Legal Environmental Assistance Foundation, Inc. v. Clark

• Decision Date: 29 February 1996
• Docket Number: No. 85204,85204
• Citation: 668 So.2d 982
• Parties: Util. L. Rep. P 26,510, 21 Fla. L. Weekly S99 LEGAL ENVIRONMENTAL ASSISTANCE FOUNDATION, INC., Appellant, v. Susan F. CLARK, J. Terry Deason, Joe Garcia, Julia L. Johnson, and Diane K. Kiesling, as the Florida Public Service Commission, Appellees.
• Court: Florida Supreme Court

Page 982

668 So.2d 982

Util. L. Rep. P 26,510, 21 Fla. L. Weekly S99

LEGAL ENVIRONMENTAL ASSISTANCE FOUNDATION, INC., Appellant, v. Susan F. CLARK, J. Terry Deason, Joe Garcia, Julia L. Johnson, and Diane K. Kiesling, as the Florida Public Service Commission, Appellees.

No. 85204.

Supreme Court of Florida.

Feb. 29, 1996.

An Appeal from the Public Service Commission.

Ross Stafford Burnaman, Tallahassee, for Appellant.

Robert D. Vandiver, General Counsel and David E. Smith, Director of Appeals, Florida Public Service Commission, Tallahassee; and Jeffrey A. Stone, Russell A. Badders and Teresa E. Liles of Beggs & Lane, on behalf of Gulf Power Company, Pensacola, for Appellees.

WELLS, Justice.

We have on appeal two orders issued by the Public Service Commission (the Commission) which set numeric demand-side management goals for Florida's four largest investor-owned electrical utilities. We have jurisdiction, article V, section 3(b)(2), Florida Constitution, and we affirm the Commission's orders.

In accordance with Florida's Energy Efficiency and Conservation Act (FEECA), in June 1993, the Commission initiated proceedings to set numeric demand-side management goals for ten years for Florida's four largest investor-owned utilities: Florida Power and Light Company, Florida Power Corporation, Tampa Electric Company, and Gulf Power Company. See §§ 366.80-366.85, 403.519, Fla.Stat. (1993); Fla.Admin.Code Ch. 25-17, Part I, "Conservation Goals and Related Matters." ¹ These goals were to be set in an effort to reduce growth rates of weather-sensitive peak demand, to reduce and control the growth rates of electric consumption, and to increase the conservation of expensive resources such as petroleum fuels. See Fla.Admin.Code R. 25-17.0021(1). Several parties were granted intervenor status in these proceedings, including appellant Legal Environmental Assistance Foundation, Inc. (LEAF).

At the outset of the proceedings, the Commission required each utility to develop a technical market potential result report. In this report, each utility was to address the applicability of numerous potential demand-side management measures ² to the utility's systems. ³ The utility was then to schedule a meeting with intervenors and the Commission's staff ⁴ to try to reach a consensus over which conservation measures were potentially applicable to the utility. Next, the Commission required each utility to compile a cost-effectiveness goals results report for every potentially applicable conservation measure. Each utility was to calculate the results of this cost-effectiveness report separately for residential and commercial/industrial classes for winter and summer demand savings, energy savings, and annual and cumulative rate impacts. These cost calculations were to be tallied by using two standards: total resource cost (TRC) and rate impact measure (RIM). Again, meetings were held to allow debate and discussion among the utilities, intervenors, and staff over the methodology used by each utility to reach these results.

Once these reports were completed, the Commission required each party to file a prehearing statement of the party's basic position on the issues in the proceeding. The Commission also required its staff to file a prehearing statement. Thereafter, the Commission issued a prehearing order and held a hearing which lasted over seventeen days. While not presenting any witnesses, the Commission's staff participated during the hearings by cross-examining witnesses and entering items into evidence.

After the hearing, parties filed briefs and posthearing statements. The Commission's staff did not file a posthearing statement but rather filed an advisory memorandum to the Commission recommending disposition of the issues. The Commission then held a special agenda conference at which the Commission's staff advised the Commission. Soon thereafter, the Commission issued an order entitled "Order Setting Conservation Goals." LEAF then filed a motion for reconsideration. While not granting oral argument on the motion, the Commission's "Order Granting in Part and Denying in Part Reconsideration" corrected several numerical errors from the order. These two orders are the subject of this appeal.

LEAF raises three issues with respect to those two orders. In its first issue, LEAF claims that its due-process rights were violated by the Commission's posthearing procedures. More specifically, LEAF claims that the same Commission staff attorney improperly participated at the hearing and advised the Commission at the agenda conferences. We disagree.

