Power v. Washington Water Power Co., 48413-9

• Decision Date: 14 April 1983
• Docket Number: No. 48413-9,48413-9
• Parties: POWER, a Washington Non-Profit Corporation, Appellant, v. The WASHINGTON WATER POWER COMPANY, a Washington Corporation, and a regulated private electric, natural gas, and water utility, Respondent.
• Court: Washington Supreme Court

Page 289

99 Wn.2d 289

662 P.2d 374

POWER, a Washington Non-Profit Corporation, Appellant, v. The WASHINGTON WATER POWER COMPANY, a Washington

Corporation, and a regulated private electric,

natural gas, and water utility, Respondent.

No. 48413-9.

Supreme Court of Washington,

En Banc.

April 14, 1983.

James A. Bamberger, Spokane, for appellant.

Paine, Hamblen, Coffin & Brooke, David J. Meyer, Spokane, for respondent.

Paul G. Cornelius, Spokane, Kenneth E. Reeves, Nat'l. Consumer Law Center, Inc., Boston, amicus curiae.

DOLLIVER, Justice.

The Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. §§ 2601-45 (Supp. 4 1980), was enacted by Congress in part to encourage energy conservation and to provide equitable retail rates for electricity consumers. 16 U.S.C. § 2601. The act sets out ratemaking and utility service standards designed to further the purposes of the act. See 16 U.S.C. §§ 2621(d), 2623-25. It requires state regulatory authorities to consider whether federal ratemaking and utility service standards and lifeline rate provisions are appropriate under conditions and circumstances facing state utilities and consumers. 16 U.S.C. §§ 2621(a), 2622.

PURPA creates for consumers a federal right of participation and intervention in proceedings by state regulatory authorities to determine whether the state regulatory authority should adopt the ratemaking and utility service standards expressed in the act. 16 U.S.C. § 2631(a). See H.R.Conf.Rep. No. 1750, 95th Cong., 2d Sess. 63, 81, reprinted in 1978 U.S.Code Cong. & Ad.News 7659, 7797, 7815. Electric utilities in proceedings under the act are required to compensate electric consumers who substantially contribute to partial or total approval of positions advocated by them for "reasonable attorneys' fees, expert witness fees, and other reasonable costs". 16 U.S.C. § 2632(a)(1). Where a state provides an "alternative means for assuring representation of electric consumers" (16 U.S.C. § 2632(a)(1)), however, PURPA waives the requirement for compensation for the costs of intervention. See 16 U.S.C. § 2632(b).

Plaintiff Peoples Organization for Washington Energy Resources (POWER) is a nonprofit corporation organized to represent consumers before the Washington Utilities and Transportation Commission (Commission). POWER intervened in cause U-80-13 (Washington Utilities and Transportation Commission v. The Washington Water Power Company) in which the Commission considered the applicability of the PURPA ratemaking and utility service guidelines to rate increases requested by Washington Water Power Company (WWP). POWER was represented at the Commission proceedings by Spokane Legal Services Center. Also appearing in the ratemaking proceedings was Donald A. Ericson, a special assistant attorney general appointed to represent "the people of the state of Washington". See RCW 80.01.100.

During the proceedings, attorneys for POWER cross-examined expert witnesses presented by WWP and the Commission staff and presented opening and closing arguments summarizing its position on a number of issues. POWER also presented testimony relating to the allocation of the rate increase among customer classes according to "cost of service" considerations, the use of "declining block rates" for certain customer classes, the adoption of a "baseline/lifeline" residential rate design, and the inclusion of the cost of construction work in progress (CWIP) in the utility's rate base. Special Assistant Attorney General Ericson cross-examined expert witnesses, presented a closing argument, and garnered the testimony of citizens at public hearings held by the Commission following presentation of expert testimony. Neither Ericson nor attorneys for POWER retained expert witnesses or independent consultants to analyze expert testimony presented at the ratemaking proceeding.

On January 26, 1981, the Commission entered its third supplemental order in cause U-80-13. The Commission's order rejected WWP's cost of service study, adopted a 3-tier inverted residential baseline rate design, and directed WWP to show why declining block rates should be maintained for its commercial and industrial customers. Attorneys for POWER then moved for compensation of the costs and fees associated with its advocacy in the case. The Commission denied the motion, apparently in the belief that the participation of Special Assistant Attorney General Ericson in the rate case constituted "alternative means for assuring representation of electric consumers", thereby precluding reimbursement of intervenor costs and fees under 16 U.S.C. § 2632. Pursuant to 16 U.S.C. § 2632(a)(2), POWER brought this civil action in Thurston County Superior Court to collect its attorney fees and costs. The Superior Court granted WWP's summary judgment motion denying attorney fees and costs to POWER.

