*1 J., argues DONNELLY, sitting. wherein it that the statute unconsti not tutionally against professional discriminates J., be- WELLIVER, participating engineering corporations by requiring them the Court when cause not a member of secure certificate of while cause was submitted. professional engineering partnerships so required. validity The constitutional of statutes neither touch on fundamen rights
tal civil suspect nor involve classifica upheld
tions must be a rational basis legislative City classification of exists. Liberman, (Mo.
St. Louis v.
engineer registered and to prac authorized Company, Em- Arkansas-Missouri Power engineering tice in this . . state . .” pire Company, Kansas District Electric Accordingly, challenge the constitutional City Company, Light Power Missouri & fails. Company, Edison Missouri Power & Finally, eq urges Maran-Cooke Light Company, Public Missouri Service principles justify recovery uitable Company, Company, Utilities Missouri services rendered princi Rountree. Such Joseph Company, Light Un- St. & Power ples cannot override the mandate of Company, ion and Armco Electric Steel legislature in 429.015 authorized Corporation, Intervenor-Respondents. corporations lien, may have a and it is to No. 60848. government arguments that branch of Missouri, Supreme Court concerning the equity wisdom and En Banc. statute should be addressed. judgment court St. circuit 29, 1979. June County
Charles is affirmed. Sept. Rehearings Denied MORGAN, J., BARDGETT, C. SEILER JJ., WELBORN, SIMEONE, Special
Judge, FINCH, Judge, Senior concur.
43 *3 of fuel costs recovery subject to
by electric utilities a roll-in to jurisdiction. It also authorized under collected amounts rates of basic a sur- prior fuel utilities by the charge of fuel costs incurred during prior clause period in which the collectible which were not was effective but clause, before it of that terms Utility Appellants Con- supersedеd. Missouri, Inc., and Wil- sumers’ Council counsel, separately Barvick, public liam M. *4 Both below. proceedings intervened in the were de- rehearing which filed motions for decision appealed nied and both circuit court to the order of the commission of writ re- County by petition for of Cole 386.510, RSMo view, by as authorized the order affirmed 1969. The circuit court ap- The and decision of the commission. reverse We peals have consolidated. been and remand. long history. proceeding a
This has rather entered March 1973 the commission On 17,730 No. investigation of in case an order investigate the fuel in order to by costs recovery of fuel of clause method A jurisdiction. its electric utilities within clause, a filed as a fuel clause tariff, which part utility’s of an electric or de- automatically to increase allows it power per kilowatt- charge for crease the Barvick, Gregory Christof- William M. J. of the amount hour to consumers fel, City, intervenor-appellant. Jefferson for utility’s fuel increase decrease Liberman, Washington Samuel H. Uni- costs, monthly basis. Such usually on Law, Skinker, versity School of Lindell & permitted been had before clause never Louis, petitioner-appellant. St. for rate schedule part a residential become Counsel, Phillips, Paul Rob- W. Asst. Gen. permitted although it Missouri, has been Swearengen, ert L. Hawkins and James C. large commercial part as a of industrial and City, Jefferson W. and Wil- Stewart Smith not before schedules, matter which is Co., August Jaudes, liam Elec. L. E. Union this state courts of in this case. The us Griesedieck, Louis, respondents. St. validity of on the passed never have before held hear- such a clause. The SEILER, Judge. on Febru- ings in the summer giving order case, 1,1974 report and ary court issued a This transferred from the application of appeals, City district, opin- temporary authorization prior Kansas (FAC) to all sales of 83.06, pursuant concerns the ion to rule fuel Sep- On electricity year period. for a two lawfulness reasonableness of Public began re- the commission (PSC) report and or- tember Service Commission’s FAC, as a of the 17,730. operation order der cause No. In that view gath- 17,730. It No. case of an fuel continuation of authorized the use automatic Any any given ered sales in month. information from the utilities as to and actual experience their with the held hear- into a fuel was converted change in cost 1,800 ings February 1976 power at which over change per cost kilowatt-hour of heard, pages testimony re- were which arrived by applying sold a formula filings ceived numerous of briefs and exhib- nec- BTU’s of heat average number of its. The 1974 order was extended until essary generatе one kilowatt-hour April April 1976. On 1976 the com- adjustments technical electricity. Certain mission, by decision, a three to two entered made, the fuel figure equal to and a report and order authorizing continued (i. e., adjustment charge the increased use of a modified FAC. effectiveness the base decreased cost of over original May FAC was extended cost) Thirty days notice was determined. 31, 1976, permitted and the new FAC was given ad- to the commission billings commencing become effective on justment included on consumers’ then was 1, 1976, June and was made effective until lag-time day bills. Because of 60-120 31,1978. May We understand the FAC was (each utility’s depending on its lag varied extended order of the commission until figures practices), required gather either decision this court in this case or charge, and compute the FAC 31, 1978, earlier, December whichever was changes in fuel requirement, the notice again and was extended order of in, were added example, costs October commission until such time as the commis- January 16 to for the December bills *5 sion had appropriate ruled on the amount of safeguards, Certain readings. 15 meter the adjustment, utilities’ annual fuel which requirement that information rel- such as a yet has case, occurred. In the any of whether fuel evant to a determination cause is not continuing mоot because of the given the commis- costs in fact increased be importance question of the au- whether an sion, were ordered. adjustment fuel charge tomatic is authoriz- light ed fact, method, in the of of As a of inexact which we take result this rather notice, that adjustment charge a fuel charging in Janu- still which involved customers part of customer question bills and the ary for in fuel costs incurred October recur, authorization for its yet use will according of ki- apportioned to the number judicial review, could evade State ex rel. October, utility the ov- lowatt-hours sold in Gomm’n, Laclede Gas v.Co. Public Service the number of errecovered its full costs if 535 S.W.2d 565 (Mo.App.1976). January greater in kilowatt-hours sold were October, than in underrecovered I. Adjustment The Fuel Clause were less. report In its 1974 and order commis the
sion reviewed the statutory authority for order, modi- In its the commission FAC, authorization basically of an relying previ- adjustment fied the had fuel on Burton, Hotel Continental v. ously approved. set forth a model tariff (Mo.1960) 393.130(4), and § RSMo was to be indicating how the new FAC By discussed infra.1 its order it authorized compliance with this tar- filed. Substantial recovery adjustment of fuel costs in two utility which wished required any iff was parts, cost, the recovery basic fuel adjustment The a fuel clause. utilize fuel charge changes for up or reсovery permitted only coal order down in the cost of fuel from the base cost possibility the costs. In order to eliminate previously by set the commission. recovery because of a of under over fuel,
Basically, possible switch the source the 1974 fuel for- by mula heat-rate based formula permit- authorized the old the commission utility ted dollar part replaced by permitting to file an FAC as was a formula tariff permitted recovery schedule. The of fuel costs above FAC for dollar company to determine its actual fuel cost cost. This formula also below the base fuel statutory are to RSMo 1969 unless indicated.
