Opinion ID: 6328601
Heading Depth: 2
Heading Rank: 1

Heading: The Substance and Effect of a CASD Decision

Text: [¶15] An understanding of the CASD process, the content of a CASD decision, and the regulatory impact of a CASD decision is necessary for an understanding of the issues raised by this appeal. [¶16] Under the process set out by 35-A M.R.S. § 1308,12 when a customer disputes a utility’s bill, the customer must first attempt to settle the dispute at an “informal hearing” with the utility. If the customer is not satisfied with the result of this informal hearing, the customer may “appeal” the utility’s 12 Title 35-A § 1308 (2021) provides: § 1308. Reparation or adjustment The commission may order reparation or adjustment when it finds that an amount charged to or collected from a customer was not in accordance with the filed rate applicable to the customer or was based upon error. The customer shall attempt to settle any dispute concerning the alleged overcharge or billing error at an informal hearing with the utility company prior to filing a complaint with the commission. If the customer is dissatisfied with the utility company’s decision, the customer may appeal the decision to the commission. The commission may not order a rebate for a billing error or excessive charge that antedates the order for more than 6 years. 13 decision to the Commission by filing a complaint with the CASD, which will investigate and issue its own written “decision.”13 Id.; 65-407 C.M.R. ch. 660, § 13(G) (effective Aug. 28, 2011).14 [¶17] Either the customer or the utility can then appeal the CASD’s decision to the Commission, which will “review the decision to determine if it complies with applicable statutory and regulatory requirements, is based on sound facts, and does not represent an abuse of discretion.” 65-407 C.M.R. ch. 660, § 13(H)(1), (3). The Commission will then issue an order affirming the CASD’s decision, remanding the customer complaint, reversing or revising the decision, or opening an investigation pursuant to 35-A M.R.S. § 1303. 65-407 C.M.R. ch. 660, § 13(H)(4). [¶18] Thus, as with the initial appeal to the CASD, under section 1308 and the Commission’s regulations, when a customer exercises its right to appeal the CASD decision, the Commission reviews the billing dispute on the merits and determines which party should prevail. 13 The CASD process applies not just to water service but to any public utility service, such as electricity. See, e.g., 65-407 C.M.R. ch. 815, § 13 (effective Jan. 9, 2022). 14 Citations to chapter 660 of the Commission’s regulations are to the version of the regulations that was in effect when the CASD issued its decision. See 65-407 C.M.R. ch. 660 (effective Aug. 28, 2011). Portions of chapter 660 have since been amended, but the amendments do not affect the issues on appeal. See 65-407 C.M.R. ch. 660 (effective Apr. 28, 2020). 14 [¶19] Importantly, the pursuit of a CASD appeal and its outcome have a regulatory effect. When a customer files an appeal with the CASD, the utility is prohibited from shutting off the customer’s service. 65-407 C.M.R. ch. 660, § 13(F)(1). If, at the end of the section 1308 regulatory review, the Commission agrees with the customer on the merits, then the utility is foreclosed from shutting off the customer’s service for not paying the bill; conversely, if the Commission agrees with the utility, then the regulatory prohibition against terminating the customer’s service is lifted if the customer does not pay what the Commission decides is owed.15 See 35-A M.R.S. § 704(1), (2); 65-407 C.M.R. ch. 660, § 13(F)(1)-(2), (H)(2). [¶20] The billing dispute between General Marine and the Portland Water District (PWD) adhered to this process by which the Commission decides the merits of a billing dispute and whether to grant regulatory approval for a utility to terminate a customer’s service. Based on its conclusion that General Marine had used water from an unmetered connection, PWD issued General Marine a bill for $15,803.70. In a letter detailing the charge, PWD noted that, if the parties could not resolve the issue, General Marine “ha[s] the right to submit The Commission and PWD acknowledge that the CASD process precludes, as a regulatory 15 matter, the termination of a customer’s service unless or until the utility prevails in the Commission’s review of the billing dispute. 15 the dispute to the [CASD].” After attempting to settle the dispute informally with PWD, General Marine appealed to the CASD. [¶21] Consistent with the Commission’s regulations, see 65-407 C.M.R. ch. 660, § 13(G)(2)-(3), the CASD’s investigation of General Marine’s complaint was conducted largely ex parte: the investigator requested specific information and records from PWD, exchanged emails with representatives of both parties, and might have spoken with each party outside of the other’s presence. As the Commission concedes, this review process does not comport with minimum administrative due process, largely because each party does not have an opportunity to rebut the other party’s position.16 After its ex parte review, the CASD issued a written decision on the merits containing its findings of fact and ruling that PWD’s bill was supported in full by those facts and the law. [¶22] Consistent with section 1308, see supra n.12, the CASD’s decision contained a provision notifying General Marine of its right to appeal the decision to the Commission and instructed that if General Marine did so, “[t]he Commission shall review the decision to determine if the CASD decision is 16 The traditional minimum indicia of due process include adequate notice, a neutral decision maker, the right to present evidence and legal argument, and a transparent process with the ability to rebut opposing evidence and argument. See Jusseaume v. Ducatt, 2011 ME 43, ¶ 12, 15 A.3d 714; Geary v. Dep’t of Behav. & Developmental Servs., 2003 ME 151, ¶ 19, 838 A.2d 1162; Mutton Hill Ests., Inc. v. Town of Oakland, 468 A.2d 989, 992 (Me. 1983). 