Court Opinion

ID: 9859955
Source: CourtListenerOpinion
Date Created: 2023-09-24 23:04:00.887752+00
Date Added: 2024-06-11T11:11:18.708651
License: Public Domain

SHEPARD, Justice,
concurring.
While I have joined today in the majority opinion, I find it necessary to add that I believe at least some of the expenses allowed by the Public Service Commission can be affirmed on the basis of legislative acquiescence.
*618As appellee Northern Indiana Public Service Company (NIPSCO) correctly points out, this Court has recognized that where an administrative interpretation has existed over a long period of time without being reversed through amendment of the statute, the courts should presume that the legislature has acquiesced in the manner in which the agency has interpreted the law. This presumption is said to aid the courts in understanding legislative intent. Although the interpretation placed upon the statute by an administrative agency is not binding upon the courts, it is entitled to considerable weight "as evidence of the meaning of the statute to those charged by law and most concerned with its administration." Baker v. Compton (1965), 247 Ind. 39, 42, 211 N.E.2d 162.
With respect to the case at bar, NIPSCO has cited a number of ratemaking cases under the Public Service Commission Act in which:
the Commission has consistently interpreted it to permit the inclusion in rates, as an operating expense, of the cost of [a] prudently cancelled plant and the Legislature by not changing the statute has acquiesced in this interpretation.
Appellee's Brief in Support of Petition to Transfer, pp. 54-55. However, as Justice DeBruler has pointed out in writing for the majority, most of the cases cited by NIP-SCO involved plants which were "used and useful" property and then retired from service. To use the cases of "property abandoned or otherwise retired from service" as support for the amortization of nuclear steam supply equipment or turbines is simply putting too much weight on too slender a thread. Since the legislature has repeatedly declined to authorize including in rates those expenses associated with construction work still in progress, it is hard to accept the argument that the legislature has acquiesced in the inclusion of construe, tion expenses for work no longer in progress.
There are some rate cases, though, from which the argument for legislative aequi-escence seems to support a part of the expenses approved by the Commission. The most germane of these is Public Service Company of Indiana (Ind.Public Service Commission, June 10, 1981, Cause No. 36318). In that case the Commission allowed amortization of $8,595,000 for outside services related to studies of the feasibility of constructing two additional nuclear generating units at its Marble Hill site. The utility decided not to construct the units. The Commission explained its approval as follows:
The prudence of Petitioner's decision to perform such studies was not challenged, nor was the prudence of its decision not to construct the units, and we find such decisions to have been prudently made. Both the Public and Staff, however, ree-ommend that Petitioner's shareholders be required to pay such costs. The evidence indicated that Petitioner is not seeking any return on its unamortized balance, in effect requiring its shareholders to share in such costs. We note that many state commissions when faced with similar abandoned nuclear projects, including the FERC, have allowed amortization of such costs similar to that proposed by Petitioner. We feel that in light of the prudence of Petitioner's ac tions incurring such costs for the benefit of its ratepayers, such costs should be amortized in the manner recommended by Petitioner.
Supra, at 11.
The Commission has also authorized amortization of management studies aimed at making a utility operate more efficiently. Indiana & Michigan Electric Company (Ind.Public Service Commission, January 31, 1977, Cause No. 84588). Somewhat farther afield, it has charged ratepayers for the expenses associated with studying a utility's construction program as a part of a rate case. Public Service Company of Indiana (Ind.Public Service Commission, January 20, 1983, Cause No. 86818).
These cases seem to approve expenses for studies which are intended to improve the efficiency of the utility on the assumption that there will be gain for the ratepay*619ers as well as for the stockholders. In this respect, they are founded on the same premise as the cases permitting amortization of the remaining basis of plants retired from service. The Commission has concluded that the ratepayers are better off if utilities can retire an inefficient plant early and still recapture their whole investment than if a company could only recapture it investment by continuing to operate an inefficient plant.
Even these cases make only a modest argument for legislative acquiescence, since the General Assembly can only be said to acquiesce if it chooses not to act after the Commission issues a decision. The earliest of these cases is dated 1977 and NIPSCO has been spending money on Bailly N-1 since the late 1960s. Nevertheless, there is a presumption of validity which this Court gives to decisions rendered by the Commission. Public Service Commission v. City of Indianapolis (1956), 235 Ind. 70, 131 N.E.2d 308. I conclude that expenses in the nature of planning, analysis, and investigation of the Bailly project, associated with both the decision to build and the decision to cancel, should be declared to be within the Commission's sphere of authority to approve. While this is presumably only a small portion of the $190 million allowed by the Commission, it is still a multi-million dollar proposition, and I would remand to the Commission for a determination of the actual extent of these expenditures.
Unfortunately, this view has not attract» ed sufficient concurrence to make it an order of the Court, and I have joined the majority in its conclusions on the construction of the Public Service Commission Act.
Finally, I think it is important to re-emphasize that there is nothing in today's action which should be read as meaning that the Court regards the Commission's practice of permitting amortization of the unrecovered basis of plants retired from service as being outside its authority.