.A. § 59-623, in Mountain View Rural Telephone Co. v. Interstate Telephone Co., 55 Idaho 514, 46 P.2d 723 (1935). There, this court noted that the word "not" should be read into the section preceding the phrase "increasing or resulting in an increase." The effect of this interpretation is to make I.C. § 61-623 applicable to the setting of new rates, but not increased rates. The interpretation was necessitated by an apparent conflict with I.C. § 61-622, then I.C.A. § 59-622, which purported to deal with increases in existing rates. The result is that I.C. § 61-623 applies to setting of new rates, while I.C. § 61-622 governs increases in rates previously set by the Commission.

In the instant case, the Commission is being asked to raise rates which it previously set, and the applicable statute is I.C. § 61-622. This matter was originally filed with the Commission on December 17, 1973. At that time, I.C. § 61-622 contained no time limit of any sort. ² It cannot be said that the jurisdiction of the IPUC was limited to any statutorily specified time period.

We note additionally that I.C. § 61-502 gives the Commission on-going power and duty to fix reasonable rates "61-502. Determination of rates. Whenever the commission, after a hearing had upon its own motion or upon complaint, shall find that the rates, fares, tolls, rentals, charges or classifications, or any of them, demanded, observed, charged or collected by any public utility for any service or product or commodity, or in connection therewith, including the rates or fares for excursions or commutation tickets, or that the rules, regulations, practices, or contracts or any of them, affecting such rates, fares, tolls, rentals, charges or classifications, or any of them, are unjust, unreasonable, discriminatory or preferential, or in any wise in violation of any provision of law, or that such rates, fares, tolls, rentals, charges or classifications are insufficient, the commission shall determine the just, reasonable or sufficient rates, fares, tolls, rentals, charges, classifications, rules, regulations, practices or contracts to be thereafter observed and in force and shall fix the same by order as hereinafter provided, and shall, under such rules and regulations as the commission may prescribe, fix the reasonable maximum rates to be charged for water by any public utility coming within the provisions of this act relating to the sale of water."

The Illinois Supreme Court, in dealing with similar statutes, noted that

"The contention that the Commission must conclude its inquiry into the proposed rate within a ten-month period confuses the power of the Commission to suspend with its power to determine the reasonableness of the rate. The ten-month period applies only to the former. If that period has expired before the Commission has concluded its inquiry, then the utility may begin collecting charges under the new rate, so far as pre-existing contractual obligations permit. The running of the period does not terminate the Commission's inquiry, however, and the new rate remains subject to permanent cancellation by the Commission's final order in the proceedings. Illinois Bell Telephone Co. v. Commerce Comm. ex rel. City of Edwardsville, 304 Ill. 357, 136 N.E. 676; City of Edwardsville v. Illinois Bell Telephone Co., 310 Ill. 618, 142 N.E. 197." Central Ill. Public Service Co. v. Ill. Commerce Comm'n, 5 Ill.2d 195, 125 N.E.2d 269, 274-75 (1955).

See also, Application of Montana-Dakota Utilities Co., 102 N.W.2d 329 (N.D.1960).

The Commission was not only empowered, but charged with a continuing obligation, to continue its inquiry into the rate structure. I.C. § 61-502. The Commission did not err in entering orders subsequent to the expiration of the eleven month period, because no statute limits the time of its jurisdiction and because the Commission is authorized on an on-going basis to consider and alter rates.

Appellants similarly argue that the Commission lacks authority to enter interim orders. All Commission orders as to rates are subject to change, given the mandate of I.C. § 61-502 that the Commission continue to evaluate the rates charged and make changes as necessary. It is true that no statute gives explicit authority to the Commission to enter "interi...