1. references otherwise Further permitted recovery cally, previously of the included cost of fuel costs cost, component which power purchased from of the part FAC became a base The generated by sources rather than by utili- that amount. consequently rose ty- temporari- was adjustment charge thus fuel zero, charge because ly any new formula, Under utility the new was from figured was thus increased fuel cost required actual, still to determine rather higher base cost. estimated, than changes fuel cost for the Surcharge month in II. The which an increase in costs oc- curred, but was allowed to use estimated The commission also ordered figures prоjected sales the month as of adjustment revenues “uncollected fuel charges which increased based on the by lag under the April caused 1976” changed fuel costs would be billed. Once collected, peri- over 1974 clause would be actual sales became known a correction fac- months, under a od of not than twelve less tor would be included a later month’s surcharge plan be submitted collection billing. Further, period 30-day notice utility, each way, part was eliminated. In this of the recover surcharge designed regulatory lag incurring the between costs April up incurred fuel cost increases passing on to them the consumer was increases 1976 which safeguards, including eliminated. Certain made charges to not been the customer had monthly reports to the required by (as lag of the because a result commission, annual were audit re- order), charges were not these quired. prescribed procedures collectible under the As an example operation of the expired that order in the order before commission, 1976 FAC authorized May charges These also on assume that fuel costs have risen in Janu- under the permitted collected to be ary. Once actual costs for that 14,1976, approved April FAC on known, will them to the submit *6 commencing billings became effective commission. It will also its estimat- submit 1, June resulting ed sales in March and the fuel filed. dissenting opinions Two adjustment charge to be used in the March that the pointed out Commissioner Fain billing. The staff will the balance have only on initially approved FAC had been February the month of these fig- to check it basis, concluded that was temporary March, adjust- ures. In an fuel increased tool, partic- regulatory very as a useful charge During ment will take effect. substantially less- ularly in had not that it April, utility the will the determine differ- He also the caseload. ened commission’s ence between its actual sales and March FAC to use permitting stated that estimated to figure sales used March was un- power purchased cover ouRof-state charge. figured A correction factor will be police is to because it difficult desirable adjust any inaccuracy, and will be commission’s purchases outside the from figuring charge. included May in commenda- jurisdiction. He did note that same procedure The would followed each be added. safeguards been ble additional had month, February’s so that costs Al- Mulvaney also dissented. Commissioner figured applied April in March and esti- greatly was though feeling the clause sales, April mated actual sales would be difficul- strengthened, policing he believed figured May and a correction factor be required it general confusion over ties included billing, in the June and so forth. its elimination. The also raised the fuel cost for PSC base Issues Raised III. utility filing each an include FAC to appeal on 12 A of issues are raised annualized cost of for the month number into four may be period preceding They of this divided commission order. case. against authorization general arguments This is “roll-in” costs. called a of fuel Basi- 47 First, the FAC. it argued is FAC, there is thorization for an we do not reach the simply no statutory authority for use of an second and third issues raised. automatic all. IV. General Powers of Public Second, even if statutory such is Service Commission
found, the
PSC can
authorize
FAC
The
Service
first Public
Commission law
case,
in a
contested
applica-
rule
1913,
1,
Mo.Laws,
was enacted in
S.B.
whole,
ble to the industry as a
as
is
1-140,
previously
has
at 556. This court
§§
Third,
claimed was done here.
even if
recognized
purpose
protect
its
was to
rule method
appropriate,
require-
is
against
consumer
the natural monopoly
findings
ments for
proce-
of fact and other
public utility,
public
of a
of a
provider
required
dures
chapter
386 were not
necessity, May Dep’t
Co.
