Opinion ID: 2215827
Heading Depth: 2
Heading Rank: 5

Heading: Rate Structure in 18200/18200-A.

Text: Once having determined what increase was necessary to meet Boston Edison's revenue deficiency in 18200/18200-A, the Department considered various proposals offered by the Company and the interveners for allocating the increase among the Company's customers. The Department accepted the basic principle underlying the Company's proposed rate structure and fashioned experimental rates allocating the rate increase according to the relative contribution of customer classes to the growth in peak-load demand for electricity. [29] However, the Department modified the Company's proposal by exempting the first 384 KWH of monthly residential usage from the rate increase, on the ground that this segment of residential usage had not contributed significantly to the growth in peak-load demand. Boston Edison and General Motors challenge this exemption on appeal. They argue that the Department lacked statutory authority to make any exemption at all and that the exemption made is not supported by substantial evidence. In addition, General Motors maintains that the exemption violates its rights under art. 10 of the Declaration of Rights of the Massachusetts Constitution. There was no error. Under the provisions of G.L.c. 164, § 94, most recently amended by St. 1973, c. 816, §§ 2, 3, the Legislature has given the Department regulatory authority over all rates, prices and charges to be collected in the Commonwealth for the sale of electricity. As we have previously noted, this statute gives the Department jurisdiction of the entire rate structure  in electric rate cases. Boston Real Estate Bd. v. Department of Pub. Utils., 334 Mass. 477, 485 (1956) (emphasis in the original). The statute contains no exception, but the appellants now submit that the 384 KWH exemption created in 18200/18200-A exceeded the Department's authority. There is no merit to this contention. What Boston Edison and General Motors object to is different treatment for different classes of customers, reasonably classified, which we have long held to be within the statutory powers of the Department. Id. at 495. This is not a case of irrational discrimination. See Lefkowitz v. Public Serv. Comm'n, 40 N.Y.2d 1047, 1048 (1976). Cf. New England Tel. & Tel. Co. v. Department of Pub. Utils., 371 Mass. 67, 84 (1976). The Department determined that Boston Edison's need for rate relief stemmed from its construction program; that new construction had been necessitated by the growth in peak-load demand; and that, since average residential usage had not contributed significantly to the growth in peak-load demand, residential users should not participate fully in the rate increase. The Department could reasonably conclude, on the record before it, that the challenged exemption would encourage energy conservation in the public interest, both by residential users below the 384 KWH level and by Boston Edison's largest industrial customers. For this reason, the Department's determination must be affirmed if supported by the record. See Apartment House Council of Metropolitan Wash., Inc. v. Public Serv. Comm'n of D.C., 332 A.2d 53, 58 (D.C. Ct. App. 1975). Evidence given by a Boston Edison witness clearly indicates that the Company's increased costs resulted ultimately from the growth in peak-load demand. It also indicates that the general service class of commercial and industrial users was primarily responsible for that growth and that residential customers who kept their consumption below 384 KWH monthly contributed least to the need for new plant construction. The 384 KWH figure represents the average residential usage in recent years, and the record shows that this figure has remained relatively steady while commercial and industrial demands have increased. We conclude that there is substantial evidence to support the Department's decision to exempt certain customers. General Motors points out that the rate structure in 18200/18200-A increases Boston Edison's margin of profit on power sold to industrial customers in order to offset the relatively low margin of profit on power sold to residential ratepayers. It asserts that this price differential amounts to confiscation of its property in violation of the Massachusetts Constitution. This position finds no support in our cases, and there is considerable judicial precedent to the contrary in other jurisdictions. See Norfolk & W. Ry. v. Conley, 236 U.S. 605, 608-609 (1915); Minneapolis Gas Co. v. Federal Power Comm'n, 278 F.2d 870, 871 (D.C. Cir.1960); Allied Chem. Corp. v. Georgia Power Co., 236 Ga. 548, 553-554 (1976); Petrolane Gas Serv., Inc. v. Idaho Pub. Utils. Comm'n, 85 Idaho 593, 602 (1963); Carpenter v. Pennsylvania Pub. Util. Comm'n, 141 Pa. Super. 447, 450 (1940). We decline to adopt General Motors' argument as the law of the Commonwealth.