Title: Tri-State Generation and Transmission Ass'n, Inc. v. Wyoming Public Service Com'n

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Tri-State Generation and Transmission Ass'n, Inc. v. Wyoming Public Service Com'n1987 WY 46735 P.2d 718Case Number: 86-223Decided: 04/16/1987Supreme Court of Wyoming
TRI-STATE 
GENERATION AND TRANSMISSION ASSOCIATION, INC., Wyrulec Company and Carbon Power 
and Light, Inc., Petitioners

 
 
v.

 
 
The 
WYOMING PUBLIC SERVICE COMMISSION; Charles E. Johnson; John R. Smyth; Nels J. 
Smith; Pacificorp; and Shoshone River Power, Inc., 
Respondents.

 
 
HOT 
SPRINGS RURAL ELECTRIC ASSOCIATION, INC., and Riverton Valley Electric 
Association, Inc., Petitioners

 
 
v.

 
 
The 
PUBLIC SERVICE COMMISSION OF WYOMING; Charles E. Johnson; John R. Smyth; Nels J. 
Smith, in their official capacities as Commissioners of the Public Service 
Commission of Wyoming; Pacificorp d/b/a Pacific Power & Light Company; and 
Shoshone River Power, Inc., Respondents.

 
 
The 
WHEATLAND RURAL ELECTRIC ASSOCIATION, INC., Petitioner

 
 
v.

 
 
The 
WYOMING PUBLIC SERVICE COMMISSION; Charles E. Johnson; John R. Smyth; Nels J. 
Smith; in their official capacities as Commissioners of the Wyoming Public 
Service Commission, Respondents.

 
 

WYOMING RURAL 
ELECTRIC ASSOCIATION, Petitioner

v.

 
 
The 
WYOMING PUBLIC SERVICE COMMISSION; Charles E. Johnson; John R. Smyth; Nels J. 
Smith; in their official capacities as Commissioners of the Wyoming Public 
Service Commission; Pacificorp d/b/a Pacific Power & Light Company; and 
Shoshone River Power, Inc., Respondents.

 
 
RURAL 
ELECTRIC COMPANY, Petitioner

 
 
v.

 
 
The 
WYOMING PUBLIC SERVICE COMMISSION; Charles E. Johnson; John R. Smyth; Nels J. 
Smith; in their official capacities as Commissioners of the Wyoming Public 
Service Commission; Pacificorp, d/b/a Pacific Power & Light Company; and 
Shoshone River Power, Inc., Respondents.

 
 
SHERIDAN-JOHNSON 
RURAL ELECTRIFICATION ASSOCIATION, Petitioner

 
 
v.

 
 
The 
WYOMING PUBLIC SERVICE COMMISSION; Charles E. Johnson; John R. Smyth; Nels J. 
Smith; in their official capacities as Commissioners of the Wyoming Public 
Service Commission; Pacificorp, d/b/a Pacific Power & Light Company; and 
Shoshone River Power, Inc., Respondents.

 
 
Michael 
A. Williams, Robert E. Youle, Edward A. Gleason and John C. Smiley of Sherman 
& Howard, Bruce S. Asay of Kline, Buck & Asay, Thomas M. McCaffrey of 
Tri-State G&T Assoc., Inc., for Tri-State Generation & Transmission 
Assoc., Inc.

 
 
Frederick 
J. Harrison, Rawlins, for Carbon Power & Light, Inc., Rural Electric 
Association, Inc., Riverton Valley Electric Association, Inc., Wheatland Rural 
Electric Association, Inc., Wyoming Rural Electric Association, Rural Electric 
Company, and Wyrulec.

 
 
Robert 
W. Connor, Jr., Sheridan, for Sheridan-Johnson Rural 
Electrification Association; submitted on brief.

 
 
Argument 
presented by Messrs. Harrison and Gleason for Petitioners.

 
 
A. G. 
McClintock, Attorney General, Mary B. Guthrie, Senior Assistant Attorney 
General, and Roger C. Fransen, Assistant Attorney General, for Public Service 
Commission.

