State ex rel. Utilities Commission v. Public Service Co. of North Carolina, Inc. , 1982 N.C. App. LEXIS 3136 ( 1982 )

WEBB, Judge.

The defendant first contends the Utilities Commission was without authority to reopen the January order without a hearing for a general rate case. It bases its argument on the following sections of Chapter 62 of the General Statutes:

§ 62-78. Proposed findings, briefs, exceptions, orders, expediting cases, and other procedure.

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(c) In all proceedings in which a panel of three commissioners, commissioner or examiner has filed a report, recommended decision or order to which exceptions have been filed, the Commission, before making its final decision or order, shall afford the party or parties an opportunity for oral argument. When no exceptions are filed within the time specified to a recommended decision or order, such recommended decision or order shall become the order of the Commission and shall immediately become effective unless the order is stayed or postponed by the Commission; provided, the Commission may, on its own motion, review any such matter and take action thereon as if exceptions thereto had been filed.

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§ 62-80. Powers of Commission to rescind, alter or amend prior order or decision.— The Commission may at any time upon notice to the public utility and to the other parties of record affected, and after opportunity to be heard as provided in the case of complaints, rescind, alter or amend any order or decision made by it. Any order rescinding, altering or amending a prior order or decision shall, when served upon the public utility affected, have the same effect as is herein provided for original orders or decisions.

The defendant argues that under G.S. 62-78(c) when a panel of the Commission issues an order to which no exception is taken, it becomes a final order which cannot be amended under G.S. 62-80 without a hearing as a complaint proceeding as provided in G.S. 62-73, a new record developed, and a new order issued based on the new record.

Whatever the effect of G.S. 62-78(c) on an order filed by a panel of three Commissioners we do not believe this affects the power of the Utilities Commission to act pursuant to G.S. 62-80. G.S. 62-80 provides the Utilities Commission may “alter or amend” an order after a hearing. We believe that by using the words “alter or amend” the Legislature intended that the Commission may change an order in some respects without considering all factors that must be considered in a general rate case. The statute does not limit changes in orders to those that have not become final.

The defendant argues that since the statute provides that before an order may be “altered or amended” the matter shall “be heard as provided in the case of complaints,” this means there must be a complaint hearing pursuant to G.S. 62-73 and all the elements required by G.S. 62-133 must be considered. We do not so read G.S. 62-80. We believe it requires that the procedures of complaint hearings shall be used before amending an order but it does not require a general rate hearing before an order may be amended.

The defendant also contends the evidence which the Commission heard at the reopened hearing made the hearing an unlawful procedure. It bases this argument on the testimony of a Public Staff witness as to the proper amount of investment tax credit amortization. The witness testified that the most reliable way to calculate the amortization for the year ending 30 September 1980 was to use the fiscal year ending 30 December 1980 and based his testimony on this period. The defendant contends that by doing so, the witness testified to facts that were not in existence at the close of the first hearing. We do not believe it was error for the Commission to receive this evidence. It could accept this testimony as the best way to calculate the investment tax credit amortization for the period in question.

The defendant also argues that the Commission could not under G.S. 62436(a) change a rate without a finding that the rate is “unjust, unreasonable, insufficient or discriminatory, or in violation of any provision of law.” No such finding was made by the Commission. The Commission was proceeding pursuant to G.S. 62-80, not G.S. 62436(a). The finding required by G.S. 62436(a) was not necessary to the validity of the Commission’s August order.

The defendant contends that the action of the Commission constituted retroactive rate making. It says this is so because the Commission had already determined the proper amount of income tax expense. We do not believe the Commission’s order of 5 August 1981 constituted retroactive rate making. It did not reduce the defendant’s revenue to compensate in the future for what may have been an excessive rate in the past. It reduced the defendant’s future rate for what it found was a more realistic investment credit tax amortization. This is not retroactive rate making. See Utilities Commission v. Edmisten, 291 N.C. 451, 232 S.E. 2d 184 (1977) for a discussion of retroactive rate making.

The defendant says there were matters in the January order which were unfavorable to it. Defendant did not except to the order because it was satisfied overall, which it would not have been if the rate had been originally reduced by taking into account the amortization of the investment tax credit. It has now been deprived of an opportunity to argue the exceptions it would have made if it had known what would occur in August. The defendant also argues that it has sold 500,000 shares of stock based on a rate contained in a final order which rate has now been reduced. The defendant contends this is unfair to the public which bought the stock. We believe the fairness of the statute is a matter for the General Assembly. As we read it, the statute allows the Utilities Commission to amend a final order as was done in this case. We are bound by this statute.

We do not believe the cases relied on by the defendant are helpful to it. Utilities Commission v. Edmisten, 291 N.C. 575, 232 S.E. 2d 177 (1976) deals with the authority of the Utilities Commission to rehear a general rate case under G.S. 62-80 before the 30-day period for appealing from its order had expired. It does not deal with the power of the Commission to amend an order after it has become final. Utilities Commission v. Carolina Coach Company, 260 N.C. 43, 132 S.E. 2d 249 (1963) involved the rescission of an order made pursuant to an agreement by two buslines in regard to transportation rights. Our Supreme Court said the Commission could not act arbitrarily or capriciously in rescinding the order but there must be a change of circumstance requiring it in the public interest. We do not believe Carolina Coach is a precedent for this case.

The defendant brings forward an assignment of error as to the allowance for depreciation in the January order. We have held that the January order is a final order which was reopened by the Utilities Commission under G.S. 62-80 for the purpose of a hearing as to the investment tax credit amortization. The January order was in other respects a final order from which no appeal was taken. We do not pass on the question of depreciation in this appeal.

The defendant stated in its brief that the Commission’s action violated the Fourteenth Amendment to the United States Constitution and Article I, Section 19 of the Constitution of North Carolina. The defendant advances no reasons why this is so other than its arguments as to the application of Chapter 62 of the General Statutes and its effect on the defendant. G.S. 62-80 was in effect at the time this case was instituted. All orders entered by the Commission were subject to this section. The developments of this case may work a hardship on the defendant, but we do not believe it is of constitutional dimension.

Affirmed.

Chief Judge MORRIS and Judge WHICHARD concur.