Northern States Power Co., Application of

• Decision Date: 05 January 1983
• Docket Number: No. 13703,13703
• Citation: 328 N.W.2d 852
• Parties: In the Matter of the Application of NORTHERN STATES POWER COMPANY for a Proposed Increase in Rates for Electric Service.
• Court: South Dakota Supreme Court

Page 852

328 N.W.2d 852

In the Matter of the Application of NORTHERN STATES POWER COMPANY for a Proposed Increase in Rates for Electric Service.

No. 13703.

Supreme Court of South Dakota.

Argued Sept. 7, 1982.

Decided Jan. 5, 1983.

Walter Washington, Asst. Atty. Gen., Pierre, for appellant South Dakota Public Utilities Com'n; Mark V. Meierhenry, Atty. Gen., Pierre, on brief.

Lawrence L. Piersol of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for appellee Northern States Power Co.; Charles D. Gullickson of Davenport, Evans, Hurwitz & Smith, Sioux Falls, on brief.

HENDERSON, Justice.

ACTION

Northern States Power Company (NSP) applied to the South Dakota Public Utilities Commission (PUC) for an increase in electric rates to cover NSP's projected losses related to the Tyrone nuclear power project. The PUC decided to defer ruling on NSP's application until the Federal Energy Regulatory Commission (FERC) decided what NSP's losses were.

NSP appealed to the circuit court, wherein the PUC's decision was reversed as being beyond the PUC's statutory authority. This appeal ensued.

On the federal level, FERC has approved the losses claimed by NSP; however, the PUC has appealed FERC's order to the Eighth Circuit Court of Appeals. We reverse and remand.

FACTS

NSP provides electric power in the states of Minnesota, Wisconsin, North Dakota and South Dakota. During the mid-1970s, NSP of Wisconsin, a subsidiary of NSP, undertook the Tyrone nuclear power plant project in Wisconsin. The Wisconsin Public Service Commission (WPSC) originally approved the project. However, in 1979 WPSC asserted that Wisconsin rate payers would not benefit from the Tyrone project. Subsequently, WPSC withdrew its approval of the project which resulted in estimated losses for NSP of Wisconsin of 71.8 million dollars.

NSP and NSP of Wisconsin filed an amendment to their coordinating agreement with FERC whereby NSP assumed 87% of the Tyrone losses from NSP of Wisconsin. For NSP's South Dakota customers, this agreement translated into proposed increased wholesale electric rates amortized over five years beginning at $512,000.00 per year. The PUC intervened in the FERC action opposing the proffered amendment. However, the amendment was ultimately approved by a FERC administrative court on December 4, 1980.

On June 23, 1980, NSP filed with the PUC an application seeking an increase in retail electric rates to include the Tyrone costs. Hearings were had before the PUC and on November 19, 1980, the PUC and NSP reached a settlement agreement which provided in part that if the Tyrone costs were deferred by the PUC and later determined allowable by a final order no longer subject to judicial review, that NSP would be provided a reasonable carrying charge to compensate it for the deferral.

On January 5, 1981, the PUC ruled to defer NSP's proposed South Dakota retail share of the Tyrone costs until the FERC wholesale rate issues could be determined by a final order no longer subject to judicial review. NSP appealed the PUC ruling to the circuit court wherein the decision of the PUC was reversed and remanded. The lower court ruled that the PUC exceeded its statutory authority because the deferral removed NSP's statutory right of receiving its current costs of providing electrical services. Therefore, the lower court concluded that the PUC failed to establish just and reasonable rates. The PUC has now appealed that decision to this Court.

As to the federal actions, FERC issued an order on December 3, 1981, substantially approving the decision of the FERC administrative court. However, the total Tyrone loss figure was revised downward to 67 million dollars. On February 3, 1982, the PUC appealed FERC's order to the Eighth Circuit Court of Appeals.

ISSUES

I.

IS NORTHERN STATES POWER COMPANY A PARTY AGGRIEVED BY THE PUBLIC UTILITIES COMMISSION DECISION AND ORDER? WE HOLD THAT IT IS.

