*1 instance, change refusing nal of condition. In this mission erred in reopen physical behavior of the reservoir re- hearing accept “newly discovered evi- constant, mains but the information dence” logs in the form of from two new gained through development depletion completed wells hearing since the ended. experience demonstrates that the conclu- El Paso admits this merely new evidence sions reached originally were incor- augments prior its evidence. We are not rect. . . change . An external of condi- persuaded. tion is characterized the fact that the The Corporation order of the animal incorrectly described in the supported by is substantial evidence. dog first instance —the was called a cat AFFIRMED. and the mistake was discovered later. change That such a of condition satisfies IRWIN, J., BARNES, J., C. V. C. legal requirement supported by HODGES, SIMMS, OPALA, DOOLIN and case, Peppers (Application Pep- first JJ., concur. Co., Okl.,
pers Refining
reservoir is .... Neverthe-
less, knowledge new scientific and tech-
nology may add new dimensions to the legal
basic concepts of waste and correla- rights,
tive may super- or the statutes be
seded others which re-define these terms.” of Oklahoma ex rel. STATE testimony When the and evidence CARTWRIGHT, General Jan Eric given by expert Leede’s witnesses are com Appellant, law, pared with the we are convinced the v. Corporation presented Commission was suf ficient evidence to hold a substantial OKLAHOMA NATURAL GAS COMPA- existed, change knowledge of conditions Corporation NY and change spacing to authorize a in the Commission, Appellees. 1,440 acres to 640 acres. 56438. No. argument change of a in the econom- Supreme of Oklahoma. Court drilling ics of sale of natural is new to Oklahoma. We first discussed the issue 19, Jan. Kuykendall Corpora- recent case of Rehearing Feb. Denied Commission, tion 52 OBJ (Okl.1981), wherein we said economics “is considered,
only one factor to be its
persuasiveness tempered must only pertinent other considerations which influence,
may override its but which displace
well it.” In the case at bar we find
economics was but one several factors Corporation
considered presented negate other evidence did not persuasive character.
El Paso also seeks to have the order grounds
reversed on Com-
1343 *3 Gen., Cartwright, Atty.
Jan Michael Eric Bardrick, Gen., Chief, Asst. Atty. L. Con- Div., sumer/Utility City, Oklahoma for pellant. Jr., Gaberino, Arrington, A.
John L. John Jr., Arrington Kirby, J. Thomas Huffman Tulsa, Dunn, appellee, Kihle Gaberino & Natural Gas Co. Oklahoma LAVENDER, Justice: Compa- Gas Appellee Oklahoma Natural (Oklahoma Natural) gas a natural ny subject to the public utility whose rates are 609,172 determining proportionate Commission jurisdiction among increase between and spread (Commission). Oklahoma of Oklahoma customer Natural’s Oklahoma users.. engaged purchase, in the Natural been transmission, storage, and distribution order, Attorney General From 1906, and it cur- natural since October General) (Attorney the State of Oklahoma popu- combined rently serves estimated appeals. 2,000,000 in Oklaho- approximately lation exceptions no General filed in 209 cities and through facilities ma proceed- Report to the of the Referee areas, rural and either adjoining towns did not ings before the Commission partial requirements of 51 com- full or apply by the a review seek lines. its transmission through munities rehearing or new trial before for a points filed an Natural with reference
Oklahoma judi- Commission, seeking authority raises on and issues he now court. Natu- utility by this *4 rates to its cial review gas its increase natural that, result, Attorney the urges ral were referred The customers. right to raise either waived the General has hearing. to a referee of the Commission court, to or that this them now of customers Oklahoma industrial Several proper- points issues have not been said and in the cause on the issue Natural intervened judicial by this ly preserved for review rate increase between spread any of the of court. Natural’s among customers. and Oklahoma the hearing, referee filed with Upon the authority of the Com- power and the in- report recommending an regulate, his control supervise, and mission to in the in Oklahoma Natural’s rates sale of its crease Natural’s rates for the Oklahoma IX, Thereafter, $29,451,199. the of the Okla- gas of are found in Art. Í8§ amount Constitution,1 O.S.1971, et 17 granting order § entered homa 162,3 O.S.1971, Corpo- $26,- in the seq.,2 17 and § a rate increase of Natural use, any commodity may supply Const., to be fur- IX, pertinent pro- or Art. 18 insofar § public. vides: nished to the by pipe “(a) “(b) conveyance line. For the of power the and “The Commission shall have transmission, production, duty