Office of the Public Advocate v. Public Utilities Commission, 122 A.3d 959

Bangor Gas Company (a subsidiary of Penobscot, owned by Energy West) provides natural gas to ~4,000 customers, including Bucksport Mill. Sempra originally owned Bangor Gas and invested substantially in plant before selling it.
In 2007 Energy West acquired Penobscot/Bangor Gas for approximately $500,000; an impairment analysis led Bangor Gas to write down book value and record an accounting impairment loss (~$38 million).
Bangor Gas sought renewal of an alternative rate plan (ARP) in 2012; the Public Utilities Commission (PUC) conducted a revenue-requirement and cost-of-service review as required by statute and ultimately approved a seven-year ARP with no change to then-current rates.
The PUC calculated rate base using the depreciated original cost of plant (≈ $36.24 million) rather than the 2007 acquisition cost ($500,000), concluding original cost better reflected the assets used to provide service and promoted rate stability.
The PUC also allowed inclusion of 50% of Bangor Gas’s regulatory proceeding expenses, amortized/normalized over five years (≈ $40,000 annually), despite imperfect filing compliance.
The Office of the Public Advocate (OPA) and Bucksport Mill appealed, arguing (1) the PUC should have used the impaired acquisition cost as rate base, and (2) the PUC improperly included amortized regulatory proceeding expenses.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper valuation basis for rate base	PUC must use Energy West’s 2007 acquisition cost (impaired book value) to set rate base	PUC may use original (depreciated) cost of property in public use; statute allows consideration of original cost and other factors; original cost better reflects assets used to serve customers	Affirmed: PUC acted within statutory discretion to use depreciated original cost rather than acquisition impairment amount
Inclusion of regulatory proceeding expenses	PUC abused discretion by including/amortizing these expenses (insufficient support and filing noncompliance)	Even if filing was imperfect, revenue requirement was litigated; inclusion was normalized and had negligible effect on adopted ARP rates	No need to reach merits because inclusion did not affect ARP outcome; PUC’s approach did not alter starting rates and was not reversible error

Houlton Water Co. v. Pub. Utils. Comm’n, 87 A.3d 749 (Me. 2014) (appellate review of PUC decisions is deferential; court will overturn for abuse of discretion)
Office of the Pub. Advocate v. Pub. Utils. Comm’n, 816 A.2d 833 (Me. 2003) (agency interpretation of statutes it administers entitled to deference absent compelling contrary statute)
New England Tel. & Tel. Co. v. Pub. Utils. Comm’n, 390 A.2d 8 (Me. 1978) (courts defer to commission’s technical expertise and do not substitute their judgment on factual rate determinations)
Trask v. Pub. Utils. Comm’n, 731 A.2d 430 (Me. 1999) (statutory construction governed by plain meaning; agency has discretion to weigh statutory valuation factors)
Pine Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n, 634 A.2d 1302 (Me. 1993) (explaining normalization of infrequent expenses in ratemaking)