State ex rel. Utility Consumers Council v. Public Service Commission

• Decision Date: 10 January 1978
• Docket Number: No. 37802,37802
• Parties: STATE ex rel. UTILITY CONSUMERS COUNCIL of Missouri, Relator-Appellant, v. PUBLIC SERVICE COMMISSION of Missouri and Union Electric Company, Defendants-Respondents. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 688

562 S.W.2d 688

STATE ex rel. UTILITY CONSUMERS COUNCIL of Missouri, Relator-Appellant, v. PUBLIC SERVICE COMMISSION of Missouri and Union Electric

Company, Defendants-Respondents.

No. 37802.

Missouri Court of Appeals, St. Louis District, Division Two.

Jan. 10, 1978.

Motion for Rehearing and/or Transfer Denied Feb. 14, 1978.

Application to Transfer Denied April 10, 1978.

Samuel H. Liberman, II, David J. Newburger, George S. Newman, Utility Consumers Council of Missouri, Inc., St. Louis, William M. Barvick, Public Counsel, Dept. of Consumer Affairs, Regulation and Licensing, Jefferson City, Jack L. Koehr and Robert C. McNicholas, City of St. Louis, St. Louis, Robert G. Brady and Robert C. Johnson, Bryan, Cave, McPheeters & McRoberts, St. Louis, Bruce S. Feldacher, St. Louis, Robert M. Lindholm, Dept. of Natural Resources, Jefferson City, for relator-appellant.

Michael F. Pfaff, Michael K. McCabe, Jefferson City, Joseph E. Birk and Charles A. Bremer, St. Louis, Gerald Charnoff, Shaw, Pittman, Potts & Trowbridge, Washington, D.C., for defendants-respondents.

PER CURIAM.

Appellant Utility Consumers Council of Missouri, Inc. (hereinafter "UCCM") ¹ filed in the circuit court its petition for review of a Report and Order by the Missouri Public Service Commission (hereinafter "Commission") which granted Union Electric Company (hereinafter "Company") a certificate of convenience and necessity pursuant to Sec. 393.170(3), RSMo. 1969. ² The circuit court upheld the findings and order of the Commission. UCCM appealed to this court. We, too, affirm.

This litigation was initiated on June 7, 1974, when the Company filed its application with the Commission for permission to construct and to operate a nuclear-powered steam electric generating plant in Callaway County, Missouri. Since the plaint was to be constructed beyond the regular service territory of the Company, it was necessary for the Company to apply to the Commission for a certificate of convenience and necessity. Sec. 393.170. Appellant UCCM intervened in the proceedings before the Commission, as did several industries, ³ the City of St. Louis and the Coalition for the Environment. The Office of the Public Counsel entered its appearance. ⁴

The Company's plans called for the construction of two nuclear-powered generating units, each with a nominal electrical output capacity of 1,150 megawatts. The basis of each unit was to be a pressurized water reactor (PWR) modeled on the Standardized Nuclear Unit Power Plant System (SNUPPS) developed by a consortium of five utilities. ⁵ The nuclear steam supply system (NSSS) would include four steam generators along with the nuclear reactor to convert water to steam using reactor heat. The fuel in the reactor core would be in the form of small uranium dioxide pellets. The heat generated in the reactor would be transmitted to the steam generators where the steam produced would drive the turbine-generators to produce electricity. The operation of the first unit was planned for 1981, and the operation of the second unit for 1983.

Public hearings held primarily in Jefferson City, Missouri with one session in Clayton, Missouri lasted nearly one month. The industrial intervenors filed a "Statement of Position", but they did not participate in cross-examination at the hearings. The Coalition for the Environment filed nothing after their "application to intervene" but were represented at the hearing by the same counsel appearing for appellant UCCM. Counsel for the City of St. Louis, the Public Counsel, the counsel for appellant, and counsel for the Company participated in cross-examination at the hearings.

On March 14, 1975, the Commission entered its "Report and Order", to become effective April 1, 1975, finding in pertinent part that:

1) "the need for the proposed plant to meet present and future demands for service was established by Company";

2) "based on all of the evidence in the record, we (the Commission) are compelled to reach the conclusion that the most economical way of supplying the increased electrical needs of Company's customers in the future is through the construction of the proposed nuclear plant";

3) "the evidence in this record clearly establishes within reasonable certainty, Company's ability to obtain and necessary financing";

4) "the issue of radiological health and safety is within the exclusive jurisdiction of the federal government";

5) "there remains no specific statutory authority for in camera proceedings"; and 6) "with regard to the proprietary privilege claimed by Company, this Commission does not have the jurisdiction or authority to determine judicial questions."

