Opinion ID: 2347721
Heading Depth: 1
Heading Rank: 15

Heading: Effective Dates of Revised Rates

Text: The effective dates of the revised rates are challenged by Washburn, Caribou, and Ellsworth. Because the operative principles in this issue are alike for all three companies, we will discuss the factual situation for only one utility, Washburn, and apply our conclusion to Caribou and Ellsworth. Washburn initially filed its proposed rates with the Commission on June 20, 1975. After a summary investigation, the Commission suspended the proposed rates for a period of three months from July 20, 1975 and subsequently suspended the proposed rates for a five-month period from October 20, 1975. On March 19, prior to the expiration of the suspension period, the Commission disallowed these rates as unjust and unreasonable and ordered the company to file a new schedule of rates designed to produce $43,852.00 annually. Washburn filed the substituted rates on March 29, 1976 with a request that they be made retroactive to March 20. In its March 31, 1976 decree, the Commission denied Washburn's request for retroactive application of its substituted rate schedule and instead approved Washburn's refiled rates effective prospectively from March 31. On appeal, Washburn alleges that under 35 M.R.S.A. § 69 it was error to have given its rates prospective application from March 31. Washburn's allegation requires us to once again interpret § 69, a section that we have thrice considered in less than a year and one half. See New England Telephone and Telegraph Co. v. Public Utilities Commission, Me., 376 A.2d 448 (1977) ( New England III ); New England Telephone and Telegraph Co. v. Public Utilities Commission, Me., 362 A.2d 741 (1976) ( New England II ); and New England Telephone and Telegraph Co. v. Public Utilities Commission, Me., 354 A.2d 753 (1976) ( New England I ). Section 69 provides in pertinent part: Whenever the commission receives notice of any change or changes proposed to be made in any schedule of rates filed with said commission under the provisions of law, it shall have power at any time before the effective date of such change or changes . . . to hold a public hearing and make investigation as to the propriety of such proposed change or changes. . . . Pending such investigation and order, the commission may at any time within said period preceding the effective date of any such schedule . . . suspend the operation of such schedule or any part thereof, but not for a longer period than 3 months from the date of said order of suspension. If said investigation cannot be concluded within said period of 3 months, said commission may in its discretion extend the time of suspension for a further period of 5 months. There are many dates, the effect of which, the parties do not dispute. They agree that under 35 M.R.S.A. § 64 [47] Washburn's proposed rates would have become effective thirty days after being filed on June 20, 1975 had the Commission not acted. However, pursuant to its power under § 69, the Commission suspended the proposed rates before the effective date of such change . . . to hold a public hearing and make investigation as to the propriety of such proposed change . . . Had the Commission not again suspended the proposed rates, these rates would have become effective by operation of law at the termination of the initial three-month period. New England II, supra at 749. But because the investigation could not be concluded within the three-month period, the Commission extended the time of suspension for another five months. The parties agree that the Commission's subsequent March 19 order, coming within the eight-month suspension period authorized by § 69, was not ultra vires. Washburn does allege, however, that since the substituted rate schedule was not approved until March 31, subsequent to the maximum suspension period which terminated on March 19, its proposed rates of June 20 were effective during this eleven-day hiatus. We disagree. We explained in New England II that a proposed rate can be suspended only for a maximum period of eight months. If the Commission had not issued an order within this suspension period disapproving the proposed rates and authorizing the filing of substituted rates, the June 20 proposed rates would have become effective by operation of law. The suspension power granted by paragraph two of Section 69 allows the Commission to delay, but not to abolish, the effective date of the proposed changes. During this period of delay, the changes remain proposed and, as such, a proper subject for the investigation authorized by Section 69. At the expiration of this period, if the proposed rates are not found unjust or unreasonable and a substituted rate is not authorized in the meantime, the effective date, delayed but not abolished by the suspension, has arrived. New England II, supra at 749. (emphasis supplied in last sentence). By issuing an order on March 19, within the suspension period, the Commission prevented the proposed rates from becoming effective. Contrary to Washburn's allegation, the March 19 order did not extend the suspension period; rather, it terminated the suspension and permanently ordered that the proposed rates never become effective. Washburn contends in the alternative that since the suspension period ended prior to the Commission's approval of its substituted rate schedule, the substituted rate schedule should be given retroactive application to March 20, the first day following the termination of the suspension period. We again disagree. In New England I, we explained that proposed or substituted rates have prospective effect from on or after the date they are filed with the Commission. Since changes in permanent rates become effective only by virtue of the utility's placing on file a changed schedule of rateseither, as clarified aforesaid, by the utility's own entirely unilateral filing or the utility's  substituted  filing in compliance with a Commission order for such substitutionall changes of a utility's permanent rates go into effect only prospectively, viz., on or after the date of either (a) the utility's own entirely unilateral filing putting the changed rate into effect, or (b) the utility's filing of such substituted rate schedule as the Commission has ordered. New England I, supra at 762. (emphasis in original). Since Washburn's substituted rates were filed on March 29, they could only have had effect from on or after that date. The Commission, in approving the rates on March 31, was acting entirely within the ambit of § 69 as clarified by the New England trilogy. Ultimately, Washburn appears to be alleging that because the maximum suspension period is eight months, the substituted rates must be in effect prior to the termination of that suspension period. The flaw in its argument is that the maximum suspension period concerns the length of time a proposed rate schedule can be suspended. It simply has no bearing on when a substituted rate schedule becomes effective. In this regard, its only relevance is to fix the maximum period of time within which the Commission can order a filing of substituted rates. [48] Our decision, contrary to Washburn's assertion, protects a utility against inordinate administrative delay. Since a substituted rate schedule must be ordered within the statutory period prescribed by § 69, the effective date of the new rates is primarily conditioned upon the speed with which a utility can refile its rates in conformity with the Commission decision. Washburn was free to file its substituted rates at any time after the Commission decision of March 19. That it took Washburn from March 19 until March 29 to refile its rates was financially unfortunate from Washburn's point of view; this delay was, however, attributable to Washburn and not the Commission. We finally come to that period of time between the filing of the substituted rates on March 29 and their approval effective March 31. This two-day period was necessary so that the Commission could determine that the substituted rate schedule conformed to its March 19 order, 35 M.R.S.A. § 295, [49] and that the new schedule would yield revenues found by the Commission in its prior order to be just and reasonable. In its March 31 decree, the Commission had the choice of making the substituted rates effective when refiled or when approved. New England I, supra at 762. Its choice of the approval date rested within the sound discretion of the Commission. We recognize that during this period there is a potential for Commission abuse for the subsequent decree approving the substituted rates depends entirely upon the alacrity of the Commission. But Washburn does not allege that the Commission unreasonably delayed its approval of the refiled rates. In acting reasonably and expeditiously in approving the refiled rates, the Commission's decision to make Washburn's rates effective on March 31 was not an abuse of its discretion. Similarly, the Commission decision to give prospective effect to the refiled rates of Caribou and Ellsworth was not improper.