New England Tel. & Tel. Co. v. Public Utilities Commission

• Decision Date: 26 July 1977
• Citation: 376 A.2d 448
• Parties: NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY v. PUBLIC UTILITIES COMMISSION.
• Court: Maine Supreme Court

Page 448

376 A.2d 448

NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY v. PUBLIC UTILITIES COMMISSION.

Supreme Judicial Court of Maine.

July 26, 1977.

Pierce, Atwood, Scribner, Allen & McKusick by Vincent L. McKusick, Everett P. Ingalls, George J. Marcus, Portland, Robert D. Bruce, Christopher M. Bennett, Boston, Mass., for plaintiff.

Thomas R. Gibbon, Horace S. Libby, Alan G. Stone, P. U. C., Augusta, for defendant.

Before DUFRESNE, C. J., and POMEROY, WERNICK, ARCHIBALD, DELAHANTY, GODFREY and NICHOLS, JJ.

WERNICK, Justice.

We have specially expedited our consideration and decision of an important, and potentially dispositive, issue raised in two complaints brought pursuant to 35 M.R.S.A. § 305 by New England Telephone and Telegraph Company (New England) against the Public Utilities Commission (Commission). The question is whether, as contended by New England, a schedule of rates "proposed" by New England (by a filing made with the Commission on September 10, 1976) became effective, by operation of law, on June 8, 1977 despite an adjudication by the Commission that said proposed rates, calculated to yield New England increased annual revenues of approximately $27 million dollars, were neither just nor reasonable.

We decide the issue against New England's contention.

1 The History and Nature of the Proceedings

On August 10, 1976 this Court had ordered the Commission to undertake an investigation pursuant to 35 M.R.S.A. §§ 296 and 306 of the justness and reasonableness of temporary rates then being collected by New England. New England Telephone and Telegraph Company v. Public Utilities Commission, Me., 362 A.2d 741, 758 (1976). The Commission commenced that investigation, which is hereinafter styled the " §§ 296-306" proceeding.

New England's aforementioned September 10, 1976 filing of a "proposed" schedule of rates, under the authority of 35 M.R.S.A. § 64, ¹ triggered an additional rate investigation when the Commission responded to the filing by exercising its powers, under 35 M.R.S.A. §§ 64 and 69, ² to inquire into the justness and reasonableness of the schedule of rates proposed by New England. In connection with this investigation the Commission also exercised its power to suspend New England's proposed schedule of rates for an initial period of 3 months, thereby to prevent the proposed schedule from becoming effective by operation of law, under § 64, upon the expiration of 30 days from the date the proposed schedule was filed. This case involving the investigation of New England's proposed schedule of rates is hereinafter styled the " § 64-69" proceeding.

Although the above-described two investigations by the Commission were legally different, ³ the Commission and New England agreed that they be consolidated for practical reasons.

Under its authority pursuant to § 69, the Commission purported to extend the initial 3 months suspension it had effectuated in the §§ 64-69 proceeding for a further period of 5 months. In consequence of this action, the Commission conceived the second suspension effective until June 10, 1977. By contesting the correctness of this conception, New England precipitates the core issue now before us for decision.

Hearings were held in the consolidated case in March and May, 1977. Final briefs were filed on May 20, 1977. On June 7, 1977 the Commission issued an order containing its ultimate findings as to the §§ 64-69 part of the consolidated case. That order found that: (1) the rates in the proposed schedule filed by New England on September 10, 1976 were unjust and unreasonable and (2) rates effecting an annual revenue decrease of no less than $1.9 million were just and reasonable. Accordingly the Commission disallowed the proposed September 10, 1976 schedule. In addition, by virtue of powers reposing in it under 35 M.R.S.A. § 69, as incorporating powers granted the Commission under § 294, ⁴ the Commission ordered the filing of substitute rates designed to effect the $1.9 million decrease found by the Commission to be just and reasonable. New England was to file schedules containing such substitute rates no later than noon on June 9, 1977. The June 7 order also stated expressly that subsidiary findings supporting its ultimate conclusions would follow in an order to be issued June 10, 1977.

