Court: Supreme Court of Rhode Island; January 6, 1986; Rhode Island; State Supreme Court
A statutory petition for a writ of certiorari was filed by the Wakefield Water Company to challenge the legality and reasonableness of a decision by the Public Utilities Commission regarding revenue increases. Wakefield sought a 36% revenue increase, totaling $359,802, based on a twelve-month operational period ending September 30, 1983. The commission suspended the tariff's effective date until September 6, 1984, and, after public hearings, approved a reduced revenue increase of $149,824 (42% of the requested amount). Wakefield filed a new tariff as ordered, which was approved to take effect on October 17, 1984.
Subsequently, Wakefield requested the compliance tariff to be effective from August 30, 1984, but the commission modified the effective date to September 5, 1984. A motion filed by the Division of Public Utilities and the Attorney General sought to delay the new rates until thirty days after the compliance order. The commission denied this request and confirmed the effective date of the rate increase.
Wakefield's petition for certiorari included four issues, one of which questioned the commission’s treatment of Wakefield for income tax purposes. The commission treated Wakefield independently for tax calculations, applying the capital structure of its parent corporation and calculating income tax adjustments based on the full income subject to graduated tax rates. The court ultimately denied and dismissed Wakefield's petition.
In *Wakefield Water Co. v. Public Utilities Commission*, R.I. 457 A.2d 251 (1983), the court affirmed Wakefield's independent status regarding a 'surtax exemption.' Wakefield contested the commission's refusal to reimburse $20,097 in appeal costs related to the commission’s treatment of federal income tax exemption, amortized at $10,048 per year over two years. The commission previously established criteria for determining the recoverability of such regulatory expenses, emphasizing that these costs must be reasonable, incurred in good faith, and supported by affirmative evidence of necessity and value. In this instance, the commission found that Wakefield failed to provide the required documentation to justify the appeal costs. Consequently, the commission disallowed the reimbursement request, highlighting its intention to scrutinize expenses carefully to protect ratepayers and requiring detailed breakdowns of hours, nature of services, and evidence of reasonableness for any future claims. The commission's authority to create reasonable rules for managing appeal cost recoverability was underscored, referencing statutory powers under G.L. 1956 (1984 Reenactment) 39-1-1(2), 39-1-11, and 39-3-33.
Wakefield, a participant in the prior action (docket No. 1547), was aware of the commission's ruling and requirements but failed to provide evidence to support its reimbursement claim for rate-case expenses, leading to the disallowance of that claim. Wakefield contended that the commission erred by not issuing a rate order within ninety days of the last public evidentiary rate hearing on June 1, 1984. Wakefield's compliance tariff proposed an effective date of August 30, 1984, but the commission set the effective date as September 5, 1984. The commission determined that the hearing in docket No. 1734 concluded on July 5, 1984, not June 1, 1984, based on Rule 1.17(a)(10) of the Commission Rules of Practice and Procedure, which states that the record closes upon the filing of briefs. The commission's report and order was issued sixty-two days after the record closed, thus complying with the ninety-day requirement. The court found that the commission acted within its authority in adopting this rule and did not exceed its powers or act unreasonably in its decisions. It reaffirmed that rate increases should be prospective, allowing consumers to adjust usage before new rates take effect. Wakefield is responsible for creating a billing system that aligns with this principle and cannot claim difficulties as grounds for exemption from compliance with the ruling. The court denied Wakefield's petition for certiorari and quashed the previously issued writ, remanding the case to the Public Utilities Commission.
