Bergen County Utilities Authority v. State

Citations: 276 N.J. Super. 577; 648 A.2d 513; 1994 N.J. Super. LEXIS 425

Court: New Jersey Superior Court Appellate Division; October 21, 1994; New Jersey; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The court's opinion, delivered by Judge Petrella, addresses the responsibility of the Bergen County Utilities Authority (BCUA) for fees and expenses imposed by the Division of Rate Counsel in the Department of the Public Advocate. The BCUA did not dispute Rate Counsel's right to intervene in the rate-setting process but contended that Rate Counsel was not entitled to charge legal fees under N.J.S.A. 52:27E-19a, arguing that its March 1991 petition sought only approval for a rate reduction without changes to services. Established in 1978, the BCUA has provided solid waste services since 1981 and operates under the New Jersey Solid Waste Management Act. 

In February 1991, the BCUA applied to the Board of Public Utilities (BPU) for a certificate to operate a solid waste transfer station and submitted an initial tariff for solid waste rates. Rate Counsel indicated its intention to participate in these proceedings in May 1991. The BPU granted the BCUA's certificate on August 16, 1991, accepting its initial tariff on an interim basis, which went unchallenged for nearly nineteen months. In March 1993, the BCUA petitioned to reduce its solid waste service rate, asserting no service changes were planned. 

Rate Counsel claimed it intervened in the proceedings on behalf of the public interest and notified the BCUA of its intent to charge for expenses related to its involvement in rate and service changes. The BCUA argued that no final approval had been granted for its initial rate structure or services by the BPU or the Department of Environmental Protection and Energy at the time of Rate Counsel's actions.

On May 14, 1993, the Department of Environmental Protection and Energy (DEPE) directed the Office of Legal Affairs to process the Bergen County Utilities Authority's (BCUA) application for a certificate of public convenience and necessity and a rate decrease petition through consolidation and a contested hearing at the Office of Administrative Law (OAL). The DEPE required the BCUA to submit its 1994 solid waste budget and a petition for solid waste disposal rates by December 1, 1993, with rates effective March 1, 1994. Additionally, the DEPE temporarily modified the BCUA's solid waste disposal rates and tasked the OAL with reviewing a $31 million accounting adjustment related to landfill closure costs. 

On June 3, 1993, the BCUA’s attorney challenged the authority of Rate Counsel to impose legal fees under N.J.S.A. 52:27E-19a, arguing that the proceedings did not involve a rate increase or service change. However, on September 14, 1993, Rate Counsel issued a Final Agency Determination imposing legal fees totaling $17,516.75 against the BCUA for public interest representation from March to June 1993. Following the BCUA's appeal, additional bills were issued, bringing the total fees assessed to $34,477.25, which is below the statutory cap of $72,699 set by N.J.S.A. 52:27E-19a.

The Department of the Public Advocate Act of 1974 established the Public Advocate's authority to represent the public interest in regulatory proceedings. Rate Counsel is specifically tasked with protecting public interests in rate-setting and service provision matters, with statutory provisions for covering its incurred costs. The relevant statute allows Rate Counsel to assess fees when representing the public in certain business proceedings, although case law on this statute is limited.

Both parties reference an unpublished court opinion that is non-precedential and not discussed herein. Legislative history regarding the 1981 amendment to S. 1533 is limited, with the Senate Statement reiterating the statutory language. A conditional veto message from the Governor indicates that the amendment aimed to enable the Division of Rate Counsel to evaluate utilities for each rate change application. Therefore, statutory construction rules apply, necessitating consideration of the entire legislative framework.

By analyzing N.J.S.A. 52:27E-19a alongside N.J.S.A. 52:27E-18, it could be inferred that Rate Counsel's reimbursement rights are linked to its right to intervene. However, the Supreme Court's ruling in State Farm Mut. Auto. Ins. Co. v. State, Dept. of Public Advocate clarifies that these rights are not identical, particularly as N.J.S.A. 52:27E-19b does not encompass all proceedings initiated by insurers. The language of N.J.S.A. 52:27E-19a includes terms absent from N.J.S.A. 52:27E-19b, implying that conclusions drawn in State Farm do not definitively apply here.

The BCUA is required to reimburse Rate Counsel for its involvement in interim rate-setting proceedings, as the proposed rate schedule relates to a utility's application to modify services, which under N.J.S.A. 52:27E-19a, warrants Rate Counsel's scrutiny. The BCUA's transition from landfill disposal to a transfer station constitutes a change in required services, justifying Rate Counsel's examination of the associated operating expenses and proposed tariffs. The BCUA's claim that Rate Counsel lacks authority to assess fees absent a rate increase or service change is rejected, as proper solid waste disposal is a matter of significant public interest. The decision is affirmed. 

Notably, although the Office of the Public Advocate was dissolved in 1994, the Division of Ratepayer Advocate was established within the Board of Public Utilities, maintaining the oversight role previously held.

The Reorganization Plan established the BPU as part of the Department of the Treasury, adhering to requirements under the New Jersey Constitution and relevant state statutes. Prior to the enactment of N.J.S.A. 48:13A-6.2 on November 16, 1990, BCUA was not classified as a public utility and therefore was not regulated by the BPU or DEPE. N.J.S.A. 48:13A-6.2b mandates that owners or operators of solid waste transfer stations must file revised tariffs or contract changes with the BPU for approval when adjusting charges. A notice for a consolidated hearing regarding the reasonableness of initial and subsequent interim rates was issued by the OAL on June 9, 1993. BCUA did not amend its appeal to address two additional bills and has failed to pay them. Furthermore, R. 1:36-3 specifies that unpublished opinions do not serve as binding precedent, with limited exceptions related to established legal doctrines.