Court Opinion

ID: 5874234
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:54:53.733189+00
Date Added: 2024-06-11T08:44:48.149439
License: Public Domain

Mikoll, J.
(concurring in part and dissenting in part). I concur with the majority’s conclusion to confirm the PSC’s disapproval of the “three-pipeline” escalation clauses under its statutory authority set out in Public Service Law § 110 (4). The PSC’s determination is supported by substantial evidence. However, I conclude that the PSC acted arbitrarily and without substantial evidentiary support in its determination to include Seneca’s short-term debt in National Fuel’s capitalization.
While the resolution of matters of great technical complexity are best entrusted to the agency charged with their resolution (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459), this court has also held to the premise that “prior determinations by the Commission, inconsistent with its present posture, tend to support a conclusion that its determination is irrational” (Matter of New York Tel. Co. v Public Serv. Commn., 64 AD2d 232, 246, lv denied 46 NY2d 710).
The PSC here admitted that in setting rates of other utilities, it has adjusted their capitalization so as to remove nonregulated subsidiaries. The PSC admitted that the exclusion of Seneca’s capital from the consolidated capital structure was proposed by National Fuel in a prior rate case, was not disputed for purposes of that case by the witness for the Department of Public Service, was mentioned by the administrative law judge, and was reflected in the rates established by the PSC in that case.
The PSC’s belated attempt to distinguish its earlier exclusion of Seneca’s capital from its present treatment on the ground that the issue was not squarely raised in the prior case is not legally supportable. The contention is belied by the PSC’s admission *362that the exclusion was accepted in interim cases after the administrative law judge’s determination in the prior case. Such indorsement by an administrative law judge in the prior case, “when approved and confirmed by the commission and ordered filed in its office, shall be and be deemed to be the order of the commission” (Public Service Law § 11).
The record also supports the conclusion that Seneca does not effect a burden on National Fuel ratepayers. The inclusion of Seneca’s debt in the rate of return for National Fuel deprived it of a fair rate of return. The PSC thus acted arbitrarily and without substantial evidentiary support for its determination.
There should be a modification of the PSC’s determination by annulling so much thereof as reduced National Fuel’s allowed rate of return by including an unregulated affiliate’s debt in its consolidated capital structure, and a remittal for further proceedings.
Main, Yesawich, Jr., and Harvey, JJ., concur with Mahoney, P. J.; Mikoll, J., concurs in part and dissents in part in an opinion.
Determination confirmed, and petition dismissed, without costs.