Opinion ID: 1433961
Heading Depth: 2
Heading Rank: 3

Heading: kcc regulatory responsibilities

Text: The Court of Appeals held that the concept of revenue neutrality and the prohibition against audits and earnings review prevent the KCC from performing its regulatory responsibilities in general, K.S.A. 66-1,187 et seq., and are inconsistent with the obligation of the KCC to ensure just and reasonable rates and charges for the consumers of Kansas. The Court of Appeals further held the revenue neutrality and no audit provisions were wholly inconsistent with the public policy of Kansas as expressed in K.S.A. 1996 Supp. 66-2001. Apparently, the holding was based on its determination that (1) the revenue neutral provision kept the KCC from determining the appropriate funding level for the KUSF; (2) the no audit or earnings review provision made it impossible for the KCC to determine an affordable rate for universal service; and (3) both provisions would have made inadequate any regulatory review to determine the propriety of local telephone rate changes. CURB was the party who initially raised this issue before the Court of Appeals, and it focused only on the no audit or earnings review provision. CURB argued that the no audit or earnings review provision precluded the KCC from performing an audit, earnings review, or rate case in order to establish the initial prices to be used as price caps in the price baskets but that these initial prices can never be changed by the KCC because in the future the price caps (initial prices) will automatically increase without a KCC determination. This occurs in conjunction with the formula created in the KCC's Order of December 27th. Because K.S.A. ง 66-1,187 et seq. were not repealed as part of the enactment of [the] Kansas Act, the new mandates are inconsistent and do not allow the KCC to fulfill its statutory duty to ensure just, reasonable and affordable rates.... ....The KCC can not reconcile its duty to produce just and reasonable rates with its inability to require an audit or examine costs. Reading the provisions of the federal and state acts together shows that the KCC must be allowed to use any methods necessary to ensure rates that [are] just and reasonable and not merely accept rates as presented to them by utilities. K.S.A. 1996 Supp. 66-2005(u) is not harmonious with the other sections of the Kansas Act and existing federal and state law and should not be read as a limit on the power of the KCC to fulfill its statutory duty. The sections in the Act which provide for revenue neutrality and no audit or earnings review are transitional. For the reasons set forth in sections A and B of this opinion, we hold that the Kansas Act does not conflict with the KCC's statutory duty to regulate and ensure just and reasonable rates and charges to consumers.