Opinion ID: 1174031
Heading Depth: 2
Heading Rank: 2

Heading: Measures of Utility Responsibility.

Text: Contrary to other Department arguments, the Commission's order is not illegal because of inconsistency with Utah law, notably those passages in the Wexpro I opinion that speak of MFS's trust relationship with ratepayers and of the no-profits-to-affiliates rule. This Court's references to MFS's trust relationship to its customers, 595 P.2d at 874 and 876, have been productive of considerable confusion. [28] The single judicial authority cited for this reference unquestionably used those words not in the technical sense of property owned in trust for another, but in the nontechnical sense of special responsibilities owed to another. Thus, in the two sentences immediately preceding its reference to trust relationship the cited case refers to the utility's monopoly position and to its consequent duty to operate in such manner as to give to the consumers the most favorable rate reasonably possible. City of El Dorado v. Arkansas Public Service Commission, 235 Ark. 812, 816, 362 S.W.2d 680, 683-84 (1962). That statement, which was echoed in this Court's opinion in connection with each of its references to the trust relationship, is simply an expression of the utility's legal responsibility to make just and reasonable charges for its services and to assure that those services are in all respects adequate, efficient, just and reasonable. U.C.A., 1953, § 54-3-1. These and the related traditional legal duties of a utility  not a technical trust relationship  are the measure of the utility's relationship to its customers. This clarification is not intended to minimize the extent of MFS's duties to its customers. Those duties are extensive, and they are enforceable. The Commission is empowered to supervise and regulate every public utility in this state, and to supervise all of the business of every such public utility, § 54-4-1, including the fixing of rates. U.C.A., 1953, § 54-4-4. We have often said that the Commission is responsible to exercise its statutory powers over utilities to assure that the public receives the most efficient and economical service possible. Lewis v. Wycoff Co., 18 Utah 2d 255, 259, 420 P.2d 264, 266 (1966). The fixing of rates presupposes efficient and economical management. Utah Power & Light Co. v. Public Service Commission, 107 Utah 155, 212, 152 P.2d 542, 568 (1944). Although the Commission is normally forbidden from intruding into the management of a utility, we have suggested that it can do so where the policy and consequent expenditure is actuated by bad faith, or involves dishonesty, wastefulness, or gross inefficiency. Logan City v. Public Utilities Commission, 77 Utah 442, 447, 296 P. 1006, 1008 (1931). [29] These powers are surely sufficient for the Commission to ascertain and correct wasteful or grossly inefficient business practices by utilities in order to enforce what Wexpro I referred to as the duty of a public utility corporation to operate in such a manner as to give to the consumers the most favorable rate reasonably possible. 595 P.2d at 874 and 876. In addition to its general legal responsibilities as a utility, MFS assumed additional responsibilities of a fiduciary character when it obtained ratepayer financing for utility exploration and development by including such expenses in its rate base. The resulting proprietary interest of ratepayers in MFS properties so financed, recognized in Wexpro I, might be termed a trust relationship. Whatever uncertainty exists on that score is finally resolved in the current settlement, under which the ratepayers have relinquished that proprietary interest in exchange for a royalty interest in a specific and larger quantity of properties, plus other considerations.