Court Opinion

ID: 9755211
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:30:26.837792+00
Date Added: 2024-06-11T07:28:05.285605
License: Public Domain

*216STOWERS, Justice,
concurring in part and dissenting in part.
I agree in part and disagree in part with the court's opinion. I begin by noting that the court's opinion, recognizing that the Regulatory Commission of Alaska (RCA) has the authority to correct some procedural mistakes, does not expressly hold that these permissible corrections would constitute retroactive ratemaking. I think a fair reading of the opinion implies that these corrections are retroactive ratemaking, and the court is carving out a narrow exception where it is permissible for the RCA to engage in retroactive rulemaking.
My first disagreement with the court arises from my conclusion that Alaska Exchange Carriers Association's position in this appeal is correct: this is not a case of retroactive ratemaking, but rather a case of a correction of a mathematical or clerical mistake; in other words, a procedural correction to a procedural mistake. I would hold that, on the facts of this case and given the nature of the error and the simple way that it can be corrected, any such correction would be merely a mathematical, or clerical, or procedural correction-not ratemaking.1 Under this analysis, it is unnecessary to create any exception to the rule against retroactive rate-making.
Regardless, whether the correction is retroactive ratemaking or not, I agree with the court that RCA has the authority to correct mathematical, clerical, or procedural mistakes of the kind in this case, for the reasons given by the court's opinion.
My second disagreement with the court goes to the remedy on remand. Given that all parties agree that the underlying assumptions and data (Le., the numbers that were used to generate the agreed upon rate) are correct, and that but for the procedural mistake made in this case the rate would have been correctly calculated, I would remand this case to the RCA with instructions to make the necessary correction. I see no reason to have RCA further consider any issue in this case; the parties have previously agreed to the correct figures and calculations and RCA has already approved those figures and calculations, both with respect to the original rate and with respect to the rate's prospective application. Under these circumstances, all the court need do is explain that RCA, with its new authority to correct procedural errors, should correct this one.
*217Finally, I disagree with the court's resolution of the effective date of the correction: the date that public notice is given of the error. The underlying rationale of this effective date is to create an incentive in the party who will benefit from the correction to promptly identify and seek to correct mathematical, clerical, or procedural errors. While this might be a laudatory policy in some cases, I see no justification for such a rule in this case. As is well explained in the majority opinion, all parties and the RCA agreed on the assumptions and data supporting the original rate-that is to say, there is no dispute that the inputs and numbers used to generate the original rate are correct. A procedural error was made that made the calculation of the rate incorrect. All that is necessary to correct this procedural error is to use the agreed-upon numbers in the correct calculation. In the absence of any showing that any party acted in a way to improperly or unfairly benefit from the failure to discover the calculation error, I see no good reason not to simply correct the calculation nunc pro tunc to the effective date of the original rate. I would require the RCA to do so in this case.
Hypothetically, if there were some evi-denee that a party had acted improperly or unfairly to obtain a benefit from a procedural calculation error, then I would agree with Justice Winfree's dissent and hold that the RCA should use its discretion to determine an appropriate corrective date. One of the factors the RCA could consider is the majority's policy rationale for using the date of first public notice of the error-to create an incentive to promptly identify and correct procedural errors.
In all other respects, I concur with the court's opinion.

. See Bldg. Owners and Managers Ass'n of Metro. Detroit v. Mich. Pub. Serv. Comm'n, 383 NW.2d 72, 80-81 (Mich.1986), wherein the court explained:
plaintiffs contend that the subsequent validation of the 1970 rate order amounted to a retroactive rate increase that is prohibited by law.
We do not agree. A rate was set and a subsequent hearing supplied the necessary finding of reasonableness after proper notice to the ratepayer. The rate was not changed after the fact....
A challenge to a rate based on a procedural flaw does not render its subsequent validation a retroactive rate.
(Emphasis added) (citation omitted).
Similarly, in IH. Power Co. v. Ill. Commerce Comm'n, 254 IllApp.3d 293, 193 IILDec. 403, 626 N.E.2d 713, 724 (1994), the court explained:;
If a mere mathematical error resulted in a double reduction for the disallowed deferred charges, the mistake should be remedied. If, however, the calculation was designed to account for errors ... on a prospective basis, then what [Illinois Power] perceives as a ministerial error was in fact an informed policy decision and should not be disturbed.
(Emphasis added).
And in Ind. Office of Util, Consumer Counselor v. Duke Energy Ind., Inc., 896 N.E.2d 936, 2008 WL 4892553 at *4-5 (Ind.App. Nov. 14, 2008), the court said:
We agree with Duke that this is not the type of situation that should be controlled by the rule against retroactive ratemaking. What occurred in this case is that Duke, in previously mis-stating its [construction cost] balances ..., failed to comply with FERC accounting guidelines. This resulted in an erroneous stating of the total project balances of Duke's under-construction [property]. It would appear that if Duke had not made this accounting correction ... the capital balances for those projects would continue to be erroneous in the future. Duke chose instead to correctly state the total [construction costs] that should have been calculated according to FERC guidelines....
We also fail to perceive how permitting Duke to make this accounting correction would negatively affect utility planning, investor confidence, utility credit rating, or integrity of service [the factors identified by Indiana courts underlying the purposes of the rule against retroactive ratemaking].