Opinion ID: 1428299
Heading Depth: 2
Heading Rank: 3

Heading: Effective Date of Commission's Order.

Text: {51} Our decision to affirm the Commission's May 29 order gives rise to the question of its effective date. In their answer briefs, the Attorney General and the Commission's staff assert that if we affirm the Commission's order, we may order U S West to treat the rate reduction as if it went into effect on July 13, 1998 (the date ordered by the Commission), notwithstanding the fact that this date has already passed. U S West responds that we cannot require the Commission's order to be treated as if it had taken effect on that date because such a requirement would violate Article XI, Section 7 of the New Mexico Constitution, the filed-rate doctrine, and the rule against retroactive ratemaking. {52} The parties acknowledge that this Court has recognized a prohibition against retroactive ratemaking in Mountain States 1977, 90 N.M. at 341, 563 P.2d at 604. After vacating an order of the Commission and determining that interim rate relief was warranted in that case, we addressed the question of whether the effective date of such relief could predate the Court's order. See id. at 336, 341, 563 P.2d at 596, 604. We concluded that it could not. New Mexico is not alone in reaching this conclusion, see Krieger, supra, at 1022 n. 214 (identifying New Mexico as among jurisdictions that apply the rule against retroactive ratemaking in this context), and, in fact, it appears that courts are evenly divided on the issue, see id. at 1022. {53} The rationale behind our application of the rule against retroactive ratemaking in the context of Mountain States 1977 was that ratemaking is legislative in its nature, and it is axiomatic that legislative action operates prospectively, not retroactively. 90 N.M. at 341, 563 P.2d at 604 (citation omitted). [3] It follows that only commissions, not the courts, can engage in ratemaking. Krieger, supra, at 1023 & n. 222 (citing Public Serv. Comm'n v. Diamond State Tel. Co., 468 A.2d 1285, 1298 (Del.1983)). Many of our past decisions have relied on this reasoning. See, e.g., U S West 1995, 121 N.M. at 161, 909 P.2d at 721 ([T]his Court is not a ratemaking body.); Mountain States 1982, 99 N.M. at 7, 653 P.2d at 507 (We do not set rates....); State Corp. Comm'n v. Mountain States Tel. & Tel. Co., 58 N.M. 260, 266, 270 P.2d 685, 689 (1954) (We do not have the power or authority to determine what a fair actual rate is.). If only the Commission, and not this Court, has the power to engage in ratemaking, it follows that only the Commission, and not this Court, can change rates after this Court vacates a prior order of the Commission and remands the matter for further proceedings. {54} The same conclusion does not necessarily follow when the Court affirms an order of the Commission. In that situation, it is not necessary for the Commission to engage in additional ratemaking because the Court's action merely serves to enforce the rates set in the order it affirms. Under this rationale, when the Court affirms the Commission's order, the rule against retroactive ratemaking provides no obstacle to giving effect to that order as of the date provided therein, particularly when the rates set by the order would have gone into effect at that time but for the filing of a removal action. See Krieger, supra, at 1023-24. {55} U S West contends that there are other obstacles, however. First, under the provisions of our state constitution regarding removal of the Commission's orders to this Court, the power to change rates is not necessarily the same as the power to enforce a rate change. While Article XI, Section 7 grants the Commission the former power, the latter power is reserved for this Court when the company does not comply with the Commission's order and instead removes it. For these reasons, we agree with U S West that its filing of a removal action suspends enforcement of the Commission's order while review of that order is pending in this Court. {56} If the Court affirms the Commission's order, however, we do not believe that Article XI, Section 7 or the prohibition against retroactive ratemaking preclude us from enforcing the order as of the effective date stated therein. To apply such a prohibition in this context would provide an incentive for unreasonable delays by a party opposing the Commission's orders. Article XI, Section 7 requires this Court to give precedence to removal actions, and the powers and duties of this Court under that article are in addition to the other powers vested in [it] by this constitution and the laws of the state. Thus, we do not read Article XI, Section 7 as prohibiting the Court from exercising its equitable powers under Article VI of our state constitution to enforce an order of the Commission as of the effective date stated in that order, provided that the Court's action does not infringe on the Commission's power to set rates or the rights of U S West and other parties to remove the Commission's orders to this Court. {57} In its reply brief, U S West also contends that the Court cannot enforce the interim rate reduction as of the effective date stated in the Commission's order without violating the filed-rate doctrine because U S West has not filed new tariffs in response to that order. This contention lacks merit. The filed-rate doctrine provides that `the rate of the carrier duly filed is the only lawful charge ... [and] the carrier must abide by it.' American Tel. & Tel. Co. v. Central Office Tel., Inc., 524 U.S. 214, ___, 118 S.Ct. 1956, 1962, 141 L.Ed.2d 222 (1998) (quoting Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 59 L.Ed. 853 (1915) and discussing the Interstate Commerce Act and the Federal Communications Act). However, the doctrine does not apply when, as here, the filed rate `is found by the Commission to be unreasonable.' Id. at ___, 118 S.Ct. at 1962 (quoting Maxwell, 237 U.S. at 97, 35 S.Ct. 494). Indeed, one purpose of the filed-rate doctrine is to preserve the agency's primary jurisdiction to determine the reasonableness of rates. Tenore v. AT & T Wireless Servs., 136 Wash.2d 322, 962 P.2d 104, 108 (1998) (en banc), cert. denied, ___ U.S. ___, 119 S.Ct. 1096, 143 L.Ed.2d 95 (1999). Moreover, another purpose of the filed-rate doctrine is to further the policy of nondiscriminatory rates [such that] similarly situated customers [do not] pay different rates for the same services. Id. at ___, 118 S.Ct. at 1963. The present case does not involve an issue of discriminatory ratepaying. For these reasons, the filed-rate doctrine does not apply here.