GTE Florida Inc. v. Clark, 85776
| Decision Date | 29 February 1996 |
| Docket Number | No. 85776,85776 |
| Parties | 21 Fla. L. Weekly S101 GTE FLORIDA INCORPORATED, Appellant, v. Susan F. CLARK, etc., et al., Appellees. |
| Court | Florida Supreme Court |
An Appeal from the Public Service Commission.
Alan C. Sundberg and Sylvia H. Walbolt of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee; and Marceil Morrell and Kimberly Caswell of GTE Florida Incorporated, Tampa, for Appellant.
Robert D. Vandiver, General Counsel and David E. Smith, Director of Appeals, Florida Public Service Commission, Tallahassee; and Jack Shreve, Public Counsel and Charles J. Beck, Deputy Public Counsel, on behalf of the Citizens of the State of Florida, Tallahassee, for Appellees.
GTE Florida Incorporated (GTE) appeals a Public Service Commission (PSC) order that implements a remand from this Court. In that remand, we affirmed in part and reversed in part a prior PSC order disposing of a requested rate increase by GTE. The PSC, in its initial proceeding, denied GTE's proposed rate increase and, instead, ordered that GTE revenues be reduced by $13,641,000. We reversed the PSC order insofar as it denied GTE recovery of certain costs simply because those expenditures involved purchases from GTE's affiliates. We found that those costs were clearly recoverable and that it was an abuse of discretion for the PSC to deny recovery. GTE Florida Inc. v. Deason, 642 So.2d 545 (Fla.1994). Accordingly, we issued our mandate on July 7, 1994, and remanded for further action. The PSC, in implementing our decision, entered an order that only allowed recovery of the disputed expenses on a prospective basis from May 3, 1995. This effective date was over nine months after our mandate issued. As noted, our decision was final on July 7, 1994, and the initial erroneous order was entered by the PSC on May 27, 1993. The issue in this cause is whether GTE should be able to recover its expenses, erroneously denied in the first instance, for the period between May 27, 1993, and May 3, 1995. We have jurisdiction. Art. V, § 3(b)(2), Fla. Const.
We reverse the PSC's order implementing our remand. We mandate that GTE be allowed to recover its erroneously disallowed expenses through the use of a surcharge. However, no customer should be subjected to a surcharge unless that customer received GTE services during the disputed period of time.
In our decision reversing the PSC's original order insofar as it denied GTE recovery of certain expenses, we stated:
We do find, however, that the PSC abused its discretion in its decision to reduce in whole or in part certain costs arising from transactions between GTE and its affiliates, GTE Data Services and GTE Supply. The evidence indicates that GTE's costs were no greater than they would have been had GTE purchased the services and supplies elsewhere. The mere fact that a utility is doing business with an affiliate does not mean that unfair or excess profits are being generated, without more. Charles F. Phillips, Jr., The Regulation of Public Utilities 244-55 (1988). We believe the standard must be whether the transactions exceed the going market rate or are otherwise inherently unfair. See id. If the answer is "no," then the PSC may not reject the utility's position. The PSC obviously applied a different standard, and we thus must reverse the PSC's determination of this question.
On remand, GTE proposed a surcharge as the appropriate mechanism by which to recover its expenses incurred during the appeal and remand. The PSC denied GTE's proposal. The PSC ruled that GTE's failure to request a stay during the pendency of the appellate and remand processes precluded it from recovering expenses incurred during that time period. In this review, the PSC also argues that the imposition of a surcharge would constitute retroactive ratemaking. We reject both contentions.
Both the Florida Statutes and the Florida Administrative Code have provisions by which GTE could have obtained a stay. 1 However, neither of those mechanisms is mandatory. We view utility ratemaking as a matter of fairness. Equity requires that both ratepayers and utilities be treated in a similar manner. While the facts of Village of North Palm Beach v. Mason, 188 So.2d 778 (Fla.1966), were different from those we now encounter, we find that Justice O'Connell's reasoning is appropriate in this case. He stated:
It would be inequitable to defer the utility's right to the increased rates for approximately two years because of what we found to be a defect in the order entered by the commission. The soundness of what we do here is demonstrated by the fact that if the instant case had involved an order decreasing...
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