Stores
v. Union
Fourth,
followed.
case the sur-
Light
Electric
& Power
341 Mo.
charge is unlawful as retroactive ratemak-
(1937),
while at the same
ing in order to
past
recovеr for
losses.
permitting
recovery
time
utility
appeal,
On
our role is to determine
just
and reasonable return.
report
whether the commission’s
and order
only protec-
“Prior to its enactment the
and,
so,
was lawful
whether it was rea
tion
consumers as
rates and service
sonable,
Dyer
ex
v.
rel.
Public Service
right
was their
to make
best
contract
Comm’n,
(Mo.1960),
S.W.2d
competition
could with utilities in
denied,
cert.
U.S.
S.Ct.
with each
for their
business. This
(1961).
L.Ed.2d 384
feeling
law was the
of growing
result
pre
commission order has a
that such
competition, as existed
sumption of validity and the burden is on
field,
inadequate
protect
pub-
those attacking
prove
it to
invalidity.
provided,
competition
lic.
lieu
800;
Id. at
State ex rel. St. Louis-San Fran
right
and the
private bargaining,
im-
cisco
R. Co. v. Public Service
partial
reg-
every
treatment of
one under
S.W.2d
(Mo.App.1969).
559-60
In de
ulations
and enforced
termining
statutory
for,
authorization
state.
.
.
.
also
This court
said
of,
or lawfulness
the order we need not
recognized
Public
Law
‘cer-
Service
defer
commission,
which has no au
princi-
tain generally accepted economic
thority to declare or
principles
enforce
ples
conditions,
wit,
public
that a
equity,
law or
Bd. of Public Works of Rolla
.
.
.
is
its nature mo-
Corp.,
Sho-Me Power
362 Mo.
nopoly;
competition
inadequate
(banc
1952). However,
as to
and,
protect
exists,
*7
public,
the
if it
is
matters of reasonableness we cannot substi
waste;
likely to become an economic
tute
judgment
our
for that of the commis
place
state regulation takes the
of and
supported
sion if it is
by substantial and
regula-
stands for competition;
that such
competent evidence on the record
as
tion,
respect
patron
to command
or
from
whole, State ex rel. National Trailer Con
owner,
must be in the name of the
voy,
Comm’n,
Inc. v. Public Service
488
overlord,
state,
and to be effective
942,
S.W.2d
(Mo.App.1972).
944
possess
power
intelligent
must
of
visi-
We have
application
supervision
concluded that
an
tation
of ev-
plenary
of
and the
FAC to
ery
finally (how-
residential and small commercial
business feature to be
customers,
case,
as was done in this
ever invisibly)
qual-
reflected in rates and
”
beyond the statutory authority
ity
May Dep’t
of the com-
of
v.
service.’
Stores
roll-in,
mission and
FAC,
sur-
Light
Union Electric Power and
charge were
48,
therefore unauthorized and
quoting
City
S.W.2d at
ex rel.
of
State
cannot continue
Comm’n,
The question
effect.
of
Sedaba v.
Public Service
use of an
in regard
291,
FAC
497,
(Mo.1918),
to other customers
Mo.
S.W.
is not an issue in
547,
this case. Because of our
appeal dismissed 251 U.S.
40 S.Ct.
resolution
question
of statutory au-
(1920).
In
be
electricity,
these
§§
Chapter 386
public
authorizеs a
service com-
393.270(3).
An interim rate increase
Chapter
mission and
393 sets
rules
forth
be
ex
requested
emergency
where an
need
electric,
sewer,
regulation
gas,
etc.
ists,
ex
Co. Public
rel. Laclede Gas
corporations.
given jur-
The commission is
Comm'n,
(Mo.
Service
manufacture,
isdiction over the
sale and App.1976);
393.150.
§
distribution
electricity,
386.250(5),
§§
regulation
necessary,
is
system
Such a
393.140,
pow-
RSMo 1969. This includes the
despite
expense
required to
and time
supervise,
er to
among
things,
costs,
hearings and
investigate utility
hold
service;
quality
production
and of
to
fix rates because:
standards;
improvements
order
to
set
com-
“despite the
of substantial
existence
investigate
inspect
to
methods
petition
types
utilities], actu-
[between
utilities;
facilities of
require
and to
theoretical,
al
as
.
.
. some
as well
filing of a
report
verified annual
on the
by the
alternative to
determination
price
financial
physical
situation and
condition of
plainly is
supply
laws of
demand
the company, etc. Section 393.140. The
rates and stan-
necessary. Regulation of
power
require
commission also has the
to
all
technique we
is the
companies
electric
to
with
dards of service
“file
the commis-
prob-
and to
print
keep open
public
dealing
sion
have evolved for
with
inspection
showing
schedulеs
lem,
operation].”
all rates and
[government
short of
charges made,
established
enforced or to
Priest,
Reg-
Utility
of Public
Principles
charged
enforced,
be
all forms of con-
(1969).
ulation 2
agreement
regula-
tract or
and all rules and
designed
protect
system
“This
is
con-
rates, charges
relating
tions
and service
against
compe-
exploitation
sumers
where
§393.140(11).
used or to
used .
.
.”
tition is
or inade-
inherently unavailable
change
No
shall be made
30 days
without
quate,
insure that these industries
days
except
notice and
publication
At the
public
will serve the
interest.
authorized by the commission. Id.
companies
provides
same time it
these
393.150,
a utility may
Pursuant
opportunity
assurance
stating
file a
charge,
schedule
a new rate or
invest-
return on their
earn a reasonable
regulation,
rule or
which shall become valid
expan-
capital
ment and to attract
suspended
commission,
unless
see
Joseph
C. Swi-
quoting
sion.” Id.
