AG Processing Inc. v. Missouri Public Service Commission

408 S.W.3d 175
CourtMissouri Court of Appeals
DecidedMay 14, 2013
DocketNo. WD 75437
StatusPublished
Cited by15 cases

This text of 408 S.W.3d 175 (AG Processing Inc. v. Missouri Public Service Commission) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AG Processing Inc. v. Missouri Public Service Commission, 408 S.W.3d 175 (Mo. Ct. App. 2013).

Opinion

KAREN KING MITCHELL, Presiding Judge.

AG Processing Inc. (AGP) appeals an order approving tariffs (Tariff Approval Order) issued by the Public Service Commission (PSC) in Case File No. ER-2012-0024: In the Matter of the Determination of Carrying Costs for the Phase-In Tariffs of KCP & L Greater Missouri Operations Company (Carrying Costs Case). AGP argues that the tariffs, themselves, are unlawful and that the Tariff Approval Order is also unlawful and void, because: (1) the PSC lacked jurisdiction to issue the Tariff Approval Order due to existing writs of review filed in a related case, Case File No. ER-2010-0356: In the Matter of the Application of KCP & L Operations Company for Approval to Make Certain Changes in its Charges for Electric Service (Rate Change Case); (2) the PSC failed to give proper notice to the public in the affected area of the portion of a rate increase (approved in the Rate Change Case) made effective by the tariffs (approved in the Carrying Costs Case); (3) the PSC lacked authority, under section 393.155.1, to grant a phase-in rate increase that exceeded the amount requested by the utility for the affected area (approved in the Rate Change Case); (4) the PSC violated section 393.270.4 in ER-2012-0024, by failing to consider all relevant factors before granting a rate increase; and (5) the PSC’s Tariff Approval Order was not supported by competent and sub[178]*178stantial evidence in that there was no evidence to support an order approving the $7 million, phased-in portion of the rate increase plus carrying costs. We find that the PSC had jurisdiction and that all of the remaining claims raised by AGP were decided either in an order entered in another case already on appeal to this Court or in an order in this case from which AGP failed to appeal; thus none of these claims are properly preserved for appellate review in this case. Therefore, we affirm.

Background

To properly understand the context of the present case, we begin with a brief discussion of the PSC’s authority and procedures. The PSC was created and established to regulate public utilities that operate in Missouri. § 386.040; State ex rel. Office of Pub. Counsel v. Mo. Pub. Serv. Comm’n, 331 S.W.3d 677, 681 (Mo.App. W.D.2011). “The PSC is authorized to approve rate schedules for electrical corporations, typically during a general rate case, as long as the rate is just and reasonable both to the utility and to its customers.” Office of Pub. Counsel, 331 S.W.3d at 681 (citing § 393.150).

Usually, a rate case begins when a utility files a schedule with the PSC, stating a new rate. § 393.150.1. The new rate schedule becomes effective automatically unless the PSC suspends it under section 393.150.1. When a proposed rate schedule is suspended pursuant to section 393.150.1, the PSC must provide notice to the affected parties, hold a full hearing, and consider all relevant factors before approving any new rate. Office of Pub. Counsel, 331 S.W.3d at 681.

After a new rate is approved, the utility publishes a proposed tariff sheet. See State ex rel. AG Processing, Inc. v. Pub. Serv. Comm’n, 276 S.W.3d 303, 305 (Mo.App. W.D.2008). “ ‘A tariff is a document which lists a public utility[’s] services and the rates for those services.’ ” State ex rel. Mo. Gas Energy v. Pub. Serv. Comm’n, 210 S.W.3d 330, 337 (Mo.App. W.D.2006) (quoting Bauer v. Sw. Bell Tele. Co., 958 S.W.2d 568, 570 (Mo.App. E.D.1997)). The PSC reviews the proposed tariff sheets to determine whether the proposed tariffs comply with the order approving the new rate. See Mo. Gas Energy, 210 S.W.3d at 337. Only after the PSC’s review and approval do the proposed tariffs take effect. See 4 CSR 240-3.010(28).

“In the context of cases before the [PSC], the terms ‘tariff and ‘rate schedule’ are synonymous.” State ex rel. AG Processing, Inc. v. Pub. Serv. Comm’n, 311 S.W.3d 361, 364 n. 3 (Mo.App. W.D.2010). In practice, it is common in a rate case for the PSC to approve a new rate in an initial report and order with findings of fact and conclusions of law, and then to issue one or more subsequent orders approving the proposed tariff sheets that implement the previously approved rate change. See, e.g., State ex rel. Office of Pub. Counsel v. Pub. Serv. Comm’n, 236 S.W.3d 632, 634-35 (Mo. banc 2007); AG Processing, Inc., 276 S.W.3d at 305.

A. Case File No. ER-2010-0356: In the Matter of the Application of KCP & L Operations Company for Approval to Make Certain Changes in its Charges for Electric Service (Rate Change Case)

Before looking at the issues in the present case, we review the context in which they arose.1 On June 4, 2010, KCP & L Greater Missouri Operations Company [179]*179(ICCP & L-GMO) filed proposed tariff sheets with the PSC and applied for a rate change in two rate districts: one consisting of parts of Kansas City, Lee’s Summit, Sedalia, Warrensburg, and surrounding areas (MPS); and the other consisting of the area in and around St. Joseph (L & P). In response to the proposed tariff sheets, the PSC opened Case File No. ER-2010-0356: In the Matter of the Application of KCP & L Operations Company for Approval to Make Certain Changes in its Charges for Electric Service. AGP, an agricultural cooperative, intervened in the proceeding.2 KCP & L-GMO initially proposed a $22.1 million annual rate increase for the L & P rate district and a $75.8 million annual rate increase for the MPS rate district, for a total proposed annual rate increase of $97.9 million. After conducting the necessary hearings, the PSC issued a report and order, adopting a general rate increase for electrical service for both the MPS and L & P rate districts. Inconsistent with KCP & L-GMO’s request, however, the PSC adopted a $29.3 million rate increase for the L & P rate district — approximately $7 million more than the original request.3

In response to the PSC’s report and order, AGP and KCP & L-GMO both filed timely applications for rehearing. Among other things, AGP challenged the grant of a rate increase in excess of the amount KCP & L-GMO initially requested for the L & P rate district. AGP also suggested that “another option may exist” under section 393.155.1, which “provides the Commission with the ability to phase-in large rate increases that [are] ‘primarily due to an unusually large increase in the corporation’s rate base.’” AGP suggested that the initial increase to L & P customers be $22.1 million, and that the additional $7 million be phased-in over a period of years.

Subsequently, the PSC issued an order of clarification and modification.

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Bluebook (online)
408 S.W.3d 175, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ag-processing-inc-v-missouri-public-service-commission-moctapp-2013.