Opinion ID: 1991260
Heading Depth: 1
Heading Rank: 7

Heading: The Commission's Orders

Text: Having upheld both the Commission's interpretation of § 54F and the legality of the procedure through which it implemented this statute in Cases O, T, and U, we turn lastly to BG&E's challenge that the Commission's orders in these cases were unlawful, arbitrary, and capricious. In reviewing an order of the Commission, we are constrained by § 97 to limit the scope of our inquiry: Every final decision, order, rule or regulation of the Commission shall be prima facie correct and shall be affirmed unless clearly shown to be (1) in violation of constitutional provisions, or (2) not within the statutory authority or jurisdiction of the Commission, or (3) made upon unlawful procedure, or (4) arbitrary or capricious, or (5) affected by other error of law, or (6) if the subject of review is an order entered in a contested case after hearing, such order is unsupported by substantial evidence on the record considered as a whole. In light of § 97, we have consistently held that Commission orders enjoy a high degree of judicial deference on review. See, e.g., Public Service Comm'n v. Patuxent Valley, 300 Md. 200, 216-17, 477 A.2d 759 (1984); Potomac Edison, supra, 279 Md. at 582-83, 369 A.2d 1035; Baltimore Gas, supra, 273 Md. at 361-63, 329 A.2d 691. Recognizing the experience and special expertise of the Commission and its staff, a reviewing court must not substitute its judgment for that of the Commission. Potomac Edison, supra, 279 Md. at 582-83, 369 A.2d 1035; Baltimore Gas, supra, 273 Md. at 362, 329 A.2d 691; Baltimore Trans. Co. v. Pub. Ser. Comm., 206 Md. 533, 558, 112 A.2d 687 (1955). Indeed, a reviewing court must uphold a Commission order on appeal unless the party challenging the order demonstrates by clear and satisfactory evidence that the order is unlawful or unreasonable. Baltimore Gas, supra, 273 Md. at 362, 329 A.2d 691; Baltimore Trans., supra, 206 Md. at 558, 112 A.2d 687; Montgomery Co. v. Pub. Ser. Comm., 203 Md. 79, 84, 98 A.2d 15 (1953). In Baltimore Gas, supra, we reaffirmed our adherence to the principles of judicial review articulated for the Court by Chief Judge Hammond in Insurance Comm'r v. Nat'l Bureau, 248 Md. 292, 236 A.2d 282 (1967): [The court's] appraisal or evaluation must be of the agency's fact-finding results and not an independent original estimate of or decision on the evidence. The required process is difficult to precisely articulate but it is plain that it requires restrained and disciplined judicial judgment so as not to interfere with the agency's factual conclusions.... [J]udicial review essentially should be limited to whether a reasoning mind reasonably could have reached the factual conclusion the agency reached. This need not and must not be either judicial fact-finding or a substitution of judicial judgment for agency judgment. 248 Md. at 309-10, 236 A.2d 282. BG&E first argues that in holding the company's management responsible for the forced outages in Cases O, T, and U, the Commission imposed a standard requiring perfect hindsight and nearly perfect performance. The record in these cases belies this argument. In investigating both of the outages in question, the Commission carefully considered the likelihood of the types of accidents that occurred, the foreseeable costs resulting from such accidents, and the cost and efficacy of preventive measures. The Commission concluded that BG&E had failed to implement cost-effective procedures that might well have prevented the outages. We believe this conclusion was reasonable and supported by substantial evidence. In Case O, the record contained substantial evidence that the outage was caused by a standard 1/2 inch nut having fallen into the thrust bearing of the main turbine during a routine maintenance procedure. There was undisputed evidence that similar accidents had occurred before, although none had ever resulted in an outage. BG&E offered testimony that it has a policy of requiring its employees to notify a supervisor if they are unable to account for a tool or piece of equipment that may have been lost in the vicinity of a critical maintenance project. BG&E also indicated that, to encourage compliance with this policy, it takes no disciplinary action against employees who report missing tools or equipment. While endorsing this policy, the Commission concluded that it had been poorly implemented. The policy was apparently never written down; employees learned of it, if at all, by word of mouth. In addition, the Commission found no documentation chronicling the measures actually taken in instances in which articles were reported missing. In the Commission's opinion, cost-effective measures could have been instituted by BG&E to ensure that employees were aware of the policy and to verify that appropriate procedures were followed when articles were reported missing. The Commission's order clearly indicates that BG&E was not denied recovery of 25% of its replacement power costs merely because the outage was caused by human error; indeed, the Commission emphasized that an outage occasioned by human error is not a per se violation of this statutory standard. Rather, BG&E was denied full recovery because it had failed to implement cost-effective procedures that might have prevented such an outage. In Cases T and U, the Commission determined that the outage in question was caused by a mechanic's failure to install a dummy plug in a condenser tube sheet after having removed a leaking condenser tube from the sheet for metallurgical examination. Because the plug was not installed, salt water from the Chesapeake Bay entered the condenser through the tube sheet and contaminated the reactor's secondary cooling system. The Commission further found that the contamination was worsened and the subsequent outage lengthened because BG&E had too few chemistry personnel on duty during the maintenance procedure, thereby delaying detection of the leak, and because BG&E had failed to train adequately its chemistry and operations personnel regarding the proper procedure for detection and control of gross salt water leakage. In its order, the Commission concluded that, in light of the importance of the proper insertion of dummy condenser tubes as a defense against cooling system contamination by bay water, and in consideration of the significant consequences which would result from an error in the performance of the maintenance activity, management should have foreseen the need for and benefit of additional control procedures. The Commission identified several cost-effective control procedures it believed might have prevented this type of accident: lead repairman documenting the position of tubes which were plugged as well as tubes which were pulled; conducting an inventory of the number of tubes removed and the number of plugs utilized; and/or having a quality control inspector verify the maintenance work. The Commission also found that BG&E's management should have foreseen the need for additional chemistry personnel during the maintenance procedure, and the need for more thorough training for its chemistry and operations personnel. Again, the Commission denied a portion of BG & E's recovery not merely because the accident occurred, but because BG&E had failed to implement cost-effective procedures that might have prevented the accident. BG&E next argues that no substantial evidence was introduced that the outage reviewed in Case O would have been prevented by the precautionary measures advocated by the Commission. Implicit in this argument is a basic misconception regarding the burden of proof in these proceedings. Section 54F(i) places the burden on the applicant to prove that it has complied with the requirements of § 54F(f). Thus, it was incumbent upon BG&E to prove that the outage was not the result of its failure to implement cost-effective precautionary measures. As we have already indicated, the record contains substantial evidence that the measures advocated by the Commission were cost-effective and might well have prevented the outage. The burden of proof was therefore upon BG&E to demonstrate that these measures would not in fact have prevented the outage, rather than upon the Commission or People's Counsel to prove the contrary. Finally, BG&E asserts that [t]he failure of a utility to perceive and implement each and every conceivable maintenance control is not tantamount to imprudence or mismanagement. We agree. As the Commission indicated in its orders in these cases, it is only the failure to implement cost-effective controls that is tantamount to imprudence. A reasoning mind could reasonably have concluded, as did the Commission, that the precautionary measures advocated in these orders were cost-effective. We, therefore, defer to the Commission's judgment in this regard. JUDGMENT AFFIRMED, WITH COSTS. McAULIFFE, J., concurs in the result. McAULIFFE, Judge. I concur in the result only.