State ex
County
rel. Jackson
v. Public Ser
Comm’n,
dler, Chairman, Federal Power
(Mo.
vice
532 28-29
speech
1965).
(February
1975),
denied,
banc
cert.
U.S.
the above
apparent
from
As
(1976),
S.Ct.
50 Co., 466, (Maine 1958). it, er 22 469 cheapest
most
and is
to
rather
P.U.R.3d
cost
thus
668-69;
cheapest
Foy, 13
L.Rev. at
than the method which is
overall.
See
Vanderbilt
969-73; Martin, 47
at
Trigg, 106 Pa.L.Rev.
g.
Foy,
e.
discussion
cases cited in
See
and
Schedules,
at 310.
Miss.L.J.
Adjustment
Utility
Cost
Rate
663,
(1959-60);
Vanderbilt L.Rev.
public service commissions
Numerous
Trigg,
Utility
Escalator
in Public
Clauses
adjustment clauses in
have
Schedules,
964,
Rate
969-
U.Pa.L.Rev.
arguments principally
the face of
above
(1957-58); Martin,
Adjust-
The Fuel
Fewer
of a fear of inflation.
because
Regulatory
ment
and Its
in the
Clause
Role
legal
for the
have
basis
courts
addressed
Process,
(1976).2
47 Miss.L.J.
adjustment
clause.
use of an automatic
claus
leading
approving such
The twо
cases
Conversely,
ratemaking meth-
traditional
es,
cases,
generally
are
relied on
other
subjected
ods have been
to severe criticism
Co.,
Virginia
Norfolk v.
Electric and Power
they
expensive
that
are
and time con-
505, 90
(1955),
and Chica
197 Va.
S.E.2d
suming
utility
of both
detriment
Comm’n,
go
13 Ill.2d
v. Illinois Commerce
adjustment
and consumers. The fuel
However,
(1958).3
right provided or to that “the amount of an increased decreased and that expense represented by gain the or company item amount of the lose revenue exactly tax the by economy equal valid is not affected in an to in- amount operation respects by greater other or to in creased or decreased amount the by pay Consequently, volume of sales or in the the tax item. or- variations items”, any expense operates amounts of id. so rate of at der that the same, purpose necessity and that the sole оf the TAC return remains the provided, only to the that the substan- recover exact amount of course gross receipts operation increase or in is change company’s decrease in the tial the ” gross receipts tax. It tax . . . id. concluded that: the rate added, except in (emphasis final at 81-82 supervi- “The does commission not lose clause). sory operation company’s control over be- cause of the automatic tax gross receipts the The distinction between present clause contained in the order. to the and other items of cost tax subject company’s The rates are still by the court in underscored was further supervision. the commission’s Those discussing of the com- the reasonableness however, rates, are not and cannot be order, that it noted the mission’s wherein of, affected one iota the amount evidence showed: of, any change money the the amount operating ex- “that the items company to pay must collect with which related to the pense directly which are tax, gross receipts except its in the exact gross gross the company’s revenues are amount by which that tax is increased or tax; that receipts tax and the state sales added). (emphasis decreased.” Id. separate cate- thоse two fall into items for the company collects gory; that the is say That the tax was a direct paid is the state the sales tax which charge, exactly proportioned to the custom- separate as a item added customers bill, er’s directly the amount of which was bills; proposed that the order determined the amount of that bill. Ef- separately gross receipts be tax would fectively, imposed the tax was on the of tax but the amount itemized on bill bill, amount of the and hence customer’s part of the customer’s due would be a governed by amount was the other amounts is the cost, e., cost total i. the customer charged change Any customer. in other is receipts tax gross same whether the cost change factors could not this direct is included separate item shown as relationship, any change and thus in the tax such; gross rate as that the steam properly could into be taken considera- item receipts expense tax is an tion under regard the TAC without segre- an item with as well be dealt changes in other costs and without disturb- items; that gated expense from other ing statutory changes scheme that tax) do (other than sales other tax items rates return not occur without consider- segregated such not lend themselves to ing all public cost factors and without is receipts tax gross handling; that understanding pro- awareness and of rates city by the time subject change posed charged. to be added). (emphasis council.” Id. at 84. context, In this the court concluded that justi- evidence court that concluded lawful, the TAC was despite the fact that that order fied the commission’s hearing no new would be held before each TAC was lawful. pursuant made TAC response change gross receipts Hotel readily apparent is itself, tax hearing because at the below in respondents’ support does not Continental ratemaking affirm, case in which TAC was stated, we position. While it approved: setting reasona duty of as a of its part power rates, has
“the took into consideration ble the commission dif- expense might operating the tax treat some items of the circumstance ferently others, gross than recognized by determining ured amount of also separate such treatment be effectuat- receipts applicable must to the amount of tax compliance ed in with all statutes customer’s The fuel bill.
