Mid-Plains Tel., Inc. v. Public Service Commission, MID-PLAINS

• Decision Date: 03 January 1973
• Docket Number: MID-PLAINS,No. 263,263
• Citation: 56 Wis.2d 780,202 N.W.2d 907
• Parties: TELEPHONE, INC., a Wisconsin corp., Appellant, v. PUBLIC SERVICE COMMISSION of Wisconsin, Respondent.
• Court: Wisconsin Supreme Court

Page 907

202 N.W.2d 907

56 Wis.2d 780

MID-PLAINS TELEPHONE, INC., a Wisconsin corp., Appellant, v. PUBLIC SERVICE COMMISSION of Wisconsin, Respondent.

No. 263.

Supreme Court of Wisconsin.

Jan. 3, 1973.

Axley, Brynelson, Herrick & Gehl, Madison, for appellant.

Robert W. Warren, Atty. Gen., William E. Torkelson, Chief Counsel, Public Service Comm. of Wis., Madison, for respondent.

CONNOR T. HANSEN, Justice.

This action emanates from a petition for substitution of service filed with the Public Service Commission (hereinafter Commission) by a number of residents of Parkwood Hills, now a subdivision of the city of Madison, located on the city's far west side. Prior to its annexation to the city of Madison, Parkwood Hills was, and it still is, serviced by the Middleton exchange of Mid-Plains. The petition sought a substitution of the Madison exchange of the Wisconsin Telephone Company for that of Mid-Plains' Middleton exchange.

The Commission denied the petition for substitution of service, and that issue is not before us on this appeal. However, in addition to the issue of substitution of service, the Commission also noticed for hearing, at the same time, the issue of rates.

At the hearing, it developed that Mid-Plains was requiring the residents of Parkwood Hills to pay an additional charge of $20 a month above the standard foreign exchange service charge for Madison foreign exchange service. This charge was being made pursuant to the then filed foreign exchange tariff of Mid-Plains, designated as Section No. I, Sheet No. 17, Amendment No. 37, paragraph D.

When the Commission entered its order of July 16, 1969, denying the substitution of service, it also ordered that paragraph D of the filed foreign exchange service tariff of Mid-Palins be canceled because the Commission found it to be unreasonable and unjust. The Commission denied the motion of Mid-Plains for a rehearing of that portion of its July 16th order canceling paragraph D, and Mid-Plains took no further action.

At this stage of the proceedings, no problems had developed, but subsequent action of Mid-Plains and the Commission precipitated this litigation. Sometime after the entry of the July 16th order of the Commission, and after the time for appeal had expired, Mid-Plains was requested to quote the rates for foreign exchange service to the Madison exchange of the Wisconsin Telephone Company for the Parkwood Hills customers of Mid-Plains.

Mid-Plains responded by letter dated December 1, 1969, directed to the Commission. In its rate quotaion, Mid-Plains determined that paragraph B--2--b, and not B--2--a, of its filed tariff was applicable to the Parkwood Hills residents. Such an application of the filed tariff of Mid-Plains produced substantially the same rate as that in existence prior to the cancellation of paragraph D of the filed tariff by the July 16, 1969, order of the Commission. The Commission responded by sua sponte issuing an ex parte order dated December 4, 1969, deleting some language in B--2--a of the filed tariff in order to effect a lower rate for the Parkwood Hills residents. The Commission denominated this a 'Supplemental Order.' As previously stated, it is this December 4, 1969, order of the Commission that produced this appeal.

As it concerns this appeal, the pertinent provisions of the filed tariff for foreign exchange service are:

'B. RATES

'1. . . .

'2. Mileage Charges 'a. For customers located within 2 miles of a common exchange boundary and outside the Base Rate Area, the monthly rate for each main telephone and P.B.X. trunk is the sum of the following: . . ..' (Emphasis added.)

B--2--b of the filed tariff establishes rates '. . . For all other customers. . . .'

Mid-Plains, in submitting its rate quotation of December 1, 1969, determined that the Parkwood Hills residents were not 'outside the Base Rate Area,' and, therefore, subject to the rates provided in B--2--b.

The December 4, 1969, order of the Commission struck the words 'outside the Base Rate Area' from paragraph B--2--a, in order to provide a lower tariff for Parkwood Hills residents.

Prior to 1968, the base rate area of the Middleton exchange of Mid-Plains was composed of what can be described as the general metropolitan area of Middleton. The remainder of the area served by the Middleton exchange had an established rural area rate. After due notice, a hearing was held in 1967, and as a result, a subsequent order of the Commission and filings by Mid-Plains in 1968, the rural rate area was eliminated and the entire area served by the Middleton exchange of Mid-Plains was designated as the 'Base Rate Area.' It follows that this modification would place Parkwood Hills within the base rate area.

ISSUE.

The issue presented is whether the Commission acted in excess of its authority and in violation of due process when it issued the December 4, 1969, order without affording Mid-Plains any notice or an adequate opportunity to be heard.

Mid-Plains contends that the Commission's order of December 4, 1969, is void, in that it was issued in excess of the Commission's power and authority. Mid-Plains argues that the Commission failed to afford it adequate notice and opportunity to be heard prior to the issuance of the December 4, 1969, order modifying its filed tariffs. It further maintains that when it sent its December 1, 1969, quotation to the Commission, the only applicable rates in its filed tariff for foreign exchange service were those contained in B--2--b. Our attention has not been directed to any other applicable filed tariffs.

It is the Commission's position, and the trial court held, that Mid-Plains had made an erroneous interpretation of the meaning and application of the July 16, 1969, order; that the Commission merely took steps to clarify and carry out the intention of its July 16, 1969, order by the issuance of the December 4, 1969, order; and that Mid-Plains failed to seek judicial review of the July 16, 1969, order, and is precluded from doing so now. The Commission argues that as an administrative agency it can take appropriate action, without notice or hearing, ot clarify or enforce its original order, and that the December 4, 1969, order was a mere conformation to the actual intent of the Commission in the issuance of the July 16, 1969, order.

As we view this case, it is not a question of what the Commission intended to do when it issued its July 16, 1969, order. The fact is that the order canceled paragraph D and nothing more, and Mid-Plains did not appeal from this order. There was no need for it to appeal as long as paragraph B--2--a remained in effect. Furthermore, from the record before us, it cannot be ascertained whether the words 'outside the Base Rate Area' would relate to only those residents of Parkwood Hills. In addition to the Middleton exchange, Mid-Plains operates the Cross Plains exchange.

Generally, the fundamental or essential requirement of procedural due process of law is notice and hearing, that is opportunity to be heard either before a court or the administrative agencies. ¹

The Commission is an administrative body created by the legislature. Its powers are limited by the statutes conferring such power expressly or by fair implication. Every administrative agency must conform precisely to the statutes from which it derives power. Schmidt v. Local Affairs & Development Dept. (1968), 39 Wis.2d 46, 56, 57, 158 N.W.2d 306.

The legislature has specifically delineated the procedure to be used to determine the reasonableness of public utility rates prior to the issuance of a...