Narragansett Elec. Co. v. Harsch

• Decision Date: 13 January 1977
• Docket Number: No. 75-218-M,75-218-M
• Citation: 368 A.2d 1194,117 R.I. 395
• Parties: , 20 P.U.R.4th 112 NARRAGANSETT ELECTRIC CO. v. William W. HARSCH et al. P.
• Court: Rhode Island Supreme Court

Page 1194

368 A.2d 1194

117 R.I. 395, 20 P.U.R.4th 112

NARRAGANSETT ELECTRIC CO. v. William W. HARSCH et al.

No. 75-218-M.P.

Supreme Court of Rhode Island.

Jan. 13, 1977.

[117 R.I. 431] Edwards & Angell, Edward F. Hindle, Knight Edwards, Deming E. Sherman, Providence, for petitioner.

Julius C. Michaelson, Atty. Gen., R. Daniel Prentiss, Special Asst. Atty. Gen., for Public Utilities Commission.

Roberts & Willey Inc., Dennis J. Roberts, II, Providence, for Rhode Island Consumers' Council.

OPINION

PAOLINO, Justice.

This is a statutory petition for certiorari brought by the Narrangansett Electric Company (the company) pursuant to G.L.1956 (1969 Reenactment) § 39-5-1, seeking a review of the Public Utilities Commission's (the commission) report and order in a rate proceeding instituted by the company. Briefs have been submitted by the company, the Attorney General (on behalf of the commission) and the Rhode Island Consumers' Council (the council).

According to the record before us, the company is engaged in the generation, purchase, transmission, distribution and sale of electricity. All of the company's common stock is owned by the New England Electric System (NEES), a holding company chartered under the terms of the Public Utility Holding Company Act of 1935. The company is also affiliated with the New England Power Company (NEPCO) which is a Massachusetts corporation engaged in wholesale electric generation and transmission. NEPCO has approximately 30 customers which purchase all or a major portion of their requirements from NEPCO and which, in turn, sell and distribute electricity at retail to ultimate consumers. NEPCO is engaged in interstate business and is thus regulated by the FPC. Since 1967, with the approval of the FPC, the company and NEPCO have operated together under a so-called 'integrated facilities contract' by which the company purcahses virtually all of its energy requirements from NEPCO. Under the 1967 contract, the company's and NEPCO's generating and transmission facilities are integrated in order to maximize efficiency. Costs incurred by the company in connection with its integrated facilities are offset as credits against its power bills from NEPCO.

On September 27, 1974, the company filed with the commission a proposed upward revision of its rates, tolls and charges so as to realize an additional $10.2 million annually. The company proposed to collect said additional sums commencing on November 1, 1974, with the exception of $5.4 million which the company sought to start collecting as of October 15, 1974, on an emergency basis subject to possible refund. General Laws 1956 (1969 Reenactment) § 39-3-13.

The commission docketed the company's application and on October 11 and 17, 1974, conducted hearings regarding the requested emergency relief. On October 15, 1974, the commission entered an order suspending implementation of the entire application for 6 months, § 39-3-11, and on November 1, 1974, the request for emergency rate relief was denied.

Thereupon the company submitted prepared testimony and exhibits purporting to support the propriety of the $10.2 million increase in revenues. Public hearings on the proposed increases spanned the period between June 10, 1975 and July 14, 1975. At those hearings, the proposal was evaluated on the basis of data complied during a test year composed of the 12 months ending March 31, 1975.

Shortly after the conclusion of the hearing, by an order dated July 31, 1975, the commission rejected the company's proposed rate increase and found instead that the company was only entitled to additional annual revenues of $909,000. The company was directed to revise its proposal to reflect this finding and to resubmit it for implementation.

On August 6, 1975, the company filed its statutory petition for certiorari seeking review of the commission's decision. We thereupon ordered the writ to issue. Narragansett Elec. Co. v. Harsch, No. 75-218 M.P. (R.I., Order Filed August 8, 1975).

I. The Roles of the Attorney General and the Commission

At the outset we are confronted with two interrelated issues raised in our order of February 26, 1976, Narragansett Elec. Co. v. Harsch, R.I., 352 A.2d 400 (1976), wherein we denied without prejudice the company's motion that the Attorney General be barred from filing a brief in the present case. In that order, we directed the parties to brief and argue the questions whether the Attorney General represented the public or the Public Utilities Commission and whether or not the commission is a proper party to this petition.