 
 

Stanley K. 
Hathaway of Hathaway, Speight and Kunz, and George M. Galloway of Stoel, Rives, 
Boley, Fraser & Wyse, for Pacific Power & Light 
Company.

 
 
Robert 
D. Olson and James M. Guill of Goppert & Olson, Cody, for Shoshone River 
Power, Inc.

 
 
Argument 
presented by Messrs. Fransen, Olson, and Galloway for Respondents. 

 
 
Brown, 
C.J., and Thomas, Cardine, Urbigkit, and Macy, JJ. 

 
 
CARDINE, 
Justice.

 
 
[¶1.]     This is an appeal from 
a Public Service Commission order approving respondent Pacific Power and Light 
Company's purchase of all of the assets of respondent Shoshone River Power, Inc. 
Petitioners contend that the Public Service Commission erred in ruling that the 
proceeding did not constitute a contested case.

 
 
[¶2.]     We 
reverse.

 
 
[¶3.]     Petitioner Tri-State 
Generation and Transmission Association, Inc. (Tri-State) is a non-profit 
cooperative association that provides wholesale electric power to its 
member-owners, who include the petitioners in the present action and respondent 
Shoshone River Power, Inc. (Shoshone). Shoshone and Tri-State's other members 
buy electrical power from Tri-State under all-requirements power supply 
contracts, which provide that the members will buy all of their energy from 
Tri-State over an extended time period.

 
 
[¶4.]     The all-requirements 
contracts serve several purposes. They guarantee that the distribution 
cooperatives will have a dependable source of power under their management and 
control and that generation and transmission companies like Tri-State will have 
a stable customer base. They also serve as security for long-term loans to 
Tri-State from the Rural Electrification Administration.

 
 
[¶5.]     On November 18, 1985, 
Shoshone filed an application with the Public Service Commission (Commission) 
requesting permission to sell all of its utility facilities to Pacific Power and 
Light Company (PP&L), an investor-owned utility providing service throughout 
Wyoming. By a 
separate application, PP&L requested authority to acquire the assets of 
Shoshone and begin providing service to Shoshone's customers. On March 18, 1986, 
the Commission entered an order approving the sale, allowing PP&L to service 
Shoshone's customers in accordance with PP&L's existing tariffs, and 
authorizing Shoshone's dissolution.

 
 
[¶6.]     On March 20, 1986, 
Tri-State filed a petition to intervene and a petition for rehearing, alleging 
that the sale of Shoshone would result in a breach of Shoshone's 
all-requirements contract and jeopardize Tri-State's ability to provide power to 
its other customers. Tri-State contended that the matter required a contested 
case hearing. On March 31, petitioner Carbon Power and Light, Inc. filed a 
petition to intervene and petition for rehearing on the same grounds. The 
Commission also received informal letter protests from eight other rural 
electric distribution cooperatives, all urging that the Commission hold a public 
hearing on the sale.

 
 
[¶7.]     On April 22, 1986, the 
Commission heard arguments on the petitions for rehearing. Argument was strictly 
limited to the legal issue of whether a contested case hearing was required 
before PP&L could purchase the assets of Shoshone. In an order entered on 
April 30, 1986, the Commission found that the matter did not require a contested 
case hearing and reaffirmed its earlier order approving the sale. The Commission 
noted that Tri-State had filed a breach of contract action against Shoshone in 
federal district court, and found that "[Tri-State's] rights arising from its 
relationship with Shoshone are being protected in court as they should be." 
Petitioners appealed the Commission's order to the district court, and the 
district court certified the appeal to this court pursuant to Rule 12.09, 
W.R.A.P.

 
 
[¶8.]     Although the issues on 
appeal have been stated in various ways by the parties, the primary and 
dispositive issue is whether a contested case hearing was required. The Wyoming 
Administrative Procedure Act defines a contested case as

 
 
"a 
proceeding including but not restricted to ratemaking, price fixing and 
licensing, in which legal rights, duties or privileges of a party are required 
by law to be determined by an agency after an opportunity for hearing." Section 16-3-101(b)(ii), 
W.S.1977.