deliv- authority pervising, regulating portation charged with the For and be of su- ery furnishing light gas.” controlling heat with and all trans- of or or . companies doing * and transmission * * * * * State, relating business in in all matters to gener- “The Commission shall have Sec. 152: performance public their duties and their of utilities, public supervision al over all therefor, charges correcting and of abuses and pre- power establish and to to fix and rates preventing unjust discrimination and extortion rules, requirements regulations, af- scribe and by companies; such and to that end the Com- services, operation, fecting agement inquire thereof, and the man- their shall, time, prescribe mission enforce hereinafter classifications of tions, from time to and business; of shall and conduct their against companies, such the manner management of the business into the authorized, rates, charges, such method which same is con- and the traffic, regula- rules and and ducted.” require and them to and shall establish may, from time 155: “The Commission Sec. service, facilities, public all maintain such orders, time, adopt promulgate, or to may just, conveniences as which said be reasonable and rules, requirements, regulations or relative rates, classifications, charges, rules audits, tests, investigations, inspections, by any regulations adopted, upon, and such scribed its or acted properties plants and relative of the valuations to company, pre- inconsistent with those judg- inspection in its tests of meters as scope within of necessary proper; provided, may ment * authority, unlawful and shall be void. act, any public provisions of this that under the any utility, may appeal corporation, . . . O.S.1971, pertinent provisions 2. The finding judgment Corporation order or or seq. et § are as follows: provided tried law in cases Commission as and Utility’ transpor- Sec. 151: “The term ‘Public . . . shall before said Commission heard every corpora- be taken to companies.” mean and include tation and transmission own, oper- tion .. . that now or hereafter ate, O.S.1971, equipment, any manage any plant “The Com- or 162: § or indirectly, or 3.17 assign thereof, empowered directly public mission is authorized Attorney ration Did the Commission’s General Rules and General’s failure to file Regulations Governing Operations exceptions written with the Commission to Gas Utilities State Oklahoma.4 report pursuant of the referee to Rule 24; or his failure to file with the Commis- Attorney Did the General’s failure rehearing; sion a motion for applica- or an “exceptions” 19(c) to file under OCCRP aside, tion to set amend or modify the or- objections 24 constitute a waiver of the der; or for other form of relief from the Commission’s rate order? We hold not. pursuant the order to Rule 24 constitute a cursory reading 19(c) A of OCCRP discloses waiver right urged to raise the issues rulings therein referred to relate to General, or did such failure procedure matters of and not to the sub result being properly pre- said issues not stantive and recommendations served for review this court? hearing officer. The rule authorizes hearing and directs that officer “shall are mindful that Rule 24 and We upon evidence, rule objec admission of authorizing filing Rule 26 in excep thereto, tions upon any and shall rule other report tions to the of the referee and in objection arising motion or in the course of authorizing rehearing, a motion for or an hearings,” objections and unless said aside, modify to set amend or rulings on procedural evidence or other the Commission’s order use the word preserved matters are by exceptions pursu “shall,” “may,” rather than the word 24, they ant to Rule are waived. No issue *5 general under rules of construction make pertaining to the admission of evidence or procedures permissive such and not mandat rulings by meaning the referee within the ory.5 are further We aware that the re by of Rule 24 is raised the Gener port hearing and recommendations of the al. persons regular examiners, “(a) employ hearing in its Rule 23: At the conclusion of a designated Referee, officer, who hearing shall be deputy, and who before a other than a oaths, power shall shall, have to administer examine practicable such officer at the earliest witnesses, report date, and receive evidence and the report proceed- file his written Corporation Commission, same to the under ing. regulations such rules and may adopt; as the Commission “(c) expiration days At the of five after the ” .... report filed, fíled, exceptions is if no thereto are the Commission shall enter such order as shall pertinent regulations Corporation 4. The of the appropriate upon be deemed consideration of Commission are as follows: report. added.) (Emphasis the “(a) Rule 1. These rules shall be known as “(a) days Rule 24. Within five after the re- Corporation the Oklahoma Commission Rules port officer, hearing deputy, of a other than a is Practice, may and be cited as OCCRP. filed, any party adversely by report affected the * * * * * * thereto, may exceptions file his written and “(c) govern proceedings These rules shall all copy by regular upon serve a mail each thereof Commission, Corporation before the Oklahoma added.) party (Emphasis of record. commissioner, deputy, panel, and trial examin- “(a) days Rule 26: Within ten after an order er, referee, attorney employ- or other officer or entered, any party may of the Commission is ee of the Commission. rehearing; application file a motion for a or an * * * Rule 19: aside, order; modify to set or the or for amend “(c) hearing The ... officer shall exercise all any other form of relief from the order. powers of the of the Commission in the con- specifically application motion or shall state: proceeding. hearing duct of a The ... officer evidence, upon shall rule admission of and ob- application hearing Such shall be set for be- jections thereto, upon any and shall rule other Commission, copy fore the unless referred. A objection arising motion or hearing. in the course of the including application, of the notice of the date ruling hearing Review of a of a offi- hearing, by applicant for set upon shall be served the cer, deputy, by exceptions other than a shall be party by regular each of record mail.” pursuant 24], to Rule 25 [s/c should read Rule (Emphasis added.) any objection ruling and to a or other action of hearing excep- officer not included in such Shea, Okl., Shea v. thereto, tions and amendments shall be deemed (Emphasis added.) to have been waived. objected to in the manner autho- timely if bind- only and are not advisory are
officer agency’s the the ing governing that the rules upon by rized cured, to reach its own required might is sub- Commission is have been and make the evidence upon conclusions purposes for which versive of both the reject accept or adequate findings, of the was created and adver- Commission recommendations or all ful- sary system gives purposes those which officer, examining or add to them.7 fillment.9 that cognizant of the fact We are further hold that matters We therefore many occasions ruled that this court on presented been before which could have a or new trial or motion a a motion governing proceed rules under Commission necessary prerequisite rehearing is anot body were not ings and which an an order or determination appeal from by either presented before the Commission of the Commission.8 evidence, objection proceed or affirmative However, not heretofore this court has pre are ings for review Commission question presented precise addressed the appeal on review this court cluded from the Oklaho- pending before here. Matters thereto. party adversary a who is generally are ma nature which complex and technical a However, ruling this is a de since initially decided should be considered and accepted from what has become parture best body personnel whose are appeal in cases on orders practice amalgamate those intricacies equipped to application and its conclusions specific into upon case at would therefore inflict bar appeal. To presentable form for review very harms Attorney General some of the findings and permit a review on avoid, it is deci which we seek to here properly determinations were court that thereof be sion presented to fully the Commission ap only, shall be prospective same and informed determination deliberation large deprive public plied only at cases hereinafter filed those necessary appellate of a valuable pending court where there is a in those cases now *6 service. the timely opportunity apply therein to same. very judi- adversary
At the heart of our Orderly cial is system opposition. informed of a of an assertion In the absence procedure require good administration right or federal of under the state violation objections in be- available Constitution, scope of re permissible the agency fore made an administrative view this court of orders of the Commis by has opportunity while it an for reconsidera- is to of wheth sion limited a determination tion appropriate and correction at the time pursued its regularly er the Commission adversary practice. permit under its To findings and authority, and whether to quietly by sit until an administrative are of the Commission sustained lodged conclusions proceeding is in an closed and And, peal, appeal, by on the law and substantial evidence.10 and then raise issues Okl., Am.Jur.2d, Law, 724, Corporation 2 Administrative v. §§ 9. Cameron 6. (1966). 725. 20; Constitution, IX, Law, Am.Jur.2d, Art. § 7. 