governing the purpose PSC and with the charge estimating the amount figured by behind those statutes. To allow an auto- given in a of sales be made which will *12 adjustment tax, receipts matic gross of a as allocating to each kilowatt-hour month and out, carefully pоinted this court so did not the increase in fuel percentage a sale of statute, conflict with the purposes Thus, of the prior a month. during costs incurred for tax separately items so treated were higher January, in if costs are incurred in oper- different kind from other items of each will amount of these costs customer expense. is, ating That or not whether depend part only in March will in not pay charge tax increased or decreased could electricity he on the amount of uses but on company’s have no effect on the rate of electricity used. If the total amount of return, was, for charge, whatever it made, proportionate his fewer sales are go government would and would not charge greater than if more sales will be company’s affect the revenue. It could not are made. in an charge
result excessive to the custom- adjustment charge Additionally, the fuel er, directly for it was apportioned to his use utility’s management be aby will affected utility, of the and its amount could be ex- fuel, of choice of decisions such as choice Further, actly determined. no economies in unit, efficiency generating of that unit operations other could offset increased matters. The operational similar aver- cost of tax. age also bе af- per cost kilowatt-hour will contrast, during
In energy peak adjustment a fuel fected overall use of hours, generators may clause would not be of when less scope. such limited efficient supply While could all nominally be have to be added to considered a relating “rule rate”, to a individual consumer power, though as was the tax even adjustment clause, during electricity primarily in fact the commission does not use thereby gain power Further, permit non-peak its use if since in our mo- hours. would effect move in and out of society initiate a new method of bile customers granting particular utility as territory increases. As noted in Hotel Continental, careers, (such they jobs new customers operating change non-tax costs fuel) in, separate charged fall into a be for wholly category example, will October than does the tax fuel costs incurred in cost at issue in that an actual increase in case. Although in respondents August their customers were us- attempt brief when different distinguish adjustment conditioning, etc. We ing electricity a for air fuel clause adjustment labor, from an imply do not the method of sup clause mean plies, by the commission is construction and so forth on the allocation basis authorized, one, largest single item, good that fuel is the expense or reasonablе argument given factors they simply in oral these admitted that but to state that directly assignable to the rationale behind costs are not authorization of a fuel ad fuel justment and thus that justify clause used use of the customer could be adjustment category as a covering put cannot be in the same clauses these other cost, which enters operating expense. permit gross receipts items To tax all relationship of such costs to the service automatically adjusted picture be once over, is at least company create a and consumer approval third method month, simply is added as contemplation rates within the the bill is authorizing charge the month to the bill in statutes. paid. ap- Unlike tax clause Continental,
proved of a charge Finally, Hotel we note that is rate of return of not a direct TAC cannot affect the charge. adjustment charge operation A tax cannot fig- utility, is since economies Comm’n, used to increase or directly. decrease it Public Service
While large fuel costs to a extent de- (Mo. 1977); Springfield banc ex rel. pendent general on market conditions and Warehouse & Transfer Co. v. Public Service costs, periodically fixed contract the utility Mo.App.
does exercise control its fuel over costs (1949). negotiates when it fuel contracts or chooses sup- by respondents The sections cited generat- buy what fuel to burn in what position strengthen port their do not it. ing possible unit.5 also to offset fuel 393.270(3) 393.130(4) Section refer savings costs with from efficiencies no “sliding Although specific scale” rate. salaries, operation, wages, areas of such as respon- reference to this term was made taxes, depreciation sup- materials and argument, brief or the utili- dent’s in oral plies This, course, other than fuel. does argue commission that ties did before the *13 necessarily adjustment mean that a fuel provision a sliding for scale authorized a statute, by clause is not but authorized it adjustment in their briefs and does mean that it is as not authorized sim- responded such appellants this court to ply reasoning an extension of Hotel argument. part The relied Continental. We must now determine provision order. on this in its 1974 Since by whether it is otherwise authorized stat- provisions respondents did refer us ute. term, containing this we will discuss its Respondents difficulty themselves have an FAC. applicability to use of pointing provisions to what in the statutes generally specifies Section 393.130 give them to adjust- utilize a fuel charged the same rate all within must be brief, ment clause. In their supra, as noted class, the same should not be but that they simply argue that “it is clear that the “еstablishing sliding prohibit construed to a statutes and case law in Missouri authorize a the automatic period scale for fixed for provisions.” such In argument, they oral electricity, charges gas, of specific admitted that it was to find hard . service rendered or to be rendered authorizing FAC, sections but we stockholders of paid and the dividends to be approve 393.130, should it on the basis of §§ ” corporation . . . . such . electrical 393.140, 393.270, through applica- 393.130(4) supplied). In order (emphasis § principle tion of the an agency that where 393.270(3) scales, excepts permit sliding § given is authority, broad supervisory defer- require- sliding the case of scale from given ence interpretation should be to its of price that the the commission ment fixed statute, citing State ex rel. Jackson Coun- be the price. maximum ty, 20, 532 S.W.2d ex rel. Laclede Co., Gas FAC’s 561. Since have in Bertha “sliding A was defined scale” regard been used in large to industrial and Co., Electric Mining Empire A. Co. Dist. commercial users for years, because (1921) 622, as Mo.App. 235 S.W. jurisdictions them, approve posit- other it is charges tying automatic ed approve that we should them. also In that paid dividends to be stockholders. case, plaintiff to hold the PSC, sought legislature, It is for the not the into with defend- contract which it entered jurisdiction. set the extent of the latter’s lower rates January The mere fact that ant on ap- the commission has proved with the rates past, similar which were accordance clauses in the commission, permit them, opposed as states is irrelevant then fixed permitted statute, com- higher under our rates an order fixed 1,1918. Philipp Lines, January State ex rel. Inc. Plaintiff Transit v. mission effective May 5. In the Fuel esti- edition of the Wall Street of reduced cost estimates. cost Journal, p. reported $137 it is million than that the mates were said to be less Tennessee Valley Authority considering cancelling projected is in- earlier fiscal 1979 because of 6.5 million, plants percent, electricity production by hydroelectric $100 rate in- creased July power plant. crease scheduled to effect in and nuclear take because argued improvement January contract and extension of the excepted by (now RSMo increasing § naturally service will result in 898.140) being “sliding scale" with the ef- the volume of the business hourly variety, as it varied the rate accord- increasing suffi- fect of the net income ing per to the number of hours used month ciently permit in the reduction provided discount which increased for a decreasing the in- actually rates without as the hours of use increased. come, Recognition . this fact . . scale, sliding is the basis of the so-caliеd court, noting only pos-
The
after
that the
whereby
municipal
the income which the
provi-
sible authorization for the contract
scale,
public utility
permitted to earn is in-
sliding
sion
was that it was a
went on
sliding
charged
ar-
creased as
for the ser-
to hold that
it was not a
scale
rangement
A.
