Court Opinion

ID: 9733754
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:16:34.17796+00
Date Added: 2024-06-11T18:26:44.001774
License: Public Domain

OPINION
WILLIAMS, Chief Justice.
This case is before the Court on separate statutory petitions for certiorari filed by Interstate Navigation Company d/b/a The Block Island Ferry (Interstate), and the Town of New Shoreham (town) (collectively petitioners). After granting certio-rari, this Court consolidated the matters for briefing and argument. The petitioners seek review of an August 20, 2002, *525report and order (2002 order) of the Public Utilities Commission (PUC or commission) issued in docket number 2802, in which it ruled that Island Hi-Speed Ferry, LLC (Hi-Speed) could . continue operating through the 2002 season charging a previously approved rate. In re High-Speed Ferry’s Request for Confidential Treatment of Compliance Report and Data Responses, docket no. 2802, (written order issued August 20, 2002). Also in the 2002 order, the PUC denied the petitioners access to a compliance report and related data responses (compliance report) Hi-Speed submitted as part of its obligation to provide information to allow the PUC to monitor the reasonableness of Hi-Speed’s rates. Id. Because the 2002 operating season has passed and the PUC has since issued a new order establishing Hi-Speed’s rates, In re Island Hi-Speed Form of Regulation and Review Rates, docket no. 3495, (written order issued November 25, 2003), the issues raised in this case are moot. Therefore, we affirm the 2002 order of the PUC.
I
Facts and Travel
Interstate and Hi-Speed are competing companies that provide ferry services to and from the town.1 Because Interstate has been in business since at least 1954, Hi-Speed may be viewed as the new kid on the block. In 1998, the PUC granted Hi-Speed permission to operate a high speed catamaran shuttling passengers between the town and the Port of Galilee in Narragansett. In a report and order issued on March 31, 1999 (1999 order), the PUC approved round-trip rates of $26 for adults and $12 for children2 for Hi-Speed applicable for the 1999 season — May 14 through October 11. In authorizing Hi-Speed’s temporary rates, the PUC ordered Hi-Speed to file a “Cost of Service Schedule and Rate Design”3 so the PUC could revisit Hi-Speed’s rates after its initial test year. The 1999 season, however, came and went without Hi-Speed beginning its operation. Nevertheless, in 2000 this Court was called upon to review Hi-Speed’s 1999 rates. In re Island Hi-Speed Ferry, LLC, 746 A.2d 1240 (R.I.2000). Despite the fact that the rates under review at that time technically applied only to the 1999 season, which had concluded, we held that the case was not moot because the “administrative gridlock” that had delayed the commencement of Hi-Speed’s service was likely to recur and evade judicial review. Id. at 1243. We treated the 1999 rate approval as though it applied “for the'initial season during which *526Hi-Speed is in operation” and ultimately ruled that the methodology used to calculate the rates was reasonable. Id. at 1248, 1246-47. Thus, when Hi-Speed finally launched its maiden voyage in mid-summer 2001, it operated under the rate approval that originally applied to the 1999 season.
On January 15, 2002, Hi-Speed filed a compliance report (report) in accordance with the PUC’s 1999 order. When it submitted its report, Hi-Speed asked the PUC to treat the report as confidential4 pursuant to Rule 1.2(g) of the Public Utilities Commission Rules of Practice and Procedure.5 The petitioners objected to Hi-Speed’s request for confidential treatment of the report, and Interstate requested access to it pursuant to the Access to Public Records Act (APRA), G.L.1956 chapter 2 of title 38. The town also argued that no rate had been set for Hi-Speed’s 2002 operating season because the previous rate approval applied only for the 2001 season and had expired. The town further asserted that it had a right to participate in any hearings about Hi-Speed’s 2002 rates.
After a public hearing, the PUC granted confidential and proprietary treatment to Hi-Speed’s report on a preliminary basis. In its post-hearing brief, Hi-Speed maintained that the PUC was not required to conduct a rate case to set its 2002 tariffs. It argued that the PUC should exercise its discretion and allow the 2001 rates to remain in effect so new rates could be based on data available after the 2002 season— Hi-Speed’s first full season of operation. Interstate filed a post-hearing brief, in which it argued that the approved 2001 rates could not be used by Hi-Speed in 2002 and that it would be illegal to authorize new rates without a public hearing. Also in the wake of the hearing, Interstate filed an objection to a PUC data request for information about whether Interstate planned to enter the high-speed ferry market. Interstate said the information requested “is proprietary and confidential and is protected from disclosure because to disclose it would cause substantial harm to the competitive position of Interstate.”
In the 2002 order, the PUC announced that it made a final determination that the report that Hi-Speed submitted was pro*527prietary and confidential.6 Describing the information in the report as a “roadmap” for starting a competing high-speed ferry service, the PUC specifically found that “the financial information developed in establishing [a high-speed ferry] business is proprietary and to disclose it to a potential competitor would likely cause substantial harm to [Hi-Speed].” It also noted that Interstate is the incumbent ferry carrier and, with the information contained in the report, could use its superior financial resources and name recognition to enter the high-speed ferry business and undercut Hi-Speed. In fact, based on Interstate’s refusal to answer its questions about whether Interstate planned to enter the high-speed ferry business, the PUC found that “Interstate would be likely to use the information contained in [the report] in a manner that would cause substantial harm to Hi-Speed’s competitive position.” Accordingly, the PUC overruled the petitioners’ objections to Hi-Speed’s request for confidential treatment and denied Interstate’s APRA request.
