Carestream Health, Inc. v. Colorado Public Utilities Commission
2017 CO 75
| Colo. | 2017Background
- Carestream purchased gas transportation service from Public Service Company of Colorado after acquiring assets from Kodak and wanted transportation-only service rather than gas sales.
- Public Service set up Carestream’s account using Kodak’s meter data and inadvertently applied a pressure-based correction factor twice, underreporting usage by ~15% and undercharging Carestream by ~$1.26 million over ~3 years.
- Public Service discovered the error in 2013, back-billed Carestream for the 24 months prior to discovery (~$716,920) and recovered the remaining ~$510,000 from its general customer base through the Gas Cost Adjustment (GCA).
- Carestream filed a complaint with the Colorado Public Utilities Commission (Commission), arguing Public Service violated its tariff by failing to “exercise all reasonable means” to prevent billing errors and by using the GCA to shift costs to other customers.
- The ALJ and the Commission found Carestream failed to prove Public Service should have foreseen and prevented the unique error; the district court affirmed. Carestream appealed to the Colorado Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the tariff’s requirement to “exercise all reasonable means” includes a foreseeability limitation | Carestream: Tariff contains no foreseeability requirement; Commission improperly added such a requirement and exceeded its authority | Commission/Public Service: ‘‘Reasonable’’ must be assessed in context; foreseeability limits what measures are reasonable | Court: Reasonableness requires considering foreseeability; Commission’s interpretation valid |
| Whether Carestream has standing to challenge Pub. Serv.’s use of the GCA to recover remaining undercharge | Carestream: Has injury as a customer/public-spirited party harmed by utilities not following tariffs; analogous to O’Bryant | Pub. Serv./Commission: Carestream suffered no direct injury from GCA allocation; claim is speculative and indirect | Court: Carestream lacks injury-in-fact and therefore lacks standing |
Key Cases Cited
- Pub. Serv. Co. of Colo. v. Pub. Utils. Comm’n, 644 P.2d 933 (Colo. 1982) (discussing GCA and pass-through adjustments)
- Van Wyk v. Pub. Utils. Comm’n, 27 P.3d 377 (Colo. 2001) (public utilities subject to Commission regulation)
- Trans Shuttle, Inc. v. Pub. Utils. Comm’n, 89 P.3d 398 (Colo. 2004) (scope of judicial review of Commission actions)
- Jarco, Inc. v. Pub. Utils. Comm’n, 2 P.3d 116 (Colo. 2000) (appellate review standard for Commission decisions)
- Eddie’s Leaf Spring Shop & Towing LLC v. Pub. Utils. Comm’n, 218 P.3d 326 (Colo. 2009) (deference to agency interpretation of statutes/regulations)
- Durango Transp., Inc. v. Colo. Pub. Utils. Comm’n, 122 P.3d 244 (Colo. 2005) (agency findings of fact are final absent constitutional challenge)
- Wimberly v. Ettenberg, 570 P.2d 535 (Colo. 1977) (standing requires injury-in-fact and legally protected interest)
- O’Bryant v. Pub. Utils. Comm’n, 778 P.2d 648 (Colo. 1989) (recognizing public/customer interest as potential injury for standing in certain contexts)
- Maurer v. Young Life, 779 P.2d 1317 (Colo. 1989) (Wimberly standing test applied to Commission review)
- Ritzert v. Bd. of Educ., 361 P.3d 966 (Colo. 2015) (reasonableness inquiry depends on circumstances)
- Mountain States Tel. & Tel. Co. v. Dep’t of Labor & Emp’t, 520 P.2d 586 (Colo. 1974) (due process requires notice and opportunity to be heard)