statutory
within the
authoriza-
vice
is decreased." Bertha
rendered
reasons,
Mining Co.,
(emphasis
tion for various
one which was
at 510.
235 S.W.
sliding
that such a
scale
for the
“must be
added).
Bonbright, Principles of
See
charges
automatic
Rates,
(1961).6
Utility
263 n. 21
Public
electricity
.
.
. and the dividends to
legislature
provi-
The
has re-enacted the
paid
stockholders.” Id. 235
S.W. at
Mining
sion construed in Bertha A.
quoted
approval
court
with
the follow-
presume
we
in the
must
thus concurred
ing from In re Boston Consolidated Gas
interpretation
“sliding
scale” set out
Company, Mass.
Light
Board of Gas & Elec.
Crawford,
therein.
State v.
*14
Commissioners, 1919A P.U.R. 699: “The es-
dismissed,
(Mo.1972), appeal
317
409 U.S.
sential characteristic
reg-
of this method of
811,
176,
(1972),
93 S.Ct.
§ in 2 Pond Public Utilities state (4th 1932): ed. support § their the statutes as a whole do power adjustment clause. to utilize a fuel “The fixed rate can be reduced without out basic materially generally Section 393.130 sets affecting by the net income improving governing giving the and ade extending the service and rules safe the furnished, field quate by utility, prevents to which the service is the service because a reduction the preferential being given rates as well as rates one customer. five, ap- 6. But see El Dorado v. Arkansas been filed with and Public Service “shall first have Comm’n, commission”, 393.270(3). proved by 235 Ark. This S.W.2d § (1962), interprets “sliding per- requires actually approve scale” to that the commission mit a fuel rate, clause. There no dis- merely permit rather than it to take “sliding cussion in this case of course, what scale" Of the commission’s order stat- effect. means; simply provi- the court states that this ing in advance filed in accordance that tariffs applies sion clauses. As noted formula not be sus- with the established supra, interpreted we have not so the term. requirement. pended to this would not conform Parenthetically, we note that under our stat- sliding rate, ute a scale it effec- before becomes general powers property determining utility’s 393.140 Section sets out the gives phrase of the proper commission. While statute rate of return: “[T]he general supervisory power ‘among things’ clearly PSC over denotes utilities, gives charges is supra, ‘proper electric as discussed of such determination’ factors,” ex upon PSC broad discretion within the based ail relevant powers circumference Public conferred on it rel. Missouri Water Co. v. Service by legislature; (Mo.1957), provision cannot in give itself change PSC that: making legisla-
rate scheme up by set ascertain- may “however difficult be the ture. factors in ment of relevant material just and reasonable establishment of empowers Section 393.270 the commission can rates, expediency impulse neither nor investigate matters about which com- requirement be substituted for the plaint made, investigate be toor by such law’ rates be ‘authorized ascertain facts to the exercise of ‘supported substantial by competent and powers and to fix maximum rates after Article upon evidence record.’ whole hearing investigation upon considera- Missouri, V, V.A.M. Constitution of § tion provi- of all relevant factors. These S.” Missouri Water give them, sions authority, no as we read establish a use variable rate adjustment clause, and in fact disallow such stat- Although quoted section in that establish fixed-rate requirement “complaints”, ute refers to rather than a system, variable-rate 393.- is of that all relevant factors be considered 270(2), (3), prescribe the manner suspend the file and applicable course which such rates are to be established. was itself method also. Missouri Water Co. company from appeal by the water discussed, supra, As rate increases can hearing the commission after fixed normally either the file and As suspend under the file and method. method, suspend through a full blown *15 v. Union Dep’t Co. May stated in Stores method, hearing. rate either a max- Under Co., 107 S.W.2d Electric 341 Mo. by imum rate must be fixed the commis- rel. (1937), in State ex quoted approval with general sion. with keeping This is in the at 28: County, Jackson statutory system discussed above of fixed public util- by rates filed that a provisions the utilities to remain in “These mean suggest to the per- filing effect until a approved ity may by new rate is schedules Although hearing mitted to take and classifications effect. no commission rates reasonable, by required just the a and commission is before new which it believes are them, they goes and, accepts rate into effect the file and if the commission rates, commission suspend method, the the commission is nonethe- are authorized but required, question less determining in whether or not alone can determine rate, suspend charge.” to a proposed the to consider all make them lawful proper factors relevant maximum utility to utilize By permitting an electric price 393.270(4) charged. to be Section commission the adjustment a fuel states that the commission: the to permits to be considered one factor “may judg- consider all facts which in its determining in exclusion of all others proper ment have any bearing upon a be increased. a rate is to whether or not question although determination of the itself be is, may FAC not although the That complaint not set forth in the and not utility’s a rate, an FAC in by approval a therein, allegations within the contained in advance schedule, rate the commission regard, things, with among due other to a decrease) (or in rates approves any increase average return . . . .” reasonable through ap- autоmatically result which will of fuel to interpreted provision, plication price This if the court has of the FAC It would addressing utility a case the method of valuation the increases or decreases.
