Opinion ID: 1335385
Heading Depth: 1
Heading Rank: 4

Heading: Rate Change

Text: The City argues that the Commission also exceeded its jurisdiction when the Commission ordered the City to alter the rates of the City's residential, commercial and industrial customers when no customer affected by those rates petitioned the Commission for a review of the rates pursuant to W.Va.Code, 24-2-4b(c) [1994]. [14] The City concedes that the Legislature has given the Commission the authority to alter utility rates that the Commission finds to be discriminatory, unjust or unreasonable and that W.Va.Code, 24-2-4b [1994] specifically grants the Commission the authority to alter rates established for a municipally operated utility. However, the City argues that the rates for a municipally operated utility may only be reviewed by the Commission upon the filing of a petition in accordance with W.Va.Code, 24-2-4b(c) [1994]. Subsection (c) provides for a very limited set of circumstances in which a petition may be filed and it provides for a specific set of entities who may protest municipal operated utility rates. [15] The City argues that, in this case, no petition was filed protesting the rates of the City's residential, commercial and industrial customers. Instead, the District filed a petition challenging only the newly established rates for the District. Therefore, the City contends, the Commission had jurisdiction over the newly established rates for the District, but had no jurisdiction over the already existing rates established for the City's residential, commercial and residential customers. The Commission takes the opposite position and maintains that once a petition is filed pursuant to W.Va.Code, 24-2-4b(c) [1994] protesting the rates of a municipally operated utility, the Commission has jurisdiction over all of the municipality's rates and may review these rates in a de novo proceeding in accordance with W.Va.Code, 24-2-4b(f) [1994]. [16] Generally, [i]nterpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review. Syllabus Point 1, Appalachian Power Co. v. State Tax Department of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995). The interpretation of a statute begins with an examination of the statute to determine if the intent of the Legislature is clear. If the Legislature's intent is clear no further inquiry is necessary. Syllabus Point 2, Appalachian Power Co. However, if the intent of the Legislature is not clear, we will ordinarily give significant deference to the agency's interpretation of a statute if that interpretation is based on a permissible construction of the statute. We held in Syllabus Point 4 of Appalachian Power that: If legislative intent is not clear, a reviewing court may not simply impose its own construction of the statute in reviewing a legislative rule. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. A valid legislative rule is entitled to substantial deference by the reviewing court. As a properly promulgated legislative rule, the rule can be ignored only if the agency has exceeded its constitutional or statutory authority or is arbitrary or capricious. Through W.Va.Code, 24-2-4b [1994], the Legislature granted to the Commission jurisdiction over the rates of a municipally operated utility. The Commission's jurisdiction to review and approve or modify [a municipality's] rates is triggered by the filing of a petition. W.Va.Code, 24-2-4b(c) [1994] provides for three separate situations when a petition may be filed. [17] Subsection (c)(2) permits a petition to be filed by any customer who is served by a municipally operated utility, who resides outside the corporate limits of the municipality, and who is affected by a proposed rate change. The statute requires that a petition filed under subsection (c)(2) must allege discrimination [18] between customers within and without the municipal boundaries. [19] Once a petition is filed, the Commission is directed to conduct a hearing under the provisions of W.Va.Code, 24-2-4b(e) and (f) [1994]. Upon receipt of a petition, the Commission is required by W.Va.Code, 24-2-4b(e) [1994] to appoint a hearing examiner to review the grievances set forth in the petition. Subsection (e) requires the hearing examiner to issue an order approving, disapproving or modifying, in whole or in part, the rates imposed by the ... municipally operated public utility[.] Subsection (e) does not provide that only the protested rates may be altered, but rather explicitly states that the utility's rates may be approved, disapproved or modified by the Commission in whole or in part. The Commission may, under W.Va.Code, 24-2-4b(f) [1994], [20] exercise the power granted to it in W.Va.Code, 24-2-3 [1983], that provides in pertinent part: The commission shall have power to enforce, originate, establish, change and promulgate... rates ... [a]nd whenever the commission shall, after hearing, find any existing rates ... unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any of the provisions of this chapter, the commission shall by an order fix reasonable rates ... to be followed in the future in lieu of those found to be unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any provision of law[.] We do not find language in W.Va. Code, 24-2-4b(f) [1994] that limits the Commission's scope of review only to those rates that initiated the petition. Rather, the Commission may, pursuant to W.Va.Code, 24-2-3 [1986], originate, establish or change existing rates that the Commission finds to be unjust or discriminatory. We held in Syllabus Point 2 of Central West Virginia Refuse, Inc. v. Public Service Commission of West Virginia, 190 W.Va. 416, 438 S.E.2d 596 (1993) that: W.Va.Code, 24-2-3 (1983), clearly and unambiguously gives the Public Service Commission the power to reduce or increase rates whenever it finds that the existing rate is unjust, unreasonable, insufficient, or unjustly discriminatory or otherwise in violation of any provision of W.Va. Code, 24-1-1, et seq. We therefore find that once a petition is filed under W.Va.Code, 24-2-4b(c) [1994], the Commission may examine both the rates that are directly challenged in the petition and those rates of a municipally operated utility that reasonably impact upon the challenged rates, so that the Commission may fully address any question of discrimination. In the case before us, the District filed a petition before the Commission alleging rate discrimination in accordance with W.Va.Code, 24-2-4b(c)(2) [1994]. Once this petition was filed, the Commission was authorized by W.Va.Code, 24-2-4b(e) and (f) to review and modify the City's utility rates and remedy the alleged discrimination. Neither subsection (e) or (f) limited the Commission's scope of review to the District's newly established rates. Consequently, we find that the Commission did not exceed its jurisdiction in modifying the City's residential, commercial and industrial customer's rates and we affirm that portion of the Commission's order. [21]