Court Opinion

ID: 8044636
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:49:48.716401+00
Date Added: 2024-06-11T16:37:26.293785
License: Public Domain

Manoukian, J.,
concurring:
Although I reach the same result as the majority opinion, I believe that it fails to go far enough in addressing the questions posed in this appeal. The background of NRS 704.110(5) and NRS 704.185 and the deferred accounting procedure is satisfactorily set forth in the majority opinion. My basic concern stems from the majority’s failure to address definitions of technical terms and its failure to fully discuss the substantial evidence question.
Sierra Pacific Power (Sierra) elected to use the deferred accounting procedure, and after one year, filed an application for increased electrical rates to produce revenues of $2,802,310. A public hearing on this application was held before the Public Service Commission (PSC). In its order and opinion the PSC granted $1,158,410 of the requested increase determining that sales of surplus power (“economy energy”1) and interchange energy2 to Pacific Gas and Electric Company (PG & E) and Utah Power and Light Company (UP & L) should have been credited to Account 5553 rather than Account 447.4
*484The significance of this accounting treatment is that by crediting the income of the sales to Account 555, the ratepayers’ liability for increased fuel costs is decreased by the gross amount of the off-system sales. By crediting the sales to Account 447, as Sierra asserts is proper, the profits are not reflected in the rate structure, but flow instead to Sierra’s stockholders.
Sierra appeals the district court’s affirmation of the PSC’s opinion and order allowing only the 1.1 million rate increase. I agree with the majority that the PSC did not promulgate new regulations in violation of the Administrative Procedure Act (NRS 233B). Clearly, “an agency charged with the duty of administering an act is impliedly clothed with power to construe it as a necessary precedent to administrative action.” Matter of George, 579 P.2d 354, 358 (Wash. 1978). Analogously, “NRS 288.110 charges the board with that responsibility and great deference should be given to the agency’s interpretation when it is within the language of the statute.” Clark County School District v. Local Gov’t, 90 Nev. 442, 446, 530 P.2d 117 (1974). See also, City of Los Angeles v. Public Utilities Commission, 542 P.2d 1371, 1383 (Cal. 1975). Unless the interpretation is plainly erroneous or inconsistent with the regulation, deference will generally be given to an administrative agency’s interpretation of regulations it has drafted. McCulloch Gas Processing Corp. v. Black Hills Oil Marketers, Inc., 462 F.Supp. 834 (D.C.Wyo. 1978); Jordan v. Arnold, 472 F.Supp. 265 (M.D.Penn. 1979).
Here, the PSC’s opinion merely decided what amounts, if any, of certain energy sales should be credited to Account 555. It was not, as Sierra asserts, the promulgation of new regulations in violation of NRS 233B. The Commission clearly acted within its authority.
Contrary to Sierra’s position, the PSC did not determine that the sales were exchanges of energy under Account 555, but rather that “the plain language of this account [555] together with Section 2.42 of General Order 21 clearly contemplates and indeed requires the recording of the net settlements associated with interchange energy transactions.” (Emphasis added.) In its opinion, the PSC did note that Account 555 provides that the “net settlements for the exchange of electricity shall be recorded in that account . . . [and] that distinct purchases and sales shall not be recorded as exchanges,” however,
[this] does not mean that distinct sales shall not be recorded in Account 555 but merely that the account shall not contain an entry reflecting only the net amount of purchases and sales as in the case of exchange power, such *485that the gross amount of the purchases should be debited to Account 555 and the gross amount of sales should be credited to Account 555 without any netting.
This determination is supported by the record.
Mr. McElwee, Sierra’s rate manager, testified that in a reverse situation (i.e., Sierra purchasing power from UP & L or PG & E), the entire expense would be booked in Account 555. In addition, all sales were made pursuant to Sierra’s interconnection agreements with both PG & E and UP & L, there exists a “mutual assistance agreement to sell energy” between Sierra and UP & L, and purchases of power by Sierra from UP & L and PG & E are common.
Although Sierra’s ratepayers do receive some net benefit from the sales because the increased generation slightly decreases kilowatt per hour production cost, the benefits under Sierra’s proposed accounting adjusted the benefits of the sales to “accrue to [Sierra’s] stockholders,” through increased dividends. These economy energy sales are nontariff or “off system” sales. As indicated in the testimony of Dennis Polosky, chief rate engineer of the PSC, “even irrespective of deferred energy accounting, the benefits of such transactions should be apportioned to Nevada ratepayers. . . . Nevada ratepayers are in fact called upon to bear the costs of generation stations as well as transmission . . . lines, they should correspondingly be the recipients of their share of the benefits gained by the Company’s [Sierra’s] use of those facilities.” See Re Public Service Co. of Oklahoma, 19 PUR 4th 190, 199 (1977) (“ ‘availability — not assured’ sales constitute a sale of a firm customers’ reserves . . . [i]t is only fair that the firm customers bearing the cost of the reserves receive the benefit” of Off-system sales). Clearly, there is substantial evidence to support the inclusion of the sales in Account 555. Southwest Gas v. Pub. Serv. Comm’n, 86 Nev. 662, 474 P.2d 379 (1979).
There is also substantial evidence to support that portion of the PSC’s decision which designates that all future receipts from economy energy sales be credited to Account 555. The continuing interchange agreements between Sierra, UP & L and PG & E indicate that the sales would be identical to those in the instant case, in which we have found substantial evidence to support the PSC’s determination relative to the inclusion of present sales in Account 555.1 deem this language in the opinion merely interpretive insofar as future sales are concerned.
I find appellant’s remaining contentions to be without merit and would also affirm the decision of the trial court.

Economy energy is defined as, “Energy produced and supplied from a more economical source in one system, substituted for that being produced or capable of being produced by a less economical source in another system.” Glossary of Electric Utility Terms, Edison Electric Institute (N.Y., N.Y.) p. 32.

Interchange energy is defined as “Kilowatt hours delivered to or received by one electric utility system from another. They may be returned in kind at a later time or may be accumulated as energy balances until the end of a stated period. Settlement may be by payment or on a pooling basis.” Glossary of Electric Utility Terms, p. 33.

The parameters of what shall be included in Account 555 are enunciated in the Federal Energy Regulatory Commission Uniform System of Accounts, 18 CFR 101:
555 Purchased power.
A. This account shall include the cost at point of receipt by the utility of electricity purchased for resale. It shall include, also, net settlements for exchange of electricity or power, such as economy energy, off-peak energy for on-peak energy, spinning reserve capacity, etc. In addition, the account shall include the net settlements for transactions under pooling or interconnection agreement wherein there is a balancing of debits and credits for energy capacity, etc. Distinct purchases and sales shall not be recorded as exchanges and net amounts only recorded merely because debit and credit amounts are combined in the voucher settlement.

That which is to be included in Account 447 is similarly outlined in 18 CFR 101, “447 Sales for resale. A. This account shall include the net billing for electricity supplied to other electric utilities or to public authorities for resale purposes.”