We addressed a similar due-process challenge to the Commission staff's participation in an administrative hearing in South Florida Natural Gas Co. v. Pub. Serv. Comm'n, 534 So.2d 695 (Fla.1988). In South Florida Natural Gas, the utility, a gas company, requested a permanent rate increase. After a hearing, the Commission entered an order granting the utility a permanent rate increase which was below the requested amount. On appeal to this Court, the utility challenged the order, claiming that it was deprived of due process because the Commission allowed its staff to examine witnesses and assist in evaluating the evidence. Rejecting the utility's contention, we found that since section 366.06(1), Florida Statutes (1985), compelled the Commission to investigate and determine the propriety of a rate increase, the Commission was clearly authorized to utilize its staff to test the validity, credibility, and competence of the evidence presented in a rate-increase proceeding. See id. at 697-98. We therefore found no due-process violation with the Commission's procedure.

However, we have held that the Commission's discretion in its use of staff is not absolute. See Cherry Communications, Inc. v. Deason, 652 So.2d 803 (Fla.1995). The Cherry court confronted the issue of whether, in a license revocation proceeding, it violated due process for the attorney who prosecuted the case to also meet with the Commission during its deliberations and submit advisory memoranda to the Commission, much of which was adopted by the Commission. In finding a constitutional violation, we acknowledged our decision in South Florida Natural Gas and stated that the Commission has great flexibility in using its staff in a wide range of capacities. We then distinguished the rate-making procedure in South Florida Natural Gas and found in that license-revocation proceeding, the Commission was exercising its quasi-judicial disciplinary authority. Id. at 804. Consequently, we held that it violated petitioner's due process rights to have the prosecuting attorney in a quasi-judicial proceeding invited into the deliberations where his advice was given and acted upon. Id.

We find that the case at bar is more akin to the rate-making proceeding in South Florida Natural Gas and hold that the Commission properly used its staff ⁵ in making a determination of the demand-side management goals for the next ten years. ⁶ Under section 366.81, Florida Statutes (1993), the Commission was directed to develop and adopt overall goals and was authorized to require each utility to develop plans and implement programs for increasing energy efficiency and conservation within its service area, subject to the approval of the Commission. Thus, the Commission was required to ensure that each utility's plans were appropriate. Just as we have found that the Commission may appropriately utilize its staff to test the validity, credibility, and competence of the evidence presented in a rate-increase hearing, see South Florida Natural Gas, we here find that the Commission may use its staff to evaluate the evidence presented in this goal-setting procedure.

Likewise, we find no merit to LEAF's second issue, that the Commission's order adopted a pass/fail goal policy which is inconsistent with the law and the Commission's rules. In the order setting conservation goals, the Commission stated that the goals set in this docket are not aspirational and any utility that does not achieve its goals would either be penalized or have programs prescribed to it on a case-by-case basis. LEAF claims that this policy contravenes both the statutes ⁷ and the rules, ⁸ which refer to "goals" rather than a pass/fail policy. At the outset, we must determine whether LEAF has standing to appeal the Commission's decision.

Section 120.68(1) sets forth the standard for judicial review of administrative action and states that "[a] party who is adversely affected by final agency action is entitled to judicial review." Thus, there are four requirements for standing to seek such review: (1) the action is final; (2) the agency is subject to provisions of the act; (3) the person seeking review was a party to the action; and (4) the party was adversely affected by the action. See Daniels v. Florida Parole & Probation Comm'n, 401 So.2d 1351 (Fla. 1st DCA 1981), aff'd sub nom. Roberson v. Florida Parole & Probation Comm'n, 444 So.2d 917 (Fla.1983).

Pursuant to those requirements, the question here with respect to LEAF's standing is whether, as an intervenor, it was a "party" and if so, whether LEAF will be adversely affected by the Commission's action. ⁹ Florida Administrative Code Rule 25-22.039 allows persons who have a substantial interest in the proceeding and desire to become a party to intervene. Early in these proceedings, LEAF filed a petition to intervene. The petition stated:

LEAF is a public interest advocacy organization located in Tallahassee Florida. The goals established in this docket will create regulatory incentives or disincentives for Florida Power and Light ("FPL") to increase the efficiency with which it delivers energy services. The corporate purposes of LEAF include securing the environmental and health benefits of increased efficiency in the delivery of energy services. A substantial number of LEAF's members use and enjoy the natural resources whose quality is...