People's Electric Cooperative, Inc. v. State ex rel. Oklahoma Corp. Commission

Citations: 50 P.3d 579; 2002 OK CIV APP 57; 73 O.B.A.J. 1580; 2002 Okla. Civ. App. LEXIS 35; 2002 WL 924912Docket: No. 95,719

Court: Court of Civil Appeals of Oklahoma; January 1, 2002; Oklahoma; State Appellate Court

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Judge Keith Rapp addresses the appeal by 111 People's Electric Cooperative (PEC) against the Oklahoma Corporation Commission (OCC), which found it had jurisdiction to regulate PEC despite its membership voting to opt out of OCC regulation. The dispute arose after a PEC customer lodged a complaint with the OCC regarding an electric bill, which PEC refused to address, asserting it was no longer under OCC oversight. The OCC initiated a contempt action against PEC for noncompliance with constitutional provisions and OCC rules concerning consumer complaint investigations. 

Both parties agreed on the facts, focusing on whether the OCC had jurisdiction to handle the complaint after PEC's election. The Administrative Law Judge (ALJ) initially ruled in favor of PEC, but the OCC reversed this decision by a 2-1 vote, interpreting the election as only removing OCC's authority over rates, not general consumer protections. The OCC treated the case as a declaratory judgment action.

The parties disagreed on the standard of review; the OCC proposed the 'any substantial evidence' standard, while PEC sought a de novo review due to the legal nature of the issue. The document notes that under the Oklahoma Administrative Procedures Act, the standard for reviewing declaratory decisions involves legal questions that can be examined without deference to previous rulings. Given the undisputed facts, the appellate court will apply a de novo standard of review.

PEC claims full exemption from OCC regulation under 17 O.S. Supp. 2000, 158.27 (E), except for specific exceptions related to territory, customer acquisition, and utility competition. The OCC's Consumer Division contends that this section pertains solely to rates and charges, asserting that the OCC retains regulatory authority in all other matters under 17 O.S. Supp. 2000, 158.27 (A). A majority of OCC Commissioners interpreted the statute as clear and unambiguous, affirming the OCC's authority to regulate areas beyond rates and charges. The Court concludes that when electric cooperative members elect exemption from OCC regulation, it applies only to rates and charges, not to rules affecting cooperative services and operations. This conclusion derives from a comprehensive examination of Section 158.27, aiming to discern and fulfill legislative intent, which is determined from statutory language and its overarching purpose. The Legislature is presumed to express its intentions clearly through statutory language. The OCC's authority is rooted in Article 9 of the Oklahoma Constitution, which mandates the supervision and regulation of transmission companies concerning their public duties and charges, ensuring the prevention of abuses and discrimination. Although PEC is established under the Rural Electric Cooperative Act (RECA), which once exempted cooperatives from OCC jurisdiction, this exemption was repealed in 1971 with the enactment of the Retail Electric Supplier Certified Territory Act (RECTA). Section 158.27, originating from RECTA, grants the OCC regulatory power over rates, charges, and service terms, with comprehensive oversight capabilities to monitor cooperative operations and compliance with laws and orders.

In 1988, the Legislature amended Section 158.27 by adding subdivision B, which exempted certain rate increases from OCC rate investigations while allowing members to petition for rate investigations. In 1998, another amendment retained the substance of subsection A but removed the phrase "requirements and regulations," clarifying the OCC's supervisory power over associations in terms of rates and operational rules. Despite these amendments, the introduction of subsection E in 1993 raised questions about the OCC's authority over rates and terms of service when members opted out of OCC regulation. Subsection E aims to determine the necessity of OCC regulation over rates and charges, allowing members to exempt themselves, but does not explicitly remove OCC authority over terms of service. PEC argues that references to "this section" in subsections E(2), E(4), E(5), and E(T) imply a broader scope of deregulation, which the court finds to be a strained interpretation lacking reasonable statutory construction. The court emphasizes that to support PEC's argument, it would need to infer the removal of OCC's authority over terms of service, a conclusion not supported by explicit legislative language. The court asserts that since statehood, rates and charges have only been one aspect of the OCC's regulatory role and that if the Legislature intended to completely exempt PEC from OCC jurisdiction, it would have clearly stated such intent in the statute.

Subsection E focuses on rates and charges, while Subsection A addresses both terms of service and rates. The court concludes that deregulation under Subsection E removes the Oklahoma Corporation Commission's (OCC) authority to set rates, affirming the OCC's findings. Record retention rules require utilities to keep records for at least two years, accessible for examination by the Commission. Utilities must maintain detailed records reflecting costs in Oklahoma and must inform the Commission of record locations. 

In mediation procedures, disputes between utilities and consumers regarding life-threatening situations, status of elderly or handicapped individuals, financial assistance, payment agreements, and bill interpretations can be referred to the Commission's Consumer Services Division. This division will issue informal decisions on service terms or disconnection. If unresolved, either party may escalate the matter to the Commission. Utilities must investigate disputed charges promptly and cannot disconnect service while disputes are under review. Section 307 mandates agencies to establish rules for declaratory rulings, but the record does not confirm if the OCC has done so, nor do the parties dispute the Commission's handling of the proceedings as a request for declaratory relief.

The phrase "Effective January 1, 1973" was removed from the text, but the rest remained unchanged. PEC does not claim that the new subsection B, which reestablishes subsection A authority under certain conditions, is applicable in this case. The proviso specifically relates to the elimination of OCC rate investigations when rates do not exceed 3% of the previous year's revenue. PEC presented letters from individual legislators to demonstrate legislative intent for Subsection E; however, these letters are neither binding on the Court nor pertinent to the case. The Court's role is to interpret the Act based on the standards of law. In Kinney v. Board of County Commissioners of Tulsa, it was established that the Court is not obliged to consider individual legislative comments. Similarly, in Haynes v. Caporal, the Oklahoma Supreme Court ruled that the intent of legislation cannot be substantiated by individual testimonies, as legislative action is represented solely by collective voting.