Summary
The Utah Supreme Court reviewed orders of the Public Service Commission concerning interim rates in PacifiCorp's energy balancing account proceedings. The court held that Utah Code section 54-7-12(4)(a) authorizes interim rates only in general rate cases, not in energy balancing account proceedings, and that the Commission's procedure improperly altered the utility's statutory burden of proof. The court set aside the Commission's orders.
Topics
Practice areas
Questions Presented
- Whether the Consumer Groups demonstrated substantial prejudice sufficient to obtain judicial review under the Utah Administrative Procedures Act.
- Whether Utah Code section 54-7-12(4)(a) authorizes the Public Service Commission to impose interim rates in an energy balancing account proceeding.
- Whether imposing interim rates before PacifiCorp proved by substantial evidence that its claimed costs were prudently incurred altered the utility's burden of proof in violation of Utah Code section 54-7-13.5(2)(e)(ii).
- Whether the Commission's interim-rate orders violated the Utah Administrative Procedures Act by departing from prior practice.
Holdings
- The Consumer Groups demonstrated substantial prejudice because the prospect of customers paying an interim-rate surcharge was sufficiently imminent in the first proceeding, and customers were actually paying approximately $2.8 million in premature interim charges in the second proceeding.
- Section 54-7-12(4)(a)(ii) authorizes interim rates only in the context of a general rate case and does not authorize interim rates as part of an energy balancing account proceeding.
- The Commission unlawfully altered PacifiCorp's burden of proof by allowing interim recovery before PacifiCorp proved by substantial evidence that its claimed costs were prudently incurred or just and reasonable.
- The court did not reach the claim that the Commission's orders unlawfully departed from prior practice under the Utah Administrative Procedures Act.
Key quotations
“We hold that the Commission lacks this authority.” (¶ 1)
“In other words, if a chosen EBA mechanism alters either the standard for cost recovery or PacifiCorp’s burden of proof, the mechanism is improper and the Commission has exceeded its statutory authority.” (¶ 44)
“By law PacifiCorp is allowed to recover its claimed costs through an interim rate only after proving by substantial evidence that its costs are prudently incurred.” (¶ 47)
Factual background
PacifiCorp operates under an energy balancing account established pursuant to Utah Code section 54-7-13.5 to reconcile estimated and actual net power costs. The Public Service Commission reinstated a procedure allowing PacifiCorp to recover claimed energy-balancing-account costs through interim rates before the Division of Public Utilities completed its audit and before PacifiCorp proved by substantial evidence that the costs were prudently incurred. The Commission subsequently authorized approximately $2.8 million in interim recovery from customers.
Procedural history
The Public Service Commission initially approved an energy balancing account and an interim-rate procedure, later eliminated that procedure, and then reinstated it in February 2017. The Consumer Groups petitioned for reconsideration, and the first petition for review followed. After PacifiCorp's 2018 filing, the Commission imposed approximately $2.8 million in interim rates, rejected another reconsideration petition, and the second petition for review followed. The Utah Supreme Court consolidated the proceedings, held that the Consumer Groups had demonstrated substantial prejudice, and set aside the Commission's orders.
Remand instructions
None stated; the court set aside the Commission's orders imposing interim rates and authorizing approximately $2.8 million in interim recovery.