People's Counsel v. Public Service Com'n

• Decision Date: 16 April 1984
• Docket Number: No. 83-710.,83-710.
• Citation: 474 A.2d 835
• Parties: PEOPLE'S COUNSEL OF the DISTRICT OF COLUMBIA, Petitioner, v. PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Respondent, Potomac Electric Power Company, Washington Metropolitan Area Transit Authority, Intervenors.
• Court: D.C. Court of Appeals

Page 835

474 A.2d 835

PEOPLE'S COUNSEL OF the DISTRICT OF COLUMBIA, Petitioner, v. PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Respondent, Potomac Electric Power Company, Washington Metropolitan Area Transit Authority, Intervenors.

No. 83-710.

District of Columbia Court of Appeals.

Argued February 8, 1984.

Decided April 16, 1984.

John T. Schell, Washington, D.C., with whom Jay D. Pedelty, Brian Lederer, and Elizabeth A. Noel, Washington, D.C., were on briefs, for petitioner.

Lloyd N. Moore, Jr., Washington, D.C., with whom, Roberta Willis Sims, Washington, D.C., was on brief, for respondent.

William Dana Shapiro, Washington, D.C., with whom Edward A. Caine, Washington, D.C., was on brief, for intervenor Potomac Electric Power Co.

Onkar N. Sharma, Washington, D.C., for intervenor Washington Metropolitan Area Transit Authority.

Before MACK, BELSON and TERRY, Associate Judges.

BELSON, Associate Judge:

This appeal poses the question whether this court should uphold the Public Service Commission's decision not to require Potomac Electric Power Company to convert its recently-completed power-generating plant, Chalk Point Unit 4, from an oil-burning to a coal-burning facility. While the record is long and complex, the controlling issues are simple and can be disposed of summarily.¹

Petitioner, Office of People's Counsel, and intervenor, Washington Metropolitan Area Transit Authority, unsuccessfully urged the Commission to require conversion. Their first challenge here is to PSC's position that throughout the administrative proceedings OPC had the burden of persuading PSC to order conversion.² It is true that the Commission never explicitly allocated the burden of persuasion until it ruled on OPC's application for reconsideration of the final order on appeal here.³ OPC asserts that it was prejudiced by this after-the-fact allocation.

As PSC points out, however, OPC advocated conversion throughout the proceedings on Chalk Point Unit 4's fuel mode.⁴ OPC was thus the proponent of an order mandating conversion to coal. It was chargeable with the knowledge that the proponent of an order bears the burden of persuasion in a contested administrative case.⁵ It is true that PEPCO bore the burden of producing relevant data, for it possessed such data; the fact that PEPCO had the burden of production explains why the company presented its evidence first at the hearings. We agree with the Commission that the burden of persuasion, however, resided with OPC.

OPC's second main argument is that PSC did not explain adequately its decision not to require conversion to coal. In Final Order No. 7425, the major order preceding the order now on appeal, the Commission majority agreed with its hearing agent that the evidence was extremely strong that the public interest favored conversion.⁶ The Commission stated at page 8 of Final Order No. 7425:

[W]e are convinced that were we predisposed to order the conversion of the Chalk Point Unit 4 at this time, the record would fully support our position. . . . It is our opinion that the findings of fact . . . support, and we so rule, a determination that conversion will reasonably promote the public interest.

. . . The record clearly establishes the economic desirability of conversion, and we agree that PEPCO should have begun its evaluation far sooner. We cannot understand why PEPCO did not and we question the wisdom or prudence of PEPCO's management in this regard.

OPC and WMATA assert that this amounted to a decision that conversion to coal should go forward, with the specific details to be worked out in the next stage of the proceedings. At that next stage, however, the stage that terminated in the order on appeal here, PSC declined to order conversion.

In arguing that PSC irrationally ignored its earlier conclusions, OPC and WMATA overlook the fact that in Final Order No. 7425 PSC never actually ordered conversion. Although PSC reached a general conclusion that conversion to coal was in the public interest, it demanded further evidence of the costs and benefits of particular conversion plans rather than ordering conversion.

When the evidence was in, PSC determined that unprecedented political and economic factors made the future differential between oil prices and coal prices so extraordinarily unpredictable that PSC could not conclude with a reasonable degree of certainty that conversion to coal was in the public interest. The stakes were high. If the Commission misjudged in ordering conversion, the huge cost of conversion, estimated at $420,000,000 even without consideration of the cost of capital,⁷ would be misspent. That misjudgment would impose an enormous burden on the consumers of electrical service. In short, OPC failed to sustain its burden of persuading the Commission that the savings in fuel costs upon conversion to coal justified incurring the cost of conversion.

OPC and WMATA argue that it is the Commission's function to make difficult predictions of future developments, and that PSC should not have shirked its duty here. We agree, of course, that PSC must make numerous estimates of what will happen in the future. However, we defer to PSC's determination that the future oil-coal price differential is so exceptionally unpredictable that PSC should not hazard a guess and then base a decision on that guess. PSC's decision in its final order to reject the tentative conclusions it had reached in its earlier order was rationally based on that determination of uncertainty.

We find unpersuasive petitioner's further argument that PSC erred in failing to determine the cost of capital or the discount rate that would effect the total cost of conversion to coal. PSC concluded that even without those additional costs, the $420,000,000 price of conversion was so high and the likelihood of benefits so uncertain that conversion was inadvisable. That conclusion made the suggested further determinations irrelevant.

Our favorable review of the PSC determinations discussed above makes it unnecessary to address the other issues raised by OPC and WMATA.⁸ Accordingly, the orders before us for review are

Affirmed.

1. Our scope of review is narrow. We accord great deference to the expertise of the Commission; indeed, our review of a utility commission order is the narrowest judicial review in the field of administrative law. Washington Gas Light Co. v. Public Service Comm'n, 450 A.2d 1187, 1193 (D.C. 1982) (per curiam). Under D.C. Code § 43-906 (1981), our review is limited to "questions of law, including constitutional questions; and the findings of fact by the Commission shall be conclusive unless it shall appear that such findings . . . are unreasonable, arbitrary, or capricious." In accordance with that statute, we must determine whether the order is just and reasonable, see People's Counsel v. Public Service Comm'n, 399 A.2d 43, 46 (D.C. 1979), and ensure that the Commission "`has respected procedural requirements, has made findings based on substantial evidence, and has applied the correct legal standards to its substantive deliberations,'" Potomac Electric Power Co. v. Public Service Comm'n, 402 A.2d 14, 18 (D.C.) (en banc), cert. denied, 444 U.S. 926, 100 S.Ct. 265, 62 L.Ed.2d 182 (1979) (quoting Telephone Users Ass'n v. Public Service Comm'n, 304 A.2d 293, 296 (D.C. 1973), cert. denied, 415 U.S. 933, 94 S.Ct. 1448, 39 L.Ed.2d 492 (1974)).

2. In Final Order No. 7795, the main order on appeal here, PSC stated without analysis that OPC and the Commission Staff had failed to demonstrate imprudence. OPC took this statement to indicate the Commission's view that OPC had had the burden of persuasion throughout the proceedings on conversion. In Order No. 7878, the denial of OPC's application for reconsideration of Final Order No. 7795, the Commission confirmed that OPC had had the burden of persuasion.

3. PSC's Order No. 7107 set out the procedures to be followed in this case, but did not mention the burden of persuasion. The Commission can avoid any future misapprehension concerning the burden of proof by allocating it in such orders.

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