2 Administrative 10. Oklahoma § etc., Cty., Texas Union Gas Co. v. Southern Sys- Okl., (1977); Tecumseh Gas State, Okl., P.2d 1004 (1966); 564 v. Garrison 420 P.2d 474 State, (1977); Appli- Okl., tem v. Okl., P.2d 356 Company, 565 v. Shell Oil P.2d 482 Crews 406 Company, Louisiana Gas State, cation of Arkansas (1965); Republic Natural Gas Co. v. 198 Pet., Okl., et (1976); State, Union Texas 350, 1009; P.2d 376 558 Holzbierlein v. Okl. 180 P.2d Comm’n, Corporation al., al. v. 509, (1981). et Okl. 197 172 P.2d Okl. Freight as we said Central with its required by customers matters Lines, Corporation Department Inc. v. Commission and the Commission:11 of Transportation Regulations, and by utiliz- “The term ‘substantial evidence’ means ing the billing envelope mailing was something of more than a scintilla evi- per distributed at a year smaller cost than possesses dence and means evidence that would have been the cost a single of mail-
something of substance of relevant ing required of a notice without the use consequence such as carries it fit- billing envelope. He further testified conviction, ness to induce is such publication contained items relat- evidence that men fairly reasonable ing energy conservation as well cook- as to differ whether it a case.” establishes ing recipes. undisputed, His evidence was and we hold that there was substantial evi- In the recent of El case Paso Natu support dence in Commission’s allow- Company ral Gas Commis ance Tips” the cost of publica- the “Flame Oklahoma, al.,12 sion of The State of et tion expense as an item of Oklahoma Natu- determining court enunciated the rule that ral. whether there substantial evidence in support of the Commission’s 2. Oklahoma Blanket
conclusions, Natural's Job Or- requires a by review this court Expense. ders as an of the whole evidence in the found including record fairly evidence which challenges General weight detracts from the thereof. utility sum claimed as an item of invest by ment Oklahoma Natural amount foregoing guidelines, Measured we $1,850,000 ground jobs on the that such objections will consider the to the order of savings were not let with cost Mr. mind. Commission raised the Attorney Wimpey job testified that the blanket or General. ders consisted of costs incurred Oklaho In furtherance for a ma projects, Natural minor construction increase, rate Oklahoma Natural used as usually involving line extensions custom year year ending test August usually performed ers jobs Oklaho objection without any on the major ma All Natural itself. construction parties. projects upon competitive are let He bid. utility procure further testified that the did 1.Publication distribution projects minor sav construction with cost Tips” “Flame an Expense. ings in was dis testimony mind. His not monthly billing Included en puted there no was evidence offered velope during addressed its customers job show minor construction was let year publication test prepared by *7 savings with cost in mind. There was sub Oklahoma Tips,” Natural entitled “Flame support stantial evidence in of the Commis $85,922, at an annual of per cost or 16 cents finding sion’s and determination. objects Attorney customer. The General to the inclusion of cost as an allowed Appliance Program. 3. School expense to Oklahoma Natural on the asser claimed an Oklahoma Natural Gas tion it of providing gas is not a cost $38,000 during year amount test as of However, to service customers. P. A. Wim- operating expense furnishing for home pey, Vice Senior President-Financial gas ranges. economics school classes with Natural, publi Oklahoma testified that through cation was primary vehicle Wimpey purpose Mr. testified that the which program Oklahoma Natural communicated to and was inform educate Okl., (1971); quoted Okl., 11. P.2d 877 with State, proval, System supra, Tecumseh Gas n.10. expended by Natural ment” Oklahoma dur- through of energy
students on conservation gas modern of efficient natural use ing year. the test The General disputed was appliances. evidence not This not have argues that this item should been sufficiently and it substantial to we hold attraction of allowed because “The new in- finding and determination of support regulat- function of a dustry proper not a the Commission. gas proper gas ed it a cost of utility nor is Money Spent Funding of Gas Re- Wimpey ratepayers.” service to Mr. testi- Institute. search encompasses the fied that the item total The Commission allowed the sum expenses incurred Oklahoma Natural’s $433,309, actually spent by the amount which marketing department entire during year, Natural the test in just the many more than attrac- functions funding Gas Research Institute industry tion of new to Oklahoma. as expense. testimony an item of of J. Wimpey Both and testified that the Scott Scott, D. Executive Vice President of Okla utility provided to the state and assistance exhibit, Natural, dis supported its