Court Opinion

ID: 9685980
Source: CourtListenerOpinion
Date Created: 2023-08-24 15:12:17.6435+00
Date Added: 2024-06-11T18:18:12.253010
License: Public Domain

FOLEY, J.
(dissenting) The new PSC natural gas rates will result in increased firm customer costs and, arguably, will competitively disadvantage businesses within the affected tariff areas. Absent evidence of any resulting conservation, I would reverse that portion of the circuit court judgment denying relief to the WAMC and would remand this matter to the PSC for reconsideration.
The PSC contends that if a rate design reduces use of natural gas by interruptible customers, some conservation will automatically result. While this simplistic statement of the PSC position made by its counsel in oral argument has a certain logical appeal, it does not find support in the record. What the record does support is that the cost of natural gas to homeowners and other *328firm customers will ultimately be increased as a result of the new rate design. The new rates may also put the affected Wisconsin manufacturers in a competitively unacceptable position with manufacturers from other states with lower energy costs.
Although judicial review of an agency decision is limited, a court is not relieved of the responsibility of determining whether the agency’s ultimate decision is based on and reasoned from findings of fact that are supported by substantial evidence in the record. Voight v. Washington Island Ferry Line, Inc., 79 Wis.2d 333, 255 N.W.2d 545 (1977). An agency must give sound reasons for its determination in order to make meaningful judicial review possible. Transport Oil Inc. v. Cummings, 54 Wis.2d 256, 195 N.W.2d 649 (1972). Although we must accept agency findings of fact if they are supported by substantial evidence, Sanitary Transfer & Landfill, Inc. v. DNR, 85 Wis.2d 1, 270 N.W.2d 144 (1978), if the agency findings are not supported by the record, then the agency has not provided an adequate explanation for its decision.
In this case, the PSC gives two reasons for its rate design: (1) promotion of conservation, and (2) ease of transition to other fuels by low priority users. The second reason is really only a method of achieving conservation. The PSC defines conservation as any reduction in natural gas use by any gas customers. The WAMC, conversely, contends that conservation only results: (1) if there is a total reduction in gas consumption, more gas is actually left in the ground; or (2) if there is less natural gas used for low priority uses leaving more for high priority uses. The WAMC contends that the present rate design will not effect either of these results.
Accepting the PSC definition of conservation, as the majority does, requires an affirmance. If we were, however, to accept the WAMC’s definition, we would have to *329reverse and remand, since there is no evidence that such conservation will result. By the PSC definition, conservation results if a Wisconsin interruptible customer uses less gas, even if that gas is ultimately consumed by the same type of low priority user in another state. A claim that this is conservation should not receive judicial approval.
To understand the full impact of the PSC decision, it is necessary to understand the process by which natural gas is bought, allocated and sold in Wisconsin. There are two classes of customers involved: firm customers and interruptible customers. Firm customers are those who have a consistant and absolute need for natural gas and commonly include such users as homes, churches, schools or hospitals. Interruptible customers are those who can use either natural gas or another fuel, commonly industrial users. Traditionally, natural gas was less expensive than the alternative fuel and will continue to be slightly less expensive to the interruptible customer under the new rate design.
A utility must buy enough natural gas to meet the peak demands of its firm customers. On any given day, some of this gas will probably not be used by the firm customers. The excess gas is then sold to the interrup-tible customers who get it at a lower price because the interruptible customers cannot depend on the supply. The utility must pay for the peak amount of natural gas potentially needed by firm customers regardless of whether the gas is completely used by utility customers. By selling excess gas to the interruptible customers, the utility picks up income that would otherwise be lost and at the same time provides some benefit to interruptible customers in Wisconsin. If the excess gas were not sold to the interruptible customers, the utility would have to charge the firm customers more for the gas they use to pay for the gas not used but still purchased.
*330Furthermore, the PSC does not dispute the fact that once the gas is taken from the well and put in the pipeline, it cannot be conserved. It can be neither put back in the well nor stored in Wisconsin for future use. Once the utility contracts for a certain amount of gas, that gas is put in the pipeline and must be used somewhere along the pipeline. If the gas is not used by Wisconsin’s interruptible customers, it will merely be used by someone in another state. We have no way of knowing if the gas will be used by a low or high priority user in that other state. The practice of using interrup-tible customers to consume excess natural gas is an efficient way of utilizing all the gas bought by Wisconsin utilities and keeps the cost to the firm customers down.
Although the PSC has the power to choose between increased costs to consumers and conservation, the choice made here resulting in increased consumer costs is difficult to accept in the absence of any real conservation. The choice is even harder to accept when one realizes that the new rate design results in dramatically increased costs to Wisconsin manufacturers in the affected tariff areas. Since Wisconsin manufacturers are competing with out-of-state industries who are not necessarily subject to these higher costs, the new rate design may create an unfavorable climate for the development of new industry in Wisconsin and may put Wisconsin industry at a competitive disadvantage.
A rate structure that eliminates interruptible customers will not enable a utility to serve any more firm customers, since interruptible customers only use excess gas and that supply is never certain. Therefore, the gas cannot be used for a higher priority use, but will merely not be used in Wisconsin by either high or low priority interruptible customers.
The PSC goal of conservation is admittedly a commendable one. I do not question the power of the PSC *331to effectuate this goal, even at the expense of Wisconsin consumers. I would, however, require that its largess to out-of-state consumers be justified in some manner. The PSC should not be allowed to set up a rate design with no support besides a vague claim of conservation. Action without justification is capricious, and to allow such action is an abdication of judicial responsibility and would' give the PSC virtually absolute power. Finding no support in the record for a conservation effect here, I would remand this case to the PSC to either justify the present rate design or to formulate a new one.