1 STATE OF WEST VIRGINIA

SUPREME COURT OF APPEALS

Jefferson County Vision, Inc.

, Petitioner

vs) No. 19

- 0774

Public Service Commission of West Virginia and Jefferson Utilities, et al., Respondents

M EMORANDUM DECISION

Jefferson County Vision, Inc., ( “ JCV ” )

, 1 appeals the August 2, 2019, order of the Public Service Commission of West Virginia (“Commission”) that dismissed its pending complaint regarding the issuance of an emergency certificate of convenience and necessity

t o Jefferson Utilities, Inc. (“JUI”)

, 2 to extend water service to an industrial park site known

as Jefferson Orchards in Ranson, West Virginia

. The Commission has filed its requisite Statement of Reasons for the Entry of its Order. 3

This Court has considered the parties’ briefs, oral argum ents, and the appendix

record. Upon application of the standard of review and the pertinent authorities, this Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the final order of the Co mmission is appropriate under Rule 21 of the Rules of Appellate Procedure.

1 According to JCV’s complaint , it is a nonprofit corporation formed “to promote, among other things, responsible development within Jefferson County including proposed utility infrastructure.”

2 JUI is a privately owned company that provides water treatment and potable water delivery service in Jefferson County. As such, it is regulated as a public utility.

3 Christopher P. Stroech appeared on behalf of JCV

, and John J. Meadows, Todd Swanson, P eter J. Raupp, and Ryan D. Ewing represented JUI. Jessica M. Lane and Natalie N. Terry responded for the Commission . Susan J. Riggs filed an amicus curiae brief on

behalf of Roxul , USA, Inc., in support of the Commission ’s decision. 

### FILED June 15, 2020

released at 3:00 p.m.

EDYTHE NASH GAISER , CLERK

SUPREME COURT OF APPEALS

OF WEST VIRGINIA2 On July 12, 2018, the Commission approved an application filed by JUI for an emergency certificate of convenience and necessity to extend water ser vice to Jefferson

Orchards for u se by a new manufacturing facility to be constructed in the industrial park. Roxul USA, Inc., planned to build and operate the Rockwool stone wool manufacturing facility in Jefferson Orchards and to receive water from JUI. The West Virginia

Infrastr uc ture and Jobs Development Council (“WVIJDC”) , a public economic development authority that provides funding for public utility expansion and renovation projects throughout the s tate

, approved the water line exten s ion project and d esignated it

as an “emergency project .” 4 The estimated cost of the pro ject was $4,850,000 and was to

include the installation of approximately 18,050 linear feet of sixteen

- inch water line, a 795,000

- gallon water storage tank, a 1,200 gallon per minute triplex pressure booster

stati o n, an altitu d e fa ult vault, and all other necessary appurtenances. The cost was to be funded by a $4,520,000 loan from the WVIJDC to the Jefferson County Development

Authori ty (“JCDA”) and $330,000 provided by JUI from its cash flow. JUI indi cated that the project would have no impact on the rates of it s existing customers. Following public

notice 5 and a favorable evaluation by the Commission staff, the Commission granted the application for the certificate in a July 12, 2018, order subject to certain conditions. Specifically, t he order provided:

IT IS FURTHER ORDERED that if there are any changes in the Project plans or scope, as well as the terms of

a n y financing other than grants or loan s that impact the rates, Jefferson Utilities, Inc., must seek Commission approval of those changes.

IT IS FURTHER ORD E RED if there are any changes in the plans or scope, or terms of financing of the Project, or changes in rates associated with the Project , Jefferson Utilities, Inc., must petition to reopen for Commission approval of such changes. Changes in project costs of financing do not require separate approval if the changes do not affect rates and

4 See W.Va. Code § 3 1

- 15A

- 2 (h) (1998) (defining “emergency project” as “a project

which the [WVIJD C ] has determined: (1) Is essential to the immediate economic development of an area of the state; and (2) will not likely be developed in that area if construction of the projec t is not commenced immediately”).