The PUC also allowed Hi-Speed to continue charging rates in accordance with the terms of the order applicable to the previous year. So ordering, the PUC said that until “such time as Hi-Speed actually files for a rate change or has at least a full year of financial and operating data available, [it would] exercise its discretion in opening a new docket with regard to setting new rates, if appropriate, for Hi-Speed.” The PUC opined that
“[t]o conduct a rate proceeding at this time based on only a few months of data, and then conduct another rate proceeding for Hi-Speed at the end of this year after a full year’s data is collected, would be an inefficient use of time and resources on the part of the [PUC]. Also, allowing a full year’s worth of data to be collected in order to set new rates, if appropriate, is consistent with the [PUC’s] prior orders in this docket and will not harm the ratepayers.”
This Court granted certiorari to review the 2002 order in September 2002. Thereafter, on February 27, 2008, the PUC initiated a new docket to review the reasonableness of Hi-Speed’s rates and charges. In November 2003, the PUC issued the 2003 order in the new docket (3495) denying Interstate’s and the town’s requests to intervene. Ultimately, the PUC determined that the appropriate form of rate regulation for Hi-Speed is a price floor with no revenue or profit cap, and that the appropriate charges were the amounts Hi-Speed charged in its initial season. The PUC also authorized Hi-Speed to retain any revenue collected in excess of the previously determined revenue cap.
We are of the opinion that the opening of a new docket by the PUC and reestablishing Hi-Speed’s rates has rendered all issues in this case moot. “This Court has held that ‘a case is moot if * * * events occurring after [its] filing have deprived the litigant of a continuing stake in the controversy.’ ” Morey v. Wall, 849 A.2d 621, 624 (R.I.2004) (quoting Associated Builders & Contractors of Rhode Island, Inc. v. City of Providence, 754 A.2d 89, 90 (R.I.2000) (per curiam)). “The mootness doctrine ensures that the litigant’s interest in the outcome continues to exist throughout the appellate process.” Id. “A case that otherwise is moot may be considered if the issues involved are likely *528to recur in such a way as to evade review and are of great public importance.” Id.
When asked at oral argument about their attempts to gain access to Hi-Speed’s report, petitioners said that their ability to gain access to the report was crucial to a proper determination of Hi-Speed’s rates for the 2002 season. Because the 2002 season has passed, however, any changes to the rates for that season would constitute retroactive rate-making by the PUC. “One of the central principles of ratemaking is that rates must be prospective.” Providence Gas Co. v. Burke, 475 A.2d 193, 197 (R.I.1984). Subject to narrow exceptions, the PUC is prohibited from engaging in retroactive ratemaking. This Court has sanctioned retroactive rate increases to allow a utility to recoup extraordinary expenses incurred as a result of an unusually severe storm, Narragansett Electric Co. v. Burke, 415 A.2d 177, 179 (R.I.1980), or an unforeseeable “supplemental tax surcharge assessed by [a] city,” Providence Gas Co., 475 A.2d at 198. Here, however, no parties argue that Hi-Speed’s rates should be increased retroactively to make up for extraordinary expenses similar to those incurred in Narragansett Electric Co. and Providence Gas Co. Also, a retroactive rate reduction would be impracticable given the nature of the ferry industry. Unlike utility companies that provide services to account-holding customers,. Hi-Speed’s patrons are unidentified passengers who would not benefit from a refund. Cf. Mountain States Telephone and Telegraph Co. v. Arizona Corporation Commission, 124 Ariz. 433, 604 P.2d 1144, 1146-48 (Ct.App.1979) (ordering a phone company to refund unlawfully established charges); State v. Conservation Council of North Carolina, 312 N.C. 59, 320 S.E.2d 679, 686 (1984) (ordering a power company to refund “proceeds of rates that were illegally charged”). Therefore, based on petitioners’ avowed purpose in seeking access to the compliance report,- the PUC’s APRA and Rule 1.2(g) rulings are moot..
The most important fact that renders this case moot, however, is the fact that the PUC has issued a new report and order setting Hi-Speed’s rates after a public hearing. The 2003 order authorized Hi-Speed to set its rates based on a price floor that equaled the 2002 tariffs. That order also authorized Hi-Speed to keep any money that may have exceeded the previously determined revenue cap. Because Hi-Speed currently is operating under the 2003 order rather than the 2002 order,7 for which petitioners seek review in this case, petitioners could not obtain legal redress regardless of our ruling on the *529propriety of Hi-Speed’s 2002 operating tariffs.8
Even if this case were not moot, we would question whether the PUC’s decision to continue a tariff triggers the hearing requirement of G.L.1956 § 39-3-11. Section 39-3-ll(a) provides “[w]henever the commission receives notice of any change or changes proposed to be made in any schedule filed under the provisions of § 39-3-10, the commission shall hold a public hearing and make investigation as to the propriety of the proposed change or changes.” (Emphases added.) Here, the PUC continued its order setting Hi-Speed’s tariffs without changing its terms. Notably, the Supreme Court of Alabama has held that the continuation of an expired rate does not constitute a rate change and does not trigger procedures necessary to effectuate a rate change. Aireo, Inc. v. Alabama Public Service Commission, 496 So.2d 21, 23-24 (Ala. 1986). Also, with respect to the petitioners’ assertion that the PUC was required to conduct a hearing as part of its obligation to periodically review Hi-Speed’s rates, there is no indication that the PUC unreasonably shirked that duty. In fact, the PUC specifically explained in the 2002 order that it would not be prudent to review Hi-Speed’s rates because of the lack of data to perform a proper evaluation. Nevertheless, because we deem the PUC’s rulings in the 2002 order to be moot, we need not reach the other issues that the petitioners raise.
Conclusion
For the reasons stated herein, we affirm the report and order of the Public Utilities Commission. The record shall be remanded to the Public Utilities Commission with our decision endorsed thereon.
Justice FLAHERTY did not attend oral argument but participated on the basis of the briefs.

