In the Matter of the Application of KCP&L Greater Missouri Operations Company for Permission and Approval of a Certificate of Public Convenience and Necessity Authorizing it to Construct, Install, Own, Operate, Maintain and Otherwise Control and Manage Solar Generation Facilities in Western Missouri United for Missouri Office of Public Counsel v. Missouri Public Service Commission KCP&L Greater Missouri Operations CO, and Missouri Division of Energy
2016 Mo. App. LEXIS 1318
| Mo. Ct. App. | 2016Background
- KCP&L Greater Missouri Operations Co. (GMO) applied to the Missouri Public Service Commission (PSC) for a Certificate of Convenience and Necessity (CCN) to build a 3 MW pilot solar plant at Greenwood to gain operational experience and prepare for increased solar demand.
- The project is a pilot (not required to meet current load), will offset ~5,000 tons CO2 annually, and is relatively small compared to GMO’s $1.4B rate base and $180M annual capital spend.
- GMO intends to fund construction from its funds and ultimately recover costs from ratepayers; the project would benefit from a 30% federal Investment Tax Credit.
- United for Missouri (UFM) and the Missouri Office of the Public Counsel (OPC) intervened, challenged the PSC’s decision after a hearing, and appealed the PSC’s Report and Order granting the CCN.
- Appellants argued (1) procedural/due-process defects (no prefiled testimony, only ten business days’ notice), and (2) the project is not "necessary or convenient for the public service" because it is not needed for load, is not least-cost, not required by current environmental rules, and primarily benefits the utility.
- The court reviewed lawfulness de novo and reasonableness for substantial competent evidence; it affirmed the PSC, finding no due-process violation and that substantial evidence supported the CCN under Mo. Rev. Stat. § 393.170.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSC violated due process by not requiring prefiled testimony and by giving only ten business days to prepare | OPC: procedure denied meaningful opportunity to be heard; deviated from usual process | PSC/GMO: rules permit live testimony and the PSC provided sufficient notice and full opportunity to litigate (discovery, depositions, stipulations, cross-examination) | Court: No due-process violation; PSC complied with rules and parties had meaningful opportunity to be heard |
| Whether the CCN is lawful under statutory authority | UFM/OPC: GMO failed to prove the project is "necessary or convenient" under §393.170; relies on precedents requiring present need and cost-justification | PSC/GMO: statute grants authority; consideration of future needs, operational experience, public interest, and small relative cost justify CCN | Court: PSC had statutory authority and lawfully granted CCN |
| Whether the PSC’s decision was unreasonable / unsupported by substantial evidence because project isn’t needed for load and isn’t least-cost | UFM/OPC: project is speculative, not needed for current load, alternatives are cheaper, and benefits mainly the utility | PSC/GMO: pilot yields experience essential for integration of anticipated future solar demand; project cost small relative to rate base; ITC reduces net cost; PSC can consider future planning | Court: Substantial competent evidence supports PSC findings that pilot is an improvement justifying cost and in public interest |
| Whether environmental/regulatory uncertainty (e.g., Clean Power Plan) undermines necessity | UFM/OPC: CPP stay and current RES compliance mean project isn’t needed for regulation | PSC/GMO: uncertainty makes planning prudent; CPP likely to survive in some form; preparing now is reasonable and small investment supports readiness | Court: PSC reasonably considered potential CPP impacts and public policy favoring renewables; this supported necessity determination |
Key Cases Cited
- Harter v. Pub. Serv. Comm’n, 361 S.W.3d 52 (Mo. App. W.D. 2011) (due-process standard in administrative proceedings)
- State ex rel. AG Processing, Inc. v. Pub. Serv. Comm’n, 120 S.W.3d 732 (Mo. banc 2003) (appellate standard reviewing PSC orders: lawfulness de novo; reasonableness for substantial evidence)
- State ex rel. Pub. Water Supply Dist. No. 8 v. Pub. Serv. Comm’n, 600 S.W.2d 147 (Mo. App. W.D. 1980) (discussion of "necessary or convenient" and public necessity)
- Mo. Coach Lines v. Pub. Serv. Comm'n, 179 S.W.2d 132 (Mo. App. 1944) (necessity defined as improvement justifying cost)
- State ex rel. Electric Co. of Mo. v. Atkinson, 204 S.W. 897 (Mo. 1918) (PSC purpose and public protection rationale)
- Ringo v. Pub. Serv. Comm’n, 132 S.W.2d 1080 (Mo. App. 1939) (future needs may be considered in public convenience analyses)
- State ex rel. Gulf Transport Co. v. Pub. Serv. Comm’n, 658 S.W.2d 448 (Mo. App. W.D. 1983) (future planning as part of comprehensive evaluation)
- Stopaquila.Org v. Aquila, Inc., 180 S.W.3d 24 (Mo. App. W.D. 2005) (PSC’s broad regulatory authority)
- Pub. Serv. Comm’n v. KCP&L Co., 31 S.W.2d 67 (Mo. banc 1930) (role of PSC regulating monopoly to protect public)