Providence Gas Co. v. Burke, s. 82-340-M

• Decision Date: 21 February 1984
• Docket Number: Nos. 82-340-M,s. 82-340-M
• Citation: 475 A.2d 193
• Parties: PROVIDENCE GAS COMPANY v. Edward F. BURKE, Administrator Division of Public Utilities and Carriers. Dennis J. ROBERTS II, Attorney General v. PROVIDENCE GAS COMPANY. P., 82-341-M.P.
• Court: Rhode Island Supreme Court

Page 193

475 A.2d 193

PROVIDENCE GAS COMPANY v. Edward F. BURKE, Administrator Division of Public Utilities and Carriers.

Dennis J. ROBERTS II, Attorney General v. PROVIDENCE GAS COMPANY.

Nos. 82-340-M.P., 82-341-M.P.

Supreme Court of Rhode Island.

Feb. 21, 1984.

Dennis J. Roberts II, Atty. Gen., John R. McDermott, Sp. Asst. Atty. Gen., for petitioner.

Michael P. DeFanti, Hinckley & Allen, Robert J. Ferranty, Providence, for respondent.

OPINION

KELLEHER, Justice.

On September 28, 1981, the Providence Gas Company (company) filed with the Public Utilities Commission (commission) a schedule of proposed rate increases designed to produce an additional $12,821,714 in revenues. The commission, under the authority of G.L.1956 (1977 Reenactment) § 39-3-11, as amended by P.L.1977, ch. 236, § 2, suspended the proposed effective date of the new schedules.

Section 39-3-11 allows the suspension of the effective date for an initial five-month period and subsequent three-month period if additional time is needed. The purpose of these suspension periods is to allow hearings on the proposed increase through which the commission and the public may become better informed with respect to the proposed rate increase.

This statutory purpose worked as well in practice as in theory in the instant case. Over twenty-five issues were presented to the commission through the direct testimony of seven witnesses. The Division of Public Utilities and Carriers (division) presented three witnesses who disputed the claims of the company. These hearings were all public and were held during the months of January, February, and March of 1982. Later, the commission conducted three separate night hearings for the express purpose of soliciting comments from the general public about the company's proposal.

On June 23, 1982, the commission issued a report and order rejecting the proposed increase and requiring the company to file a new tariff that would generate revenues in the amount of $9,963,992. The new tariff was filed by the company one week later, on June 30. On July 9, 1982, the division sought to amend the approved rate order, alleging that clerical errors made the total amount of the order incorrect. The company and the commission assented to one of these errors, but the rest were rejected by the commission, and on July 16 the company was requested to file new orders consistent with this decision.

The new tariff, designed to produce additional revenues in the amount of $9,551,769, was filed later, on July 16. It was accepted by the commission in an order providing that the tariff's new rates would become effective on July 20, 1982. This order provided that the company could collect these rates for gas consumed between June 23 and July 20.

This appeal was filed by the Attorney General July 21, and on July 22, a cross-appeal was filed by the company. There are six issues raised, each of which we shall address. These include the limits under which the commission operates with respect to the statutory suspension period; the propriety of two alleged retroactive rate increases; the competency of the evidence relied on by the commission; an alleged failure to correct clerical errors; and whether the Attorney General's petition for writ of certiorari was timely filed.

We first turn to the question of whether the Attorney General's petition for certiorari from the amended report and order of the Public Utilities Commission of July 16 was filed within the statutory period. The statute allowing such appeals is § 39-5-1. This statute provides that "[a]ny person aggrieved by a decision or order of the commission may, within seven (7) days from the date of such decision or order, petition the [S]upreme [C]ourt for a writ of certiorari to review the legality and reasonableness of said decision or order."

The order that the Attorney General now challenges was issued on July 16, 1982. The certiorari petition was filed on July 21, clearly within the seven-day period. However, the company asserts that since a substantial portion of the Attorney General's appeal concerns the June 23 order, the appeal as it relates to those issues is untimely. We believe that there may be merit in this contention, but, because of the mathematical deficiencies that appeared subsequent to the issuance of the June 23 report and order and, more importantly, because of the substantial public interest involved in this type of controversy, we shall consider the July 21 petition as seeking the issuance by this court of a common-law writ of certiorari, having in mind that the Legislature cannot divest this court of its power to review decisions of subordinate tribunals who exercise a judicial or quasi-judicial function. State v. DeLomba, 117 R.I. 673, 370 A.2d 1273 (1977); Simmons v. Town Council of Coventry, 112 R.I. 522, 312 A.2d 725 (1973); Smith v. Estate of Catterall, 107 R.I. 729, 271 A.2d 300 (1970). Consequently, we will review all of the issues raised by the Attorney General.

