Idaho Underground Water Users Ass'n v. Idaho Power Co.

• Citation: 404 P.2d 859,89 Idaho 147
• Decision Date: 06 July 1965
• Docket Number: No. 14 and P,No. 9317,IPUC,No. 101,101,14 and P,9317
• Parties: , 60 P.U.R.3d 194 IDAHO UNDERGROUND WATER USERS ASSOCIATION, Appellant, v. IDAHO POWER COMPANY, Respondent. In the Matter of the Application of Idaho Power Company for Approval of Rates, Rules and Regulations Comprising Proposed Tariffropsed Rates for Special Contract Customers.
• Court: United States State Supreme Court of Idaho

Page 859

404 P.2d 859

89 Idaho 147, 60 P.U.R.3d 194

IDAHO UNDERGROUND WATER USERS ASSOCIATION, Appellant, v. IDAHO POWER COMPANY, Respondent.

In the Matter of the Application of Idaho Power Company for Approval of Rates, Rules and Regulations Comprising Proposed Tariff No. 101, IPUC No. 14 and Propsed Rates for Special Contract Customers.

No. 9317.

Supreme Court of Idaho.

July 6, 1965.

Rehearing Denied Sept. 9, 1965.

Louis F. Racine, Jr., robert C. Huntley, Jr., and William D. Olson, Pocatello, for appellant.

R. P. Parry and John H. Daly, Twin Falls, A. C. Inman and J. E. Bruce, Boise, for respondent.

Allan G. Shepard, Atty. Gen., State of Idaho, and Larry D. Ripley, Asst. Atty. Gen., Boise, for Idaho Public Utilities Commission.

McFADDEN, Justice.

Idaho Power Company (the Company) in January, 1962, instituted these proceedings by filing with Idaho Public Utilities Commission (the Commission), its request for 13.6% increase in its rates charged its general users. Various protests, including that of Idaho Underground Water Users Association (the appellant), were filed against the granting of any rate increase. Hearings were conducted and, after the introduction of voluminous testimony and admission of many exhibits, the Commission entered Order No. 6647, denying the Company's proposed tariff and schedule of charges which would have constituted a 13.6% increase in the rates, but directed the Company to submit a revised tariff for an increase of rates of 7.5%. The new tariff was filed and approved by the Commissioner's Order 6659, and on the same day appellant filed its motion for rehearing, directed towards Order No. 6647, asserting it to be erroneous and contrary to the evidence. This petition for rehearing was denied by Order No. 6680. Appellant appealed from these various orders of the Commission, the effect of which was to grant to the Company a 7.5% increase in the rates charged various of its customers.

Appellant is an unincorporated association, the membership of which is comprised of approximately 5100 users of the electrical power supplied by the Company. The members use the electrical power for the purpose of irrigation and soil drainage pumping, as well as general service and residential usages.

Appellant has made eight assignments of error, five of which (I, II, III, IV, VIII) are directed to Order No. 6647. In assignment V appellant contends that the Commission erred in conducting its hearing without the appearance of the Attorney General on behalf of the people of the State of Idaho; in assignment VI, which is directed to Order No. 6659, appellant claims the Commission erred in approving the revised tariff, asserting the rate increases were not proper or justified; assignment VII, directed to Order No. 6680, asserts the Commission erred in denying appellant's petition for rehearing.

The issues presented by assignments of error Nos. VI and VIII are wholly encompassed within the other assignments of error pertaining to Order No. 6647 and hence are not considered separately herein.

Appellant's first assignment of error is that the Commission erred in failing to make specific findings in Order No. 6647 as to each of the following:

'(1) Rate base to used for purpose of computing a Fair Rate of Return.

'(2) What percentage figure constitutes a Fair Rate of Return.

'(3) The amount of Dollar Return the Idaho Power Company would receive without a rate increase and whether that return would be unreasonable.

'(4) The amount of Dollar Return the Idaho Power Company would receive under the 7 1/2% revenue increase granted and that the Return would be fair.'

By this assignment, appellant challenges the sufficiency of the findings of the Commission in the particulars set out, asserting the order is so insufficient that it would be impossible from the findings to determine whether the 7.5% increase, any increase or even a rate decrease, is justified.

In answer to this challenge, the Company asserts that under I.C. § 61-626 and § 61-627 matters not raised in the petition for rehearing will not be considered by this court; and further that appellant's petition for rehearing failed to present any issue as to the insufficiency of the findings.

