Court Opinion

ID: 6709658
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:34:39.361877+00
Date Added: 2024-06-11T09:07:48.098575
License: Public Domain

Justice Mitchell
dissenting.
The majority recognizes that the Commission adopted its treatment of the costs associated with the Harris Plant common facilities for reasons of “equity.” As Justice Martin has explained in his dissenting opinion in State ex rel. Utilities Commission v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989), in which I joined, the Commission is not a court of equity and has no equitable powers. Nor do our statutes permit the Commission, or this Court for that matter, to exclude from the rate base any costs prudently incurred in constructing a used and useful electric generating plant. The result reached by the Commission, like the result reached by the majority of this Court, may be fair, equitable or simply a reasonable way to do things. However, neither the result reached by the Commission nor the result reached by the majority of this Court complies with our statutes regulating public utility ratemaking.
As I read the record on appeal, the Commission did not conclude that any of the common facilities were not used and useful in the generation of electric power at the Harris Plant. Indeed, it does not appear that any party to these proceedings contended before the Commission that the common facilities were not used and useful. Instead, the dispute before the Commission involved whether Carolina Power & Light Company (hereinafter “CP&L”) had incurred costs associated with the common facilities prudently, not whether any facility of the plant was used and useful.
The Commission made findings and concluded that the costs incurred in building the Harris Plant were prudently incurred, a conclusion with which the majority of this Court agrees. Nevertheless, although no one appears to have raised the issue, the Commission further concluded that some of the common facilities were “excess common facilities.” Even if it is assumed — erroneously in my view — that the Commission had the authority to treat part of the prudently incurred costs for the used and useful common facilities as “excess,” I do not believe that its findings and conclusions in this regard were supported by the evidence presented.
CP&L offered evidence, which appears to have been uncontroverted, that none of the fuel handling building is unused, because portions of it not presently needed for fuel handling are being used to house other plant facilities. The Technical Support Center is a computer-equipped area located in the fuel handling building that is kept available for use by engineering and technical support *500personnel in the event of a plant emergency. Under Nuclear Regulatory Commission (hereinafter “NRC”) regulations, this center must be housed in a building with eighteen-inch-thick reinforced concrete walls. CP&L would have had to construct such a building at the Harris Plant for the Technical Support Center, had space not been available in the fuel handling building. Although other portions of the common facilities were larger than absolutely necessary, uncontroverted testimony was introduced by CP&L to the effect that the larger facilities would “be of great benefit in the event of an emergency requiring quick repairs on a large scale” at the Harris Plant, a nuclear powered electric generating plant within thirty miles of the State Capitol at Raleigh.
Further, CP&L offered uncontroverted evidence that after the decision not to complete other nuclear units at the Harris Plant had been made, it sought and obtained studies to determine whether portions of the common facilities could be eliminated. These studies revealed that while it would be physically possible to delete portions of the common facilities, they would respond differently to seismic stresses. If CP&L made such changes, it would be required to perform new seismic studies to satisfy the NRC that the modified facilities at the nuclear plant would not be damaged in the event of an earthquake. Such studies could have revealed that major modification of plant equipment and supports already in place would be necessary in order to ensure seismic stability of the modified facilities.
Based on such information, CP&L determined that it would be cheaper to build the common facilities as originally designed and use any extra space for other plant-related purposes than to delay construction yet again during times of rapidly rising construction costs while it initiated and carried out the procedures necessary to gain NRC approval for smaller facilities. Given the long history of regulatory delay in the approval and construction of the various phases of the Harris Plant — well documented in the Reports of this Court over a period of almost two decades — it is to be doubted that evidence supporting any other rational decision was available. In my view of the record, none was introduced. I conclude that the evidence before the Commission would not support a determination that any of the used and useful common facilities at the Harris Plant, or any of the prudently incurred costs of such facilities, were “excess.”
*501In my view, the Commission has no authority in law to exclude any portion of the prudently incurred construction costs of used and useful facilities from the rate base. N.C.G.S. § 62-133(b)(l) requires that the Commission determine in every general rate case “the reasonable original costs of the public utility’s property used and useful . . .” in providing the service rendered to the public. Such costs constitute the utility’s rate base. Under N.C.G.S. § 62-133(b)(4) and (5) the Commission must set rates which will allow the utility to earn a fair return on its rate base. The use of the phrase “reasonable original costs” in N.C.G.S. § 62-133(b)(l) seems to me to require that costs for the construction of the used and useful facilities of a completed nuclear power plant be included in the rate base when, as here, those costs have been determined to have been prudently incurred. Therefore, I conclude that all such costs incurred in the construction of the Harris Plant common facilities must be included in the rate base.
For the foregoing reasons, I believe that the Commission erred in excluding a portion of the costs of common facilities from the rate base and that this Court has compounded that error by excluding all such costs from the rate base and treating them as cancellation or abandonment costs. Therefore, I dissent.