Opinion ID: 793196
Heading Depth: 2
Heading Rank: 1

Heading: Retroactive Ratemaking

Text: 7 Qwest first argues that the April 4 Order violates the rule against retroactive ratemaking. The rule against retroactive ratemaking prohibits a commission from prescribing rates to recoup a utility's past losses for transactions that have already taken place. See, e.g., BP West Coast Prod., LLC v. FERC, 374 F.3d 1263, 1301 (D.C.Cir.2004); Pac. Gas & Elec. Co. v. FERC, 373 F.3d 1315, 1319-20 (D.C.Cir. 2004); Consol. Edison Co. of New York v. FERC, 347 F.3d 964, 969 (D.C.Cir.2003). The purpose of the rule against retroactivity, and the closely related filed rate doctrine, is to ensure predictability. Pub. Util. Comm'n of California v. FERC, 988 F.2d 154, 163 (D.C.Cir.1993). Therefore, the rule does not apply in situations where there is adequate notice that resolution of some specific issue may cause a later adjustment to the rate being collected at the time of service. Natural Gas Clearinghouse v. FERC, 965 F.2d 1066, 1075 (D.C.Cir.1992); see also OXY USA, Inc. v. FERC, 64 F.3d 679, 699 (D.C.Cir.1995) (The goals of equity and predictability are not undermined when the Commission warns all parties involved that a change in rates is only tentative and might be disallowed.). 8 The April 4 Order expressly put Qwest and all other interested parties on notice that the existing UNE rates were under review and subject to true-up payments when MPUC adopted permanent rates. Rates collected prior to April 4, 2002, are not subject to true-up payments. With these considerations in mind, the April 4 Order change[d] what would be purely retroactive ratemaking into a functionally prospective process by placing the relevant audience on notice at the outset that the rates being promulgated [were] provisional only and subject to later revision. Natural Gas Clearinghouse, 965 F.2d at 1075 (citation omitted). Therefore, the April 4 Order does not violate the rule against retroactive ratemaking. 4