The June 10 order was directed at the entire consolidated case rather than the §§ 64-69 action alone. As to the §§ 64-69 proceeding, the June 10 order fleshed out that of June 7. It set forth in detail the rationale for rejection of both the temporary rates then being charged and the rates proposed by New England on September 10, 1976. It further recited Commission findings and conclusions in regard to the rate design approved to produce the ordered $1.9 million decrease in annual revenue.

Before the Commission issued its June 10 order, New England commenced, on June 8, 1977, an action in this Court pursuant to 35 M.R.S.A. § 305, asking us to adjudicate that the schedule of rates proposed by it on September 10, 1976 had gone into effect by operation of law on June 8, 1977. New England asserted that this had occurred because the Commission's order of June 7 (though a timely order for the purpose) was insufficient in its content to prevent the effectiveness, by operation of law, of New England's proposed rate schedule. On June 9, 1977, pursuant to powers reposing in him under § 305, the Chief Justice stayed the effect of the June 7 order, his intention being to maintain the status quo ante, i. e., the continued effectiveness of the temporary rates in effect since July 21, 1975.

After the issuance of the Commission's June 10 order, New England filed a second complaint invoking § 305. This complaint consisted of two counts.

Only the first count ⁵ is presently before us. It alleges that the June 10 order was issued when the Commission no longer had power to act. Repeating its allegation that the June 7 order was insufficient in content to toll implementation of the proposed rates by operation of law, New England renewed its prayer for the relief sought in the earlier complaint. On June 14, 1977 the effect of the Commission's June 10 order, like that of the June 7 order, was stayed by the Chief Justice.

By procedural order of the same date ⁶ we accelerated our consideration of the issue raised by both the first § 305 complaint and Count 1 of the second § 305 complaint: whether either, or both, of the Commission's two orders had prevented New England's proposed schedule of rates from becoming effective by operation of law.

2 The Merits

New England contends that the Commission's erroneous interpretation of § 69 led the Commission to miscalculate the terminal point of the suspension periods. As a result, according to New England, first, the June 10 order conceded by New England to be sufficient in content to bar the effectiveness by operation of law of New England's proposed schedule of rates was too late for this purpose because issued after expiration of the period during which the Commission had suspension power to prevent such effectiveness; and, second, the June 7 order, though timely, was insufficient in its content to preclude the effectiveness by operation of law of New England's proposed schedule of rates. Hence, in New England's view, the schedule of rates proposed on September 10, 1976 went into effect by operation of law on June 8, 1977.

The Commission counters with the contentions that: (1) the June 10 order was issued in time to prevent the effectiveness by operation of law of New England's proposed schedule of rates and (2) in any event, this result was accomplished by the order of June 7 which New England acknowledges was a timely order.

We decide that the Commission is correct in its position that the order of June 10 was forthcoming in time to prevent the effectiveness by operation of law of New England's proposed schedule of rates. We therefore need not reach, and intimate no opinion on, the alternative question of whether the June 7 order, unquestionably timely, had sufficient content to achieve the same result.

Since New England's attack on the timeliness of the June 10 order focuses on the meaning of § 69, a preliminary survey of the statutory framework is in order.

Under § 64, schedules of rates proposed by a utility cannot become effective until 30 days after they are filed unless the Commission accelerates their effectiveness. As here pertinent, § 69 provides:

"Whenever the commission receives notice of any change or changes proposed to be made in any schedule of rates filed with said commission . . ., it shall have power at any time before the effective date of such change or changes . . . to hold a public hearing and make investigation as to the propriety of such proposed change or changes. . . . After such hearing and investigation, the commission may make such order with reference to any new rate, . . . proposed as would be proper in a proceeding initiated upon complaint or upon motion of the commission in any rate investigation.

"Pending such investigation and order, the commission may at any time within said period preceding the effective date of any such schedule, by filing with such schedule and delivering to the public utility affected thereby a statement of its reasons for said suspension, suspend the operation of such schedule or any part thereof, but not for a longer period than 3 months from the date of said order of suspension. If said investigation cannot be concluded within said period of 3 months, said commission may in its discretion extend the time of suspension for a further period of 5 months."

Under §§ 64 and 69, then, the Commission may either (1) step in to investigate rates filed under § 64 and order their implementation in fewer than 30 days, or (2) enlarge the period of investigation by delaying the effective date beyond the expiration of that initial 30-day period for additional 3- and 5-month periods. The total maximum...