Trustees of Clark University v. Department of Public Utilities

• Decision Date: 05 April 1977
• Citation: 361 N.E.2d 1285,372 Mass. 331
• Parties: TRUSTEES OF CLARK UNIVERSITY et al. 1 v. DEPARTMENT OF PUBLIC UTILITIES et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1285

361 N.E.2d 1285

372 Mass. 331

TRUSTEES OF CLARK UNIVERSITY et al. ¹ v. DEPARTMENT OF PUBLIC UTILITIES et al. ²

Supreme Judicial Court of Massachusetts, Suffolk.

Argued March 9, 1977.

Decided April 5, 1977.

Andrew J. Newman, Boston, for Trustees of Clark University and others.

Samuel Huntington, Boston, for Massachusetts Elec. Co., intervener.

Margot G. Botsford, Asst. Atty. Gen., for the Department of Public Utilities.

Before HENNESSEY, C.J., and BRAUCHER, WILKINS, LIACOS and ABRAMS, JJ.

WILKINS, Justice.

On March 1, 1976, the Department of Public Utilities (department) permitted the Massachusetts Electric Company (company) to implement a rate increase of 1.86 mills per kilowatt hour (KWH) for nearly all the company's customers. ³ The rate adjustment was designed to recover a simultaneous increase in the company's wholesale power costs. The company purchases its power from the New England Power Company which, effective March 1, 1976, was permitted by the Federal Power Commission (FPC) to increase its charges to the company, subject to possible adjustment following the conclusion of rate proceedings before the FPC. The company's rate adjustment, called Purchased Power Cost Adjustment #5 (PPCA #5), as approved by the department, requires refunds to the company's customers, in a manner approved by the department, if the FPC proceedings result in a refund or credit to the company from the New England Power Company.

The plaintiffs, industrial and institutional customers of the company which intervened in the department's proceedings (the Clark group), have appealed from the decision and order of the department. They challenge not the amount of the increase, but the method by which the increase was allocated among the company's customers. The company has been permitted to intervene here. The case has been reserved and reported to this court by a single justice. We conclude that the department did not exceed its authority in approving the company's filing.

A purchased power cost adjustment is intended to permit the company to modify its rates to reflect changes in the cost of its purchased power without submitting a full-fledged rate filing. Such an adjustment is temporary, although of undefined duration, because any outstanding adjustment will be eliminated when the company thereafter obtains approval of a general rate filing or when, as is the case with respect to PPCA #5, a subsequent purchased power cost adjustment is approved by the department. The department has approved PPCA #6, effective February 1, 1977, reducing the uniform charge from that in effect under PPCA #5 by 0.21 mills per KWH. An appeal has been taken from that decision and order as well, but that appeal has not yet been argued.

We turn first to the contention advanced in a motion to dismiss filed by the department and the company. They claim that all issues concerning PPCA #5 are moot because it has been superseded by PPCA #6. They argue that, even if the Clark group were successful here, there is no way by which a retroactive redistribution of the company's revenue needs can be made among its customers. Certainly, if, as a result of this appeal and subsequent department proceedings, the obligation of the company's industrial customers is reduced, the company's admitted revenue deficiency will have to be made up from customers in other rate classifications. No party suggests any lawful method by which additional funds could be collected from other customers in this circumstance. See Metropolitan Dist. Comm'n v. Department of Pub. Utils., 352 Mass. 18, 26, 224 N.E.2d 502 (1967). The Clark group argues, however, that a retroactive adjustment may be made in its favor because any refund from the New England Power Company, following conclusion of the FPC rate proceeding, may be allocated specifically to customers, such as themselves, who pay an industrial rate, so as to achieve (or at least to tend toward achieving) the rate distribution for which it contends.

Although there is no certainty that there will be a refund, we are disinclined to treat the case as moot. The possibility of a refund has not been shown to be so remote as to justify a refusal to deal with the merits of the case. Moreover, in certain aspects, the appeal raises issues which are likely to come before us again, perhaps even in the Clark group's appeal from the department's decision and order approving PPCA #6. See Board of Gas & Elec. Comm'rs of Middleborough v. Department of Pub. Utils., 363 Mass. 433, 436, 294 N.E.2d 866 (1973). We turn then to a consideration of the decision of the department and the Clark group's objections to it.

The department's decision gives relatively little attention to the method advanced by the Clark group for the distribution of the burden of the company's needed revenue increase. In approximately ten lines of its decision the department dismissed the Clark group's proposal for distributing the increase disproportionately among the company's residential, commercial, and industrial customers. The Clark group's proposal was based on its assertion that the increase in rates needed by the company was largely attributable to increases in peak demand for which industrial customers were less responsible than commercial and particularly residential customers. The department, somewhat inaccurately, characterized the Clark group's proposal as one which would place the major burden of the increase on the residential classification. The department said that the evidence did not support the Clark group's case. However, at least part of the alleged deficiencies in the Clark group's case may be equally applicable to the company's case. Perhaps the department's discussion of the Clark group's proposal would not be adequate as a statement of reasons, as required by G.L. c. 30A, § 11(8), if the Clark group has been an unsuccessful party whose own proposal was before the department for action. However, the issue before the department was not the reasonableness and acceptability of the Clark group's proposal. An intervener's case should not be ignored. See Framingham v. Department of Pub. Utils., 355 Mass. 138, 147, 244 N.E.2d 281 ...