Opinion ID: 1525205
Heading Depth: 1
Heading Rank: 9

Heading: Standards Applied

Text: The Commission granted EPEC's request to defer post-in-service costs for Unit 1 based upon a financial integrity and viability standard. Docket No. 6350, supra note 6, at 1239-41. However, the Commission granted EPEC's unit 2 request for deferred accounting based on a measurable harm standard. Docket No. 7460, supra note 1, at 1079. The City argues that the use of two different standards is arbitrary and capricious because the Commission has created new standards for each decision concerning deferred accounting. [19] We disagree. In determining whether to allow a particular utility to defer post-in-service costs, the Commission has discretion to proceed on an ad hoc or case-by-case basis. See, e.g., Securities and Exch. Comm'n v. Chenery Corp., 332 U.S. 194, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947); National Labor Relations Bd. v. Wyman-Gordon Co., 394 U.S. 759, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969); Southwestern Bell Tel. Co. v. Public Util. Comm'n, 745 S.W.2d 918, 926 (Tex.App.-Austin 1988, writ denied). In SEC v. Chenery Corp., 332 U.S. 194, 202-03, 67 S.Ct. 1575, 1580-81, 91 L.Ed. 1995 (1947), the Court stated that ad hoc adjudication may be preferable to a formal rulemaking proceeding where the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule; and where the problem is so specialized and varying in nature as to be impossible of capture within the boundaries of a general rule. Both of the foregoing considerations apply in the Commission's early attempts to define the proper standard to apply to deferred accounting cases. [20] Early in the process, the Commission was faced with numerous complex problems presented by the recent arrival of nuclear generation plants. While remaining within the statutory framework of PURA, the Commission had to balance the interests of consumers with the complex financial consideration created by public utilities investing large amounts of capital in nuclear plants. Proceeding on an ad hoc or case-by-case basis is fully understandable in the context of a newly created competitive market that involves complex technical considerations and competing statutory objectives. See Southwestern Bell Tel. Co. v. Public Util. Comm'n, 745 S.W.2d 918, 926-27 (Tex.App.-Austin 1988, writ denied); see also Securities and Exch. Comm'n v. Chenery Corp., 332 U.S. 194, 202-03, 67 S.Ct. 1575, 1580-81, 91 L.Ed. 1995 (1947). As a result, we hold that the Commission was within its discretion in proceeding on a case-by-case or ad hoc basis and applying different standards in different proceedings. [21]