Opinion ID: 2193374
Heading Depth: 1
Heading Rank: 4

Heading: Decision, Dissent, and Reconsideration

Text: On April 1, 2004, the PSC rendered its decision. Based on findings that Verizon was the District's sole source for E911 service at a competitive price, the PSC agreed with the District that Verizon's E911 service should not be classified as a competitive service, but rather should be reclassified and placed back in the basic business basket. [14] Order No. 13149 at 8. Citing D.C.Code § 34-2002(j)(3) and (9), the PSC explained that this reclassification was necessary because, [i]n the absence of actual competition for E911 service, there are no market forces that would tend to produce fair, just, and reasonable rates or protect the District Government from excessive charges. Id. [15] In accordance with its decision, the PSC suspended Verizon's E911 tariff rate and invited Verizon to propose a lower, reasonable rate to replace it. [16] The suspension was effective only as of the date of the ruling, however. A majority of the PSC rejected the District's argument that the relief should be retroactive, i.e., that the District Government should be relieved of its obligation to pay Verizon the competitive May 2002 tariff rate for E911 service that was provided prior to April 1, 2004. The PSC majority explained that it saw no reason to depart[ ] from the traditional notion that ratemaking is prospective. Order No. 13149 at 9. Having secured the PSC's final approval of the 2002 Price Cap Plan, which placed E911 service in the competitive basket, Verizon was entitled to initiate the rate increase for that service with no further PSC authorization. And once the new tariff rate took effect, the PSC majority stated, Verizon had a right to rely on the legality of that rate and levy its charges accordingly. Id. at 10 (citing D.C.Code § 34-603 (2001) (providing that all rates and other charges fixed by the PSC shall be in force and shall be prima facie reasonable until finally found otherwise in an action brought for that purpose)). Therefore, the majority concluded, [w]e cannot use our subsequent determination that the E911 service should be reclassified as a basis for rendering the filed rate illegal because to do so would violate the well-settled prohibition against retroactive ratemaking. [Citation omitted.] Relief is prospective, only. Therefore, the District is obligated to pay the tariff rate under Verizon's May 2002 E911 tariff up until the date of this Order. Id. at 10. One member of the PSC, Commissioner Rachal, dissented from the determination that the District Government remained subject to the competitive tariff rate for the E911 service that it had received prior to April 1, 2004. The dissent argued that the PSC's initial decision of February 28, 2002, approving the 2002 Price Cap Plan was invalid, because it was a mistake at that time to classify E911 service as competitive. [17] [C]onsequently, the dissent reasoned, the competitive rates that were charged for this service from that time to date are also invalid. Neither the majority nor Verizon can rely on a tariff that was illegal and implemented under erroneous conclusions. Id., Dissent at 5. On reconsideration, over Commissioner Rachal's continuing dissent, the PSC majority adhered to its decision that the reclassification of E911 service as a basic business service entitled the District Government to prospective relief only. [18] The majority articulated the core of its rationale as follows: The filed rate doctrine and its corollary, the rule against retroactive rate making, bars this Commission from retroactively substituting what we perceive as an unreasonably high or low rate with one that we perceive is just and reasonable. The filed rate doctrine forbids a regulated entity to charge rates for its services other than those properly filed with the appropriate regulatory authority. The related rule against retroactive rate making prohibits the regulatory authority from adjusting current rates to make up a utility's overcharge or under-collection in prior periods. By authorizing only prospective rate changes, these doctrines ensure rate predictability ..., and by preventing discriminatory pricing, they promote equity .... Order No. 13258 at 6-7 (footnotes and citations omitted). In addition, the PSC majority noted, Price Cap Plan 2002 does not provide for, nor did we issue, any statement notifying interested parties that Verizon's E911 rate was provisional or otherwise subject to later revision. Id. at 6 (footnotes and internal quotation marks omitted). [19] Thus, by failing to file a petition for reconsideration of the Order approving the 2002 Price Cap Plan, the District Government had missed its opportunity to stay the effectiveness of Verizon's E911 tariff.... Id. at 4. [20]