Inasmuch as the entire field of utilities regulation is governed by statute, the resolution of these questions lies in our reading of the pertinent provisions of the general laws. See generally G.L.1956 (1969 Reenactment) title 39, as amended by P.L.1969, ch. 240, § 1. Prior to 1969, all authority to regulate utilities and to set and approve rates was vested in the Division of Public Utilities within the Department of Business Regulation. All matters involving proposed changes in rates were submitted to the administrator of said division for hearing, investigation and the issuance of appropriate orders. Persons aggrieved by such orders were entitled to judicial review thereof in the Superior Court within the strictures of the Administrative Procedures Act. ¹ In essence, therefore, the administrator and the Division of Public Utilities exercised a board range of administrative powers and whatever judicial powers were incidental to the general duties to conduct hearings and to make investigations as to the propriety of proposed changes in utility rates. ²

With the enactment of P.L.1969, ch. 240, § 1, the General Assembly effected a major revision of the processes by which proposed rate changes were to be scrutinized and by which utilities were generally to be regulated. Most significantly, the newly enacted § 39-1-3 created within the Department of Business Regulation a Public Utilities Commission (the commission) and a Division of Public Utilities and Carriers (the division) which were both ordained as independent bodies free from the jurisdiction of the department director. In the following language, the jurisdictions and powers of the two new units were set forth by the Legislature:

'* * * The (Public Utilities) commission shall serve as a quasi-judicial tribunal with jurisdiction, powers, and duties to hold investigations and hearings involving the reates, tariffs, tolls and charges and the sufficiency and reasonableness of facilities and accommodations of (various) public utilities * * *. The administrator (of the Division of Public Utilities and Carriers) shall exercise the jurisdiction, supervision, powers and duties not specifically assigned to the commission. By virtue of his office, the chairman of the public utilities commission shall be the public utilities administrator who shall supervise and direct the execution of all laws relating to public utilities and carriers and all regulations and orders of the commission governing the conduct and charges of public utilities, and who shall perform such other duties and have such powers as are hereinafter set forth.' General Laws 1956 (1969 Reenactment) § 39-1-3.

Inasmuch as the statute is not entirely clear in its delineation of the powers of the commission and division respectively, we must attempt herein to ascertain the legislative intention from a consideration of the legislation in its entirety, viewing the language used therein in the light, nature, and purpose of the enactment thereof. Mason v. Bowerman Bros., 95 R.I. 425, 431, 187 A.2d 772, 776 (1963). In so doing, it is our belief that the only meaningful way in which to read the present statute and specifically, the above-quoted provision, is that the General Assembly intended by its enactment to segregate the judicial and administrative attributes of ratemaking and utilities regulation and to vest them separately and respectively in the commission and the administrator (or division). ³ Other provisions in title 39 support this interpretation. For instance, the commission is clothed with the 'powers of a court of record' in determining and adjudicating matters within its jurisdiction ( § 39-1-7). It is further empowered to make orders and render judgments and to enforce the same by suitable process (§ 39-1-7). The commission is defined at one point in the statute as an 'impartial, independent body' which renders decisions affecting both the public interest and private rights ⁴ based upon the law and the evidence (§ 39-1-11). The commission is permitted, in much the same manner as a trial justice in the courts, to conduct prehearing conferences and issue prehearing orders which control the conduct of the rate case (§ 39-1-12). Cf. Super.R.Civ.P. 16. The several commissioners are empowered to administer oaths, to summon and examine witnesses, to compel production and examination of papers, books and other evidence, and to apply to a Superior Court justice to have persons held in contempt of the commission's process (§ 39-1-13). Furthermore, the commission has been granted broad powers to issue appropriate orders preventing irreparable injury to the public interest ( § 39-1-32), and to order additions, alterations or extensions to a utility's plant or equipment when such are deemed necessary (§ 39-4-2).

In contrast to the aforementioned judicial powers enjoyed by the commission are the general and administrative powers conveyed to the administrator and the division as set forth in ch. 3 of title 39. Of particular relevance to this case, though, is the interrelationship which the statute has established between the commission and the administrator (or division) in matters dealing with rates, tariffs, tolls and charges. Section 39-1-11 requires that the commission's adjudications be based upon the law and upon the evidence as 'presented before it by the division and by the...