Opinion ID: 1961637
Heading Depth: 2
Heading Rank: 5

Heading: BIS Expenses.

Text: NET included $413,065 in test-year expenses for the development of centralized data processing services known as Business Information Systems (BIS). Under its license contract with AT&T, New England Telephone and other Bell operating companies share in the cost of research and development of new systems. The Commission disallowed NET's $99,433 share of the cost of four of the many BIS projects; namely, those known by the acronyms BISCUS, BOSS, COPS, and DIR/ECT. Years ago, when the Commission approved the BIS cost-sharing agreement in a 1967 order, it stated that it reserves the right to investigate and pass upon the reasonableness of all charges relating to such contract. . . . In re Proposed Agreement Between Bell Telephone Laboratories, New England Tel. & Tel. Co. and Operating Companies, F. No. 13,523 (Me. P.U.C. July 1, 1967). Making reference to that reservation and to a similar one made in a 1977 order approving BIS expenses, the Commission found, after investigation, that the four BIS projects designated above could not be reasonably charged to Maine rate-payers and disallowed them. The Commission reasoned that none of the four projects is currently in service in Maine and that, although conceivably some of the expenses associated with the four projects could be amortized and charged to Maine ratepayers, NET had failed to prove the justness of such treatment. NET claims it provided sufficient evidence of the reasonableness of the BIS costs and that the Commission's decision is therefore wrong. NET's witness, John Hann, testified to the effect that all BIS projects are for research and development and are beneficial to Maine ratepayers, that the four in question have not yet been implemented in Maine, and that future improvements in NET service gained as a result of BIS research will benefit Maine ratepayers as well as other Bell System customers. NET asserts that this is sufficient evidence of the reasonableness of all costs of BIS projects, including the four in question, especially since the propriety of BIS research and development is a management decision. The determination whether a particular expense is reasonable or just for purposes of ratemaking is often difficult. The Commission must weigh the evidence and use its expertise in evaluating that evidence. Because the Commission has been delegated the primary task of determining whether a utility has met its burden of proof and justified a particular expense, this Court reviews that decision only for abuse of discretion. If the decision is reasonable and the findings are supported by substantial evidence, this Court does not interfere with the result. See 1978 NET Case, 390 A.2d at 59-60. Moreover, the Commission may accept or reject all or part of the testimony of any witness. Here, the Commission could have rationally believed that Hann's testimony fell short of proving that the four BIS projects in question benefit Maine ratepayers now or will benefit them in the reasonably near future. Scrutiny of the record in this case does not reveal anything that would justify this Court in overturning the Commission's conclusion that NET did not satisfy its burden of proving that the justness and reasonableness of NET's rates required the expenses of the four BIS projects in question to be included.