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03/14/90 OFFICE PEOPLE'S COUNSEL DISTRICT COLUMBIA

March 14, 1990

OFFICE OF THE PEOPLE'S COUNSEL OF THE DISTRICT OF COLUMBIA, PETITIONER
v.
PUBLIC SERVICE COMMISSION OF THE DISTRICT OF COLUMBIA, RESPONDENT. THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY, INTERVENOR



Petition of Appeal from an Order of the Public Service Commission of the District of Columbia

Before Newman, Ferren, and Terry, Associate Judges.

Opinion for the court by Associate Judge Ferren.

Opinion by Associate Judge Newman, Concurring in part and Dissenting in part.

The opinion of the court was delivered by: Ferren

FERREN, Associate Judge: Petitioner, Office of the People's Counsel ("OPC"), challenges a decision of the Public Service Commission interpreting D.C. Code § 43-612 (a) (1986). This section provides that regulated utilities shall bear the cost of various OPC and Commission expenses. It also sets limitations on reimbursable expenses that depend on whether the proceeding is a "valuation or rate case" or comes within "all other investigations." The Commission determined that, because the proceeding at issue did not include a formal hearing, it should be treated as "all other investigations," not as a "rate case" as OPC requested. The Commission accordingly assessed a special franchise tax upon The Chesapeake and Potomac Telephone Company ("C&P") under OPC's "other investigations" authority. OPC appeals, arguing that any proceeding in which a rate is set--as assertedly happened in this case--falls within the statutory definition of a "rate case." OPC further contends that, even if the Commission were correct in determining this is not a "rate case," the Commission exceeded its authority in ordering an "all other investigations" assessment without a request from OPC. We reject these arguments and affirm the Commission's decision.

I.

On December 24, 1986, C&P filed with the Commission a tariff rate for Centrex service for a single customer, the International Bank for Reconstruction and Development ("the World Bank"). The tariff rate was the result of a contract C&P negotiated with the World Bank. No other rates or customers were affected by the tariff. The Commission initiated a Telephone Tariff proceeding, which allows for only a brief notice and comment period. See 34 D.C. Reg. 558 (1987) (notice of 30-day comment period for this filing). *fn1 On June 3, 1988, the Commission approved the World Bank tariff. Order No. 9028. OPC did not appeal that approval.

On June 27, 1988, OPC submitted a "Notice of Agency Fund Requirements" to the Commission, a formal request. to cover OPC's expenses associated with carrying out its statutory mandate to represent taxpayers in the proceeding. *fn2 OPC maintained the World Bank tariff proceeding was a "rate case" within the meaning of D.C. Code 43-612 and accordingly requested the Commission to order C&P to pay a special franchise tax of $34,000. On August 22, 1988, the Commission, relying on our decision in Washington Gas Light Co. v. Public Serv. Comm'n, 455 A.2d 384 (D.C. 1982), issued Order No. 9092 in which it ruled that, although the Commission had set a rate when it approved the World Bank tariff, the proceeding was not a "case" for purposes of § 43-612 because it did not include a formal hearing. The Commission concluded, however, that the amount OPC had requested was consistent with OPC's statutory authority and supported by substantial evidence in the record. The Commission therefore assessed a franchise tax on C&P for the $34,000 requested but did so under OPC's "other investigations" authority. *fn3

On appeal, OPC argues that the Commission misreads Washington Gas and § 43-612. It contends Washington Gas stands for the proposition that any Commission proceeding that sets a rate is a "rate case" within the meaning of § 43-612. OPC maintains that the definition of "rate case" adopted by the Commission-- i.e., any proceeding that sets a rate and includes a formal hearing--is flawed because one cannot always determine at the outset of a proceeding whether a formal hearing actually will be held. Further, the Commission's definition, OPC argues, creates a category of "rate noncase" not contemplated by the statute. Finally, OPC contends that even if the Commission were correct in ruling that the proceeding was not a "rate case," it had no authority under § 43-612 to order an assessment under OPC's "other investigations" authority without a request for such an assessment from OPC.

II.

Before we address the merits, we must confront the issue of mootness. Intervenor C&P argues that because OPC was granted every dollar it requested, we should dismiss its appeal as moot. Unfortunately, the issue is not quite so simple. D.C. Code § 43-612 (a)(3) sets the following limitations on expenditures:

In any valuation or rate case, neither the Commission nor may individually seek special franchise tax deposits of more than one-quarter of 1 percent of the jurisdictional valuation of the company which is the subject of the proceeding. In all other investigations docketed as formal proceedings by the Commission, neither the Commission nor shall individually seek special franchise tax deposits in any 1 year of more than one-twentieth of 1 percent of the jurisdictional valuation of each public utility which is the subject of 1 or more investigations during that year.

In actual dollar terms, based on the most recent valuation of C&P, this means that the limitation on OPC's expenditures for each "rate case" involving C&P is over $800,000, while the limitation for "all other investigations" involving C&P combined during the year is less than $165,000. Thus, every dollar assessed as "other investigations" limits OPC's budget for "other investigations" for the remainder of the year.

In general, then, the question whether the Commission assesses a tax on C&P under OPC's "other investigations" authority or under its "rate case" authority has genuine financial ramifications for OPC. That is not necessarily the case here, however, where the Commission applied the assessment to OPC's 1987 limitation. Because OPC no longer can incur any 1987 expense, and because this assessment did not place OPC above its 1987 "other investigations" ceiling, it is difficult to perceive any actual injury to OPC from this particular ruling. Nonetheless, because this issue is capable of repetition and yet tends to evade review, we shall address the substance of the Commission's ruling. See Lynch v. United States, 557 ...


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