Opinion ID: 618656
Heading Depth: 3
Heading Rank: 1

Heading: Buried Drops/Buried Conduit

Text: Buried Conduit refers to an input to the cost model based on the cost of placing the buried wire that connects customers to the PRTC network. Here, PRTC proposed a figure assuming it would place such buried wires into conduits 100 percent of the time. WorldNet's proposal assumed the use of conduits 10 percent of the time. The arbitrator determined that the correct assumption should be 25 percent, referencing Board policy requiring conduit drops only for new urban subdivisions and developments and not for rural areas. PRTC argues that this determination is arbitrary and capricious, because there is no support for the Board's conclusion that the arbitrator's determination was consistent with the Board's policy to require conduit for urban sub-divisions and development projects but not to require conduit in rural areas of Puerto Rico. PRTC's argument on this buried conduit issue is confined to a single paragraph in its brief. PRTC has fallen far short of meeting its burden of demonstrating that the agency relied on improper factors, failed to consider pertinent aspects of the problem, offered a rationale contradicting the evidence before it, or reached a conclusion so implausible that it cannot be attributed to a difference of opinion or the application of agency expertise. Associated Fisheries, 127 F.3d at 109. This case is different from the cases relied on by PRTC on this issue, Laclede Gas Co. v. Federal Energy Regulatory Commission, 873 F.2d 1494 (D.C.Cir. 1989), and South Dakota Public Utilities Commission v. Federal Energy Regulatory Commission, 668 F.2d 333 (8th Cir. 1981). In Laclede, FERC's initial order simply made an assertion that the company's customers were protected by a refund obligation. 873 F.2d at 1499. After a number of commenters challenged that conclusion on rehearing, FERC merely repeated its assertion, again without analysis. Id. In contrast, here the arbitrator sought a compromise between the parties' positions, and cited Board policy that rural areas do not require conduit. In South Dakota Public Utilities Commission, the Eighth Circuit held that FERC had ignored estimates and data presented before it, and had instead chosen a formula for estimating gas reserves that was significantly inferior to another formula at FERC's disposal, which the agency ignored. 668 F.2d at 344-45. The court found that the alternative predictions that were not chosen were made by one of the most respected analysts in the natural gas industry and its projections are well in line with those of other groups. Id. at 344. But without any apparent rational basis, [FERC's chosen] model totally eliminates the [respected model's] speculative category and then reduces the remainder by 300 percent. Id. Moreover, the court held that the FERC's chosen model ignore[d] current governmental policies expressed in the Natural Gas Policy Act. Id. at 341. Thus, in the South Dakota Public Utilities Commission case it was clear that FERC had ignored one available and reliable model in favor of a dramatically different model that was without support in the record and [was] not within the zone of reasonableness. Id. at 344. In contrast, here the arbitrator was choosing between two presumably self-serving estimates presented by the parties: 100 percent by PRTC, and 10 percent by WorldNet. Unlike in South Dakota Public Utilities Commission, the estimate that was not chosen here had not been made by one of the most respected analysts in the industry, and the projections were not well in line with those of other groups. See id. Moreover, the arbitrator's decision conforms with the Board's general policy that conduit is not required in rural areas. Therefore, the Board's decision to affirm the arbitrator's determination as consistent with law and policy was not arbitrary and capricious.