Office of the People's Counsel v. Pub. Serv. Comm'n of D.C., s. 16–AA–815

• Court: D.C. Court of Appeals
• Writing for the Court: McLeese, Associate Judge
• Citation: Office of the People's Counsel v. Pub. Serv. Comm'n of D.C., 163 A.3d 735 (D.C. 2017)
• Decision Date: 20 July 2017
• Docket Number: 16–AA–817,16–AA–825,Nos. 16–AA–815,s. 16–AA–815
• Parties: OFFICE OF THE PEOPLE'S COUNSEL, District of Columbia, DC Solar United Neighborhoods, and Public Citizen, Inc., Petitioners, v. PUBLIC SERVICE COMMISSION of the District of Columbia, Respondent, and Exelon Corporation, et al., Intervenors.

163 A.3d 735

OFFICE OF THE PEOPLE'S COUNSEL, District of Columbia, DC Solar United Neighborhoods, and Public Citizen, Inc., Petitioners,

v. PUBLIC SERVICE COMMISSION of the District of Columbia, Respondent,andExelon Corporation, et al., Intervenors.

Nos. 16–AA–815

16–AA–817

16–AA–825

District of Columbia Court of Appeals.

Argued May 2, 2017

Decided July 20, 2017

Scott H. Strauss, with whom Sandra Mattavous–Frye, Karen R. Sistrunk, Laurence C. Daniels, Peter J. Hopkins, Anjali G. Patel, Jason T. Gray, and Eli D. Eilbott were on the brief, for petitioner Office of the People's Counsel.

James C. McKay, Jr., Senior Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General, were on the brief, for petitioner District of Columbia.

David J. Arkush, with whom Scott L. Nelson was on the brief, for petitioners DC Solar United Neighborhoods and Public Citizen, Inc.

Richard S. Herskovitz, with whom Christopher G. Lipscombe, Craig W. Berry, and Naza N. Shelley were on the brief, for respondent Public Service Commission of the District of Columbia.

David W. DeBruin, with whom Peter E. Meier, Matthew E. Price, and Zachary C. Schauf were on the brief, for intervenors Exelon Corporation, et al.

Before Fisher and McLeese, Associate Judges, and Farrell, Senior Judge.

Concurring opinion by Senior Judge Farrell at page 746.

McLeese, Associate Judge:

The Public Service Commission of the District of Columbia approved a merger application involving intervenor Exelon Corporation's purchase of Pepco Holdings, Inc. and its subsidiary, the Potomac Electric Power Company (Pepco). Petitioners, the Office of the People's Counsel (OPC), the District of Columbia Government, and DC Solar United Neighborhoods jointly with Public Citizen, Inc. (collectively DC SUN), seek review of the Commission's decision. Petitioners argue that the Commission made procedural errors, exceeded its statutory authority, approved merger terms that are contrary to law or unreasonable, did not clearly explain its reasoning, and failed to make an independent finding that the merger was in the public interest. We affirm.

I.

In June 2014, Exelon, Pepco, and various related entities asked the Commission to approve a merger involving Exelon's purchase of Pepco Holdings, Inc. pursuant to D.C. Code §§ 34–504 (2012 Repl.) (prohibiting consolidation of public utilities unless Commission finds consolidation to be in public interest) and 34–1001 (2012 Repl.) (prohibiting purchase of stock of one public utility corporation by another public utility corporation absent approval by Commission). The Commission held four community hearings and eleven days of evidentiary hearings, and received extensive written testimony and comments regarding the application. In August 2015, the Commission concluded that the merger as proposed was not in the public interest.

In October 2015, applicants moved to reopen the record for the Commission to consider a Nonunanimous Settlement Agreement (NSA) executed by applicants, OPC, the District, and several other parties (together, the settling parties). The Commission agreed to consider the NSA and reopened the record for the limited purpose of determining whether the NSA was in the public interest. The Commission held five days of hearings and received written statements regarding the NSA. In February 2016, the Commission concluded that the NSA was not in the public interest. Commissioner Fort concurred, but proposed a revised NSA (RNSA) that she believed would be in the public interest. Although Commissioner Phillips would have approved the NSA as in the public interest, he indicated that he would also approve the RNSA if the parties found it acceptable. The settling parties were instructed to file a notice with the Commission indicating whether they wished to accept the RNSA or instead to request further relief.

Applicants filed a request for other relief, asking that the Commission approve the merger in accordance with: (1) the terms outlined in the NSA; (2) the terms of the RNSA; or (3) the terms of a third "middle ground" proposal. Petitioners opposed applicants' request. In March 2016, the Commission approved the merger under the terms of the RNSA with one additional revision. The Commission denied petitioners' applications for reconsideration.

II.

