State ex rel. Jackson County v. Public Service Commission

• Decision Date: 22 December 1975
• Docket Number: No. 59171,59171
• Citation: 532 S.W.2d 20
• Parties: STATE ex rel. JACKSON COUNTY, Missouri, and Kansas City, Missouri, Relators-Respondents, Office of Public Counsel, Intervenor-Relator, v. PUBLIC SERVICE COMMISSION of Missouri, Respondent-Appellant, Missouri Public Service Company, Intervenor-Respondent-Appellant.
• Court: Missouri Supreme Court

Page 20

532 S.W.2d 20

STATE ex rel. JACKSON COUNTY, Missouri, and Kansas City Missouri, Relators-Respondents Office of Public Counsel, Intervenor-Relator, v. PUBLIC SERVICE COMMISSION of Missouri, Respondent-Appellant Missouri Public Service Company, Intervenor-Respondent-Appellant.

No. 59171.

Supreme Court of Missouri, En Banc.

Dec. 22, 1975.

Dissenting Opinion on Denial of Rehearing Feb. 9, 1976.

Byron E. Francis, Jefferson City, for Pub. Service Comm.

Gary J. Brouillette, Kansas City, for Mo. Pub. Service Co.

Stanley P. Christopher, Deputy County Counselor, Kansas City, Jeremiah D. Finnegan, Special County Counselor, Russell D. Jacobson, Associate County Counselor, Kansas City, for Jackson County.

Carrol C. Kennett, Associate City Atty., Kansas City, for Kansas City.

William M. Barvick, Jefferson City, for Office of Public Counsel.

William W. Ely, Blue Springs (for City of Blue Springs), Arthur Doyle and David L. Smith, Kansas City (for K. C. Power & Light), Stewart W. Smith, Jr., and William E. Jaudes, St. Louis (for Union Elec.), Shook, Hardy & Bacon, Kansas City (for City of Grandview), amici curiae.

MORGAN, Judge.

On June 13, 1975, the Public Service Commission of Missouri (herein referred to as the Commission) issued its Report and Order in Case No. 18,180 authorizing the Missouri Public Service Company (herein referred to as the Company) to increase its electric rates on July 1, 1975, to provide $5,593,000. in additional annual revenues. Applications for rehearing were filed by all parties to the proceeding, which were denied without further hearing on July 8, 1975. On July 11, 1975, the city of Kansas City and the county of Jackson (herein referred to as the Consumers) filed a joint petition in the trial court for a Writ of Review pursuant to §§ 386.510 and 386.520 (all statutory references herein being to RSMo 1969, V.A.M.S.) and a joint Motion for Immediate Reversal, Stay, Injunction or Impoundment of Funds. The Company filed a motion seeking dismissal of both the petition and motion. On July 17, 1975, the trial court, before the certified record of the proceedings before the Commission were before it, held hearings on the two motions. Thereafter, the Company's motion to dismiss was overruled and that of the Consumers for 'immediate relief' was sustained by judgment entry, which, in part, provided:

1. The report and order of respondent in its No. 18,180 is reversed for noncompliance with Section 393.270, V.A.M.S.

2. Alternatively said report and order is reversed and the proceeding remanded to respondent for consideration and determination of relators' application for rehearing in compliance with Sections 386.130 and 536.080, V.A.M.S.

3. The relief granted in the preceding paragraph two shall be effective only in the event that an appellate court should prohibit the relief granted in paragraph one.

4. The writ of review or certiorari is quashed.

Pursuant to Supreme Court Rule 81.06, the trial court declared the same to be a final appealable judgment, and stayed the enforcement thereof if the Company posted bond in the amount of $5,600,000. Since appeal, briefs have been filed (including that of other utility companies as Amici Curiae), and oral arguments made by all concerned (including the 'Public Counsel').

It is necessary to relate some of the history behind the present litigation, most of which is outlined in footnote No. (1). ¹ Of immediate concern, however, is that part occurring on December 14, 1973. On that date, the Commission issued its Report and Order in Case No. 17,763 which was the proceeding wherein the Company was last granted a tariff increase, prior to its request in No. 18,180--the present case. Therein, the Commission stated:

Based upon a thorough analysis of the updated and projected test year presented in this case, the Commission concludes that it should not entertain a request by the applicant for any further additional rate relief from its electric customers for a period of at least two years after the effective date of this Order, inasmuch as the Commission is of the opinion that a substantial portion of the applicant's certified area can be reasonably expected to expand and develop so as to favorably affect the Company's revenue growth and minimize the need for additional rate relief. Furthermore, the record requires the Commission to conclude that this anticipated growth should not require significant capital investments and generating capacity. Applicant's costly Sibley generating plant was constructed in anticipation of this reasonably expected growth and the Commission is of the opinion that under good management practices, applicant should not require significant additional generating capacity and the high financing costs associated therewith.