S7
exalt
ap-
system,
average
form over
con-
say
substance to
understand such a
the
proval of an
proper
FAC is
because the
expected to
so. It
sumer could not be
do
merely
relating
FAC is
“rule
a
to a rate"
the
say
no
to
that few understand
answer
itself,
a
rate
where the effect
filed;
argument mere-
previously
rates
this
permit
approval
such
is to
in rates
increases
ly
the need to avoid further
demonstrates
in a
provided by
manner not
the statutes.
complication.
dangerously
would also
come
least
supra,
rationale be-
Finally, as
noted
by
close to abdication
the commission of its
adjustment clause could be used
fuel
hind a
power
just
rates,
to set
reasonable
justify
to
automatic
the commission
has determined
advance
ex-
remaining operating
clauses for most
charge
fuel
made in accordance
a
penses. Having established
toehold with
prescribed
with
proper
formula will be
Continental,
will
our
we
decision in Hotel
whether,
regard
light
without
to
of other
slope”
“slippery
down
travel further
factors,
cost
charge
overall
is reasona-
bal-
dismantling
carefully
risk
would,
course,
ble. The
re-
system
by
anced fixed rate
established
filed,
tain
suspend any
rate
legislature.7 While in itself
clause
looks
effectively,
nominally,
but
if not
the burden
innocuous,
of fuel
while
cost
going
through
reports and
numerous
high,
look
clause
permit such a
would
checking fuel costs would be shifted from
statutorily-man-
lead to the erosion of the
to the commission. As once stat-
system.
legislature
dated fixed
If
by
ed
the Illinois Public Service Commis-
approve
wishes to
automatic
sion,
power
set
rates
would thus
clauses,
so
can of course do
amend-
delegated
sure, permissively
“to be
and sub-
statutes,
up appropriate
ment of the
and set
ject
recall,
but none the
effectively,”
less
statutory checks, safeguards, and mecha-
Re
Rockford Electric
1917F P.U.R.
public participation.
nisms for
As of
(111.1917).
only exception
date the
the fixed rate
Not
would
system
legislature
is a slid-
permit new
go
“rates” to
into effect with-
ing
imply an intent
scale rate. We cannot
out consideration of other factors and thus
exception
where to
so
allow further
do
without
framework which
determine
upset
system
up
fixed-rate
set
if overall rates
reasonable,
are
it would also
companies
statutes.
If
electric
negate the
393.140(11),
effect of
faced with
situation be-
“emergency”
аll
printed
rates are
open
public
costs, they
can take
rising
cause
inspection. The purpose
providing
of thus
advantage
up by the
of the method set
the customer
ascertaining
with method of
*16
legislature to
with
situations and
deal
such
what rates are in effect
enabling
him
on the basis
file for an
increase
interim
to take the appropriate
steps
challenge
rel.
ex
hearing,
an abbreviated
State
those rates
destroyed
would be
with a fuel
Co.,
Laclede Gas
535
at 566-67.
adjustment
Upon
clause.
reference to the
authority
permit
filed rate
a
utility,
schedule of the
no
the con-
Since there was
adjustment clause,
sumer would be
was
au-
confronted with a
fuel
no
formula
there
and a rate filed
a
permit
result thereof.
a
the amount
thority
While
roll-in of
it is debatable
representatives
large
old
previously
fuel
under the
costs
collected
industrial or
might
commercial customers
surcharge
or to
allow
“
See, g.,
Smith,
817, 837,
slope
slippery
e.
v.
Bounds
430 U.S.
decision would ‘lead us down
(1977)
(Rehnquist,
consequent
S.Ct.
amounts not their increased fuel costs collected under either clause recover While they just but to which the rate. utilities claim are maintain a and reasonable they have collected judgment entitled. We thus amounts would reverse under the exactly the circuit match those collected affirming court the order of clause, a refund of adjustment to order adjustment commission fuel allowing the fuel clearly be confis- the latter amounts would surcharge. roll-in and the of this refund catory, and to order an offset VII. Remedies would have by what a “reasonable rate” (A) FAC Roll-In making (retroactive) rate would be been requested Public in oral ar counsel court, something we can- the order of this gument that we however, remand to the commission is not surcharge, not do. The for a determination it of the excess subject difficulty. this amounts collected the utilities under the (B) Surcharge
FAC over that have col just rate, lected under a and reasonable ap of the FAC the terms Under which would properly include rate increases not be proved expenses could authorized, and to any order a refund of day lag time until a 60-120 recovered after such excess. amount of proper required to determine the lag. this recovery. The 1976 order reduced However, to direct the final However, fuel costs incurred to determine what a reasonable rate would (June 1, date months before effective require have been and to a credit or refund 1976) in 1976 of the FAC amount collected in excess it because collectible under the old clause ratemaking. amount would be retroactive necessary lag-time had expired before The commission has the to deter thus enacted a elapsed. The commission charged, mine the rate to be 393.270. In to collect to allow utilities surcharge determining may past so it consider excess the old clause expenses when these incurred recovery insofar as this is relevant under the in effect but not collectible determination of what rate is surcharge This expired. old clause before provide just return in the reasonable intended to illegal that it is is of course future, and so avoid further excess recov could of monies which allow collection ery, see ex Telephone rel. Co. General of a fuel collectible due to authorization of the Midwest v. Public Service However, if a fuel even clause. not, (Mo.App.1976). may S.W.2d 655 permitted, clause were howеver, already redetermine rates estab surcharge question arises whether paid lished and depriving without it is unwar allowable whether would be (or original consumer if the rates were any theory. ranted low) ly too of his property without due this order was process. argue v. Grocery See Arizona Co. Atchi The utilities son, Co., Topeka assuming & permissible, Santa Fe R. U.S.
