State Of Mo. Ex Rel. Praxair Inc v. Pub. Serv. Comm'n Of The State Of Mo., WD71988

CourtCourt of Appeal of Missouri (US)
Writing for the CourtGary D. Witt.
Docket NumberWD71988,WD71989
Decision Date26 October 2010



Missouri Court of Appeals
Western District

OPINION FILED: October 26, 2010

Appeal from the Circuit Court of Cole County, Missouri

The Honorable Jon E. Beetem, Judge

Before Division Three: Victor C. Howard, Presiding Judge, Thomas H. Newton, Judge and Gary D. Witt, Judge

The Office of the Public Counsel ("OPC"), Praxair, Inc. and Explorer Pipeline Company ("Industrials") appeal the order of the Public Service Commission ("Commission"), which granted the Empire District Electric Company ("Empire") its requested general rate increase for its retail electric service. For the reasons set forth in this opinion, we affirm.

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Factual Background

On February 1, 2006, Empire filed proposed tariff sheets designed to implement a general rate increase for its retail electric service (Case No. ER-2006-0315). Empire is an electrical corporation within the meaning of Section 386.020(15), and a public utility within the meaning of Section 386.020(43)1 The new proposed rates were designed to produce an additional $29,513, 713 in gross annual electric revenues (excluding gross receipts, sales, franchise, and occupational taxes), which was a 9.63% increase over existing revenues. The tariff sheets proposed an effective date of March 3, 2006.

The Commission allowed Praxair, Inc, Explorer Pipeline Company, Aquila, Inc., Kansas City Power & Light, and the Missouri Department of Natural Resources, to intervene in this matter.

Subsequently, the Commission held the main evidentiary hearing in this matter in September of 2006, and a "true-up"2 hearing in November 2006. During these hearings, the Commission heard the testimony of forty-four witnesses, and over one hundred exhibits were admitted into evidence.

On December 21, 2006, the Commission issued its Report and Order, which denied Empire's requested tariffs but directed Empire to "file proposed electric service

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tariff sheets in compliance with this Report and Order." Shortly thereafter, Empire filed revised tariffs sheets with a request for expedited treatment so that the tariffs would go into effect on January 1, 2007. On December 29, 2006, the Commission issued its Order Granting Expedited Treatment and Approving Tariffs.

On January 1, 2007, Empire began providing service and charging customers pursuant to the tariffs authorized by the Commission.

OPC then filed a petition for extraordinary relief based on the expedited nature of the tariff approval, which was ultimately granted by the Missouri Supreme Court based on its conclusion that the Commission "abused its discretion [in not] provid[ing] public counsel with a reasonable period of time in which to appeal the order." State ex rel. Office of Pub. Counsel v. Pub. Serv. Comm'n, 236 S.W.3d 632, 637 (Mo. banc 2007).

On December 4, 2007, the Commission issued an order vacating its original order; however, the Commission issued another order again approving the tariffs in question. OPC again sought extraordinary relief, and October 14, 2008, the Missouri Supreme Court granted the writ of mandamus stating that the Commission "is directed to comply completely with this Court's previous mandate and opinion" because the Court found that the Commission had failed to vacate its December 2006 order in light of the fact that the "commission sought to do more than restore the existing status but also determine the effect on those moneys collected under the tariffs the commission had previously approved." State ex rel. Office of Pub. Counsel v. Pub. Serv. Comm'n, 266 S.W.3d 842, 843 (Mo. banc 2008).

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On November 20, 2008, the Commission issued its Order Denying Applications For Rehearing, thus allowing its original order to be subject to review.3 On December 15, 2008, OPC filed its Petition for Writ of Review in the Cole County Circuit Court, and on December 19, 2008, the Industrials also filed their Petition for Writ of Review in the same court. These matters were consolidated, and on December 28, 2009, the circuit court issued its Judgment that found "that the Report and Order of [the Commission] is both lawful and reasonable" and "affirmed [the Order] in all aspects."

OPC and the Industrials now appeal. Further details regarding the relevant disputed issues are outlined as applicable in the analysis section below.

