Opinion ID: 1541219
Heading Depth: 2
Heading Rank: 2

Heading: Review of an Element of the Rate Order

Text: While the ultimate issue, upon judicial review, is the overall effect of the rate order, this is not to say that our review must encompass all aspects of that order. In the present case, for example, the overall rate of return is not directly at issue. None of the petitioners questions the rate levels, as such, granted WGL and Pepco; all agree (or do not contest) that for District of Columbia operations WGL is entitled to a 9.25% overall rate of return each year, while Pepco is entitled annually to 9.06% overall. The narrow question, therefore, is whether a portion of each company's prescribed return should be deemed already paid by the realization of gain (or appreciation in value) on land no longer in service, entitling the customers to a short-term credit of some sort; or whether, instead, each company's return should be recoverable in full from charges to its customers. Thus, we are asked to limit our review to scrutiny of the Commission's expert judgment applied to but one of many elements of the ratemaking calculus. While we canand willdo so, we confront a possible problem of myopia. Assume that petitioners do reveal an apparent infirmity in the Commission's ratemaking here. How can we be sure that other aspects of the rate order do not compensate the class represented by petitioners for that infirmity, such that the overall effect of the order is just and reasonable? We note, for example, that a challenge to another aspect of the same 1976 Pepco rate order is pending before another division of this court, No. 12023; thus, we are not dealing with the only element of that order that could undergo revision, affecting the parties' respective positions. Our only choice, realistically, is to assume that respondents, aware of the overall effect or end result test, Permian Basin Area Rate Cases, supra, 390 U.S. at 791, 88 S.Ct. 1344, will reveal any such compensating factor. It follows that petitioners would be obliged to refute the point as part of their burden to make a convincing showing of unreasonableness. In this case, however, it is fair to say that respondents have not proffered a compensating factor from Case No. 12023 or otherwise; thus, we can consider the record before us as the entire universe for review purposes, without concern that a vital portion of the rate proceeding transcript is missing or that we have not been provided with an additionally relevant interpretation of the data. The logical extension of our position is this: whenever more than one petition for review of a Commission rate order is filed with this court, and the Commission or another partyin advocating the overall effect or end result testconcludes that the petitions should be consolidated to achieve the requisite perspective, the Commission or other party must assume the burden of filing a motion to that effect. It will be freely granted absent unusual circumstances. Without such consolidation, however, any division of the court will have to disregard the issues in the other pending case and evaluate the rate order with respect to the one or more elements presented. We turn now to what the Commission has doneand why. We focus on the relationship between rate making and the Commission's prescribed accounting system for utility companies.