Court Opinion

ID: 9540587
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:18:00.070547+00
Date Added: 2024-06-11T15:00:03.463970
License: Public Domain

DURHAM, Justice,
dissenting:
I respectfully dissent. Utah Code Ann. § 63-46b-16(4)(g) requires an appellate court to review the whole record to determine whether agency action is supported by substantial evidence. “[The] party challenging the [Commission’s] findings of fact [Mountain Fuel in this case] must marshal all of the evidence supporting the findings and show that despite the supporting facts, and in light of the conflicting or contradictory evidence, the findings are not supported by substantial evidence.” Grace Drilling v. Board of Review of Indus. Comm’n, 776 P.2d 63, 68 (Utah Ct.App.1989) (emphasis in original); cf. Cornish Town v. Roller, 758 P.2d 919, 922 (Utah 1988) (to mount an attack on the trial court’s findings of fact, “an appellant must marshal the evidence supporting the trial court’s findings”).
My review of the record persuades me that there simply is no competent evidence *430supporting the Commission’s decision to rely on an historical test year in this ease. The only basis for the decision appears to be precedent, speculation about potential problems with competing economic models, and some financial considerations given cursory treatment only after the Commission denied Mountain Fuel’s proposal. None of these considerations rise to the level of satisfying the substantial evidence test.
The fact that historical test years have been used in some past rate-making cases does not by itself reasonably support the decision to use such a test-year period in this case. In fact, the Commission has used both historical and future test years in prior rate-making cases. Indeed, since the 1970s, the general approach has been for Mountain Fuel’s rates to be determined on the basis of a future test year.
The Commission expressed concern at the November 21, 1989, hearing about possible problems with “dueling” models used in a future-test-year case. The possibility of such problems is purely speculative given that the models were not even in existence at the time the Commission determined to use an historical test year. Further, Mountain Fuel indicated that competing models would not present the problems that may have arisen in the past because it now uses a technique called the “budgeting process.” Mountain Fuel explained that this is a superior method to those used previously because it is more straightforward and more amenable to analysis. Nevertheless, the Commission did not explore the details of the budgeting process, nor did it raise any further concerns about dueling models.
The only plausible basis for the Commission’s decision is the impact of general economic circumstances, such as inflation rates, on a test-year period. In its brief, the Commission argues that it took into account economic circumstances in deciding to use an historical test year. However, the record indicates that the Commission in fact never raised or discussed economic circumstances until after it rendered its decision rejecting Mountain Fuel’s proposal to put on evidence regarding the test-year issue. Even then, the Commission was only responding to the Committee’s request that the Commission take official notice of the inflation rate and all budget filings by the Division and Mountain Fuel for the past five years. The response to that request was simply that “the Commission will do so not passing on whether ... it is necessary or an accurate interpretation of the APA.” This responsive statement, made after its decision was rendered, does not indicate that the Commission took economic circumstances into account in deciding to use an historical test year.
Mountain Fuel’s main argument at the November 21, 1989, hearing was that it should have the opportunity to present any data it believed was appropriate to establish just and reasonable rates for the 1990s. Mountain Fuel proposed that it file both an historical- and a future-test-year case, allowing the parties to make whatever presentations and arguments they saw fit based on the information from those filings. The Commission might then consider both filings, along with any presentations and arguments, and make a reasonable judgment as to the one most representative of the period for which the rates were to apply. Although Mountain Fuel indicated that it would argue for the future test year, it did not propose that the Commission simply choose the future-test-year period. Mountain Fuel was willing to go forward with evidence for both an historical and a future test year. The Commission, however, rejected Mountain Fuel’s proposal, thereby declining to undertake any comparative analysis of the historical and future data. At this point, the majority’s assertion that the Commission was merely relying on a “rebuttable presumption” in favor of an historical test year fails. Simply put, Mountain Fuel was denied an opportunity to rebut the Commission’s “presumption.”
There was no reasonable or rational justification for the Commission’s refusal to take evidence from the parties on the test-year issue. The record reveals that the other parties involved, the Division and the *431Committee, took the position that it would be helpful and probably appropriate for the Commission to take evidence on the issue and then make its determination as to the proper test-year period. The Committee stated specifically that “there should be a brief factual hearing so that the Commission ha[s] something to base its conclusion on.” Although the Commission has some discretion in choosing a test-year period,1 its decision must rest upon some sound evidentiary basis, not upon fiat. First Nat’l Bank of Boston v. County Bd. of Equalization, 799 P.2d 1163, 1166 (Utah 1990); Hurley v. Board of Review of Indus. Comm’n, 767 P.2d 524, 526-27 (Utah 1988). The Commission abused its discretion in denying Mountain Fuel the opportunity to be fully heard.
Because the record reveals no competent basis or justification for the Commission’s decision, its action was, in my view, unreasonable as an arbitrary and capricious act. In Milne Truck Lines v. Public Service Commission, 720 P.2d 1373, 1378 (Utah 1986), this court found it essential that the Commission make subsidiary findings in sufficient detail so as to demonstrate a logical and legal basis for its ultimate conclusions: “[Findings should be sufficiently detailed to disclose the steps by which the ultimate factual conclusions, or conclusions of mixed fact and law, are reached.” Id. I believe that in this case, as in Milne, this court needs detailed findings to “perform its dut[ies] of reviewing the Commission’s order in accordance with established legal principles and of protecting the parties and the public from arbitrary and capricious administrative action.” Id.; see also Mountain States Legal Found, v. Public Serv. Comm’n, 636 P.2d 1047, 1058 (Utah 1981) (legality and legitimacy of the Commission’s orders rest on well-articulated findings and reasons). The Commission has not made sufficiently detailed findings in this case.
Based on the foregoing, I would reverse the Commission’s order, remand for a hearing on the test-year question, and decline to reach any of the other issues treated by the majority opinion.

. Utah Code Ann. § 54-4-4(3).