16 correct. It can uphold the decision, reverse it, or send it back to [the] CASD for further action.” General Marine appealed to the Commission, and the Commission reviewed the CASD decision to determine whether it was correct on the facts and law while again not conforming with the minimum requirements of administrative due process. [¶23] The Commission then issued an order that stated that it was “uphold[ing]” the CASD’s decision. Contrary to how the Court interprets the Commission’s decision, see Court’s Opinion ¶¶ 1, 12, the order issued by the Commission was, like the CASD’s decision, on the merits: it was detailed and set forth findings of fact about the merits of the billing dispute.17 When General 17 The Commission ruled, in the section entitled “Decision”: The Commission makes no finding of when or by whom the unauthorized connection was made, or whether it existed prior to the property being purchased by the current owners. What is clear, however, is that [General Marine] benefitted from unmetered water usage and that since at least 2008, it was provided notice that PWD knew of no such domestic connection or flat fee arrangement nor would it allow such a connection. For those reasons the Commission finds that the unmetered 2” domestic connection was unauthorized, which is defined by Chapter 660 of the Commission’s Rules as “interference or diversion of utility service” and includes “by-passing the meter” (unmetered service that flows through a device connected between the service line and customer-owned facilities.) Because the connection was unauthorized, PWD is allowed to issue a make-up bill under Chapter 660, § 8(E)(1). The Commission also finds that PWD billed [General Marine] correctly when it calculated the make-up bill. While [General Marine] argues that it was not given credit for the monthly flat fee it had already paid, PWD confirms that [General Marine] was credited for the monthly fire protection service. The make-up bill was calculated for consumption charges outside of the fire protection charge. Finally, as PWD notes, the make-up bill most likely under-estimates usage and does not take into account 17 Marine requested reconsideration of the Commission’s decision, which the Commission denied, the Commission noted that “[b]oth the CASD decision and the [Commission’s] [o]rder found” that General Marine had an unauthorized connection and again rejected General Marine’s arguments as to why the calculation of the amount owed was incorrect. [¶24] In sum, pursuant to the procedures governing General Marine’s exercise of its right under section 1308 to appeal PWD’s decision, the review process involved Commission staff, and then the Commission itself, issuing “decisions” with many findings of fact as to the merits of the billing dispute. This exercise in determining which party should prevail culminated in a regulatory approval for PWD to terminate General Marine’s service unless General Marine paid PWD the amount that the Commission ordered was due. The entirety of this fact-finding process resulting in this regulatory approval was undertaken without conforming to minimum administrative due process. [¶25] None of the regulatory decisions issued by the CASD and the Commission cite 35-A M.R.S. § 1303, which the Court relies upon to characterize the fact that [General Marine] kept the water running 24 hours a day during the winter. The Court’s characterization of the Commission’s decision as an informal, nonfinal decision not on the merits, Court’s Opinion ¶¶ 1, 12, is also at odds with the Commission’s briefing before us, which repeatedly refers to the factual findings made during its review of the CASD’s decision and characterizes its order as “upholding” the CASD’s decision. 18 General Marine’s appeal as a request for the Commission to open an investigation. Court’s Opinion ¶¶ 6, 9, 12. Nor in its appeal to the CASD or the Commission did General Marine ask the Commission to open an investigation pursuant to section 1303. B. The Title 35-A Framework for Review of Customer Complaints
[¶26] As noted above, see supra n.12, section 1308 is the provision in Title 35-A that deals specifically with billing disputes. Entitled “Reparation or adjustment,” it bestows upon customers the right to “appeal” a utility bill after the utility holds an “informal hearing” as to whether an error has occurred. Id. [¶27] Section 704 is entitled “Termination of utility services.” 35-A M.R.S. § 704. With respect to terminations of residential customer service, the statute echoes section 1308 and provides that the Commission must enact regulations which provide for the “right” of the customer to settle any dispute concerning a proposed disconnection “at an informal hearing” with the utility. Id. § 704(1). After that step, the customer has the right “to appeal the results of that utility’s decision to the [C]ommission.” Id. With respect to nonresidential customers, the utility must file its terms and conditions applicable to termination with the Commission, and it cannot terminate service to a 19 nonresidential customer if the Commission or its delegate issues a “rul[ing]” that the termination is not in accord with the utility’s terms or conditions. Id. § 704(2). If the Commission authorizes a delegate to resolve such disputes, there must be a procedure for “appeal” of that decision to the Commission. Id. [¶28] Thus, Title 35-A specifically addresses billing disputes by providing a right to “appeal” to the Commission under sections 1308 and 704. In that appeal, the Commission reviews the merits and issues a decision that determines whether the utility may, as a regulatory matter, terminate the customer’s service. See 65-407 C.M.R. ch. 660, § 13(H).
