Court Opinion

ID: 7960543
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:37:55.272725+00
Date Added: 2024-06-11T16:34:25.491812
License: Public Domain

Jansen, P.J.
(dissenting). I respectfully dissent. I would find that the Public Service Commission’s order constitutes an error of law because the commission improperly interpreted MCL 460.6h; MSA 22.13(6h).
MCL 460.6h(14); MSA 22.13(6h)(14) provides:
In its order in a gas cost reconciliation, the commission shall authorize a gas utility to recover from customers any net amount by which the amount determined to have been recovered over the period covered was less than the amount determined to have been actually expensed by the utility for gas sold, and to have been incurred through reasonable and prudent actions not precluded by the commission order in the gas supply and cost review. For excess costs incurred through actions contrary to the commission’s gas supply and cost review order, the commission shall authorize a utility to recover costs incurred for gas sold in the 12-month period in excess of the amount recovered over the period only if the utility demonstrates by clear and convincing evidence that the excess expenses were beyond the ability of the utility to control through reasonable and prudent actions. For excess costs incurred through actions consistent with [the] commission’s gas supply and cost review order, the commission shall authorize a utility to recover costs incurred for gas sold in the 12-month period in excess of the amount recovered over the period only if the utility demonstrates that the excess expenses were reasonable and prudent.
Such amounts in excess of the amounts actually recovered by the utility for gas sold shall be apportioned among and charged to the customers of the utility utilizing procedures that the commission determines to be reasonable. The commission may adopt different procedures with respect to customers served under the various rate schedules of the utility and may, in appropriate circumstances, order charges to be made in proportion to the amounts which would have been paid by such customers if the amounts in excess of the amounts actually recovered by the *321utility for gas sold had been included in the gas cost recovery factors with respect to such customers during the period covered. Charges for such excess amounts shall be spread over a period that the commission determines to be appropriate.
Although hardly a model of clarity, the statute does not allow Michigan Gas Utilities to incorporate projected, prior period underrecoveries. Rather, the statute authorizes recovery of actual underrecoveries once they are determined in a gas cost recovery reconciliation case. This was noted by the hearing referee, who stated in his proposal for decision, correctly I believe, that the language of MCL 460.6h(3); MSA 22.13(6h)(3) is “forward looking” (future costs) and is devoid of language that included prior period underrecoveries. The hearing referee also believed that permitting the inclusion of prior period under-recoveries in the gas cost recovery plan would lead to duplicative remedies because there is nothing in the gas utility’s plan to prevent the utility from filing in the gas cost recovery plan prior period under-recoveries and also filing for the same under-recoveries in a gas cost recovery reconciliation case.
Further, the psc’s interpretation of MCL 460.6h; MSA 22.13(6h) goes far beyond this Court’s decision in Attorney General v Public Service Comm, 215 Mich App 356; 546 NW2d 266 (1996), which held only that the PSC was not prohibited, as a matter of law, from including the costs associated with the implementation of a hedging program of natural gas futures to be among the booked costs of the natural gas for the purpose of determining the appropriate gas cost recovery factor used to determine the final rate at which the gas is sold. There is a vast difference *322between rolling an actual underrecovery determined in a gas cost recovery reconciliation order into subsequently billed gas cost recovery factors and including projected, prior period underrecoveries in gas cost recovery factors proposed for a future twelve-month period.
The psc’s order permits the gas utilities to introduce any projected, year-end underrecovery for a prior year to be a part of the calculation of gas cost recovery factors. Because MCL 460.6h; MSA 22.13(6h) does not permit this, I would find the PSC’s order to be an error of law. I would reverse the PSC’s order.