II.

DID THE PUBLIC UTILITIES COMMISSION EXCEED ITS STATUTORY AUTHORITY IN DEFERRING A DECISION ON THE RECOVERY OF THE TYRONE CANCELLATION COSTS BASED UPON THE PARTIES' SETTLEMENT AGREEMENT? WE HOLD THAT UNDER THE FACTS OF THIS CASE IT DID NOT.

DECISION

I.

Appellant PUC contends that NSP is not an "aggrieved party" within SDCL 1-26-30, and thus lacks standing in this Court. In relevant part, SDCL 1-26-30 provides: "A person who has exhausted all administrative remedies available within any agency or a party who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter."

Appellant PUC would have us add to SDCL 1-26-30 the gloss of federal cases on standing. We have reviewed appellant's numerous federal citations and authority and we are unwilling to apply federal standing law to our analysis. Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663, 678 (1962), provides the gist of the holding as pertains to federal standing and contains the following illuminating passage:

Have the appellants alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions? This is the gist of the question of standing. It is, of course, a question of federal law. (Emphasis supplied.)

See also, Nowak, Rotunda, Young, Hornbook on Constitutional Law at 73 (1978).

The concept of an "aggrieved party" is not new to this Court; indeed, as a basis for appeal it has been traced back to South Dakota's early territorial days when the first boards of county commissioners were established. Laws of Dakota Sec. 30-27 (1874-75). Many years later, the first in-depth analysis of "aggrieved party" regarding a test for standing was made by this Court in an appeal from a board of county commissioners' decision. Barnum v. Ewing, 53 S.D. 47, 220 N.W. 135 (1928). In Barnum we set forth the following test: "[W]e think ['any person aggrieved'] can only include such persons when they are able affirmatively to show that they are 'aggrieved' in the sense that by the decision of the board they suffer the denial of some claim of right either of person or property ...." Id. at 53, 220 N.W. at 138.

We have adhered to the Barnum test for an "aggrieved party" in several school board review cases. Cuka v. School Bd. of Bon Homme Sch. Dist., 264 N.W.2d 924, 926 (S.D.1978); Blumer v. Sch. Bd. of Beresford Ind. S.D., 250 N.W.2d 282, 284 (S.D.1977); Camp Crook Independent School Dist. No. 1 v. Shevling, 65 S.D. 14, 26, 270 N.W. 518, 524 (1936); but cf. Valley State Bank of Canton v. Farmers State Bank, 87 S.D. 614, 213 N.W.2d 459 (1973) (which was decided on South Dakota banking statutes, rather than an explicit test).

NSP claims that it does have standing in this Court because the PUC's deferral deprives NSP of the money it requested during the time taken to resolve the Tyrone issue. Based upon Barnum and its progeny, we agree.

II.

We review the PUC's actions pursuant to SDCL 1-26-36. As we have recently held:

Succinctly stated, we (1) determine whether the PUC's order viewed in light of the relevant facts and of the PUC's broad regulatory duties abused or exceeded its authority; (2) examine the manner in which the PUC has employed the methods of regulation which it has itself selected and determine whether each of the order's essential elements are supported by substantial evidence; and (3) determine whether the order may reasonably be expected to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed, by providing appropriate protection to the relevant public interest both existing and foreseeable. Permian Basin Area Rate Cases, 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968).

Application of Northwestern Public Service Co., 297 N.W.2d 462, 464 (S.D.1980).

We take cognizance of our recent expression in South Dakota Public Utilities v. Otter Tail, 291 N.W.2d 291, 293 (S.D.1980):

[R]ate making is a legislative process, whether performed directly by the legislature, or by an agency of its creation. Northwestern Public Service v. Cities of Chamberlain, etc., 265 N.W.2d 867 (S.D.1978) (NPS v. Chamberlain). This extends to the procedure by which a legislative determination is made and, within the broad field where that discretion is operative, legislative determinations are conclusive. NPS v....