In re Providence Water Supply Board's Application to Change Rate Schedules

Summary

The Supreme Court of Rhode Island reviewed the Public Utilities Commission's denial of a proposed rate increase intended to reimburse the Providence Water Supply Board for retiree health-care expenses paid by the City of Providence. The court held that the requested recovery was barred by the prohibition against retroactive ratemaking and did not qualify for the statutory exception for documented loans or advances. The court also concluded that the utility failed to provide sufficient documentary evidence establishing the amount of the claimed expenses and affirmed the PUC's order.

Holdings

1. The requested future rate increase constituted an attempt to recover past expenses and was barred by the general prohibition against retroactive ratemaking unless a statutory exception applied.
2. The exception in G.L. 1956 § 39-3-11.1(a) did not apply because the City of Providence failed to prove that the requested reimbursement represented repayment of a loan or advance of money made under an existing contract or arrangement, and failed to provide documentary evidence supporting the alleged indebtedness.
3. The PWSB failed to satisfy its statutory burden to prove that the requested rate increase was necessary and supported by actual, accurate, and verifiable evidence of the retiree health-care costs.

Questions Presented

1. Whether the PUC properly denied the PWSB's request to recover historical retiree health-care expenses through future rates under the prohibition against retroactive ratemaking.
2. Whether the statutory exception in G.L. 1956 § 39-3-11.1(a) permitted the requested rate increase as reimbursement for a loan or advance of money made by the city to a municipal water utility.
3. Whether the PWSB satisfied its burden under G.L. 1956 § 39-3-12 to prove that the requested rate increase was necessary and supported by accurate, verifiable evidence.

Disposition

quashed