 
 
We have 
interpreted the term "hearing" as it appears in this section to mean "trial type 
hearing." Scarlett v. Town Council, Town of 
Jackson, Teton County, Wyo., 
463 P.2d 26, 29 (1969). Thus, if a "trial type hearing" is 
"required by law," the proceeding is a contested case, and the applicable 
procedures in the Wyoming Administrative Procedure Act must be 
followed.

 
 
[¶9.]     Petitioners contend 
that a trial type hearing is required by § 37-2-120, 
W.S.1977, which provides in relevant part:

 
 
"No 
order * * * * shall be made by the commission which requires the change of any 
rate or service, facility or service regulation except as otherwise specifically 
provided, unless or until a public hearing has been held in accordance with the 
provisions of this act."

 
 
The 
terms "rate" and "service regulation" are defined in § 37-1-102, W.S.1977:

 
 
"(a) The 
term 'rate,' when used in this act, shall mean and include, in the plural 
number, as well as in the singular, every individual or joint rate, 
classification, fare, toll, charge or other compensation for service rendered or 
to be rendered by any public utility, and every rule, regulation, practice, act, 
requirement or privilege in any way relating to such rate, fare, toll, charge or 
other compensation, and any schedule or tariff or part of a schedule or tariff 
thereof.

"(b) The 
term 'service regulation' shall mean and include every rule, regulation, 
practice, act or requirement in any way relating to the service or facilities of 
a public utility."

 
 
Petitioners 
contend that this case involves a rate change and a change in service regulation 
because the Commission's order authorized PP&L to service Shoshone's 
customers and charge those customers under PP&L's tariffs. Respondents take 
the position that the Commission's order effected no change in rates or service 
regulation because Shoshone's customers will be served under PP&L's existing 
approved tariffs.

 
 
[¶10.]  Respondent's interpretation of §§ 37-2-120 and 37-1-102, 
W.S.1977, ignores both the plain language of the statutes and the 
practical effect of the Commission's order. Section 
37-1-102, supra, defines a rate as any "practice, act, requirement or 
privilege in any way relating to such rate, fare, toll, charge or other 
compensation, and any schedule or tariff or part of a schedule or tariff 
thereof." This statute goes on to define service regulation as "every rule, 
regulation, practice, act or requirement in any way relating to the 
service or facilities of a public utility." The Commission's order allows 
Shoshone to discontinue service to its customers and permits PP&L to serve 
those customers and charge them different rates than those formerly charged by 
Shoshone. These acts clearly "relate to" rates, charges, tariffs and the service 
of a public utility. Even though the Commission found that the quality of 
service would be improved and the rates would probably decrease, the order 
nonetheless has the effect of changing service regulation and rates as those 
terms are defined in § 37-1-102, supra. 
Consequently, a public hearing is required by § 
37-2-120, supra.

 
 
[¶11.]  Because a public hearing held pursuant to 
§ 37-2-120, supra, requires a determination of 
adjudicative facts, the statute contemplates a trial-type hearing and not a 
legislative or argumentative-type hearing. See Scarlett v. Town Council, Town of Jackson, TetonCounty, supra, 463 P.2d 26. Therefore, the matter 
constitutes a contested case, and the Commission erred in ruling to the 
contrary.1

 
 
[¶12.]  We find the Commission's order was 
entered without observance of procedure required by law, § 16-3-114(c)(ii)(D), W.S. 1977, and we reverse and 
remand for proceedings consistent with this opinion.

 
 
FOOTNOTES

 
 

1The Commission made the ultimate finding 
that PP&L's purchase of Shoshone was "in the public interest." The balance 
of the Commission's order, however, demonstrates that the only interests 
considered were those of PP&L and Shoshone. The Commission steadfastly 
refused to consider any facts relating to Tri-State's allegations that the sale 
of Shoshone would jeopardize its ability to provide electric power to its other 
cooperatives. A contested case proceeding will allow the Commission to fully 
evaluate these contentions.