homa attracting local chambers commerce independent, closes that is an not-for- GRI Oklahoma, and that industry new to attrac- profit organization plan to scientific created industry tion of new to the state would be development implement research ratepay- Natural’s beneficial to Oklahoma gas activities for the benefit of the natural adding of new engage example, itself does di ers. For indus- consumer. GRI development, is a rectly load, in research but Natural’s try would build Oklahoma organization planning managing which spreading fixed costs over broader thus pursues through activities con project limiting the base of need for customers institutes, not-for-profit with techni tracts testimony future rate relief. The was un- firms, universities, consulting energy cal disputed substantial and constitutes evi- companies, equipment manufacturers in support dence of the Commission’s find- engaged gas-related and devel research ings and determination reference to opment. Currently, is engaged GRI in re utility’s Development Expense. Area development projects involving search and Expense" 6.Including “Operating gas-fired pumps, improved gas heat fur Things Banquets, Award Such as Service naces, heaters, gas water improved and im Fairs, Livestock Purchased at State Floral proved appliances gas domestic which will Expenses, Space and Rental at State Fairs. provide direct benefits to the residential aspects consumer. On the industrial of its expendi- Wimpey Mr. characterized these activities, engaged GRI is in research to doing as a business necessary tures develop improved heat pump, an industrial Natural, and that Oklahoma other re systems, burner and other conservation business, support the required was civic engaged projects. lated It is in research to it activities of the communities improve safety gas in the distribution of operates. in developing consumer and alternative fuels and re gaseous sources of enhanced Particularly in view of relative techniques existing covery natural items, ly spent modest on these we amounts supplies ratepayers. which will benefit hold there sufficient substantial evi was This evidence was unrefuted was suffi (which undisputed) support dence ciently support substantial the Commis the Commission. *8 finding sion’s and determination that the urges next that Attorney The General funding cost of was a of proper GRI item Commission, arriving at Oklahoma the the in utility’s expense. operating adjusted Natural’s revenues total Development Expense. 5. Area operating the total year, for test “assumed” year the test utility revenues for of the approved The ex an pense $3,700,000 figure be- Develop- $601,198,242, for said item of “Area were without
1349 ing by evidentiary supported Systems, facts. In Tecumseh State,14 Suffice Gas Inc. v. it to say figure appeared that the as a we quoted approval Application of sponsored Exhibit 22 which by was Okla- Co., Okl., of Oklahoma Natural Gas 406 witness, Wimpey, homa Natural’s and sub- 273, P.2d as follows: mitted to the Commission. The Commis- “The setting rates, rate base method of sion staff reviewed and audited Oklahoma overly manner, in an simplified stated is including Natural’s financial records the substantially as follows: $601,198,242 figure, the results of which 1. Determination of an amount called review audit were submitted to the base,” upon “rate the which the Company objection. Commission without The Attor- permitted profit. should be to make a ney challenges figure General the used upon apprais- This amount is based actual all of parties the for the Commission of Company properties, als the and no the first time on In appeal this court. given consideration is to the number of Welch,13 the case Mann (Sylla- of v. we held of outstanding, shares stock or to the court): bus 2 by the value thereof. “Where evidence of a fact which percentage 2. Determination a rate capable proof produced was not the in (6.25% case) apply of return in this cause, trial of a in such fact was a amount, the rate base to determine the right material element of the of the dollars, Company to be allowed to the as plaintiff recovery obtained, to the be- profit or net income. tacitly conceded, cause the same was 3. Company’s Determination of the
the cause was tried
the theory
that if
expected expenses in the conduct of the
plaintiff
warranting
established facts
business, including
things
such
as
recovery,
recovery
operat-
amount
taxes,
ing expenses, depreciation,
etc.
prayed,
should be the amount
the defend-
ant cannot raise the
produce
failure to
4. Determination
rate schedules
proof
ground
for reversal
repay
Company
sufficient
to the
first
in this
time
court.”
business,
expenses in the conduct of the
amount,
plus
profit,
as determined
Mann,
principle
The
followed in
su
(2)
above.”
pra, applies here.
