Court Opinion

ID: 9770515
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:07:45.103229+00
Date Added: 2024-06-11T07:31:17.948168
License: Public Domain

OPINION ON PETITION TO REHEAR
HENRY, Justice.
United Inter-Mountain Telephone Company has lodged with the Court a courteous, dignified and vigorous petition to rehear.
Its first, and primary, insistence is that the Court erred in the conclusion reached in Section II of the opinion, relating to the adjustment to income resulting from a tax savings produced by the filing of a consolidated federal income tax return by UTI. Specifically UIMT asserts that our action in holding that “[t]he facts upon which this legal conclusion is reached are not at issue” is erroneous.
Perhaps we should have said “no longer at issue.”
The record shows that (1) a tax savings was realized by filing a consolidated return and (2) that a reasonable and acceptable method was used to allocate this saving.
The Chancellor found, in this regard, that the PSC took the ratio of the capital of UIMT ($137,569,000) to that of UTI ($2,116,761) and, on that basis, made the allocation of 6.5% against the interest expense of the entire system, or $447,209.00, to the Tennessee intrastate operations. We find this to be a fair and reasonable basis.
We adhere to our original view that this is no longer an issue and, on remand, this phase of the controversy is settled.
UIMT further insists that it falls within an exception set forth in Tennessee Public Service Commission v. Nashville Gas Co., 551 S.W.2d 315 (Tenn.1977). Its view of the exception is that it operates to require “[a] separate interstate from intrastate opera*395tions (and a separation of regulated from non-regulated operation).”
We are not confronted with a “regulated” versus a “non-regulated” utility controversy. Again, our basic concern was a proper method of allocating a portion of a tax savings from a parent company to a subsidiary subject to the regulation of the Public Service Commission.
We adhere to our reliance upon Nashville Gas. The exception noted therein has no relevance to the instant controversy.
UIMT takes strong issue with our holding that “we shall in the future decide this appeal solely on the basis of the proof before the Commission.”
This translates into a simple holding that we will heed the mandate of the legislature as set forth in Section 4-523(g), T.C.A. Under this section review in chancery is “confined to the record”, and proof in chancery is permissible only “[i]n cases of alleged irregularities in procedure before the agency, not shown in the record.”
Counsel argues that our opinion is “in direct conflict with prior holdings of this Court.” Perhaps so. Our prior pronouncements and precedents have been preempted by a new statutory scheme, under which all proof, with the exception of “irregularities”, must first be presented to the Public Service Commission.
The petition to rehear is respectfully denied.
COOPER, C. J., and FONES, BROCK and HARBISON, JJ., concur.