Opinion ID: 2398514
Heading Depth: 3
Heading Rank: 3

Heading: Rate Case Expenses to American Water Works Service Co.

Text: The company's original filing contained an account for rate case expense which, in turn, included a $19,000 expense to the company's affiliate the American Water Works Service Company (the service company). The commission, claiming to have had no proof of the company's expenses in this regard, disallowed the bulk of the proposed sum, and substituted in its place an allowance of $8,500. No further justification was offered for this finding. The commission, in its brief, defends its action by stating that it chose merely to implement the better of two educated guesses. It claims that, insofar as the company had failed to sustain its statutory burden of showing that its proposed rate increase was necessary in order to obtain a reasonable compensation for its services, § 39-3-12, its disallowance of all but $8,500 of this account was justified. While the burden is indeed upon the company at the hearing to justify a rate increase, the commission's burden is to sufficiently set forth the evidentiary facts upon which its decision rests. It bears repeating that we will not speculate as to the existence of such facts nor will we conduct our own search of the record therefor. Rhode Island Consumers' Council v. Smith, supra, 111 R.I. at 278, 302 A. 2d at 763. One educated guess does not serve to displace another. While the commission may have been amply justified in concluding that the company had failed to sustain its burden of proof, this constituted no excuse for the commission to shirk its own duty. The commission's findings must be fairly and substantially supported by legal evidence and sufficiently specific to enable this court to ascertain if the facts upon which they are premised afford a reasonable basis for the result reached. Id. at 277, 302 A.2d at 762. If it is found that it is impossible to verify the entirety of the company's proposal, then the commission would be justified in allowing only so much of it as is supportable by legal evidence. In the instant case, the commission only executed the first half of this two-stage decisional process. Its conclusion that $8,500 was a sufficient amount to cover rate case expense to the service company finds no apparent support in the record. This issue is therefore remanded to the commission for supplemental or additional decision.