Court Opinion

ID: 9567487
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:54:24.976626+00
Date Added: 2024-06-11T10:00:38.114836
License: Public Domain

Justice Meyer
dissenting.
Upon a careful review of the record, I am unconvinced that the Commission’s conclusions on the discrimination issue are supported by the findings contained in the Commission’s Order on Remand. The Commission has simply enumerated certain purported non-cost factors (some of which are not even discussed in the Commission’s Order on Remand), which it says justify the discrimination in the rates it has approved. Even as to those factors which the Commission actually addressed in its Order on Remand, it does not even discuss (much less attempt to justify) the specific magnitude of rate disparity it approved. Thus, it is absolutely impossible for this Court to discern the linkage between the factors the Commission considered and the degree or magnitude of the rate discrimination which the Commission approved. While I recognize the difficulty in quantifying precisely how much discrimination is justified by particular factors, the Commission has made no attempt to do so and, indeed, has not even addressed the subject.
While N.C.G.S. § 62-140 allows the Commission to discriminate, it charges the Commission with the responsibility of eliminating unreasonable discrimination in the rates of public utilities. It cannot be disputed that the reasonableness of any permitted discrimination is gauged by the relationship between the variances in the conditions of service and the variances in the rates. See State ex rel. Utilities Comm. v. Mead Corp., 238 N.C. 451, 465, 78 S.E. 2d 290, 300 (1953). Rate differentials must be supported by findings (1) that there exists a substantial difference in service or conditions of service and (2) that there exists a reasonable relationship between the degree of the variances in the service and the degree of variances in the rates.
*258As the majority points out, this Court on the first appeal in this case noted that the evidence before the Commission made it clear that there was substantial discrimination between the various classes of customers. Our opinion noted that the effect of the rate structure approved by the Commission is that the rates of residential and certain commercial and small industrial customers are subsidized by the remaining industrial, wholesale, and commercial customers. We remanded the case to the Commission so that it could consider the substantial difference between the cost of service and rate of return for various classes of customers and the question of unreasonable discrimination among and within the classes of service. The Commission thus had a duty to review the evidence on discrimination, to enter detailed findings based upon the evidence, and to reach reasoned conclusions on the basis of those findings. N.C.G.S. § 62-79(a). While I believe the Commission attempted to address the issues, I conclude that it has not done so adequately.
When, as here, the rates approved by the Commission deviate so drastically from rates which would be dictated by the cost-of-service studies which are presented in the proceedings, the Commission has a duty not only to explain the reasons therefor, but also to justify and attempt to quantify the magnitude of the variances dictated by the non-cost factors upon which it relies to justify the rate discrimination it approves.
Because the Commission failed to describe in detail the non-cost factors it employed, failed to explain how each of these non-cost factors justifies discrimination, and failed to quantify (as best it could) the amount of deviation justified by each non-cost factor, this Court is left to guess what precise role each of the non-cost factors listed by the Commission played in the rates the Commission approved.
With full realization of the difficulty which the Commission necessarily encounters each and every time it attempts to justify the discrimination which exists in long-existing rate patterns and schedules, I cannot vote to affirm the Commission’s Order on Remand and would vote either to reverse the Commission’s order or to remand the case yet another time for further findings and conclusions.