370, 389-90,
the commis-
permissible,
76 L.Ed.
because
S.Ct.
348 clause was
(1932);
uncollected
right
Board of
these
Utility
Public
Commission
sion had a
to treat
expenses,
Telephone
expenses differently
ers New York
271 U.S.
than
*17
expenses
(1926);
fuel
Light
that
these are “current
S.Ct.
L.Ed. 808
(with an admit-
City
being
foot v.
Mo.
Springfield, 361
236 which were
collected
adjust-
(1951).
lag)
previous
under the
ted
ment”,
sur-
thus their collection
This does not
that the utilities have
mean
making.
charge was not retroactive
profit
received a windfall
of the amounts
disagree.
We
illegally collected.
no fuel
If
effect,
that
mean
clause or roll-in
The utilities
cannot
had been
charge is
right
utilities would
to file
of the fuel
have had
amount
expenses
rate,
(“current”)
by present
an increased
in order to allow them to
determined
collected,
e.,
in the month
rate making,
setting
the fuel ex-
is retroactive
i.
penses
two or three months earlier are
permit
rates which
to recover
simply used as
month”
be-
expenses,
past
“test
or
it to refund
require
losses
which
cause from their
and under
com-
past
profits
brief
under a rate
excess
collected
order,
apparent
mission’s
it
their
perfectly
expenses plus
that
that
match
did not
complaint
recovery
is that no
actually
was had for
rate-of-return with the rate
estab
expenses
lished,
in one
Utility
incurred
of the months
Board of Public
Commission
during
charge
which the fuel
Telephone
was in effect.
ers v.
York
at
New
U.S.
“surcharge”
363;
There would
Springfield,
be no need to
Lightfoot
v.
S.Ct.
present expenses were at
expenses
issue for
are used
then
The utilities take the legitimate expectation risk in monies collect rates filed inadequate, them will be permit keep manner. them to ed in this To excessive, each approv time seek rate to them these would be a windfall monies permit To al. them to collect additional leave their without a customers *18 simply amounts remedy unlawfully because had additional col recovery of this past expenses not covered either clause an inherent surcharge. lected We have
60 RENDLEN, Judge, concurring.
power
afford redress for an erroneous
paying
results in
over
judgment which
statutory
agree
I
is no
authori-
that there
sup
one to
without
monies from
another
сlause, therefore, I
ty
for a fuel
port
and to direct that restitution be
of law
energy
cris-
times
must concur.
In these
Arkadelphia Milling
Louis
made.
Co. v. St.
we
must reach
regrettable
es it seems
134, 143-46,
S.
Ry.W.
U.S.
S.Ct.
Legislature will
hope
I
this result.
237,
(1919);
Kan
rel. v. 33 Mo. Abeille Fire Ins. Co.
269, 366-67, 361, (banc 371-73 99, denied, 1934), 293 U.S. 55 S.Ct. cert. (1934); Hyde, v. L.Ed. 680 Aetna Ins. Co. (banc 1930).
327 Mo.
Where, here, process there is due no
right paid, money in the utilities to the so power. there is no bar to exercise of this Missouri, Respondent, STATE of Further, power failure to exercise this strip ability this court of the to make a meaningful judgment, DAVIS, Appellant. payment Freddie surcharge unlawful order such as the No. KCD 29187. here nearly already at issue will always be complete by lengthy the time the often Appeals, Missouri Court appeals process is concluded. District. Western By power our inherent redress afford April 1979. parties, supra; see cf. authorities Rehearing and/or Transfer Motion for State ex rel. Barker v. Co. of Assurance July Denied Supreme Court America, 251 Mo. S.W. (1913), par- we order the utilities to Transfer Denied Application ties proceeding, to this re- which have 11, 1979. Sept. ceived benefits as a result of the erroneous judgment permitting of the court below in surcharge, unlawful to restore those
benefits. We remand to circuit court determination of the amounts
due surcharge as a result of the and to
whom, restitution, proper method of
and in connection therewith a determina-
tion other matters making of such and the such other orders as are to and opinion.
consistent with this SIMEONE, JJ.,
BARDGETT concur.
RENDLEN, J., concurs in separate con-
curring opinion filed.
MORGAN, DONNELLY, J., C. J. and separate concurring
concur and concur in RENDLEN,
opinion J.
FINCH, Sr., J., participating.
WELLIVER, J., be- participating
cause not a member of when the court
cause was submitted.