APARTMENT AND OFFICE BUILDING ASSOCIATION OF METROPOLITAN WASHINGTON, Petitioner,
PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Respondent, and The District of Columbia, The Peoples Counsel of the District of Columbia, and Potomac Electric Power Company, Intervenors.
September 20, 2018
[Copyrighted Material Omitted]
Petition for Review of Orders of the Public Service
Commission of the District of Columbia (FC-1145-17)
K. Caldwell, with whom Frann G. Francis was on the brief, for
Shelley, with whom Christopher G. Lipscombe and Richard S.
Herskovitz, Washington, were on the brief, for respondent.
C. McKay, Jr., Senior Assistant Attorney General, with whom
Karl A. Racine, Attorney General for the District of
Columbia, Loren L. AliKhan, Solicitor General, and Stacy L.
Anderson, Acting Deputy Solicitor General, were on the brief,
for the District of Columbia, intervenor.
C. Schauf, with whom Wendy E. Stark, Kim Hassan, Andrea H.
Harper, Dennis P. Jamouneau, and David W. DeBruin,
Washington, were on the brief, for Potomac Electric Power
Mattavous-Frye, Peoples Counsel, Karen R. Sistrunk, Deputy
Peoples Counsel, and Travis R. Smith, Sr., Trial Supervisor,
filed a statement in lieu of brief.
Singleton was on the brief for amicus curiae, General
Services Administration, in support of petitioner.
Fisher and Thompson, Associate Judges, and Greene, Senior
Judge of the Superior Court of the District of
Several powerful storms hit the District of Columbia area
between 2003 and 2012, causing significant damage to the
electrical distribution system and leaving many customers
without power for long periods of time. A task force created
in 2013 concluded that the frequency of power outages would
decrease and consumers of electricity would benefit if
overhead power lines were moved underground. Office of the
Mayor, Govt of D.C., Mayors Power Line Undergrounding
Task Force Findings & Recommendations at 5-6, 8-10 (Oct.
2013). The Council of the District of Columbia
("Council") decided to authorize this initiative in
the Electric Company Infrastructure Improvement Financing Act
of 2014 ("ECIIFA"), D.C. Code § §
34-1311.01-1315.01 (2015 Supp.); see also D.C. Law
20-102 (Act 20-290) (March 3, 2014).
case arises from Public Service Commission
("Commission") orders which approved a plan
identifying six electric feeder lines to be placed
underground. The principal issue is the allocation of costs
between commercial and residential customers. The Apartment
and Office Building Association of Metropolitan Washington
("AOBA" or "Petitioner") asserts that the
Commission failed to exercise its authority to allocate those
costs, that the statute governing allocation contravenes the
Home Rule Act, and that AOBAs due process rights were
violated. We affirm the Commissions rulings.
I. Procedural History
concerning allocation of costs between residential and
commercial customers had occurred in Pepco rate cases well
before the undergrounding project began. Commercial customers
protested that they were being required to subsidize services
for residential customers. It was estimated that the first
phase of the Undergrounding Initiative would cost
approximately $ 500 million, and this high price tag renewed
the debates about subsidization.
34-1313.01 and 34-1313.10 of the 2014 ECIIFA contained
provisions requiring the Commission to allocate costs
"in accordance with" "the electric companys
most recent base rate case." D.C. Code §
34-1313.01(a)(4) (2015 Supp.) (the Commission
"shall" assess charges for undergrounding
"among the distribution service customer classes of the
electric company in accordance with the distribution service
customer class cost allocations approved by the Commission
for the electric company and in effect pursuant to the most
recent base rate case"); § 34-1313.10(c)(1) (2015 Supp.)
(the Commission "shall" authorize the electric
company to collect charges "in accordance with the
distribution service customer class cost allocations approved
by the Commission for the electric company and in the
electric companys most recent base rate
In these provisions, the term "distribution service
customer class cost allocations" was used but not
defined, which led to confusion. Id. ; see
also D.C. Code § 34-1311.01 (2015 Supp.).
Commissions first effort to allocate these costs, Formal
Case Nos. 1116 and 1121, generated an appeal. AOBA
challenged the Commissions cost allocation decisions and
argued that the Commission had misconstrued the disputed
term. Apartment & Office Bldg. Assn of Metro. Washington
v. Pub. Serv. Commn of the District of Columbia, 129
A.3d 925, 929 (D.C. 2016).
2015, after AOBA submitted its initial brief in the previous
appeal, the Council amended ECIIFA to include a definition of
"distribution service customer class cost
allocations." Id. ; see also D.C. Code
§ 34-1311.01(8A) (2018 Supp.). We held that the newly amended
statute applied to the pending appeal. 129 A.3d at 931. In
addition, we held that the amended statute required the cost
allocation to "be made on the basis of the total rate
class distribution service revenue approved by the Commission
in the most recent base rate case, minus the customer charge
revenue approved by the Commission in the most recent base
rate case." Id. at 934 (citing D.C. Code §
34-1313.01(a)(4); § 34-1313.01(c)(1); § 34-1311.01(8A) ). In
other words, "the amended statute directs the Commission
to take as a given the allocation of costs in the most recent
base rate case." Id.
court emphasized that the Councils "directive [did] not
leave room for the Commission in the undergrounding
proceedings to independently address issues of
subsidization." Id. We noted, however, that the
Commissions allocation of costs in future base rate cases
"could well affect the allocation of costs in future
orders issued in connection with the undergrounding
project." Id. (citing D.C. Code §
project did not go forward at that time and the Council
amended ECIIFA again effective July 11, 2017, to modify a
portion of the funding structure. See D.C. Code § §
34-1311.01-1315.01 (2018 Supp.). Under the statute, the
Potomac Electric Power Company ("Pepco") and the
District of Columbia Department of Transportation
("DDOT") are required to jointly file every two
years an application for the Commissions approval consisting
of a Biennial Underground Infrastructure Improvement Projects
Plan and a Financing Order. D.C. Code § 34-1313.07(a) (Oct.
2017 Supp.). The Commission "may hold in abeyance or
waive the ...