Our review of the Commission's orders is limited. D.C. Code § 34–606 (2012 Repl.). We will sustain the Commission's legal conclusions if they are "reasonable and based upon factors within the Commission's expertise." District of Columbia v. District of Columbia Pub. Serv. Comm'n , 905 A.2d 249, 256 n.22 (D.C. 2006) (internal quotation marks omitted). We accord great deference to the Commission's interpretation of the Public Utilities Act, Office of People's Counsel v. Pub. Serv. Comm'n , 477 A.2d 1079, 1098 (D.C. 1984), and we defer to the Commission's interpretation of its own regulations unless that interpretation is plainly erroneous, Office of People's Counsel v. Pub. Serv. Comm'n , 955 A.2d 169, 173 (D.C. 2008). The Commission's findings of fact are conclusive "unless it shall appear that such findings ... are unreasonable, arbitrary, or capricious." D.C. Code § 34–606. "To permit meaningful judicial review, we require the [Commission] to explain its actions fully and clearly. If the [Commission] has done so, a petitioner challenging its decision ... then must carry the heavy burden of demonstrating clearly and convincingly a fatal flaw in the action taken." District of Columbia v. District of Columbia Pub. Serv. Comm'n , 905 A.2d at 256 n.22 (citation and internal quotation marks omitted). In sum, our review of the substance of the Commission's decisions is "the narrowest judicial review in the field of administrative law." Wash. Gas Energy Servs. v. District of Columbia Pub. Serv. Comm'n , 924 A.2d 296, 303 (D.C. 2007) (internal quotation marks omitted).

III.

A. Notice of NSA Hearings

On October 28, 2015, the Commission gave notice that it would hold a public-interest hearing on the merits of the NSA beginning on December 2, which was thirty-five days after issuance of that notice. The Commission further advised that it would hold a community hearing at a date and time to be announced. On November 5, the Commission issued an order giving twelve days' notice of the community hearing.

DC SUN argues that the Commission's notice of these hearings was inadequate. The parties dispute whether that objection, and several of petitioners' other objections, were properly raised before the Commission. Whether issues are properly raised before the Commission is generally not a jurisdictional issue. Wash. Gas Light Co. v. Pub. Serv. Comm'n , 982 A.2d 691, 699–708 (D.C. 2009). Because the Commission addressed the notice issue on the merits, and because we uphold the Commission's decision, we see no need to address the question whether the notice issue was properly raised before the Commission. For similar reasons, we also decline to address whether a number of petitioners' other objections were adequately preserved.

In challenging the adequacy of the public notice of the hearings on the NSA, DC SUN first relies on D.C. Code § 34–909 (a) (2012 Repl.), which provides that:

Notice of every rate application or change in condition of service proposed and filed with the Public Service Commission shall be given by the utility to each residential or commercial rate payer affected by the proposed rate application or change.... For every proceeding in which the Commission has a public hearing, the public shall be given a timely opportunity to present its views, as evidence of record, with at least 45 days['] notice, with notice widely and publicly distributed in a form sufficiently detailed and complete to permit the public to realize its specific and affected interest.

The Commission concluded that (1) this provision requires forty-five-day notice only in rate cases and cases involving changes in conditions of service, and (2) the present case is neither a rate case nor a case involving changes in conditions of service. DC SUN does not dispute the latter point, and we therefore have no occasion to address the point. Instead, DC SUN argues that § 34–909 (a) requires forty-five-day notice of all public hearings held by the Commission.

Considered in isolation, the last sentence of § 34–909 (a) supports DC SUN's position, because that sentence refers broadly to "every proceeding in which the Commission has a public hearing." It is well settled, however, that

a word in a statute may or may not extend to the outer limits of its definitional possibilities. The meaning—or ambiguity—of certain words or phrases may only become evident when placed in context. Therefore, we do not read statutory words in isolation; the language of surrounding and related paragraphs may be instrumental to understanding them. We consider not only the bare meaning of the word but also its placement and purpose in the statutory scheme. Statutory interpretation is a holistic endeavor.

Tippett v. Daly , 10 A.3d 1123, 1127 (D.C. 2010) (en banc) (brackets, citations, ellipsis, and internal quotation marks omitted).

In concluding that the forty-five-day notice requirement is applicable only to rate cases and cases involving changes in conditions of service, the Commission pointed out that the rest of § 34–909 (a) addresses rate cases and cases in which there is a change in conditions of service. The Commission also noted that it had never before applied the notice requirement in a non-rate case. Finally, the Commission explained that this court held in Office of People's Counsel v. Pub. Serv. Comm'n , 889 A.2d 1003, 1008 (D.C. 2006), that the notice-and-comment requirements of § 34–909 (a) did not apply to a non-rate case.¹

We hold that the Commission reasonably interpreted the seemingly broad language in the last sentence of § 34–909 (a) as limited to rate...