5 W est V irginia Code § 24

- 2

- 1 1 ( 2017 ) set s for th the requirements for a certificate of public convenience and necessity and provides for notice of any application for a certificat e to be made by publication. The statute further allows for a formal hearing to be waived in the absence of substantial protest. Because no protests or petitions to intervene were filed in response to the publication providing notice of JUI’s application, no public hearing was held.3 Jefferson Utilities, Inc.

, submits an affidavit fro m a certified public accountant attesting to the lack of rate impact. 6

(Footnote added).

Six months after the Commission approved the application and granted the certificate, David Tabb, a JUI customer and non

- party to the certificate case, filed a m otion seeking to have the Commission r e view the project and issue a stop work order. M r. Tabb

asserted that JUI had violated the July 12, 2018, certificate order by not seeking the Commission’s approval of changes to the project. In that regard, Mr. Tabb noted that funding for the project was no longer being provided by JCDA through a WVIJDC loan; that the construction bids received for the project exceeded the initial cost estimate by at least fourteen percent; and that Roxul/Rockwoo l had agreed to provi de substitute funding and had executed agreements with JUI to replace those between JUI and JCDA. Thereafter, the Commission staff recommended that the Commission reopen the certificate case based on its concern that the project revisions would have an im pact on customer rates. The

Commission s taff also sought t o join Roxul/Rockwool as a necessary party.

Roxul/Rockwool opposed the Commission staff’s petition to join it as a party, maintaining that it ha d simply “stepped into the shoes” of JCDA and be cause JCDA was not a party to the certificate case, there was no reason for it to be made a party. JUI also filed a response in which it acknowledged that the project costs had increased from $4,850,000 to $5,605,229 based on the construction bids receive d and that

Roxul/Rockwool had r e placed JCDA as the funding source. However, JUI maintained that the scope of the project remained the same and the financing changes would not impact customer rates because JUI’s share of the costs remained at $330,000 as a pproved by the Commission in the July 12, 2018

, order granting the certificate.

On February 22, 2019, the Commission issued a procedural order reiterating the conditions set forth in the July 12, 2018, order that would require JUI to request further

ap proval from the Commission for project changes. The Commission held its ruling on whether to reopen the certificate case in abeyance pending submission of an affidavit from JUI’s certified public accountant regarding any rate impact as a result of the project changes. JUI was also required to file with the Commission a detailed revenue requirement calculation and cash flow statement as well as sample journal entries demonstrating the recording of the transf er of the project to Roxul.

6 These conditions are consistent with West Virginia Code § 24

- 2

- 11(j) (2017),

which provides: “A public utility, including a public service district, which has received a certificate of public convenience and necessity after July 8, 2005, from the commission and has been approved by the Infrastructure and Jobs Development Council is not required to, and cannot be compelled to, reopen the proceeding if the cost of the project changes but the change does not affect the rates est ablished for the project. ”4 The requisite information was filed by JUI with the Commission on March 14, 2019. Approximately ten days before, on March 4, 2019, which was almost nine months after the period to intervene in the certificate case expired, the petitioner herei n, JCV

, and another JUI customer, Leigh Smith, filed a joint petition to intervene in the closed certificate case. That same day, they also filed a petition for reconsideration of the Commission’s February 22, 2019, order, arguing that JU I was required to seek approval of the substitute funding

from Rox ul/Rockwool. They also argued that the change in the funding source would impact customer rates. JUI filed responses objecti ng to these petitions.

By order issued March 26, 2019, the Commission denied the Commission s taff’s petition to reopen the certificate case and JCV and M s . Smith’s petition for reconsideration of the February 22, 2019, order. The Commission found that the scope and plans for th e project had not changed and the cost increase and funding revisions were not going to impact customer rates. As such, the Comm ission concluded that its approval of the project changes w as not required.

On April 5, 2019, JCV and M s . Smith filed a pet ition for reconsideration of the March 26, 2019, order. They claimed a denial of due process because they were not allowed to pursue and dispute factual issues regarding the project. Following a response from JUI, the Commission denied the petition for r econsideration by order entered May 3,

2019.

