Public Service Commission v. Office of Public Counsel
2012 Mo. App. LEXIS 1614
| Mo. Ct. App. | 2012Background
- OPC appeals a PSC order approving Atmos Energy Corporation's 2008-2009 ACA rates.
- PSC order challenged as unlawful/unreasonable under Affiliate Transaction Rule 4 CSR 240-40.016 and not supported by competent substantial evidence.
- Atmos is a Missouri LDC purchasing gas through competitive bids via gas marketing companies.
- PGA/ACA process: prospective PGA, retrospective ACA review of actual gas purchases for prudence.
- Staff recommended disallowing some ACA costs due to profit by Atmos's unregulated affiliate (AEM).
- PSC approved Atmos's ACA, and OPC appeals the decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether affiliate transactions violated 4 CSR 240-40.016 | OPC argues Atmos paid above fair market value to affiliate | Atmos/PSC rely on bidding and prudence presumption | No reversible error; PSC properly applied rules and found prudence |
| Whether the fair market price was properly determined | OPC contends price should reflect affiliate profits | PSC credited competitive bidding and arm's-length pricing | PSC findings supported by bidding process; fair market price established |
| Burden of proof and arm's-length requirement | OPC shoulders burden to show non-arm's-length transaction | Regulation preserves existing burden; presumption of prudence | Burden preserved; no modification to standard; open bidding credible |
Key Cases Cited
- State ex rel. Public Counsel v. Public Serv. Comm’n, 274 S.W.3d 569 (Mo.App. W.D.2009) (burden of proof and reasonableness standards in PSC reviews)
- Office of Public Counsel v. Missouri Public Serv. Comm’n, — S.W.3d at- (Mo.App. W.D.2012) (adhere to prudence presumption and open bidding credibility)
- State ex rel. Assoc. Natural Gas Co. v. Public Service Comm’n, 954 S.W.2d 520 (Mo.App. W.D.1997) (prudence standard requires serious doubt to disallow costs)