Pennwalt Corp. v. Public Service Commission 2

357 N.W.2d 715, 136 Mich. App. 580
CourtMichigan Court of Appeals
DecidedAugust 7, 1984
DocketDocket No. 70881
StatusPublished

This text of 357 N.W.2d 715 (Pennwalt Corp. v. Public Service Commission 2) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pennwalt Corp. v. Public Service Commission 2, 357 N.W.2d 715, 136 Mich. App. 580 (Mich. Ct. App. 1984).

Opinion

Per Curiam.

Plaintiff has filed an appeal as of right from the April 4, 1983, order of Ingham County Circuit Court Judge Jack W. Warren which affirmed the opinion and order of the Michigan Public Service Commission, dated September 28, 1978, in case number U-5502.

Plaintiff seeks to have the Michigan Public Service Commission opinion and order vacated as it relates to including plaintiff in case U-5502 and adjusting rates and charges to be assessed to plaintiff by The Detroit Edison Company for industrial process steam and electric service, and to have a refund ordered to be paid by The Detroit Edison Company to plaintiff as to those revenues collected pursuant to the increased rates and charges authorized by the Michigan Public Service Commission [582]*582which are found to be in excess of those which are lawful and proper.

In the complaint, plaintiff alleged that effective April 1, 1964, and pursuant to order of the commission dated April 4, 1963, plaintiff sold to The Detroit Edison Company all of its steam and its condensing and non-condensing generation facilities located at its Wyandotte, Michigan, plant for $3,500,000. The Detroit Edison Company agreed to furnish plaintiff with industrial process steam and electric service for a term of 25 years, until March 31, 1989, pursuant to the terms and provisions of a "Steam Electric Supply Agreement”. Subsequent to the initial effective date of the general agreement and the Steam Electric Supply Agreement, the rates specified therein have been increased from time to time, pursuant to Michigan Public Service Commission proceedings involving only Pennwalt Corporation, The Detroit Edison Company, and the Michigan Public Service Commission. The increases were approved by the commission on August 31, 1970, in case number U-3694; on November 25, 1974, in case number U-4296; on July 26, 1976, in case number U-4741; and on February 6, 1978, in case number U-5218. Each of those proceedings was separate and distinct from The Detroit Edison Company general rate cases wherein The Detroit Edison Company requested adjustments to electric and other miscellaneous rates assessed to its other customers, including industrial customers except those industrial power plant customers under special contract with it.

On July 20, 1977, The Detroit Edison Company filed a general reapplication requesting authority from the Michigan Public Service Commission to amend electric rate schedules and miscellaneous rate schedules for services rendered by it to vari[583]*583ous classes of customers, excluding however, industrial power plant customers under special contract with it, of which plaintiff is one. That general rate case application was identified as MPSC case number U-5502. Notwithstanding the fact that The Detroit Edison Company had requested no adjustment in its application in that case with respect to rates and charges for industrial process steam and electric service provided plaintiff, the commission on August 1, 1977, issued an amended notice of hearing advising that rates and charges assessed by The Detroit Edison Company for the sale of industrial process steam and electricity to industrial power plant customers, including plaintiff, were relevant to The Detroit Edison Company application and that those rates might be included in the commission’s investigation and might be the subject of a commission order.

At the time The Detroit Edison Company filed its July 20, 1977, application for rate relief in case number U-5502 and at the time the commission issued its amended notice of hearing on August 1, 1977, no final decision had been rendered by the commission in case number U-5218, the then-pending rate case before the commission wherein The Detroit Edison Company was requesting increases in rates and charges assessed to plaintiff for industrial process steam and electric service. Following the amended notice of hearing, plaintiff filed a special appearance and, in the alternative, petitioned to intervene in the commission proceedings. Plaintiff’s counsel objected to any aspect of the proceedings in case number U-5502 that could subject the rates and charges assessed by The Detroit Edison Company to plaintiff for industrial process steam and electricity to modification or adjustment in that case. A hearing officer ruled [584]*584that the rates and charges assessed by The Detroit Edison Company to plaintiff, as well as to other industrial power plant customers under special contract with The Detroit Edison Company, could be subject to possible modification in that case and, accordingly, ruled that plaintiff was not to be excluded from the proceedings in case number U-5502. On September 29, 1977, plaintiff filed with the commission a request for leave to appeal that ruling. The request for leave to appeal was granted on October 3, 1977, but no further action was taken by the commission in connection with plaintiff’s appeal of that ruling until a final opinion and order was rendered by the commission in case number U-5502, approximately one year later, on September 28, 1978, which essentially affirmed the recommendations of the hearing officer as they related to plaintiff.

On appeal, plaintiff argues that the commission’s own practice has been to dismiss a utility’s application for a rate increase when filed before its previous application has been decided, and that there is no valid basis for distinguishing this case factually from those prior cases which did not allow "pancaking”, merely because the commission itself, rather than defendant utility, raised the rate increase issue in the second application.

The defendants argue that the commission may lawfully set rates for all of The Detroit Edison Company’s customers in one general rate proceeding, even if such a proceeding overlaps a special rate proceeding, since no statute specifically prohibits "pancaking”, and the commission’s "anti-pancaking” policy has never been promulgated as a rule. Further, it is one thing to say that the commission has the authority to enforce the "anti-pancaking” policy, but it is quite another to say as [585]*585plaintiff does that the commission must apply it in this case. The purpose of the "anti-pancaking” policy was to prevent the filing of one rate case on top of another. That problem does not arise in this case, because the facts are different since it was the commission itself which issued the amended notice of hearing providing that the steam and electric rates for Edison’s two industrial power plant customers, plaintiff and Port Hurón Paper Company, would be included in rate case number U-5502. The commission stated that it would in the future require plaintiff and Port Huron Paper Company to be included in The Detroit Edison Company’s general rate applications. Thus, this case was, in the view of the commission, the beginning of a new and superior method of setting rates for The Detroit Edison Company.

This Court holds that there was no error in the Michigan Public Service Commission’s ruling that the "anti-pancaking” policy developed by the commission for the speedy administration of justice was not applicable to the facts of this case where it now thought that all of a utility’s customers should be involved in a single rate hearing, as opposed to the prior practice of separate rate hearings for industrial process steam and electric service.

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Bluebook (online)
357 N.W.2d 715, 136 Mich. App. 580, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennwalt-corp-v-public-service-commission-2-michctapp-1984.