State ex rel. Public Counsel v. Public Service Commission
397 S.W.3d 441
| Mo. Ct. App. | 2013Background
- Missouri enacted the MEEIA to value demand-side investments and allow recovery of costs for cost-effective demand-side programs.
- The Commission opened rulemaking and issued four rules implementing DSIM mechanisms and related rate adjustments outside general rate cases.
- Ameren, KCP & L, and the OPC challenged the four final orders; Renew Missouri intervened at the appellate level.
- Circuit Court affirmed the Commission’s rulemaking; the appellants petitioned for review, challenging statutory authority, timing, and penalties.
- The court conducts independent review of lawfulness and reasonableness, focusing on statutory authority, logical consistency with the MEEIA, and proper rulemaking procedures.
- The court ultimately affirms all four orders of rulemaking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to adjust DSIM outside rate cases | OPC: DSIM outside rate cases exceeds statutory authority. | Renew Missouri/Commission: MEEIA grants discretionary cost-recovery mechanisms, including timely adjustments. | Authority to adjust DSIM outside rate cases upheld |
| Definition and recovery of lost revenues | Ameren/KCP & L: lost revenues are not costs and definitions conflict with MEEIA. | Lost revenues are costs of delivering demand-side programs and necessary to align incentives. | Lost revenue recovery authorized; definition acceptable |
| Semi-annual adjustments and scope of DSIM components | KCP & L: semi-annual adjustments should include all DSIM components equally; otherwise unreasonable. | Rules permit semi-annual adjustments focusing on DSIM cost recovery with EM&V for verification. | Semi-annual adjustments upheld; within discretionary rulemaking |
| Penalties/adverse consequences under MEEIA | OPC: rules may penalize utilities failing to meet goals, contrary to encouraging investment. | MEEIA aims to encourage voluntary investment; penalties not mandated by statute. | Penalties not imposed; rules aligned with encouraging investment |
| Compliance with § 536.021.6(4) notice and response | OPC: final order failed to address a specific comment in the rulemaking record. | The order adequately summarized comments and provided reasoned responses; not a failure. | Rulemaking compliant with § 536.021.6(4) |
Key Cases Cited
- State ex rel. Office of Pub. Counsel v. Mo. Pub. Serv. Comm’n, 331 S.W.3d 677 (Mo. App. W.D.2011) (independent review of agency action; statutorily authorized powers)
- Midwest Gas Users’ Ass’n v. Pub. Serv. Comm’n, 976 S.W.2d 470 (Mo. App. W.D.1998) (twofold review: lawfulness and reasonableness; single-issue ratemaking caution)
- Utility Consumers’ Council of Mo. v. Pub. Serv. Comm’n, 585 S.W.2d 41 (Mo. banc 1979) (comprehensive rate-setting framework; single-issue ratemaking prohibition)
- State ex rel. White Family P’ship v. Roldan, 271 S.W.3d 569 (Mo. banc 2008) (statutory interpretation; plain meaning approach)
- Unnerstall v. Berkemeyer, 298 S.W.3d 513 (Mo. banc 2009) (interpretation of legislative intent; effect of statutory language)
- Purler-Cannon-Schulte, Inc. v. City of St. Charles, 146 S.W.3d 31 (Mo. App. E.D.2004) (administrative rules must be reasonable and not arbitrary)