Premised thereon, the Commission provided in 'Order 3' of its Report and Order (in No. 17,763) as follows:

3. That the prices, charges, rates and tariffs filed herein shall be the maximum to be charged by Missouri Public Service Company for electric service to be furnished within its territory for a period of at least two years from the effective date of this Order except in the case of sliding scales and automatic adjustments as heretofore or hereafter approved by this Commission pursuant to § 393.270, 3, R.S.Mo.1969. (Emphasis added.)

It seems agreed that the parties involved did not address the 'moratorium' issue during the hearing and proceedings in No. 17,763. Apparently it was supplied by the Commission on its own without the knowledge of any of the parties prior to entry thereof. In any event, there was no appeal. However, the significance thereof and its relevancy, if any, to the instant appeal will be considered in turn.

In their joint motion, the Consumers challenged the Commission Order in No. 18,180 by asserting that:

1. The Commission did not have authority to 'change or abrogate' the moratorium of two years previously ordered (referred to by some of the parties as a 'period of repose').

2. The Commission erroneously failed to base the now challenged rate schedule on a test year, i.e., actual experience reference income and expenses; but, in fact, utilized a year composed of eight months actual experience and four months estimated or projected income and expense.

3. The Commission denied the Consumers' application for a rehearing in violation of § 386.130, which requires, in part, that a '. . . majority of the commissioners shall constitute a quorum . . .' when the denial thereof was made by a lesser number.

4. The rate increase authorized by the Commission was initiated by the 'file and suspend' method (§ 393.140(11)) and is a nullity, because a rate increase can only be considered under the 'complaint' method (§§ 386.390--393.260, 393.270).

We first consider the last point (No. 4) for the reason the other three become somewhat moot if the Consumers' contention therein is well founded.

Necessarily, some portions of the many statutes involved must be quoted.

Section 393.140(11): Have power to require every gas corporation, electrical corporation, water corporation, and sewer corporation to file with the commission and to print and keep open to public inspection schedules showing all rates and charges made, established or enforced or to be charged or enforced, all forms of contract or agreement and all rules and regulations relating to rates, charges or service used or to be used, and all general privileges and facilities granted or allowed by such gas corporation, electrical corporation, water corporation, or sewer corporation; but this subdivision shall not apply to state, municipal or federal contracts. Unless the commission otherwise orders, no change shall be made in any rate or charge, or in any form of contract or agreement, or any rule or regulation relating to any rate, charge or service, or in any general privilege or facility, which shall have been filed and published by a gas corporation, electrical corporation, water corporation, or sewer corporation in compliance with an order or decision of the commission, except after thirty days' notice to the commission and publication for thirty days as required by order of the commission, which shall plainly state the changes proposed to be made in the schedule then in force and the time when the change will go into effect. The commission for good cause shown may allow changes without requiring the thirty days' notice under such conditions as it may prescribe. No corporation shall charge, demand, collect or receive a greater or less or different compensation for any service rendered or to be rendered than the rates and charges applicable to such services as specified in its schedule filed and in effect at the time; nor shall any corporation refund or remit in any manner or by any device any portion of the rates or charges so specified, nor to extend to any person or corporation any form of contract or agreement, or any rule or regulation, or any privilege or facility, except such as are regularly and uniformly extended to all persons and corporations under like circumstances. The commission shall have power to prescribe the form of every such schedule, and from time to time prescribe by order such changes in the form thereof as may be deemed wise. The commission shall also have power to establish such rules and regulations, to carry into effect the provisions of this subdivision, as it may deem necessary, and to modify and amend such rules or regulations from time to time. (Emphasis added.)

Section 393.150. 1. Whenever there shall be filed with the commission by any gas corporation, electrical corporation, water corporation or sewer corporation any schedule stating a new rate or charge, or any new form of contract or agreement, or any new rule, regulation or practice relating to any rate, charge or service or to any general privilege or facility, the commission shall have, and it is hereby given, authority, either upon complaint...