Standard of Review

We set forth our applicable standard of review in Hurricane Deck Holding Co. v. Public Service Commission, 289 S.W.3d 260, 263 (Mo. App. W.D. 2009) (citations and internal quotation marks omitted):

Our review of commission decisions is limited to determining whether or not the commission exceeded its constitutional and statutory authority or otherwise acted unlawfully; whether or not competent and substantial evidence on the whole record supported its decision; whether or not its decision was based on lawful procedure or a fair trial; and whether or not the commission acted arbitrarily, capriciously, unreasonably, or abused its discretion.
An order's lawfulness turns on whether the PSC had the statutory authority to act as it did. When determining whether the PSC's order is lawful, the appellate courts exercise unrestricted, independent judgment and must correct erroneous interpretations of the law. On appeal, this court reviews the decision of the Commission, not the judgment of the trial court. The

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Commission's order is presumed to be valid, and the challenger bears the burden of disproving its validity.

At the outset, we must first address Empire's argument that this Court should dismiss this appeal in its entirety "because all issues herein are moot, in that intervening events make a decision unnecessary and it is impossible for this Court to grant effectual relief." "'A threshold question in any appellate review of a controversy is the mootness of the controversy.'" Mo. Pub. Serv. Comm'n v. Mo. Interstate Gas, LLC, 266 S.W.3d 881, 885 (Mo. App. W.D. 2008) (quoting Mo. Dep't of Health & Senior Serv. v. Winkler (In re: Duvall), 178 S.W.3d 617, 621 (Mo. App. W.D. 2005)). "'A case is moot when the question presented for decision seeks a judgment upon some matter which, if the judgment was rendered, would not have any practical effect upon any then existing controversy.'" Id. (quoting Atteberry v. Mo. Bd. of Prob. & Parole, 193 S.W.3d 444, 446 (Mo. App. W.D. 2006)).

Here, Empire argues that because subsequent tariffs have been approved and implemented by the Commission since the tariff rate increases in question in the instant appeal, the issues at dispute on appeal have therefore been rendered moot.4 To support this argument, Empire relies almost exclusively on our holding in State ex rel. City of Joplin v. Public Service Commission, which dealt with the issue of mootness within the specific context of Commission proceedings. 186 S.W.3d 290, 296 (Mo. App. W.D.

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2005). Empire focuses solely on the following proposition: "When tariffs are superseded by subsequent tariffs that are filed and approved, the 'superseded tariffs are generally considered moot and therefore not subject to consideration'" because "superseded tariffs cannot be corrected retroactively." Id. at 295 (quoting State ex rel. Mo. Pub. Serv. Comm'n v. Fraas, 627 S.W.2d 882, 885 (Mo. App. W.D. 1981)). Yet on appeal Empire ignores that we found this proposition was not dispositive of the mootness issue in Joplin. The following principles that governed the resolution of the Joplin case, led this Court to hold that the issues in question were in fact not moot:

There are several reasons why we believe that the case is not moot, notwithstanding the fact that the 2000 rates have been superseded.... It is not unusual in public-utility rate cases for new tariffs to overtake proceedings involving old tariffs, and the 2001 remand here, along with the unrelated proceedings that delayed Commission action pertaining to the remand, ensured that this would occur.

Id. at 296.

Here, like in Joplin, because legal disputes surrounding this case have been before this Missouri Supreme Court twice, this essentially "ensured" that the tariffs at issue would potentially be superseded by subsequent tariffs. For similar reasons, outlined in Joplin, we believe that an exception to the mootness doctrine allows this Court to hear the merits of the instant appeal.

"[A]n exception to the mootness doctrine... exists [w]here the issue raised is one of general public interest and importance, recurring in nature and will otherwise evade appellate review unless the court exercises its discretionary jurisdiction." Jackson Cnty. Bd. of Election Comm'rs ex rel. Brown v. City of Lee's Summit, 277 S.W.3d 740, 745

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(Mo. App. W.D. 2008) (citation and quotation marks omitted). Invocation of this exception to the mootness doctrine is within this Court's discretion when it is demonstrated that the case in question "presents an issue that (1) is of general public interest; (2) will recur; and (3) will evade appellate review in future live controversies." Id. (citation and quotation marks omitted).


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