In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Missouri Gas Energy Service Territory In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Laclede Gas Service Territory The Office of Public Counsel Spire Missouri, Inc. v. The Missouri Public Service Commission

CourtMissouri Court of Appeals
DecidedNovember 19, 2019
DocketWD82200, WD82297
StatusPublished

This text of In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Missouri Gas Energy Service Territory In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Laclede Gas Service Territory The Office of Public Counsel Spire Missouri, Inc. v. The Missouri Public Service Commission (In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Missouri Gas Energy Service Territory In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Laclede Gas Service Territory The Office of Public Counsel Spire Missouri, Inc. v. The 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
In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Missouri Gas Energy Service Territory In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Laclede Gas Service Territory The Office of Public Counsel Spire Missouri, Inc. v. The Missouri Public Service Commission, (Mo. Ct. App. 2019).

Opinion

MISSOURI COURT OF APPEALS WESTERN DISTRICT

IN THE M ATTER OF THE ) A PPLICATION OF L ACLEDE G AS ) WD82200 and C OMPANY TO CHANGE ITS ) WD82297 INFRASTRUCTURE SYSTEM ) REPLACEMENT SURCHARGE IN ITS ) O PINION FILED : M ISSOURI G AS E NERGY S ERVICE ) T ERRITORY ; IN THE MATTER OF ) November 19, 2019 THE APPLICATION OF L ECLEDE ) G AS C OMPANY TO CHANGE ITS ) INFRASTRUCTURE SYSTEM ) REPLACEMENT SURCHARGE IN ITS ) L ACLEDE G AS S ERVICE ) T ERRITORY ; THE O FFICE OF ) PUBLIC C OUNSEL ; ) ) Appellant, ) ) S PIRE MISSOURI , INC ., ) ) Appellant, ) v. ) ) T HE MISSOURI P UBLIC S ERVICE ) C OMMISSION , ) ) Respondent. )

APPEAL FROM THE PUBLIC SERVICE COMMISSION

Before Division Two: Thomas H. Newton, Presiding Judge, Anthony Rex Gabbert, and Thomas N. Chapman, Judges The Office of Public Counsel (OPC) 1 and Spire Missouri, Inc., a gas

corporation and public utility, appeal a Public Service Commission 2

determination that it lacked the authority to require that Spire refund, or return

to, ratepayers excess infrastructure surcharges 3 related to the company’s 2017

neighborhood-replacement program after this Court found the same surcharges

ineligible as to the company’s 2016 infrastructure surcharges, reversing as

unlawful a Commission ruling to the contrary. In re Laclede Gas Co. v. Office

of Pub. Counsel, 539 S.W.3d 835 (Mo. App. W.D. 2017). 4 Having found the

OPC’s request for a ratepayer refund under a 2017 stipulation and agreement

moot, the Commission also seeks to dismiss the appeal as moot, arguing that the

company’s 2017 general rate cases, which are currently pending before the

Missouri Supreme Court, reset Spire’s 2017 surcharges to zero and thus the

1 The Office of Public Counsel (OPC) is the Missouri state agency responsible for representing consumers in cases before the Public Service Commission and on appeals of Commission orders. In re Kansas City Power & Light Co. v. Midwest Energy Consumers' Grp ., 425 S.W.3d 142, 144 n.2 (Mo. App. W.D. 2014) (citing sections 386.700 and 386.710). 2 The Public Service Commission regulates public utilities, such as gas companies, in Missouri under Chapters 386 and 393 of the Missouri Revised Statutes. In re Kansas City Power & Light Co., 425 S.W.3d at 143 n.1. 3 The “infrastructure system replacement surcharge” is commonly referred to as an ISRS. See, e.g., § 393.1015, RSMo (2016). We will refer to it as an infrastructure surcharge to avoid the overuse of acronyms and any resulting confusion. We also refer to the gas company, variously known during the relevant time period as Laclede Gas Co., Missouri Gas Energy, and subsequently Spire Missouri, Inc., as Spire for the reader’s convenience. 4 Spire has an eastern and a western territory in Missouri, and, when Spire has sought a surcharge or a new general base rate, it has done so by bringing two cases, one for each territory. This appeal involves two surcharge cases filed for the company’s infrastructure projec ts in each of its territories in 2017 and analyzes their relation to two general rate cases filed in 2017 —that took effect in 2018—for each of Spire’s territories. No other general rate cases are at issue or discussed. The related appeals argued with this appeal similarly involve two infrastructure -surcharge cases from 2016 (WD82199, WD82299) and two infrastructure-surcharge cases from 2018 (WD82302, WD82373).