. New Shoreham is an island town in the State of Rhode Island.

. The PUC also authorized a $14 one-way adult rate and one-way child rate of $8.

. The PUC required Hi-Speed to submit information relating to:
"[t]he actual cost of service schedule (income and expense statement) for the initial year of operations; [a] calculation of the earned return on equity for the year 1999; [a] schedule showing the actual capitalization of [Hi-Speed] at the start of operations (May 1999) and at the close of operations (October 1999); [a] pro forma cost of service schedule for the year 2000; and [t]he calculation of rates for the year 2000 based on the pro forma of service and ridership estimates for the year 2000.”
Hi-Speed also was required to submit information about the total number of tickets sold and a breakdown between adult and child round-trip and one-way sales; the number of days Hi-Speed did not provide service and the reasons why; monthly revenues for all sources of income; the status of Hi-Speed’s vessel leases for 1999 and 2000; and the status of Hi-Speed’s attempts to procure "a vessel for subsequent years through long-term lease, purchase, etc.”

. Hi-Speed technically requested the Public Utilities Commission to enter a protective order limiting disclosure of the compliance report. The PUC, however, treated Hi-Speed's request as a request for confidential treatment pursuant to Rule 1.2(g) of the Public Utilities Commission Rules of Practice and Procedure.

. Rule 1.2(g) of the Public Utilities Commission Rules of Practice and Procedure provides in pertinent part:

"Public Information.

(1) Access to public records shall be granted in accordance with the Access to Public Records Act, R.I.G.L. § 38-2-1 et seq. Except where the Commission directs otherwise, all pleadings, orders, communications, exhibits and other documents shall become matters of public record as of the day and time of their filing. Any claim of privilege shall be governed by the .policy underlying the Access to Public Records Act, with the burden of proof resting on the party claiming the privilege.
(2) Any party submitting documents to the Commission may request a preliminary finding that some or all of the information is exempt from the mandatory public disclosure requirements of the Access to Public Records Act. A preliminary finding that some documents are privileged shall not preclude the Commission’s release of those documents pursuant to a public request in accordance with R.I.G.L. § 38-2-1 et seq.
(5) Any person, whether or not a party, may apply to the Commission for release of the information, pursuant to the Access to Public Records Act.”

. The PUC, however, found that portions of the report that Hi-Speed voluntarily disclosed were not subject to the protective order.

. The 2002 order has no force and effect. In the nine page 2003 order (3495), the PUC specifically ordered:
"1. That the appropriate form of regulation for [Hi-Speed] is to set its rates based on a price floor with no revenue or profit cap imposed.
2. That the appropriate price floor is the current passenger rates that were originally based on [Hi-Speed’s] business plan filed in Docket No. 2802.
3. That bicycle rates shall be set at the discretion of [Hi-Speed].
4. That if [Hi-Speed] has collected in excess of the previously determined revenue cap, it may retain those funds.
5. That. [Hi-Speed] shall comply with all other direction of the [PUC] as contained herein.”
It is clear that the 2003 order is comprehensive and completely supersedes the 2002 order. The fact that the rates have remained constant is not relevant to the issues before the Court. If anything, the consistency of the rates suggests that they are reasonable. There is no indication that the 2003 rates *529were set arbitrarily. Rather, the 2003 order indicates that the PUC set the new rates after carefully reviewing the operating data it originally ordered.

. The town sought certiorari to review the 2003 order in Supreme Court case No.2003-214-M.P.