Opinion ID: 2632596
Heading Depth: 3
Heading Rank: 2

Heading: Issue1 Financial Harm

Text: [¶ 24] The determination by the Commission that PacifiCorp failed to carry its burden of proof justifying non-traditional rate making could have ended the discussion. Instead, the Commission continued its analysis to determine if there were any other reasons why it should grant the requested surcharges. It is in this context that the Commission discussed the matter of financial harm to the company. Specifically, the Commission was complying with § 37-2-121 to ensure the ultimate rate decision would not be confiscatory or unremunerative. [¶ 25] PacifiCorp's argument is that the Commission used a financial harm standard as a standard that must be met in order to qualify for the surcharges. The Commission, however, did not establish a financial harm standard as a bar to recovery of otherwise recoverable costs. In fact, the Commission specifically stated in its Order at ¶ 127 that it will not establish a bright line `financial harm' regulatory test. The Commission only analyzed the financial harm aspect to determine if the financial condition of the company might require the Commission to grant some sort of rate relief that was not otherwise allowable. [¶ 26] The above quoted statutes clearly are broad enough to grant the Commission power to review the financial status of PacifiCorp both as a whole and with regards to its Wyoming operations. In fact, such review is virtually required in a rate case. The Commission should put its rate analysis in context by examining every aspect of the utility's operations and the economic environment in which the utility functions. Montana Dakota Utilities Co. v. Public Service Comm'n of Wyoming, 847 P.2d 978, 988 (Wyo.1993) (The general rate increase application traditionally covers all facets of a utility's operations, finances, rate design, and rate of return.) PacifiCorp at least implicitly accepted this when it presented evidence regarding the financial status of the company as a whole. Evidence was also presented relating solely to the Wyoming-specific operations of PacifiCorp. The Commission, in ¶ 134 of its Order, listed both the company-wide operating revenue and the Wyoming operating revenue and determined that PacifiCorp showed that it achieved positive, albeit small, earned returns on equity in Wyoming even when the `power crisis' was at its height. [¶ 27] The Order reflects that the Commission considered both the company-wide and the Wyoming-specific operating revenue of PacifiCorp in determining just and reasonable rates. The Commission was well within its statutory authority in reviewing the overall business values of PacifiCorp. § 37-2-119. The Commission certainly did not establish a financial harm standard as a requisite to recovery of extraordinary and unforeseen costs. Under theses circumstances, this Court finds no error in the Commission's analysis of PacifiCorp's financial position, both company-wide and on a Wyoming basis, in the context of determining the justness and reasonableness of a rate increase.