Apartment and Office Building Association of Metropolitan Washington, Petitioner,
Public Service Commission of the District of Columbia, Respondent, and The District of Columbia, The People's Counsel of the District of Columbia, and Potomac Electric Power Company, Intervenors.
September 20, 2018
Petition for Review of Orders of the Public Service
Commission of the District of Columbia FC-1145-17
Excetral K. Caldwell, with whom Frann G. Francis was on the
brief, for petitioner.
N. Shelley, with whom Christopher G. Lipscombe and Richard S.
Herskovitz 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.
Zachary C. Schauf, with whom Wendy E. Stark, Kim Hassan,
Andrea H. Harper, Dennis P. Jamouneau, and David W. DeBruin
were on the brief, for Potomac Electric Power Company,
Mattavous-Frye, People's Counsel, Karen R. Sistrunk,
Deputy People's 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 Columbia.
Fisher, Associate Judge
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, Gov't
of D.C., Mayor's 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 AOBA's due process rights were
violated. We affirm the Commission's rulings.
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
company's 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 company's most recent base rate
case"). 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.).
Commission's first effort to allocate these costs,
Formal Case Nos. 1116 and 1121, generated an appeal.
AOBA challenged the Commission's cost allocation
decisions and argued that the Commission had misconstrued the
disputed term. Apartment & Office Bldg. Ass'n of
Metro. Washington v. Pub. Serv. Comm'n 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."
court emphasized that the Council's "directive [did]
not leave room for the Commission in the undergrounding
proceedings to independently address issues of
subsidization." Id. We noted, however, that the
Commission's 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 Commission's
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 obligation to file an
application for approval" upon a finding of good cause
as judged by certain enumerated criteria. Id. at
and DDOT submitted their Joint Application to the Commission
on July 3, 2017, initiating Formal Case No.
1145. They updated that application in August 2017.
The Commission ultimately approved the proposed plan and
denied motions for reconsideration. Petitioner AOBA now
challenges these and related orders. Pepco, the District of
Columbia, and the Office of People's Counsel
("OPC") intervened in the case before this court,
supporting the Commission.
Standard of Review
court has jurisdiction to hear appeals from certain orders of
the Public Service Commission of the District of Columbia.
D.C. Code § 34-605 (2012 Repl.). Under D.C. Code §
34-606 (2012 Repl.), our scope of review is "limited to
questions of law, including constitutional questions; and the
findings of fact by the Commission shall be conclusive unless
it shall appear that such findings . . . are unreasonable,
arbitrary, or capricious."
court reviews issues of statutory interpretation de
novo. Myerson v. United States, 98 A.3d 192,
197 (D.C. 2014). In reviewing the Commission's orders, we
must affirm "[i]f there is 'substantial evidence to
support the Commission's findings and conclusions and the
Commission has given reasoned consideration to each of the
pertinent factors.'" 129 A.3d at 930 (citing
Potomac Elec. Power Co. v. Pub. Serv. Comm'n of
D.C., 457 A.2d 776, 782 (D.C. 1983)). "Even if the
court disagrees with the Commission, if the Commission has
fully and clearly explained what it does and why it does it,
and the agency decision is supported by substantial evidence,
the court, upon a finding that the Commission order is