Docket 93641 | Mich. Ct. App. | Jun 10, 1988
ATTORNEY GENERAL
v.
PUBLIC SERVICE COMMISSION NO 1
Michigan Court of Appeals.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Hugh B. Anderson and Donald E. Erickson, Assistant Attorneys General, for plaintiff.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Don L. Keskey and Philip J. Rosewarne, Assistant Attorneys General, for the Public Service Commission.
Loomis, Ewert, Ederer, Parsley, Davis & Gotting (by George W. Loomis, Michael G. Oliva, and Ronald W. Bloomberg), and David A. Mikelonis, *698 Allen B. Bass, and Frank R. Knox, for Consumers Power Company.
Before: SAWYER, P.J., and KELLY and J.J. RASHID,[*] JJ.
PER CURIAM.
In this appeal as of right, the Attorney General challenges the propriety of allowing Consumers Power Company to recover, under a gas cost recovery clause, additional charges imposed pursuant to an arrangement with a supplier by virtue of which Consumers must pay for a minimum amount of natural gas, even if it takes delivery of a lesser amount.
As we read the conflicting testimony of various witnesses, it is clear to us, as it was to the Public Service Commission, that this is an accounting problem. Witnesses for parties who opposed recoupment of these costs under a gas cost recovery clause did not challenge the propriety of allowing Consumers Power Company to recover the cost in some fashion, although they suggested that treating these costs as administrative would be more appropriate.
The commission's selection among competing reasonable accounting methods is a legislative, not an adjudicative, act. Since any of the proposed methods would have been reasonable, the commission's decision cannot be deemed arbitrary, capricious, or an abuse of discretion, and appellate interference would be inappropriate. Michigan Consolidated Gas Co v Public Service Comm, 389 Mich. 624" court="Mich." date_filed="1973-07-24" href="https://app.midpage.ai/document/michigan-consolidated-gas-co-v-public-service-commission-1633082?utm_source=webapp" opinion_id="1633082">389 Mich 624; 209 NW2d 210 (1973).
Nor do we find anything about the minimum contract requirement between Consumers and its supplier that is less than reasonable and prudent. See Attorney General v Public Service Comm, 161 *699 Mich App 506, 516-518; 411 N.W.2d 469" court="Mich. Ct. App." date_filed="1987-05-14" href="https://app.midpage.ai/document/atty-gen-v-psc-1941024?utm_source=webapp" opinion_id="1941024">411 NW2d 469 (1987). Over the nineteen-year life of the contract, the clause provided gas to Consumers, and therefore to its customers, at favorable rates; the mere fact that, for the 1984 accounting year, less gas was used by Consumers' customers, thereby triggering an additional payment under the minimum contract quantity clause, does not render the agreement unreasonable or imprudent.
We are also of the opinion that, by the understood meaning of the terms in context, the statutory phrase "booked costs of gas sold," MCL 460.6h(1)(b); MSA 22.13(6h)(1)(b), subsumes, as part of the cost of gas "sold," any additional payment which Consumers must make to its suppliers pursuant to the take-or-pay arrangement. Such payments are as much a part of the cost of "gas sold" as any other portion of the payments made to the supplier.
Affirmed.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.