State ex rel. Missouri Public Service Co. v. Fraas, WD

• Decision Date: 30 March 1981
• Docket Number: No. WD,WD
• Citation: 615 S.W.2d 587
• Parties: STATE of Missouri, ex rel., MISSOURI PUBLIC SERVICE COMPANY, a Missouri corporation, Relator-Appellant-Respondent, v. Charles J. FRAAS, Chairman, Commissioners Hugh A. Sprague, Stephen R. Jones, Leah Brock McCartney, and Alberta C. Slavin, as members of and constituting the Public Service Commission of the State of Missouri, Respondent-Appellant. 31537.
• Court: Missouri Court of Appeals

Page 587

615 S.W.2d 587

STATE of Missouri, ex rel., MISSOURI PUBLIC SERVICE COMPANY a Missouri corporation, Relator-Appellant-Respondent, v. Charles J. FRAAS, Chairman, Commissioners Hugh A. Sprague Stephen R. Jones, Leah Brock McCartney, and Alberta C Slavin, as members of and constituting the Public Service Commission of the State of Missouri, Respondent-Appellant.

No. WD 31537.

Missouri Court of Appeals, Western District.

March 30, 1981.

Motion for Rehearing and/or Transfer to Supreme Court Denied

May 4, 1981.

Application to Transfer Denied June 8, 1981.

Gary J. Brouillette, Jackson, Dillard, Brouillette and Farchmin, Kansas City, and Robert L. Hawkins, Jr., Jefferson City, for relator-appellant-respondent.

Kent M. Ragsdale, Holly E. Peck, Jefferson City, for respondent-appellant.

Before PRITCHARD, P. J., and TURNAGE and CLARK, JJ.

TURNAGE, Judge.

Missouri Public Service Company filed tariffs with the Public Service Commission calling for an increase in gas and electric rates in August 1977. Following hearings, the Commission issued its report and order in June 1978 in which the Company was granted increases but not as much as it sought. On appeal to the circuit court the report and order was affirmed in part and reversed in part. The circuit court reversed as to the finding of the Commission on return on equity, as to the depreciation reserve allowance, as to consumer usage annualization and attrition allowance by finding that the order as to those items was unsupported by the evidence, and, as to the latter, the Commission did not make adequate findings of fact. Both the Commission and MPS have appealed. The Commission appeals from that part of the circuit court judgment which reversed part of the report and order and MPS appeals that part of the judgment which affirmed the report and order. On this appeal the Commission, although appealing, contends the issues have become moot because MPS has been granted two permanent rate increases since the report and order in question here was issued. Appeal dismissed.

MPS concedes the case would be moot because of the later rate increases but contends this case presents important legal issues of public interest which are likely to recur and which would not otherwise be reached by an appellate court. An examination of these issues raised by MPS will demonstrate that no such issues are present.

The first issue raised on this appeal by MPS relates to the treatment of certain tax expenses which is cast in terms of the "flow-through" or "normalization" treatment by the Commission. Briefly, the "flow-through" treatment would require MPS to charge as an operating expense only the amount of taxes actually paid to the government. The "normalization" method would allow MPS to charge as expenses the amount of taxes which it would have paid without regard to certain accounting practices which reduced the actual amount of taxes paid in certain years. This question was dealt with by this court in State ex rel. Utility Consumers Council of Missouri, Inc. v. Public Service Commission, 606 S.W.2d 222 (Mo.App.1980). In that case this court held basically that whether or not a utility is allowed to use the "normalization" method or the "flow-through" method of calculating the amount of taxes which will be charged as expenses is a matter...