Court Opinion

ID: 9709567
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:51:14.822204+00
Date Added: 2024-06-11T18:22:50.174327
License: Public Domain

STATON, Judge,
dissenting.
I dissent. The rate policy adopted by the Commission is not supported by sufficient evidence to establish a just and reasonable rate.
The rate policy question before the Commission is whether tracking or “rolling-in” the cost of supplement gas maintains a just and reasonable rate for all classes of Koko-mo ratepayers. This rate policy question is so crucial to the public interest that the Commission acknowledged its ad hoc nature:
“14. Future Supplemental Gas Purchases. This Commission stated in its Order entered November 26, 1975, in Cause # 34303, and reiterates in this finding, that this Commission has been acutely aware for some time of the nationwide shortage of natural gas in relation to the demand for such gas. During this period of shortage, Petitioner should make the best possible utilization of its historical source of gas. It should also be alert to the possibilities of supplemental sources of gas appearing, in futuro, and be prepared to take advantage of such sources. Towards this end, whenever the public interest shall be served, this Commission stands ready to give its approval in such matters.
“We think that the public interest, however, would best be served in the forseeable future by the individual treating of each such future supplementary purchases, if indeed future purchases become available. By individual treatment we mean the customary formal proceedings which include, inter alia, public hearing, submission of evidence, cross-examination by the Office of the Public Counselor and any intervening parties, and the right of any member of the public at *982large to give testimony for the record. Therefore, our Order herein is applicable only to the instant proceedings and is not intended and should not be construed as authorization for any future purchases of supplemental gas.” Order of the Public Service Commission, Cause No. 34471, Approved March 24, 1976.
In addition to the ad hoc nature of the rate policy decision to be made in each purchase of additional supplemental gas, the Commission concedes the unusual circumstances of a “nationwide shortage of natural gas.” Yet, the evidence does not support the decision of the Commission that usual methods of recovering the additional cost of supplemental purchases should be used.
The evidence does show that Kokomo has a sufficient supply of low-cost pipeline gas to serve residential ratepayers except on a few peak days. The primary need to purchase expensive supplemental gas is to avoid any curtailment of gas service to industrial ratepayers. Residential ratepayers use 38.2% of Kokomo’s gas supply while the industrial ratepayers use 46.8% of Kokomo’s gas supply. However, the percentage of total revenue from residential ratepayers is 46.9% while the industrial ratepayers percentage of total revenue is only 37.8%.
One reason given by the Commission for adopting the usual “tracking” method of recovering cost is that the supplemental gas is commingled with the pipeline gas. However, there is no evidence, that rates are impossible to adjust when different gases are commingled. There is no evidence that reliable service cost which is incurred by substantial shortages of gas supply could not be translated into adjusted rates among classes of ratepayers. Here, the additional supplemental gas purchases are being made primarily to provide reliable service to one class while a “nationwide” gas shortage exists. This one class, the industrial ratepayer, uses almost half of the total supply distributed by the utility, Kokomo Gas.
Another reason given by the Commission for adopting the “tracking” method is the additional burden that would be placed upon the industrial ratepayer if the cost were added to the present industrial rate. In Finding “15” the Commission recites that the industrial ratepayer “who is subject to curtailment is already bearing the costs of alternate fuel capability and facing reduced operating schedules, which could cause economic hardship and resulting loss of employment . . . We find it would be inequitable and discriminatory to impose the total additional cost of supplemental supplies of gas solely upon the very class of customers who are already bearing the economic burden of curtailments.” However, there is very little evidence in the record which reflects the extent of this burden so that it could be equated in equitable terms.
There is not sufficient evidence to support the conclusion of the Commission that just and reasonable rates have been established by using the “tracking” or “rolling-in” method in this particular purchase of supplemental gas by Kokomo Gas. I would reverse and remand for further hearings.