Court Opinion

ID: 7960542
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:37:55.271155+00
Date Added: 2024-06-11T16:34:25.490992
License: Public Domain

Markman, J.
(concurring). I concur in Judge Sawyer’s opinion to affirm, but write separately in order to address the specific concern raised by the dissent that MCL 460.6h; MSA 22.13(6h) does not authorize a utility to include a forecasted, prior period underrecovery in its proposed gas cost recovery factor for the following year. While I believe that this statute is susceptible to alternative interpretations, and that the dissent’s interpretation is a reasonable one, I also believe that the Michigan Public Service Commission’s interpretation is a reasonable one. Given our narrow standard of review, therefore, I believe that the psc’s decision should be affirmed.
Pursuant to subsection 6h(3) of the act, a utility seeking to implement a gas cost recovery clause must file an annual gas cost recovery plan describing “the expected sources and volumes of its gas supply and changes in the cost of gas anticipated over a future 12-month period . . . and requesting for each of those 12 months a specific gas cost recovery factor.” Adopting the hearing referee’s interpretation of subsection 6h(3), the dissent concludes that the forward-looking language — i.e., “expected” and “anticipated” — precludes a utility from including a forecasted under-recovery from a prior period.
However, utility ratemaking in general and setting a gas cost recovery factor in particular inherently *318involve an element of prediction of the future based, in part, on what has occurred in the past. For example, a utility’s future rates inevitably include the recoupment of certain costs already incurred. Indeed, subsection 6h(l)(c) defines “[g]as cost recovery factor” to mean “that element of the rates to be charged for gas service to reflect gas costs incurred by a gas utility and made pursuant to a gas cost recovery clause incorporated in the rates or rate schedules of a gas utility.” (Emphasis supplied.) The regulatory scheme embodied in subsection 6h(3) recognizes that, to the extent a utility’s proposed gas cost recovery plan includes “changes in the cost of gas anticipated over a future 12-month period,” the Legislature did not intend to preclude a utility from seeking recoupment of costs already incurred. Hence, contrary to the dissent’s reading of § 6h, in my judgment, nothing in the statutory language can be interpreted to preclude a utility from rolling in a forecasted, prior period underrecovery before the time that the actual amount of the underrecovery is determined at a reconciliation proceeding.
Moreover, allowing a utility to roll a forecasted, prior period underrecovery into a future gas cost recovery factor will not render reconciliation proceedings obsolete. As correctly noted by the lead opinion, the PSC has exercised its administrative authority under the statute by authorizing a two-stage procedure for recoupment of prior period under-recoveries, rather than forcing the utility to wait until after the reconciliation proceeding is completed. The PSC recognized that this procedure would ameliorate the effect of regulatory lag, thereby reducing interest costs passed on to ratepayers. The reasonableness *319and prudence of a utility’s forecast remains subject to scrutiny by the PSC at both the gas supply and cost reviews, pursuant to subsections 6h(2) through (9), and the eventual reconciliation proceeding, pursuant to subsections 6h(12) through (15).1 Indeed, I find it noteworthy that, in a reconciliation proceeding pursuant to subsection 6h(12), the PSC is directed to “consider any issue regarding the reasonableness and prudence of expenses for which customers were charged if the issue could not have been considered adequately at a previously conducted gas supply and cost review.” In other words, the difference, if any, between a forecasted, prior period underrecovery and the actual amount of that underrecovery is subject to review by the PSC in the reconciliation proceeding.
Finally, I find the dissent’s statement that § 6h is “hardly a model of clarity” — an assertion, by the way, with which I agree — to be at odds with its legal conclusion that the Attorney General has satisfied the statutory mandate to prove “by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable.” MCL 462.26(8); MSA 22.45(8). It is in precisely this circumstance, i.e., where the statutory language lends itself to more than one plausible interpretation, that the judiciary should be most prepared to defer to the administrative expertise of the PSC. See Attorney General v Public Service Comm, 227 Mich App 148, 155; 575 NW2d 302 (1997).

 The instant construction of the statute is also consistent with subsection 6h(10), which allows the PSC to reopen a gas supply and cost review proceeding during the twelve-month period covered by the plan if a utility files a revised gas cost recovery plan.