In
proceedings
be
fore
tacitly
it was
assumed
In
Oil
Arkansas La. Gas Co. Sun
Co. of
parties
$601,-
all
figure
that
Pa.,15we said:
198,242 represented Oklahoma Natural’s to
all discrimination between custom-
“[N]ot
tal utility operating
during
revenues
prohibition ap-
ers is
unlawful with
test year.
objection
No
that
it
plying only
to those differences
treat-
supported
factually
was raised before the
unjust
ment which are
or unreasonable.
Attorney
Commission. The
General who
Edmond,
City
also Fretz v.
66 Okl.
See
participated
before the
(1917).
1350 customers, degree to the that residential it. Re Lincoln evidence
sufficient being are subsidized 4th, and commercial classes Wyoming Corp., 1 PUR Service industrial, interruptible, regular first It is Service Commission Public and wholesale for resale customers. fixing of universally recognized that rate further established that evidence leg- public is a utilities rate schedules was customers of return residential public service process, and that a islative Natural of less than the cost to Oklahoma ca- legislative regulatory body acts in a gas to them. Based furnishing natural Wi- approving rate schedules. pacity evidence, found upon such the Commission Company, Natural Gas ley v. Oklahoma steps be taken “that should and determined Okl., (1967). Wiley, In su- P.2d rate prevent adoption any struc- in 1941 pra, we the Amendments said particular result ture which would Constitution, this Article 9 of our return; earning negative rate of class legislatively the power to review Court’s goal, be that as an ultimate rates should quite rate order of the Commission * * * way the rates of structured in such a that our review specifically cancelled. at least fall return for each customer class judicial only, shall extend shall be range within some determined reasonable whether further than to determine return; average system around the rate regularly pursued its au- Commission proceeding rates should and that in thority, whether meaningful progress so be structured sus- are conclusions of realized, on customer eye can be evi- law and substantial tained closely which are more impact, toward rates dence.” also with aligned but with cost of service service, given to the consideration value OF THE SPREAD OR DESIGN ability pay, elastici- customers’ customer RATE INCREASE considerations, ty and since cost social regarded service should not in fact presented be- Voluminous evidence was determining rates. Another sole factor un- all of which was fore analysis such consideration would be an disputed, of the classes customers greatest responsible which class is Natural, Resi- served wit: system risk to the and the increased cost Commercial, resale, dential, Wholesale for attributable thereto.” Interruptible, Regular Industrial and First considerations, the rates of from the upon return residential these Based substantially less commercial customers are the rate increase to Commission allocated return for other classes of the various customers as follows: than the rates of The order the Oklahoma We find that there was substantial affirmed, evidence the basis of the Commis spread or the design sion determined the rate increase.
IRWIN, J., BARNES, J., C. V. C. and LIQUOR OPALA, COMPANY, JJ., HARGRAVE and CENTRAL a concur. partnership composed of Rober Naifeh, Appellee, Z. HODGES, DOOLIN, JJ., and SIMMS t part and part. concur in and dissent in Carey, Beverage Stuart Metro S. d/b/a DOOLIN, Justice, concurring part; in Company, Appellee, dissenting part: I opinion concur in the majority as prospective requiring a BEVERAGE OKLAHOMA ALCOHOLIC party before the BOARD, composed of Joan CONTROL to this Court is Blankenship, Finch, Heber Winston
entertained, (1) request by to make a af- Boydston, Spears Randall Mo Allen evidence, (3) Crisp (2) objection firmative prop- or rain as Members and Richard Beverage er Director Con request for Alcoholic review. Board, Appellants, trol I portion dissent to majority opinion approves rate increase or-
dered and once ordered to spread, design Joseph Seagrams Sons, Inc., an E. application. corporation, Appellant, Indiana HODGES, Justice, concurring part, dis- Heublein, Inc., corporation, Appellant, senting part. I dissent to that majority opinion (1), (4), which is (3), (5), numbered Association, Liquor Retail In my opinion those items of cost Curiae, Amicus should expense. allowed as a proper I portions concur the other Imports, Inc., Bacardi Amicus Curiae. opinion.
majority Nos. I am Rob- authorized to state that Justice Supreme Court of Oklahoma. ert D. concurs in the herein Simms views expressed. Feb.