Opinion ID: 1938909
Heading Depth: 1
Heading Rank: 1

Heading: the order under review

Text: In August 1982 the Commission initiated Formal Case No. 794, a generic proceeding to examine the benefits to District of Columbia ratepayers derived from the research and development (R & D) programs of GRI and EPRI. The Commission issued a Notice of Investigation and Prehearing Conference, and a hearing agent was appointed to preside over the case. [3] Testimony relating to benefits derived from particular GRI projects to District of Columbia ratepayers was taken before the hearing agent, and briefs were filed. In August 1983 the hearing agent submitted his Recommended Report, in which he made a finding that District of Columbia ratepayers have received, and will continue to receive, benefits from GRI research [but that] those benefits tend to defy quantification. The Commission reviewed the hearing agent's Recommended Report and the record upon which it was based. In Order No. 8005, issued on November 21, 1984, the Commission declined to adopt the recommendation of the hearing agent. The Commission expressed concern over the escalating costs of the GRI program and determined that there was not substantial evidence to support the hearing agent's finding that the program specifically benefited District of Columbia ratepayers. Consequently, the Commission established the following rule governing the treatment of GRI and EPRI expenses in future WGL and PEPCO (Potomac Electric Power Company) rate cases: The Commission herein creates a policy and a presumption that twenty-five percent (25%) of the total costs associated with EPRI and GRI directly or indirectly benefit D.C. ratepayers. This determination is based upon the record in this complex proceeding and on our belief that ratepayers should bear their appropriate share of research expenses where the cost of such research is reasonably calculated to reduce utility rates. To the extent that PEPCO or WGL seek to have D.C. ratepayers pay in excess of 25% of the total EPRI and GRI research expenses, the burden of proof is on each to state the perfected benefit with specific supporting evidence in any application seeking a rate increase or adjustment. The Commission is of the opinion that no party to a rate proceeding should be required to use discovery to ascertain facts which are peculiarly within the possession of the utilities. We expect the companies to fully disclose the facts and to provide the Commission with the underlying basis, cost and benefit formulae, methodology or analysis justifying payment by D.C. ratepayers of such research expenses exceeding 25% of the total cost. Nothing contained herein is intended to restrict the rights of any party to contest any costs associated with the research expenses. However, as to costs associated with the 25% policy, the burden of proof is assigned to the party contesting the existence of the benefit. The presumption created herein relating to the 25% policy attaches only if the companies set out in detail the EPRI and GRI research utilized to benefit D.C. ratepayers, accompanied by a complete and clear explanation of the benefits (direct or indirect) resulting from such research. Upon such a showing in the application, the presumption of benefit will apply to 25% of the requested research expense, but no more. Order No. 8005 at 54-55 (footnote omitted). WGL filed a motion for reconsideration, challenging the Commission's jurisdiction to disallow recovery of any portion of the wholesale natural gas costs previously determined to be just and reasonable by FERC. The Commission denied the motion on April 15, 1985, in Order No. 8165, and the rule established in Order No. 8005 thereupon became final. WGL then noted this appeal, in which GRI has intervened on behalf of WGL, and the Office of People's Counsel (OPC) has intervened on behalf of the Commission.