172 A.3d 927
Md. Ct. Spec. App.2017Background
- Washington Gas Light Co. (WGL) sought to amend its STRIDE plan to recover accelerated costs for four transmission projects, some located outside Maryland (D.C./Virginia). WGL proposed to recover only the Maryland-allocated share of out-of-state projects via the STRIDE surcharge.
- STRIDE (PUA § 4-210) authorizes a fixed annual surcharge to accelerate recovery of reasonable and prudent costs for eligible infrastructure replacement projects; includes a legislative-intent provision stating the purpose is to "accelerate gas infrastructure improvements in the State."
- The Public Service Commission (PSC) and its staff interpreted § 4-210 to limit STRIDE cost recovery to projects physically located in Maryland and denied STRIDE recovery for out-of-state portions; the PSC approved only Maryland-located components.
- WGL sought judicial review after the PSC denied cost recovery for the out-of-state work; the Circuit Court for Montgomery County affirmed the PSC. WGL appealed to the Court of Special Appeals.
- The central legal question: whether the STRIDE statute’s statement of intent ("in the State") operates as a substantive limitation barring STRIDE surcharge recovery for projects located outside Maryland even if benefits flow to Maryland customers.
Issues
| Issue | WGL's Argument | PSC/OPC's Argument | Held |
|---|---|---|---|
| Whether § 4-210 permits STRIDE surcharge recovery for projects located outside Maryland | § 4-210(a)(3) lists eligibility criteria and omits location; statute is unambiguous—location is not a requirement; interconnected system benefits justify recovery for out-of-state projects allocated to Maryland | The § 4-210(b) legislative-intent clause ("in the State") is substantive and limits STRIDE cost recovery to projects physically located in Maryland | The Court held § 4-210(b) restricts STRIDE recovery to projects located in Maryland; PSC interpretation affirmed |
| Whether legislative history supports WGL’s proposed out-of-state recovery | Silence on geographic scope implies no limitation; parallels (e.g., Virginia law) suggest broader intent | Legislative history and committee materials focus on Maryland needs; no evidence legislators intended out-of-state recovery | Legislative history did not overcome plain-text reading; lack of discussion is not evidence of contrary intent |
| Whether PSC’s interpretation was entitled to deference | Agency expertise and policy rationale support deference | Deference appropriate but statutory interpretation is reviewed de novo when no long-standing agency practice exists | PSC’s construction was correct; even under de novo review plain text controls |
| Whether approving out-of-state projects would render statutory language surplusage or absurd | Allowing recovery for out-of-state projects better effectuates STRIDE’s purpose to accelerate system improvements | Allowing out-of-state recovery would render the phrase "in the State" meaningless and swallow normal ratemaking rules | Court avoided interpretation that would render statute’s "in the State" language surplusage; rejected WGL’s construction |
Key Cases Cited
- Columbia Gas of Maryland, Inc. v. Pub. Serv. Comm’n of Maryland, 224 Md. App. 575 (discusses rate base and "used and useful" principle)
- People’s Counsel v. Pub. Serv. Comm’n of Maryland (STRIDE I), 226 Md. App. 483 (prior appellate analysis of STRIDE statute and agency review)
- Communications Workers of Am. v. Pub. Serv. Comm’n, 424 Md. 418 (deference to agency factfinding explained)
- Office of People’s Counsel v. Maryland Pub. Serv. Comm’n, 355 Md. 1 (framework for deference to agency statutory interpretation)
- Blue v. Prince George’s County, 434 Md. 681 (text-in-context statutory interpretation standard)
- Phillips v. State, 451 Md. 180 (use of legislative history as a check on plain-language reading)