Gruba v. PSC
2021 MT 186N
| Mont. | 2021Background
- Beginning in 2010, ratepayers challenged NorthWestern Energy’s (NWE) Billings street‑lighting tariff and ownership charge before the Montana Public Service Commission (Commission); the case has a long procedural history including earlier appeals to this Court.
- In a 2014 amended complaint Gruba and Barsanti raised multiple issues; the Commission narrowed the complaint in 2015 to focus solely on the ownership charge for street lighting (ELDS‑1) and denied class certification.
- The Commission’s final order 7084aa (Feb. 2019) found NWE’s street‑lighting service classification and ownership charge were not unjustly discriminatory and applied a system‑wide approach to rate base for street‑lighting infrastructure.
- The Commission’s accounting showed original street‑lighting costs of $29,595,351.77, accumulated depreciation of $16,861,718.33, and a net remaining balance of $12,733,634 as of 2017.
- The First Judicial District Court affirmed the Commission; Gruba and Barsanti appealed to the Montana Supreme Court asserting statutory violations (69‑3‑109, 69‑3‑321), misapplication of Admin. R. M. 38.5.106, entitlement to refunds/overcollection, and procedural due process defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commission violated §§ 69‑3‑109 & 69‑3‑321 by allowing NWE to recover more than original cost | Gruba/Barsanti: Commission should enforce original‑cost limit and assess district‑by‑district, so customers were overcharged | Commission/NWE: rate base properly calculated system‑wide; accounting shows no overrecovery | Court: Affirmed — substantial evidence supports system‑wide valuation and net balance shows no recovery in excess of original cost |
| Whether Admin. R. M. 38.5.106 applies | Gruba/Barsanti: rule requires adjustments be explained and should apply here | Commission: rule governs adjustments "at time of filing," so it does not apply to untimely claims | Court: Rule does not apply to the untimely claim; District Court correctly rejected its application |
| Entitlement to refunds for alleged overcharges | Gruba/Barsanti: customers are entitled to refunds if ownership charge caused overcollection | Commission/NWE: no evidence of overcollection; remedy and allocation are within Commission's discretion | Court: No evidence of overcharges; District Court properly declined to order refunds; remedy is Commission's domain |
| Procedural due process (use of internal staff memorandum; narrowing complaint) | Gruba/Barsanti: internal memo was agency‑prepared evidence offered without opportunity to contest; narrowing deprived them of hearing on other issues | Commission: staff memo akin to bench memo (not offered evidence); Commission has statutory authority to limit scope and provided notice/briefing | Court: No due process violation; consideration of staff memo was not ex parte evidence and narrowing was within Commission authority |
Key Cases Cited
- Williamson v. Mont. Pub. Serv. Comm’n, 272 P.3d 71 (Mont. 2012) (administrative exhaustion and standing issues in earlier proceedings)
- Williamson v. Mont. Pub. Serv. Comm’n, 291 P.3d 1116 (Mont. 2012) (further appellate disposition in the same dispute)
- In re Mont. Power Co., 590 P.2d 1140 (Mont. 1979) (Legislature limited rate base valuation to original cost)
- NorthWestern Corp. v. Mont. Dep’t Pub. Serv. Regulation, 380 P.3d 787 (Mont. 2016) (standard for reviewing agency factual findings)
- Vote Solar v. Mont. Dep’t of Pub. Serv. Regulation, 473 P.3d 963 (Mont. 2020) (deference to agency interpretations of regulations and need for rational connection between facts and choice)
- Mont. Envtl. Info. Ctr. v. Mont. Dep’t of Envtl. Quality, 451 P.3d 493 (Mont. 2019) (standards for reviewing agency statutory interpretations)
- Jarvenpaa v. Glacier Elec. Coop., 970 P.2d 84 (Mont. 1998) (abuse of discretion standard for trial court actions)