The Commission also found that the construction of the nuclear plant was in the public interest. On March 31, 1975 appellant filed its "Motion to Set Aside Final Order and Re-Hear Case" which was denied.

On May 1, 1975, appellant filed its "Petition for Writ of Certiorari, Writ of Review" pursuant to Sec. 386.510, RSMo. (1975 Supp.). On September 19, 1975, appellant filed a "Motion to Summarily Set Aside Commission's Order and Remand the Matter to the Commission for Further Proceedings" for the reason that appellant had discovered that written testimony allegedly submitted to the Commission on the subject of safety was not filed in the record. On January 7, 1976, the Circuit Court affirmed the Commission's Report and Order. Thereafter, appellant filed its timely notice of appeal.

Initially, this court notes that jurisdiction is properly vested in the St. Louis District. Section 386.510, RSMo. (1975 Supp.) states that "the applicant (for review) may apply to the circuit court of the county where the hearing was held or in which the commission has its principal office for a writ of certiorari or review." Because a formal public hearing was held by the Commission in St. Louis County (Clayton), Missouri, the applicant's petition for review was properly brought in the circuit court of St. Louis County. See, State ex rel. Case v. Seehorn, 283 Mo. 508, 223 S.W. 664, 670-71(8) (banc 1920). Thus, this appeal lies within our territorial jurisdiction.

Briefly, the scope of review for both the circuit court and this court is delineated by Sec. 386.510, RSMo. (1975 Supp.). This section provides for judicial review of administrative action to determine the "reasonableness or lawfulness" of the action. An administrative order is lawful if the Commission had statutory authority to issue it. ⁶ The order is reasonable if it is supported by competent and substantial evidence on the whole record. State ex rel. Ozark Electric Coop. v. Public Service Com'n, 527 S.W.2d 390, 392(1) (Mo.App.1975) and cases cited therein. See also Mo.Const. Art. V § 22. The term "substantial evidence" means competent evidence which, if believed, would have a probative force on the issues. State ex rel Rice v. Public Service Commission, 359 Mo. 109, 220 S.W.2d 61, 64(3) (banc 1949); Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53(4) (Mo.App.1975). Appellant has the responsibility of pointing out the evidence which it considers unreasonable and unlawful. State ex rel. Pugh v. Public Service Commission, 321 Mo. 297, 10 S.W.2d 946, 952(10) (1920). ⁷

I

We believe that appellant's most significant point for reversal is:

"The Commission's refusal to permit Appellant to cross examine Company's witnesses on the basis of their conclusions regarding comparative costs of nuclear and fossil plants and Mr. Cornelius' testimony regarding the impact of the proposed construction on future revenue needs and rate increases renders that evidence insubstantial and incompetent. Testimony that has not been cross-examined is incompetent and insubstantial since its veracity has never been tested and thus cannot be trusted. Without the support of this testimony the evidence upon which the Commission's decision is based is insubstantial and incompetent. Thus the PSC's Order is not based upon substantial and competent evidence upon the whole record and must be set aside."

Appellant contends that it was denied cross-examination as to the contract price of the turbines, the escalator factors in the turbine contracts, the "base-line" price of Company contracts with Bechtel Power Corp., Westinghouse Corp. and General Electric Corp., the cost of uranium and the cost of fabricating the fuel assemblies that hold the uranium pellets. Appellant alleges for the first time in its brief that this contract information was necessary to determine the extent to which the Company's principal exhibit, Exhibit 18, ⁸ was based on firm contracts or on estimates. ⁹ The Company claimed at the hearings and on appeal that the information sought by appellant was proprietary. ¹⁰

The right to cross-examination in administrative proceedings is governed by Sec. 536.070(2), ¹¹ which provides that:

"Each party shall have the right to call and examine witnesses, to introduce exhibits, to cross-examine opposing witnesses on any matter relevant to the issues even though that matter was not the subject of the direct examination, to impeach any witness regardless of which party first called him to testify, and to rebut the evidence against him." (Emphasis added).

The hearings of administrative agencies must be conducted consistently with fundamental principles of due process which include the right of cross-examination. Southern Stevedoring Co. v. Voris, 190 F.2d 275, 277(2) (5th Cir. 1951). The purpose of cross-examination is to sift, modify or explain what has been said, to develop new or old facts in a view favorable to the examiner, Hungate v. Hudson, 353 Mo. 944, 185 S.W.2d 646, 649(6) (1945), and to test the correctness of the information from the witness with an eye to discrediting the accuracy or truthfulness of the witness. Lolordo v. Lacy, 337 Mo. 1097, 88 S.W.2d 353, 355(3) (1935). When the evidence is critical to the issues and necessary to sustain a proponent's burden of proof,...