Court Opinion

ID: 6768605
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:40:35.522835+00
Date Added: 2024-06-11T16:02:42.659749
License: Public Domain

Douglas, J.,
concurring. I concur. I write separately to express my concerns over the continued unchallenged validity of and the majority’s reference to the so-called proscription against retroactive ratemaking. The majority says that “ * * * CSP’s recovery of the deferred revenues, having been authorized by the PUCO’s initial order, would not violate the proscription against retroactive ratemaking.” This is, of course, flexuous reasoning — at best.
Retroactive ratemaking is a long-recognized rule of public utility regulation. This rule, court-recognized, in general restricts the right or ability of the Public Utilities Commission to permit a public utility to recover past losses through future rates and, also prevents refunds to consumers of profits of a utility which are subsequently found to have been excessive. Thus, when the commission hears and determines a rate case, the commission may only look to the future in determining appropriate utility rates. This is because of the so-called rule against retroactive ratemaking.
Through the procedures used, the ratemaking process is prospective in nature. Utilities file with the commission proposed new rates and the commission enters an order fixing the rates to be charged in future years. Then, more often than not, an appeal (by some principal or intervening party) is taken and if this court reverses the rate order, the case is remanded to the commission to again set the rates and this, again, is prospective in nature. Oftentimes, this process goes on for years (the case at bar commenced in 1984), and, regardless of the eventual outcome, the cost to all parties is enormous.
A number of courts across the country (including this court in today’s decision), while paying lip service to the rule, have found ways to create necessary exceptions to the rule to compensate for utility costs created by (1) utility commissions’ changes in accounting methodology; (2) rate orders containing mistakes; (3) losses occasioned by emergency weather conditions (ice storms and other storms like the recent one in Cleveland); (4) revenue loss during periods of rate proceedings, appeals and remands for new orders after court review; and (5) nuclear plant cancellation. Apparent slavish adherence to the rule, making it an absolute of ratemaking, has been something less than that in practice as courts continue to create exceptions to the rule. These exceptions are necessitated by the demands of modern-day utility regulation operating under very old (and maybe archaic) laws, rules and regulations. A product of all this is regulatory lag and seemingly continuous and endless rate proceedings.
*550Since there seem to be no specific sections of the Revised Code which prohibit the commission from retroactive ratemaking, the genesis of the rule is obviously judicial rather than legislative. I write now only to suggest that perhaps the time has come for the General Assembly, the commission and/or this court to meet modern-day utility regulation with new and innovative -thinking. This is not to say that the ratemaking process should be ever in a state of flux. Reliability is not only desirable — it is essential in our ratemaking system. However, the rule that utility rates must be permanent and can only be changed prospectively may not provide the flexibility we need to meet the modern needs of both consumers and utilities.
I only suggest herein that maybe the time has come for us not to apply the retroactive ratemaking rule so absolutely. It is fair that both the commission and this court apply the rule with a presumption that it is valid in a given case, but we should review the facts of each case to determine whether the presumption should apply or has, for good reason, been effectively rebutted. Applying the rule only as a presumption would afford the commission and this court the flexibility of allowing retroactive relief for any number of reasons, including the period of time while a case is on appeal and during the remand period after reversal, as here, of a rate order.
“That court best serves the law which recognizes that the rules of law which grew up in a remote generation may in the fullness of experience be found to serve another generation badly, and which discards the old rule when it finds that another rule of law represents what should be according to the established and settled judgment of society, and no considerable property rights have become vested in reliance upon the old rule. It is thus great writers upon the common law have discovered the source and method of its growth, and in its growth found its health and life. It is not and it should not be stationary. * * * ” Dwy v. Connecticut Co. (1915), 89 Conn. 74, 99, 92 A. 883, 891 (Wheeler, J., concurring).
The results of today’s decision will be devastating to many. Unfortunately, that is sometimes the case when the result, as here, is driven and dictated by the law. Must it always be so in public utility rate cases? There must be a better way! However, I submit, we do not seek possible new and better ways when we remain totally satisfied with what has gone on before and by rote say we are not ignoring the rule against retroactive ratemaking — while doing just that.
While I concur in the judgment of the majority, I do so with the hope that this suggestion, with regard to the rule against retroactive ratemaking, will promote legislative and commission inquiry, scholarly academic writing and discussion, and generally enlightened dialogue. Meanwhile, for us to say we are not violating the rule against retroactive ratemaking, when in fact we really are, does a disservice, *551I believe, to consumers, utilities, the Public Utilities Commission, the bench and the bar.