Opinion ID: 1754281
Heading Depth: 1
Heading Rank: 5

Heading: whether the commission's denial of the proposed rate increase was supported by substantial evidence?

Text: ¶ 7. The Utility argues that the Commission's denial of a rate increase was unsupported by substantial evidence, and this Court agrees. The record indicates that the Utility had been receiving the base rate of $9.50 per month for five years. The experts clearly testified that  despite competent economic management  the base rate of $9.50 resulted in ongoing losses to the Utility. Even the intervenors conceded that the Utility was entitled to some increase. ¶ 8. The Utility must at a minium, receive enough to enable it to render efficient and continuous service. Mississippi Power Co. v. Goudy, 459 So.2d 257, 271 (Miss. 1984) (Hawkins, J., specially concurring). By statute, the Utility is entitled to a fair rate of return for its services. See Miss. Code Ann. § 77-3-33(1). See also Southern Bell Tel. & Tel. Co. v. Mississippi Public Service Commission, 237 Miss. 157, 113 So.2d 622, 656 (1959). [A] fair rate is one which, under prudent and economical management, is just and reasonable to both the public and to the utility. State ex rel. Pittman v. Mississippi Public Service Com'n, 506 So.2d 978, 984 (Miss. 1987); Mississippi Public Service Com'n v. Mississippi Power Co., 429 So.2d 883 (Miss. 1983). The public is entitled to demand that no more be exacted from the rate payers than the services are reasonably worth. Southern Bell, 113 So.2d at 656. It is undisputed that the services provided by the Utility in this case were worth more than $9.50 per month. ¶ 9. The Commission's denial of a rate increase appears to have been based on its finding that the Utility was not providing adequate service. Without the benefit of a detailed finding of fact, it is difficult to discern the reasoning behind the Commission's decision; however, it appears that the denial of the rate increase was punitive. At the very least, the Commission's decision was not supported by substantial evidence and was contrary to the manifest weight of the evidence. See Miss. Code Ann. § 77-3-72(4) (Supp. 1996). Furthermore, it is incomprehensible that the Commission's denial of a needed rate increase to a utility company that is operating at a loss will result in better service to the consumers. ¶ 10. Thus, the denial of any rate increase was unsupported by substantial evidence and was contrary to the manifest weight of the evidence. This case is reversed and remanded to the Commission for a determination of the amount of increase needed to render efficient and continuous service. See Goudy, 459 So.2d at 271.