Title: In re Quechee Service Co.

State: vermont

Issuer: Vermont Supreme Court

Document:

In re Quechee Service Co. (95-047); 166 Vt. 50; 690 A.2d 354

[Filed 13-Dec-1996]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.
                                           

                                 No. 95-047

In re Petition of Quechee Service                 Supreme Court
Company, Inc. for a Certificate of
Public Good and for Approval of                   On Appeal from
Rates, Rules and Regulations                      Public Service Board

                                                  September Term, 1995

Richard H. Cowart, Chair

       James B. Anderson of Ryan Smith & Carbine, Ltd., Rutland, for
  appellant

       Michael Marks of Tarrant, Marks & Gillies, Montpelier, for appellee
  Quechee Lakes Landowners' Ass'n

       Geoffrey Commons, Special Counsel, Montpelier, for appellee Department
  of Public Service

PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.

       JOHNSON, J.  In this case we review two orders of the Public Service
  Board concerning Quechee Service Company (QSC), a once-private sewer
  company that became subject to the jurisdiction of the Board following the
  adoption of 30 V.S.A. § 203(6) in 1993.  In the first of the challenged
  orders the Board established an initial rate base and cost-of-service for
  QSC; in the second, the Board denied QSC a certificate of public good
  (CPG).  On appeal, QSC contests each aspect of the Board's decision,
  claiming that the Board erred: (1) by reducing QSC's rate base to reflect
  the percentage of development costs recovered through lot sales and then
  further reducing QSC's rate base to account for depreciation; (2) by
  determining a cost-of-service that was less than QSC's annual
  out-of-pocket expenses for utility operations, and did not include certain
  expenses requested by QSC; and (3) by denying QSC a CPG based on acts that
  occurred before QSC was subject to regulation.  In addition, QSC raises a
  number of constitutional claims, essentially arguing that the Board
  violated its due process rights by

 

  confiscating QSC's rate base and depriving QSC of its "vested property
  right" to operate a sewer plant in Vermont.  We affirm the Board's order in
  all respects.

       This case raises a combination of familiar issues and new questions. 
  The unusual position of QSC, as a private utility with a twenty-year
  operating history that has now become subject to regulation by the Board as
  a public utility, complicates both the findings and decisions of the Board
  and our review of those decisions.  Yet, although this case is complex, and
  in some ways novel, our standard of review remains the same.  Public
  Service Board orders "enjoy a strong presumption of validity," and we will
  accept the Board's findings and conclusions "unless the appealing party
  demonstrates that they are clearly erroneous."  In re Green Mountain Power
  Corp., 162 Vt. 378, 380,