The company takes the position that the commission does not have the authority to defer the active date of the new tariff beyond the eight-month statutory suspension period set forth in § 39-3-11. It argues that since the proposed rates were filed on September 28, 1981, if the commission did not put substitute rates into effect by June 27, 1982, the proposed rates would then immediately become effective.

In order to properly understand this issue, we must look at the statute itself. Section 39-3-11 provides that "[n]o change shall be made in the rates, tolls and charges which have been filed and published by any public utility * * * except after thirty (30) days' notice * * *." During this thirty-day period, the commission is required to "make investigation as to the propriety of such proposed change or changes." Following notice of this investigation, the commission has the power under this statute "to suspend the taking effect of such change or changes pending the decision thereof, but not for a longer period than five (5) months beyond the time when such change or changes would otherwise take effect * * *." At the expiration of this period, the commission has the power "further [to] suspend the taking effect of such change or changes pending the decision thereon, but not for a longer period than three (3) months beyond the expiration of the first mentioned five (5) month period." Both parties agree that the commission regularly suspends the effective date of rates for the entire eight-month period.

The company filed its proposed schedule of rates on September 28, 1981, to become effective on October 28, 1981. The commission then suspended the effective date of the proposed increases until June 27, 1982, by the entry of two suspension orders, the first for five months and the second for three months. The report and order rejecting the company's application was filed on June 23, 1982. It is our belief that once the commission issued its order of June 23 directing the company to come forward with a revised tariff designed to bring in revenue in excess of $9 million, the commission had discharged its obligation under the statute and the suspension provisions became inoperative.

This decision flows from the words of the statute, which applies only to proposed rates. The mandate of § 39-3-11 is that the commission not take longer than eight months to decide on the original filed rates. The statute does not apply to substitute rates offered after the proposed rates have been rejected.

We find ourselves in accord with Lambertville Water Co. v. New Jersey Board of Public Utility Commissioners, 79 N.J. 449, 401 A.2d 211 (1979). In Lambertville the New Jersey Supreme Court construed the meaning of its statute, which provided for two four-month suspension periods. That court held that this statute "has no bearing on the effective date of a substituted rate increase fashioned by the Board when it rejects that sought by the utility." Id. at 455, 401 A.2d at 214.

In Mechanic Falls Water Co. v. Public Utilities Commission, 381 A.2d 1080 (Me.1977), the Maine Supreme Court reached a similar conclusion. It also encountered an argument by a utility company that since the maximum suspension period is eight months, substituted rates must be in effect prior to the termination of that suspension period.

The court held that "[t]he flaw in its argument is that the maximum suspension period concerns the length of time a proposed rate schedule can be suspended. It simply has no bearing on when a substituted rate schedule becomes effective." Id. at 1108.

We agree with these sentiments. Our statute, § 39-3-11, provides only that "[w]ithin ninety (90) days after the completion of any such hearing, the commission shall make such order in reference to any proposed rate, toll or charge as may be proper." The commission, in rejecting the original September 28, 1981 filing, complied with the statute through its June 23 order. There is no requirement that a rate become effective within the eight-month period--merely that an order issue.

We now turn to the issues raised by the Attorney General in his appeal. The Attorney General claims that the commission, by its action, has permitted the company to engage in retroactive ratemaking by permitting the company to recover the new rates for gas consumed prior to the date of the commission's order of July 16.

As part of the July 16 decision and order of the commission, the company was permitted to collect, beginning July 20, 1982, the new rates for gas consumed on and after June 23, 1982. The Attorney General contends that by permitting this method of collection, the commission is engaging in retroactive ratemaking.

As an initial proposition, we must first point out that by definition retroactive ratemaking has no application to this issue. We have said in the past that the rule against retroactive ratemaking serves two functions. "Initially, it protects the public by...