Opinion ID: 2604610
Heading Depth: 3
Heading Rank: 2

Heading: Did the APUC Abuse Its Discretion by Failing to Follow Its Own Adjudicative Precedents

Text: United argues that the APUC abused its discretion by basing its decision on the quality of the applications rather than on an analysis of which applicant is best suited to serve the public interest. The APUC has stated that under AS 42.05.241, [w]here competing applicants seek a certificate that may be issued only to one entity, the [APUC] must select the applicant it considers the most fit, willing and able of those who demonstrate threshold levels of fitness, willingness and ability to serve. Re Applications for a Certificate of Public Convenience and Necessity to Operate as a Telecommunications (Cable Television) Public Utility in the Anchorage Area, 2 A.P.U.C. 527, 533-34 (1979). The factors relevant to the selection process may be divided into three categories: (1) internal strengths; (2) external strengths; and (3) miscellaneous indicia of fitness and ability. Id. at 538. The category of internal strengths includes organization; financial backing; technical facilities and equipment, including proposals for engineering and construction of plant to be built; operations expertise; and management and administrative experience. Id. These five factors establish a threshold that all applicants must meet. Id. Once the APUC has made this initial inquiry, it considers external strengths. Id. at 539. These factors focus on the interface between the applicant and the public and include the rates proposed by the utility, its track record, and its demonstrated alertness to consumer needs or desires, as well as any indications of consumer preferences. Id. Finally, the miscellaneous indicia of fitness and ability include, among other factors, the quality of application or filing. Id. In addressing the threshold factors in this case, the APUC concluded that although United had sufficient organization, financial backing, expertise, and experience, it failed to establish the adequacy of its proposal for engineering and construction of the microwave system. The APUC stated that it is extremely doubtful that, without additional evidence and explanation, [United] would be granted even an unopposed, noncompeting application to extend its service area. In contrast, the APUC concluded that Summit, in addition to demonstrating significant technical, operational, and managerial acumen and satisfactory arrangements for financing, also fully supported all aspects of its proposal. As to the factors in the external strengths category, the APUC found that Summit's plan for a buried cable would better serve the needs of Wiseman. It noted United's advantage in consumer preference, but also gave a reasonable explanation why that preference did not outweigh other factors. It also found that other factors in this category, including the proposed rates, did not favor either company. Finally, in considering the miscellaneous factors, the APUC found that the quality of Summit's application and filings was superior to those of United. Our review of the APUC decision indicates that it had a reasonable basis for its consideration and weighting of the relevant factors in this case. Contrary to United's assertion, the APUC did consider the strengths and weaknesses of each applicant. In accordance with the specific provisions of its prior decisions, the APUC also considered the strengths and weaknesses of the applications. Indeed, United's distinction between applicant and application strikes us as somewhat artificial; certainly, the APUC must base its evaluation of an applicant at least partly on the quality of its application. United's argument, taken to its logical conclusion, would force the APUC to ignore the nature and quality of a proposal and base its decisions solely on the identity of the competing applicants. Such an approach would not be in line with the APUC's statutory mandate under AS 42.05.241 or its past practice. Therefore we hold that the APUC did not abuse its discretion in denying United's application and approving Summit's based on a consideration of both the applications and the applicants.