Opinion ID: 1370217
Heading Depth: 1
Heading Rank: 5

Heading: wage and salary expenses

Text: Consumer Advocate contends the circuit court erred in affirming PSC's decision on the annualization of salary and wage expenses because that decision was not adequately documented in findings of fact or supported by substantial evidence. We disagree. BellSouth reduced the number of employees after the end of the 1994 test year due to reorganization, technological advances, and corporate downsizing. PSC's staff examined BellSouth's salary, wage, and payroll tax expenses from March to May 1995, the most recent available when the staff calculated the reduction in those expenses. A PSC accountant testified the calculations did not include more recent actual reductions in the work force because the staff preferred to use actual, audited figures. When PSC heard the case, Consumer Advocate argued the agency should examine more recent data for May and June 1995, which BellSouth had provided, because it more accurately reflected employee reductions. Consumer Advocate presented testimony showing PSC should reduce the salary and wage expense by about $2.9 million more than the staffs recommended reduction of $5.2 million. PSC adopted the staff recommendation, finding it fairly reflected BellSouth's salary and wage expenses while accounting for employee reductions. In its order denying Consumer Advocate's petition for reconsideration, PSC rejected Consumer Advocate's argument by saying it preferred to rely upon actual, audited figuresnot the unaudited data that included the month of June 1995. The circuit court affirmed the PSC's decision. Consumer Advocate now contends that PSC's decision was not adequately documented in findings of fact or supported by substantial evidence. Consumer Advocate also argues that PSC had to consider the June 1995 data under Southern Bell v. Pub. Serv. Comm'n of South Carolina, 270 S.C. 590, 602, 244 S.E.2d 278, 284 (1978) (PSC should consider known and measurable changes in expenses, revenues and investments occurring after the test year so that resulting rates will reflect the actual rate base, net operating income, and cost of capital). We conclude PSC adequately explained its findings of fact and reasoning when the original order and order upon reconsideration are read together. The original order, standing alone, would be insufficient under the principles outlined in Issue 1 because PSC merely recited the conflicting testimony and then stated its conclusion. The order upon reconsideration, however, reveals PSC chose not to consider the June 1995 data because it preferred to rely upon audited data. The order cites the PSC accountant's testimony, which constitutes substantial evidence supporting the agency's decision. Southern Bell, supra, does not require PSC to consider unaudited or speculative data. It merely requires PSC to consider known and measurable changes that occur after the test year in order to accurately calculate figures that affect the company's overall rate of return and customer rates. PSC complied with Southern Bell by considering the audited data from March to May 1995. Accordingly, we affirm the judgment of the circuit court on this issue.