Opinion ID: 1176417
Heading Depth: 1
Heading Rank: 6

Heading: Adequacy of Commission Findings

Text: The district court held that the whole tenor of Decision No. C83-1176 as it relates to rate design is one of personal preference on the part of the Commission as opposed to specific findings of fact which would support a new rate design. In the court's words: The commission has made no such findings in any of its decisions regarding Case No. 6076, and a review of the record indicates that no such findings can reasonably be made. The bootstrap attempt to do so in Decision No. C83-1392 makes no additional findings than those contained in the original Decision No. C83-1176. Nothing in the record supports the bold faced conclusion stated by the commission on page 3 in Decision No. C83-1392 that the flat energy rate currently charged by Colorado-Ute is discriminatory, preferential, creates an advantage, or otherwise violates 40-3-106(1) or 40-3-111. Any ultimate findings the district court was able to discern in the PUC's decisions, whether implied or stated, were critiqued as conclusive [sic] in nature and ... not supported by any factual findings based on the record. The standard for judicial review of the Commission's decisions is governed by section 40-6-115(3), 17 C.R.S. (1984), which provides: (3) Upon review, the district court shall enter judgment either affirming, setting aside, or modifying the decision of the commission. So far as necessary to the decision and where presented, the district court shall decide all relevant questions of law and interpret all relevant constitutional and statutory provisions. The review shall not extend further than to determine whether the commission has regularly pursued its authority, including a determination of whether the decision under review violates any right of the petitioner under the Constitution of the United States or the State of Colorado, and whether the decision of the Commission is just and reasonable and whether its conclusions are in accordance with the evidence. We have held that this statutory provision limits the court's review of PUC decisions to a determination of whether the PUC has regularly pursued its authority, whether its conclusions are supported by findings of fact based upon adequate evidence, and whether the Commission has reached its decisions by applying the appropriate constitutional and legislative standards. Ram Broadcasting of Colorado, Inc. v. Public Utilities Comm'n, 702 P.2d 746, 750 (Colo.1985); Public Utilities Comm'n v. Northwest Water Corp., 168 Colo. 154, 169, 451 P.2d 266, 273-74 (1969). We have long held that the factual determinations of an administrative body such as the PUC are entitled to considerable deference. G & G Trucking Co. v. Public Utilities Comm'n, 745 P.2d 211, 216 (Colo.1987). After all, a reviewing court, since it is without the assistance of a staff, and the expertise of the Commission, should not undertake to duplicate the evaluation and judgment processes followed by the PUC in arriving at its decisions. Morey v. Public Utilities Comm'n, 629 P.2d 1061, 1068 (Colo.1981); Atchinson, Topeka & Santa Fe Railway Co. v. Public Utilities Comm'n, 194 Colo. 263, 267, 572 P.2d 138, 141 (1977). It is peculiarly within the province of the PUC to decide what weight should be accorded the evidence and to choose among conflicting inferences that may reasonably be drawn from that evidence. G & G Trucking, 745 P.2d at 216; Acme Delivery Service v. Cargo Freight Systems, 704 P.2d 839, 843 (Colo.1985). When two equally reasonable courses of action are open to the Commission, the reviewing court should not substitute its judgment for that of the Commission in selecting the appropriate alternative. City of Montrose v. Public Utilities Comm'n, 629 P.2d 619, 623 (Colo.1981). A reviewing court's function is limited to determining whether substantial evidence exists in the record to support the PUC's determinations. If not, the Commission's order must be set aside. If so, the judicial inquiry is at an end, for the reviewing court is not permitted to substitute its judgment for that of the Commission. G & G Trucking, 745 P.2d at 216. Findings by the Commission need not be presented in any particular form, and a necessary finding may be implied from other findings made. Caldwell v. Public Utilities Comm'n, 200 Colo. 134, 138, 613 P.2d 328, 332 (1980); Aspen Airways, Inc. v. Public Utilities Comm'n, 169 Colo. 56, 62, 453 P.2d 789, 792 (1969). Where the Commission purports to make such findings, they must be discernible to the reviewing court. Caldwell, 