[¶29] In contrast to sections 1308 and 704, which specifically address billing disputes and service terminations, sections 1302 and 1303 address the Commission’s broad investigatory powers over utility practices. See 35-A M.R.S. §§ 1302, 1303 (2021). Section 1302 provides: When a written complaint is made against a public utility by 10 persons aggrieved that the rates, tolls, charges, schedules or joint rate or rates of a public utility are in any respect unreasonable or unjustly discriminatory; that a regulation, measurement, practice or act of a public utility is in any respect unreasonable, insufficient or unjustly discriminatory; or that a service is inadequate or cannot be obtained, the commission, being satisfied that the petitioners are responsible, shall, with or without notice, investigate the complaint. 20 35-A M.R.S. § 1302(1). Because a minimum of ten people must file such a complaint, this statute does not focus on a dispute with one customer claiming a factual billing error but rather relates to utility rates or practices affecting more than one individual, as also reflected by the list of subject matters about which ten aggrieved persons may complain. See id. [¶30] The next statutory provision, section 1303, provides that the Commission may “on its own motion” summarily investigate a utility when it believes that a rate or charge is unjust or unreasonable, a service is inadequate or cannot be obtained, or an investigation should be opened for any other reason. Id. § 1303(1). If, after a summary investigation, the Commission is satisfied that sufficient grounds exist to warrant a formal investigation, it then initiates a formal public hearing process, with the right to subpoena witnesses and opportunities to intervene. See id. § 1303(2). [¶31] Nothing in Title 35-A prevents one customer from requesting that the Commission open a section 1303 investigation on the Commission’s own motion. But there is no reason to think that a customer’s right to appeal under the CASD process established under sections 704 and 1308 for resolving a claimed billing error is somehow a customer’s request to the Commission to exercise its discretion to open a section 1303 investigation into a utility’s rates 21 or practices. Similarly, there is no reason to interpret the Commission’s affirmance of a CASD decision on the merits as a decision not to undertake a section 1303 investigation. [¶32] The only relationship between section 1303 and sections 704 and 1308 is that the Commission can always choose to open a section 1303 investigation when, in the course of hearing a customer’s section 1308 appeal, the Commission concludes that a broader investigation into the utility’s general practices is warranted. See Savage v. Cent. Me. Power Co., No. BCD-CV-2017-61, 2018 Me. Bus. & Consumer LEXIS 29,  (June 15, 2018) (describing section 1303 investigations started by CASD appeals relating to line extension policies); Quiland, Inc. v. Pub. Utils. Comm’n, 2007 ME 45, ¶¶ 7, 12, 917 A.2d 697 (describing a Commission investigation ordered after an appeal to the CASD); see also Friedman v. Pub. Utils. Comm’n, 2016 ME 19, ¶¶ 2, 5, 132 A.3d 183 (describing Commission investigations based on many customer smart-meter complaints); cf. Pine Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n, 631 A.2d 57, 60-61 (Me. 1993) (describing the Commission’s opening of a section 1303 investigation after the filing of a twelve-person complaint based on the utility’s general rates, revenues, and management policies). 22 [¶33] Accordingly, the only provision in the CASD regulations that cites section 1303 is the regulation describing the options that the Commission has in reviewing an appeal of a CASD decision. See 65-407 C.M.R. ch. 660, § 13(H)(4). That regulation provides that the Commission can affirm the CASD decision; reverse or alter the CASD decision; remand the complaint to the CASD; or issue an order opening a section 1303 investigation. See id. In this instance, given that the nature of the dispute was not a utility practice affecting multiple ratepayers but rather an alleged factual billing error affecting one customer, the Commission expressly chose the option of affirming and “uphold[ing]” the CASD’s decision. Although the Commission also decided not to open a section 1303 investigation into PWD’s practices, that does not detract from the fact that the Commission affirmed, on the merits, the CASD’s decision as to the billing dispute. [¶34] In sum, contrary to the Court’s position, the issue here is not whether the Commission can exercise unreviewable discretion in choosing not to open an investigation into a utility’s practices on its own motion under section 1303 if a customer requests such an investigation. See Court’s Opinion ¶¶ 9, 12. Instead, the question is whether the Commission’s decision as to who should prevail in an appeal of a CASD decision on a billing dispute when a 23 customer invokes its right to appeal is subject to judicial review and must be the product of an administrative process that accords with minimum due process.18 [¶35] For the many reasons described below, the answer to this question is yes: the Legislature intended the Commission’s decision on the merits of a billing dispute and its regulatory approval to terminate a customer’s utility service to be judicially reviewable and the product of administrative due process.