2 excess surcharges are no longer eligible for recovery. We overrule the motion

and have considered the matter on the merits. We reverse and remand for further

proceedings.

The Commission issued three separate orders following a consolidated

hearing in August 2018 intended to allow the parties to introduce evidence on

the methodology the Commission would use to determine how to place a value

on those components of the neighborhood infrastructure Spire replaced—plastic

mains and service lines—and which this Court determined were ineligible for

recovery as infrastructure surcharges because the components were not worn out

or deteriorated and no obligation had been placed on Spire to replace them by a

government-mandated safety requirement. Id. at 840. 5 The consolidated hearing

pertained to Spire’s infrastructure surcharges for projects in 2016, 2017, and

2018, each of which arises in different proceedings that are procedurally

distinguishable. This appeal focuses on the 2017 cases.

When Spire sought surcharges for its 2017 infrastructure projects, the 2016

surcharge cases were pending before this Court. The OPC opposed some of the

2017 project costs for the same reason that it had opposed costs in the 2016 cases.

The parties entered a stipulation and agreement as to the 2017 cases believing

5 Note that section 393.1012.1 permits a gas corporation to petition the Commission to increase its infrastructure surcharge to recover the costs of “certain government -mandated infrastructure replacement projects outside a general ratemaking case.” In re Laclede Gas Co. v. Office of Pub. Counsel, 539 S.W.3d 835, 838 (Mo. App. W.D. 2017) (citation omitted). The infrastructure-surcharge mechanism is more streamlined than a public utility’s general rate proceeding and is of more limited duration. Compare sections 393.1015.2 and .5(2) with section 393.270.

3 that a court ruling on the matter would be dispositive and that it would not be a

productive use of the Commission’s or the parties’ resources “to litigate the

Plastics Issue before the Commission again.” 6 Under the agreement, which the

Commission approved in April 2017, if this Court reversed the Commission ’s

ruling on infrastructure cost-recovery eligibility as unlawful or unreasonable,

“then the court’s final decision shall be applied to the [2017 cases] in the same

manner as it is applied to the [2016 cases], as applicable.” Spire and Commission

staff agreed not to challenge the OPC’s right to request that the Commission

determine the amount of the infrastructure-surcharge refund for the 2017 projects

under the Court’s ruling, but all signatories agreed “to make any argument they

wish regarding the methodology, propriety, and quantification of such refund, if

any.” 7 After the Missouri Supreme Court denied transfer in March 2018 and our

mandate issued in the 2016 cases, the Commission asked the parties to file

recommendations about moving forward with the 2016 cases; the OPC addressed

both the 2016 and 2017 cases in a single recommendation given the stipulation

6 During oral argument, the Commission contended that OPC should not have entered a stipulation as to the 2017 infrastructure surcharges that Spire sought, but instead should have allowed the surcharges to be imposed and then litigated the matter to get its challenge properly before this Court. We would not encourage parties to avoid reaching agreements that have the potential to conserve agency and judicial resources. 7 The Commission subsequently approved tariffs for the 2017 infrastructure surcharges of $3,000,749 and $3,044.481 for Spire’s separate territories on Staff’s recommendation in May 2017.

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Related

State Ex Rel. AG Processing, Inc. v. Public Service Commission
120 S.W.3d 732 (Supreme Court of Missouri, 2003)
State Ex Rel. Praxair, Inc. v. Public Service Commission
328 S.W.3d 329 (Missouri Court of Appeals, 2010)
Kansas City Power & Light Company's v. Midwest Energy Consumers' Group
425 S.W.3d 142 (Missouri Court of Appeals, 2014)
Missouri Public Service Commission v. Office of the Public Counsel
516 S.W.3d 823 (Supreme Court of Missouri, 2017)
Labarca v. Labarca
534 S.W.3d 329 (Missouri Court of Appeals, 2017)
Laclede Gas Co. v. Office of Pub. Counsel
539 S.W.3d 835 (Missouri Court of Appeals, 2017)

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In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Missouri Gas Energy Service Territory In the Matter of the Application of Laclede Gas Company to Change its Infrastructure System Replacement Surcharge in its Laclede Gas Service Territory The Office of Public Counsel Spire Missouri, Inc. v. The Missouri Public Service Commission, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-the-application-of-laclede-gas-company-to-change-its-moctapp-2019.