State ex rel. Noranda Alumninum, v. Publice Service Comm.

• Decision Date: 16 May 2000
• Citation: 24 S.W.3d 243
• Parties: (Mo.App. W.D. 2000) State of Missouri, ex rel. Noranda Alumninum, Inc., Respondent and Associated Natural Gas, Appellant-Respondent v. Public Service Commission, Appellant-Respondent, and Office of Public Counsel, Appellant-Respondent. WD57012, 57032, 57033 and 57034 0
• Court: Missouri Court of Appeals

24 S.W.3d 243 (Mo.App. W.D. 2000)

State of Missouri, ex rel. Noranda Alumninum, Inc., Respondent and Associated Natural Gas, Appellant-Respondent v. Public Service Commission, Appellant-Respondent, and Office of Public Counsel, Appellant-Respondent.

WD57012, 57032, 57033 and 57034

Missouri Court of Appeals Western District

05/16/2000

Appeal From: Circuit Court of Cole County, Hon. Byron Kinder, Judge

Counsel for Appellant: Gary Duffy

Counsel for Respondent: Robin Fulton, Dougals Micheel and Thomas Schwarz

Opinion Summary: Associated Natural Gas appeals, on a number of grounds, the circuit court's judgment to affirm in part and reverse in part the Public Service Commission decision granting its request for a natural gas rate hike.

Division holds: The Public Service Commission failed to make adequate findings of fact. Mere restatement of the parties' positions and conclusory statements of law prevent our determining whether the commission's decision was supported by substantial and competent evidence.

Paul M. Spinden, Judge

Associated Natural Gas (Associated) appeals on a number of grounds the circuit court's judgment to affirm in part and reverse in part the Public Service Commission decision granting Associated's request for a natural gas rate hike. Because the commission did not make findings of fact that enable us to conduct meaningful judicial review, we remand the case to the commission with instructions that it enter proper findings of fact and conclusions of law.

The courts have differed on the source of the commission's obligation to prepare findings of fact and conclusions of law. This court declared recently that section 536.090¹ is applicable to the commission's decisions and requires "a concise statement of the findings on which the agency bases its order." Deaconess Manor Association v. Public Service Commission of the State of Missouri, 994 S.W.2d 602, 612 (Mo. App. 1999). The Supreme Court has looked exclusively to section 386.420 as the source for the commission's obligation to make findings of fact although this statute does not mention findings of fact. The Supreme Court has interpreted section 386.420 as requiring the commission to issue written decisions which include findings of fact that are not "completely conclusory." State of Missouri, ex rel. Monsanto Company v. Public Service Commission of Missouri, 716 S.W.2d 791, 795 (Mo. banc 1986) (relying on State ex rel. Rice v. Public Service Commission, 220 S.W.2d 61 (Mo. banc 1949), and State of Missouri, ex rel. Fischer v. Public Service Commission of Missouri, 645 S.W.2d 39 (Mo. App. 1982), cert. denied, 464 U.S. 819 (1983)).

One purpose of Chapter 536 is to fill in gaps in administrative procedures. State of Missouri, ex rel. Rogers v. Board of Police Commissioners of Kansas City, 995 S.W.2d 1, 6 (Mo. App. 1999); Minx v. State Department of Social Services, Division of Child Support Enforcement, 945 S.W.2d 453, 455-56 (Mo. App. 1997). Because section 386.420 does not provide any guidance as to what constitutes proper findings of fact, we conclude that section 536.090 fills in the gaps of section 386.420 and is equally applicable to the commission's decisions. Indeed, the General Assembly declared in section 536.090 that it applied to "[e]very decision and order in a contested case."

The commission entered extensive findings of fact in this case, filling more than 27 pages. Ironically, very little of what the commission said actually constituted findings of

fact. Its findings could best be described as a general discussion of the parties' positions and a brief explanation of which position the commission deemed correct. For example, in its finding concerning recovery of gathering and transportation costs, the commission said:

Currently [Associated] has tariffed rates to recover a portion of the costs for gathering and transmission (G & T) facilities of the Arkansas Western Gas Division of Arkansas Western Gas Company (Arkansas Western). These [Associated] facilities are located in Northwest Arkansas and are used for the delivery of gas to [Associated's] SEMo district. [The commission's staff] recommends that [Associated] modify its transportation tariff and Purchase Gas Adjustment Clause (PGA) tariff to remove these rates. Staff believes [Associated] should be allowed to recover reasonable G & T costs which will be reviewed by the [c]ommission under the Actual Cost Adjustment (ACA) process; however, [s]taff maintains that the [c]ommission should not pre-approve these costs in [Associated's] tariffs. Staff argues that its proposal is consistent with the Federal Engergy Regulatory Commission's (FERC's) Order 636 which restructured the natural gas industry and deregulated gathering costs so that the recovery of these costs is based on a competitive market.

[Associated] disagrees with [s]taff and requests that the [c]ommission continue to establish the rate using cost of service principles applicable to G & T facilities and costs. [Associated] argues that the G & T facilities are no different from other Arkansas Western facilities located in Arkansas which the [c]ommission routinely includes in [Associated's] base rates. [Associated] proposes to establish a crediting mechanism to return a portion of the revenue from transportation customers back to the system supply customers. [Associated] further proposes modification of language in the PGA to clarify that the G & T rate applies to volumes flowing through the NOARK Pipeline.

Public [c]ounsel did not take a position on this issue. Noranda supports [s]taff's position.

The [c]ommission will rule in favor of [s]taff and Noranda on this issue. The [c]ommission will order [Associated] to modify its transportation tariff and PGA [c]lause tariff to remove references to the rates for recovery of G & T costs as recommended by [s]taff. The [c]ommission finds that [s]taff's proposal will allow Missouri transportation customers to negotiate the best G & T rates available and will allow [Associated] to recover from sales customers all prudently incurred G & T...