State Ex Rel. Office of the Public Counsel & Missouri Industrial Energy Consumers v. Missouri Public Service Commission
2011 Mo. App. LEXIS 84
Mo. Ct. App.2011Background
- Missouri PSC regulates electric utilities and approves rate schedules, ensuring just and reasonable rates.
- SB 179 enacted §386.266, authorizing environmental cost recovery mechanisms (ECRMs) with periodic rate adjustments outside general rate proceedings.
- PSC drafted two rules: 4 CSR 240-20.091 (ECRM establishment) and 4 CSR 240-3.162 (filing/submission requirements).
- Rulemaking proceeded with notices, public comment, hearings, and final orders; rules published July 1, 2009 and effective August 30, 2009.
- OPC and MIEC challenged the rules as unlawful or unreasonable; circuit court affirmed the rules; OPC and MIEC appealed.
- This court reviews PSC orders for lawfulness (statutory authority) and reasonableness (supported by substantial evidence, not arbitrary).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of rule promulgation | OPC/MIEC argue rules issued after authority expired | PSC authority extends to effective date and beyond; rulemaking timely under §536 | Timeliness satisfied; PSC complied with rulemaking process |
| Conformity with §386.266.4(1) and true-up (§386.266.4(2)) | Regulations permit over-earnings by ignoring full rate-case factors; true-up too narrow | Statute allows single-issue ratemaking; initial review occurs in full rate case; true-ups target ECRM costs | Regulations lawful; properly designed to allow fair ROE and annual true-ups |
| Cap and deferral provisions under §386.266.2 and 4 CSR 240-3.162(4) | Deferral could exceed 2.5% annual cap and inflate costs | Statute permits deferrals of unrecovered costs with carrying costs; cap applies to annual adjustments, not total unrecovered amounts | Regulations comply with cap and deferral provisions |
Key Cases Cited
- State ex rel. Midwest Gas Users' Ass'n v. Pub. Serv. Comm'n, 976 S.W.2d 470 (Mo.App. W.D.1998) (substantial evidence standard for PSC findings)
- State ex rel. Office of Pub. Counsel v. Pub. Serv. Comm'n, 938 S.W.2d 339 (Mo.App. W.D.1997) (independent appellate review of PSC decisions)
- State ex rel. Evans v. Brown Builders Elec. Co., 254 S.W.3d 31 (Mo. banc 2008) (statutory interpretation giving agency deference but independent review possible)
- Spradlin v. City of Fulton, 982 S.W.2d 255 (Mo. banc 1998) (interpretation of statutory language in context)
- Abbott Ambulance v. St. Charles Cnty. Ambulance Dist., 193 S.W.3d 354 (Mo.App. E.D.2006) (statutory interpretation and agency rulemaking context)
- State ex rel. Womack v. Rolf, 173 S.W.3d 634 (Mo. banc 2005) (presumption against superfluous statutory language)
- City of Springfield v. Pub. Serv. Comm'n, 812 S.W.2d 827 (Mo.App. W.D.1991) (rulemaking process and statutory interpretation principles)
- Reichert v. Bd. of Educ. of St. Louis, 217 S.W.3d 301 (Mo. banc 2007) (when interpreting statutory language, give plain meaning unless ambiguous)