State ex rel. Utilities Commission v. Cooper, 367 N.C. 430

Dominion North Carolina Power sought a general rate increase in 2012 and requested an 11.25% ROE; the Commission ultimately approved a smaller revenue increase and authorized a 10.2% ROE.
Nucor, a large industrial customer consuming 21% of Dominion’s NC sales and subject to an interruptible service contract, challenged Dominion’s cost-of-service treatment and the ROE decision; Nucor and other parties intervened, and the Attorney General and Public Staff participated.
Dominion’s cost-of-service study used the SWPA (summer/winter peak and average) method; Dominion reduced Nucor’s peak demand to reflect interruptibility but did not fully treat Nucor’s load as non‑firm.
Experts disputed both the cost-of-service adjustments and appropriate ROE: Dominion’s expert advocated ~10.5–11.5% (recommending 11.25%), Public Staff’s expert recommended ~9.37%, and Nucor’s expert recommended ~7.5–8.6%.
The Commission approved Dominion’s treatment of Nucor (rejecting Nucor’s witness Goins) and set ROE at 10.2%, finding that further adjustments would unfairly shift costs and that 10.2% balanced investor and consumer interests.
On appeal the Court affirmed the Commission’s cost-of-service treatment of Nucor but reversed and remanded the ROE determination for additional findings about the impact of changing economic conditions on consumers, citing deficiencies similar to those in Cooper.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Commission erred in approving Dominion’s cost-of-service adjustments for Nucor	Nucor: Commission must not consider effects on other jurisdictions; Dominion should treat Nucor’s entire demand as interruptible or reduce average demand	Dominion/Commission: Contractual terms and actual use impose costs; partial peak adjustment was appropriate and full non‑firm treatment would shift costs unfairly	Affirmed: Commission’s rejection of Goins and approval of Dominion’s adjustments supported by substantial evidence
Whether the ROE (10.2%) was supported by sufficient findings addressing changing economic conditions and consumer impact	AG/Nucor: Commission failed to make required specific findings on economic conditions’ impact on consumers and relied improperly on prior ROEs/other commissions	Commission: Considered expert testimony and public witness evidence and concluded 10.2% balanced consumers and investors	Reversed and remanded: Commission must make more detailed, case‑specific findings on changing economic conditions and consumer impact per Cooper

State ex rel. Utils. Comm’n v. Attorney Gen. Roy Cooper, 366 N.C. 484, 739 S.E.2d 541 (2013) (Commission must make specific findings showing it considered economic conditions and consumer impact in ROE determinations)
State ex rel. Utils. Comm’n v. Carolina Util. Customers Ass’n, 348 N.C. 452, 500 S.E.2d 693 (1998) (Commission orders must include findings sufficient to review contested issues)
State ex rel. Utils. Comm’n v. Public Staff (Public Staff III), 323 N.C. 481, 374 S.E.2d 361 (1988) (ROE is part of overall rate of return; appellate review defers to commission fact‑finding if supported by substantial evidence)
State ex rel. Utils. Comm’n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989) (rate orders will be affirmed if supported by competent, material, substantial evidence)
State ex rel. Utils. Comm’n v. Public Staff, 331 N.C. 215, 415 S.E.2d 354 (1992) (concern about fluctuation from prior ROE is not a proper proxy for current cost of equity)