While JCV and M s . Smith were attempting to intervene in the certificate case, they also sought to reop en the certificate case by fil i ng a completely separate c omplaint with

the Commission on January 22, 2019

, which is now the subject of this appeal. In that complaint, they alleged that JUI was in violation of the Commission’s July 12, 2018

, order

for fail ing to reopen the certificate case and secure the Commission’s approval of the changes to the scope, cost s , and financing of the project. JCV and M s . Smith indicated that they filed their complaint based on a local newspaper article that reported the financing changes and the increase d cost s , and noted that construction had begun. JCV and M s

. Smith asserted that the project changes were likely to increase the rates of other JUI customers and sought interim relief in the form of a stop work order. They also sought to have the Commission reopen the certificate case and issue a procedural order allowing for

di scovery and a hearing regarding the project.

By order entered on August 22, 2019, the Commission dismissed the complaint on the grounds that JCV and M s . Smith were seeking the same relief that they sought in the

closed certificate case. The Commission stated that although JCV and M s . Smith were not parties to the certificate case, the Commission had decided all of issues raised in their complaint in the February 22, 2019, March 2 6 , 2019, and May 3, 2019, orders entered in

the certificate c ase . According ly , the Commission dismissed the complaint. This appeal

followed.5 Our standard of review for final orders entered by the Commission is well

establ ished:

In reviewing a Public Service Commission order, we

will first determine whether the Commission’s order, viewed in light of the relevant facts and of the Commission’s broad regulatory duties, abused or exceeded its authority. We will examine the manner in which the Commission has employed the methods of regulation which it has itself sele cted, and must

decide whether each of the order’s essential elements is supported by substantial evidence. Finally, we will determine whether the order may reasonably be expected to maintain financial integrity, attract necessary capital, and fairly

compen sate investors for the risks they have assumed, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable. The court’s responsibility is not to supplant the Commission’s balance of these interests with

one more nearly to its liking, but instead to assure itself that the Commission has given reasoned consideration to each of the pertinent factors.

Syl. Pt. 2, Monongahela Power Co. v. Pub. Serv. Comm’n of W.Va. , 166 W.Va. 423, 276
S.E.2d 179 (1981). To be more c oncise,

“ [t] he detailed standard for our review of an order of the Public Service Commission contained in Syllabus Point 2 of Monongahela Power Co. v. Public Service Commission , 166 W.Va. 423, 276 S.E.2d 179 (1981), may be summarized as follows: (1) wheth er the Commission exceeded its statutory jurisdiction and powers; (2) whether there is adequate evidence to support the Commission’s findings; and, (3) whether the substantive result of the Commission’s order is proper.

Syl. Pt. 1, Central W.Va. Refuse, Inc. v. Pub. Serv. Comm’n of W.Va. , 190 W.Va. 416,
438 S.E.2d 596 (1993).

J C V argues that the Commission committe d procedural and legal error by dismissing its c omplaint as a “collateral proceeding .” JCV maintains that it had the right

to seek relief from the order issued in the certificate case by filing a separate complaint pursuant to 150 C.S.R. § 6.2.1 which provides:6 Any person or entity may complain to the Commission by petition substantially in the form of Form No. 1 attached to

these Rules of anything done or omitted to be done by the public utility in violation of any of the provisions of the Public Service Commission laws of West Virginia [

. ]

See also W.Va. Code § 24

- 4

- 6 (1923). JCV also relies upon s yllabus point eight of Affiliated Const. Trades Foundation v. P ublic S erv. C omm’n of W.Va. , 211 W.Va. 325, 565 S.E.2d 778 (2002), which holds :

Any person or entity having a good faith reason to file a complaint against a public utility under West Virginia Code § 24

- 4

- 6 (1923) (Repl.Vol.2001) has standing to do so, notwithstanding the fact that such person or entity was not a party to prior proceedings for a certificate of convenience and necessity or other proceedings to which the complaint relates.