Two issues confront us: (1) whether existing statutes provide for adequate representation by a special assistant attorney general of consumer interests; and (2) whether there was adequate representation in this case. We answer both in the affirmative.

The relevant portions of PURPA are as follows:

(a) Compensation for costs of participation or intervention

(1) If no alternative means for assuring representation of electric consumers is adopted in accordance with subsection (b) of this section and if an electric consumer of an electric utility substantially contributed to the approval, in whole or in part, of a position advocated by such consumer in a proceeding concerning such utility, and relating to any standard set forth in subchapter II of this chapter, such utility shall be liable to compensate such consumer (pursuant to paragraph (2)) for reasonable attorneys' fees, expert witness fees, and other reasonable costs incurred in preparation and advocacy of such position in such proceeding (including fees and costs of obtaining judicial review of any determination made in such proceeding with respect to such position).

(2) A consumer entitled to fees and costs under paragraph (1) may collect such fees and costs from an electric utility by bringing a civil action in any State court of competent jurisdiction, unless the State regulatory authority (in the case of a proceeding concerning a State regulated electric utility) or nonregulated electric utility (in the case of a proceeding concerning such nonregulated electric utility) has adopted a reasonable procedure pursuant to which such authority or nonregulated electric utility--

(A) determines the amount of such fees and costs, and

(B) includes an award of such fees and costs in its order in the proceeding.

(3) The procedure adopted by such State regulatory authority or nonregulated utility under paragraph (2) may include a preliminary proceeding to require that--

(A) as a condition of receiving compensation under such procedure such consumer demonstrate that, but for the ability to receive such award, participation or intervention in such proceeding may be a significant financial hardship for such consumer, and

(B) persons with the same or similar interests have a common legal representative in the proceeding as a condition to receiving compensation.

(b) Alternative means

Compensation shall not be required under subsection (a) of this section if the State, the State regulatory authority (in the case of a proceeding concerning a State regulated electric utility), or the nonregulated electric utility (in the case of a proceeding concerning such nonregulated electric utility) has provided an alternative means for providing adequate compensation to persons--

(1) who have, or represent, an interest--

(A) which would not otherwise be adequately represented in the proceeding, and

(B) representation of which is necessary for a fair determination in the proceeding, and

(2) who are, or represent an interest which is, unable to effectively participate or intervene in the proceeding because such persons cannot afford to pay reasonable attorneys' fees, expert witness fees, and other reasonable costs of preparing for, and participating or intervening in, such proceeding (including fees and costs of obtaining judicial review of such proceeding).

16 U.S.C. § 2632(a), (b).

Whether the appearance of a special assistant attorney general in a ratemaking proceeding under RCW 80.01.100 satisfies the requirements of 16 U.S.C. § 2632 is a novel question for Washington courts; nor, apparently, have either the courts of other states or the federal courts yet considered the adequacy of alternative methods of representation pursuant to 16 U.S.C. § 2632(b). Cf. Coalition for Fair Util. Rates, Inc. v. Baker, 656 F.2d 593, 595 (10th Cir.1981) (intervenors must exhaust state court remedies prior to bringing compensation action in federal court under 16 U.S.C. § 2633). PURPA is silent as to what constitutes adequate representation of consumer interests in state utility regulatory proceedings. The legislative history of the act indicates a state may provide representation for electricity consumers sufficient to preclude compensation for their intervention by establishing "an adequately funded office of public counsel" to represent consumers. H.R.Conf.Rep. No. 1750, supra at 83, U.S.Code Cong. & Admin.News 1978, p. 7817. See Re Costs of Participation in Elec. Rate-making Proceedings, 37 Pub.Util.Rep. 4th 259, 265 (Cal.P.U.C.1980). Cf. Re Procedure for Comp. of Elec. Consumers, 38 Pub.Util.Rep. 4th 127, 132 (Alaska P.U.C.1980) (participation of public utility commission staff does not necessarily preclude intervenor compensation under 16 U.S.C. § 2632).

Commentators generally suggest effective public participation in utility regulatory proceedings depends largely on the consumer advocate's ability to employ expert witnesses to testify on behalf of residential consumers in utility proceedings. See, e.g., Barvick, Public Advocacy Before the Missouri Public Service Commission, 46 UMKC L.Rev. 181,...