The petition for rehearing submitted by appellant recites:

'Protestant, Idaho Underground Water Users Association, respectfully petitions for a rehearing of Case No. U-1006-42 [the instant proceeding]. Protestant submits that Order No. 6647 is erroneous and contrary to the credible evidence in the following material respects.' (Emphasis added.)

then follows some six sub-paragraphs; the first five pertain to specific findings entered by the Commission, each with the assertion that the specific findings referred to were against or contrary to the weight of the evidence presented; the sixth paragraph asserts that the order is in error in granting the increase of revenue without reference or consideration to the value of the service to the classes of customers affected and particularly to the appellant's members. Nowhere does the petition for rehearing seek any modification of the Commission's order in respect to the deficiencies claimed by the first assignment of error.

In Consumers' Co., Ltd. v. Public Utilities Comm., 40 Idaho 772, 236 P. 732, this court said (at page 775 of the Idaho Report, 236 P. 732:)

'The purpose of an application of the rehearing provided by statute, and it must be presumed to have a useful purpose, is to afford an opportunity to the parties to bring to the attention of the Commission, in an orderly manner, any question theretofore determined in the matter, and thereby afford the Commission an opportunity to rectify any mistake made by it before presenting the same to the Supreme Court.'

A dissenting opinion in the Consumers' Co., Ltd., case (supra) also recognizes this requirement in the following language:

'The purpose of an application for rehearing, in contemplation of this statute, is no different than in proceedings before the courts; that is, to point out specifically in what respect the original decision is erroneous. (citation) The application is confined to matters urged at the original hearing, and may not include new points raised for the first time, or matters not in the record when the case was decided. (citations.)'

The Consumers Co., Ltd., case was before this court a second time the following year, 41 Idaho 498, 239 P. 730, when the principle was again reiterated:

'In asking for a rehearing on order No. 881 on account of the ruling of the Commission on going concern value, appellant must be held to have waived any and all other objections to the order with respect to which it asked a rehearing. If, after asking for a rehearing of only one of the many questions determined by the Commission, and after the Commission has again heard and decided the particular matter for and on account of which the rehearing is asked and granted, appellant may then not only bring to this court the one question determined on the rehearing but also all the other questions originally decided by the Commission and for which no rehearing was asked, the provision for a rehearing is of no consequence. Of the matters determined by the Utilities Commission, this court will consider only those with respect to which a rehearing was asked.' 41 Idaho at 501, 239 P. at 731.

The requirement that claimed error be first submitted to the Commission by a petition for rehearing, is a phase of the doctrine requiring the exhausting of administrative remedies before judicial consideration will be given to issues on appeal. State v. Concrete Processors, Inc., 85 Idaho 277, 379 P.2d 89. In Bohemian Breweries v. Koehler, 80 Idaho 438, 332 P.2d 875, this court also recognized certain generally recognized limitations of the doctrine requiring exhaustion of administrative remedies. 73 C.J.S. Public Administrative Bodies and Procedure, § 173, p. 514; 2 Am.Jur.2d 436, Administrative Law, § 602; 3 Davis, Administrative Law Treatise, § 20.06 (1958).

In further considering this first assignment of error, a brief review of the purpose of having findings by the Commission is in order. I.C. §§ 61-502, 61-503, 61-622, contemplate that on hearings concerning rates of a public utility, findings will be made by the Commission. The procedure to be employed by the Commission in arriving at such findings has been described in Saginaw Broadcasting Co. v. Federal Communications Commission (1938) 68 App.D.C. 282, 96 F.2d 554 (cert. denied Gross v. Saginaw Broadcasting Co., 305 U.S. 613, 59 S.Ct. 72, 83 L.Ed. 391, as follows:

'(1) evidence must be taken and weighed, both as to its accuracy and credibility; (2) from attentive consideration of this evidence a determination of facts of a basic or underlying nature must be reached; (3) from these basic facts the ultimate facts, usually in the language of the statute, are to be inferred, or not, as the case may be; (4) from this finding the decision will follow by the application of the statutory criterion.' 96 F.2d at 559.

See also: 2 Am.Jur.2d 256, 269, Administrative Law, § 447, § 456; Annot. 146 A.L.R. 209.

The reasons for requiring findings by an administrative agency such as the Public Utility Commission have been cogently expressed in 2 Davis, Administrative Law, Treatise, § 16.05 (1958), as follows:

'The practical reasons for requiring administrative findings are so powerful that the requirement has been imposed with remarkable uniformity by virtually all federal and state courts, irrespective of a statutory requirement. the reasons have to do with facilitating judicial review, avoiding judicial usurpation of administrative functions, assuring more careful administrative consideration, helping parties plan their cases for rehearing and judicial review and keeping within their jurisdiction.'

As pointed out in the Annotation, 146 A.L.R. 209, a distinction must be kept in mind in evaluating an assignment of error...