200 Colo. at 138, 613 P.2d at 332. Further, findings of fact by the Commission must show which evidence it accepts as competent and worthy of belief, and that which it rejects. Id.; Aspen Airways, 169 Colo. at 62, 453 P.2d at 792. Based upon these standards we are satisfied that the Commission's conclusions are supported by adequate findings of fact. Examination of Decision Nos. C83-1176 and C83-1392 reveals that the Commission's findings are adequate to support its ultimate conclusion that the all-energy rate is no longer appropriate for Colo-Ute and should be replaced in favor of the demand-energy rate. It found, based upon the evidence presented, that Colo-Ute's member distribution cooperatives exhibit a high coincidence of peak demand with the Colo-Ute system peak demand; [14] that Colo-Ute's total cost per unit of output has varied monthly, contrary to Colo-Ute's position that the all-energy rate and its resource management plan have resulted in a uniform cost per unit of output on a monthly basis; and that the Colo-Ute system is characterized by a definite surplus of base load capacity at certain times which indicates that Colo-Ute has not achieved uniform loading of capacity throughout the day. This condition results in an uneconomic under-utilization of capacity. With respect to Colo-Ute's resource management plan, the PUC found that it was not effective in that it contributed to growth in peak demands. Further, Colo-Ute's load curve is not flat; Colo-Ute has not been able to make non-member sales to fill in the valleys of its load; its load factor has deteriorated in recent years; and given likely economic prospects in the near and long-term, it is not expected that Colo-Ute will be better able to sell energy to non-members so as to use its plants more efficiently. Also, significantly increased expenses associated with Colo-Ute's purchase of power from other utilities to meet peak demand, and the fact that Colo-Ute is unable to meet its valleys on its system, indicate that its resource management plan and associated flat-energy rate are not working to the benefit of its ratepayers. The PUC then found that since Colo-Ute's total cost of generating a kilowatt hour is not uniform over time it follows that a flat or uniform energy rate is not cost tracking, and the all-energy rate provides a distorted price signal to member systems. In support of its adoption of the demand-energy rate, the PUC found that a demand-energy rate is appropriate for a utility whose members exhibit a high coincidence of peak demand with the system peak; that as much as two-thirds of Colo-Ute's costs are capital related; that the demand-energy rate, premised as it is upon the separate and distinct recognition of the two major cost components of producing electricity, capital and fuel, provides a more accurate price signal than the all-energy rate, and more directly tracks costs than an all-energy rate, as it assigns costs more directly to the cost causer; that the wholesale customers of Colo-Ute are capable of comprehending a demand and energy rate with a fixed customer charge; and that the demand-energy rate is the most cost tracking rate for the wholesale power charges of Colo-Ute. One of the fundamental principles of electric power rate design is that rates charged should accurately reflect the utility's actual cost of providing service, including both capital costs and operating expenses. We have held that the PUC must therefore set rates which protect both: (1) the right of a public utility company and its investors to earn a rate of return reasonably sufficient to maintain the utility's financial integrity; and (2) the right of consumers to pay a rate which accurately reflects the cost of service rendered. Public Service Co. v. Public Utilities Comm'n, 644 P.2d 933, 939 (Colo.1982). Here, inasmuch as the Commission has made specific findings establishing that the all-energy rate currently in place is less able to track the cost of service than a demand-energy rate, the Commission has complied with the statutory requirement of determining whether the rate charged is violative of sections 40-3-106(1) or 40-3-111. [15] The court below erred when it concluded that these findings ... are conclusive [sic] in nature and are not supported by any factual findings based on the record. To the contrary, the Commission's findings, whether explicitly stated or implied, comply with statutory requirements that findings be made. Moreover, these findings are adequate to support the Commission's ultimate conclusions regarding Colo-Ute's rate design.