Valley Gas Co. v. Burke, 85-518-M.P.

• Court: Rhode Island Supreme Court
• Citation: Valley Gas Co. v. Burke, 518 A.2d 1363 (R.I. 1986)
• Decision Date: 31 December 1986
• Docket Number: 85-528-M.P.,No. 85-518-M.P.,85-518-M.P.
• Parties: VALLEY GAS CO. v. Edward F. BURKE. (Two Cases).

518 A.2d 1363

VALLEY GAS CO. v. Edward F. BURKE. (Two Cases).

Nos. 85-518-M.P., 85-528-M.P.

Supreme Court of Rhode Island.

December 31, 1986.

Deming E. Sherman, Edwards & Angell, Providence, for plaintiff.

Arlene Violet, Atty. Gen., Sheldon Whitehouse, Sp. Asst. Atty. Gen., John A. Notte III, Providence, for defendant.

OPINION

KELLEHER, Justice.

On January 28, 1985, Valley Gas Company (Valley Gas) filed with the Public Utilities Commission (commission) a request for a general rate increase to become effective February 27, 1985. The increase was designed to produce an additional $3,022,430 in revenues. The commission, pursuant to its authority under G.L. 1956 (1984 Reenactment) § 39-3-11, suspended the proposed effective date of the new schedules, and hearings relative to the matter were then held for some four months.

On October 25, 1985, the commission issued an order requiring Valley Gas to file new rates and charges designed to recover additional annual revenues totaling $1,520,332. Valley Gas subsequently filed new rates, and on November 14, 1985 the commission issued an order approving the compliance tariffs, allowing those tariffs to be effective for meter readings on and after November 25, 1985.

On October 29, 1985, the Division of Public Utilities and Carriers (division) by its attorney the Department of Attorney General filed a motion for reconsideration with the commission, asking that the decision to allow Valley Gas to recover certain advertising expenses be reviewed. In its order of November 14, 1985, the commission denied the motion, ruling that no commission rule permits such a motion for reconsideration and that the proper avenue for redress is a petition for writ of certiorari.

On November 14, 1985, the division filed a petition for writ of certiorari in this matter, pursuant to G.L. 1956 (1984 Reenactment) § 39-5-1. The division seeks review of that part of the commission's order that allows Valley Gas to recover certain advertising expenses totaling $10,085. The contention here is that such recovery is prohibited by express statutory language of the Rhode Island public utility law.

On November 19, 1985, Valley Gas also filed with this court a petition for writ of certiorari. Valley Gas seeks review of that part of the commission's order that ordered that compliance tariffs become effective for meter readings on November 25, 1985, contending that the commission should have ordered said tariffs to become effective for consumption of gas on and after October 25, 1985, one month earlier than the date approved by the commission.

We have repeatedly stressed that our standard of review of an order of the commission leads us to determine whether the commission's ruling was "lawful and reasonable and whether its findings are fairly and substantially supported by legal evidence." Roberts v. Narragansett Electric Co., 490 A.2d 506, 507 (R.I. 1985) (quoting New England Telephone & Telegraph Co. v. Public Utilities Commission, 446 A.2d 1376, 1380 (R.I. 1982)); Roberts v. New England Telephone & Telegraph Co., 487 A.2d 136, 138 (R.I. 1985). With this standard in mind, we turn first to the question of whether the commission acted properly in ordering the tariffs approved on November 14, 1985 to become effective on November 25, rather than October 25, 1985.

In Providence Gas Co. v. Burke, 475 A.2d 193, 197 (R.I. 1984), we held that Rhode Island law requires that a utility may not bill at new rates for meter readings taken less than thirty days after the commission authorizes an increase in the utility's rates and charges. We stressed then that central to our ruling was a concern that bills reflect services rendered, lest the consumer be "billed for energy consumed prior to the commission's action at a rate not in effect until after its decision." Id.

Valley Gas asks that we reconsider our holding in Providence Gas and rule that new rates for consumption shall become effective upon the release of the commission's order. Valley Gas maintains that the thirty-day rule creates anomalous results, specifically, a situation wherein a consumer billed, for example, on November 11, 1985 for consumption between October 25 and November 10 is billed at the old tariff, whereas the consumer who receives a bill on November 25 pays a new, higher rate for gas consumed during that same period, the difference resulting solely from the fact that the meters are read on different days.

We acknowledge the existence of certain anomalies in the billing process resulting from application of the thirty-day rule. We do not agree, however, that this situation is of such a serious nature as would require elimination of a rule that is designed to further the interest of all consumers.

The benchmark of the holding in Providence Gas was the requirement of notice to the consumer; that is, we could not countenance a rule that would leave customers no room for alteration of their patterns of usage upon learning of the rate hike. Valley Gas argues that customers have notice of the rate hike when rates are filed, several months prior to the effective date of the hike. But the mere filing of a proposed rate hike cannot be considered effective notice to the consumer when such a rate hike can be rejected out of hand or substantially altered by the commission. As we said in Providence Gas, "customers should have knowledge of a change in rates in order to make decisions regarding their usage before the change applies to kilowatt-hours used by them." (Emphasis added.) Providence Gas Co., 475 A.2d at 197 (quoting Re Vermont Electric Cooperative, Inc., 36 P.U.R.4th 406, 406 (1980)). We therefore see no reason to overrule our decision in Providence Gas.

The second issue before us concerns the timeliness of the petition for the writ of certiorari filed by the division. On October 25, 1985, the commission issued its report and order. Four days later the division filed a motion for reconsideration with the commission on the issue of the allowance of certain advertising expenses. In its subsequent compliance order of November...