Court Opinion

ID: 6733902
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:16:16.502018+00
Date Added: 2024-06-11T16:01:42.232868
License: Public Domain

BROCK, Chief Judge.
By its first assignment of error, appellant contends that the Commission erred in adopting and ordering the implementation of Appendix A without affording Public Service an opportunity to be heard, in that the hearing and the evidence related only to the 8 June filing, and the procedures mandated by Appendix A were not presented in any way at the hearing. We find no merit in this contention.
Public Service was clearly on notice that the Commission’s approval of the 8 June filing had been rescinded and that the VVAF would be the subject of the 20 July hearing. Public Service was on notice that it would have to justify its proposed VVAF calculation and cannot be heard to complain of lack of notice that the Commission might require a calculation less favorable than the one sought. It is worthy of note that the historical/future cur*160tailment forecasting method required by Appendix A is the same as that utilized by Public Service in its 20 May filing, and that mandated by the 8 April 1976 order in Docket No. G-5, Subs 102, 112, 113 and 114, which was made part of the record in this proceeding.
As to the true-up adjustments in Appendix A, the record reveals that even the 8 June filing contained a true-up component and Public Service cannot challenge these provisions on the grounds of lack of notice and opportunity to be heard.
Appellant’s assignment of error No. 1 is overruled.
In its second assignment of error, Public Service argues that there is no competent, material or substantial evidence to support the adoption of Appendix A, since all of the evidence supported the 8 June filing. We disagree.
We perceive this case as little more than a dispute over accounting procedures, insofar as it relates to the calculation of the VVAF and the true-ups. Considering the entire record as submitted, G.S. 62-94(b)(5), we find, as noted supra, that the historical/future curtailment forecasting method was mandated by the 8 April Commission order, and was proposed by Public Service in its 20 May filing. These facts constitute competent, material and substantial evidence to support the Commission’s order requiring computation of the VVAF in the prescribed manner. As to the true-up provisions of Appendix A, again, the method of calculation of the adjustments are virtually identical to those contained in the 20 May filings, and even the 8 June filing contained a true-up component. The Commission’s order is, by statute, deemed prima facie just and reasonable. G.S. 62-94(e). Public Service has failed to carry its burden of proving otherwise with respect to the procedures for determining the VVAF and the true-up adjustments mandated by Appendix A.
Appellant’s assignment of error No. 2 is overruled.
Public Service argues, in its third assignment of error, that the refund provisions of Appendix A exceeded the authority of the Commission and constituted retroactive rate making. Public Service contends that the VVAF is an existing rate established by the Commission, which can only be changed prospectively, whereas the refund provisions of Appendix A require refunds *161back to 20 February 1975. Appellant’s argument thus is premised upon the assumption that the VVAF is itself an established rate. Clearly, retroactive changes in existing rates by the Commission are not allowed. However, we do not agree with appellant’s assumption regarding the nature of the VVAF.
On 2 July 1976, Public Service filed its undertaking to refund to its customers who paid them, the excess of payments charged at the $.2835 VVAF over amounts which the Commission might approve. We have determined supra that the Commission did not err in its order relating to the calculation of the VVAF; therefore Public Service is bound by its undertaking, and the Commission had authority to order a refund. The $.2835 VVAF collected by Public Service pending the outcome of this proceeding was in the nature of a “permitted or allowed” rate as discussed by Justice Exum in Utilities Commission v. Edmisten, Attorney General, 291 N.C. 327, 352, 230 S.E. 2d 651, 666 (1976), which is subject to refund upon determination by the Commission that it is unjust and unreasonable. G.S. 62-132. The Commission determined that the $.2835 VVAF was unjust and unreasonable to the extent it exceeded the VVAF as calculated in accordance with Appendix A.
Appellant’s exceptions to the order requiring true-up adjustments and refunds dating back to 20 February 1975 appears aimed at the requirement of specific refunds rather than at the authority of the Commission to require a true-up. The In-tervenors, in' their brief, assert that the VVAF tariff contains a provision for true-ups. The VVAF tariff is not part of the record in this case. However, as evidenced by the testimony of witnesses Dickey and Flanagan, Public Service recognizes the necessity of true-ups to account for over-collections which resulted when curtailment levels actually experienced turned out to be lower than projected at the time the VVAF was previously calculated. Public Service proposed to true-up by means of an offset to the new VVAF. As established at the hearing, under this proposal, only those who remained customers of Public Service would receive any refund for over-collections. The Commission’s order requires that customers who are no longer served by Public Service, and cannot benefit from the offset to the VVAF, but who paid the over collections from 20 February 1975, are to receive specific refunds by check.
*162The “true” VVAF rate is based upon actual curtailment experience. The “true” VVAF is the incremental rate necessary to allow Public Service to maintain its base period margin. Since the VVAF actually charged is based upon projected curtailment levels, it must be trued-up periodically to reconcile it with actual experience. Public Service does not challenge the authority of the Commission to require a true-up, and we believe that the VVAF true-up and refund provisions are distinguishable from the retrospective and prospective rate making condemned in Utilities Commission v. Edmisten, Attorney General, 291 N.C. 451, 232 S.E. 2d 184 (1977). We construe the pro forma “true” VVAF as the just and reasonable rate set by the Commission which enables Public Service to maintain its base-period margin. The estimated VVAF is more akin to the “permitted or allowed” rates mentioned supra.
Public Service excepts to the Commission’s conclusion that the VVAF has never been subject to an absolute true-up. There is nothing in the record or appellant’s brief to indicate that the Commission’s conclusion was erroneous. Without some such showing by appellant, we cannot find error in this finding by the Commission.
Appellant’s assignment of error No. 3 is overruled.
By its fourth assignment of error, Public Service argues that Appendix A is arbitrary and capricious on its face because it requires overlapping true rate calculations. This argument is meritless. Appendix A does indeed order the calculation of overlapping true rates, one for the period 20 February 1975 through 19 February 1976, and another for the period 16 April 1975 through 15 April 1976. However, the adjustments are applied to separate periods for purposes of determining over-collections (the latter true rate being applied only to the period 20 February 1976 through 15 April 1976). We find nothing arbitrary and capricious about this aspect of Appendix A. This assignment of error is overruled.
The decision of the North Carolina Utilities Commission is
Affirmed.
Judges Martin and Clark concur.