Upon review of the Commission’s final order, it is clear that JCV’s complaint was

not dismiss ed a s an impermissible collateral proceeding or for lack of standing . Rather, the Commission dismissed the complaint because JCV did not present any new facts or

subst antive issues that were not adequately addressed in the certificate case. In other words, the Commission considered t he merit s of all the arguments made by JCV in the

orders entered on Fe bruary 22, 2019, Mar ch 2 6 , 2019, and May 3, 2019, in the certificate

case and found no basis to reopen the matter. Specifically, the Commission found no change in the project plan s or scope based upon the information contained in the filings

made in the certificate case in response to the motion to reopen the proceeding

. 7 Likewise,

7 In its March 26, 2019, order, the Commission rejected the contention that the scope and project plans had changed , stating :

The JCV and Ms. Smith ’s petition for reconsideration

asserted that the s c ope of the Pr o ject has been changed to reflect approximately 1,600 feet less of sixteen

- inch pipe from the preliminary design filed in the application and the final bid cost. March 4, 2019 Petit i oner for Rec on si de ration at 3. They

also claimed that the Pro ject has changed becau se t h e amoun t

o f water to be sold to ROXUL has decreased from the original projections. Id . The assertions made by JCV and Ms. Smith are not correct. A reduction of the length of the water line installed by approximately 1,600 feet, for a Project of thi s size, between the final design and bids to the preliminary design is not significant and does not change the scope of the Project.

Furt h ermore, th ere is no difference in the annual revenue to be7 the Commission found the changes in the project’s costs and financing did not require reopening of the certificate case for Commission approval because JUI submitted an affidavit from its certified public accountant attesting to a lack of rate impact. 8 Thus, JCV’s complaint was only dism issed after the Commission determined there were insufficient grounds to reopen the certificate case.

JCV also argued t hat it was denied due process because the Commission did not permit discovery or hold a hearing before dismissing its complaint. However , the record

shows that e xtensive discovery occurred in the certificate case . Moreover, JCV did in fact serve additional discovery on JUI after it filed its January 22, 2019, complaint. With respect to a hearing, t he Commission was not required to hold a hearing in the ce rtificate case because no protest was filed in response to the notice publication. 9 A bsent any new facts

generated by JUI from ROXUL as filed in the application an d

as show n in the Marc h 14, 2019 JUI response to the Procedural Order. The request s to re o pen based on changes to the Project scope and Project

- related revenue are unfounded.

8 With respect to the changes to financing and costs, the Commission made the following findings in the March 26, 2019 order:

JUI is in compliance with the Final Order and has supplied an affidavit signed by its certified public accountant attesting that there will be no rate impact related to the increased Project cost and change in source of Project financing. Response to Procedural Order at Ex. A. JUI also provided its projected revenue requirement calculation, projected cash flow analysis and sample journal entries, all indicating that the revised Project will not result in an y additional rate base or impact current rates. The sample journal entries record the transfer of approximately $5.275 million of utility plant from ROXUL to JUI with an equal amount charged to Contributions

- in

- aid

- of

- Construction (CIAC). JUI did not pro pose an amortization of the CIAC and the Commission will not recognize an amortization of the CIAC in

a future rate proceeding of JUI. Reopening this case for Commission approval of the changes to Project costs and source of funding is not warranted becau se the changes do not

affect JUI rates.

9 See note 5

, supra.8 or substantive issues warranting a reopening of the certificate case, there was no requirement that the Commission hold a hearing before dismissing JCV’s complaint.

Simply stated, the Commission ha s not exceeded its statutory jurisdiction and

powers , and there is adequate evidence to support the Commission’s findings. Based u pon our careful review of the record in this matter

, we find that substantive result of the Commission’s final order is proper. Accordingly , the Commission’s August 2, 2019, order

is affirmed. 10

Affirmed.

ISSUED: June 1 5 , 20 20

CONCURRED IN BY:

Chief Justice Tim Armstead Justice Margaret L. Workman

Justice Elizabeth D. Walker

Justice Evan H. Jenkins

Justice John A. Hutchison

10 In its Statement of Reasons for Entry of its Order, the Commission argue d that

this matter i s “ technically moot ” because the w ater line extension portion of the project was completed in October 2019. However, the record show ed that t he water tank and booster station had yet to be installed.