State ex rel. Utilities Commission v. Nantahala Power & Light Co.

311 S.E.2d 619, 66 N.C. App. 546, 1984 N.C. App. LEXIS 2921
CourtCourt of Appeals of North Carolina
DecidedFebruary 21, 1984
DocketNo. 8210UC1289
StatusPublished

This text of 311 S.E.2d 619 (State ex rel. Utilities Commission v. Nantahala Power & Light Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Utilities Commission v. Nantahala Power & Light Co., 311 S.E.2d 619, 66 N.C. App. 546, 1984 N.C. App. LEXIS 2921 (N.C. Ct. App. 1984).

Opinion

WEBB, Judge.

Appellants contend (1) the Utilities Commission is preempted by Federal Energy Regulatory Commission regulations from setting rates that ignore the NFA and the 1971 Apportionment Agreement; (2) the Commission has unconstitutionally burdened interstate commerce; (3) the Commission has intruded into the exclusive and preemptive jurisdiction of the FERC under the Federal Power Act; (4) the Commission did not base its findings that Nantahala and Tapoco constitute a single integrated system and should be treated as one entity with respect to determining rates to applicant’s retail customers on evidence in the record but treated these matters as findings by the Supreme Court; (5) the Utilities Commission has disregarded the determination by the FERC in Nantahala Power and Light Co., 19 FERC [CCH] par. 61, 152 (May 14, 1982) and 20 FERC [CCH] par. 61, 430 (September 30, 1982) that the power exchange agreements are reasonable; (6) that the Commission was in error in finding concealed benefits to Tap-oco and Alcoa in the power exchange agreements; (7) that the roll-in is fatally flawed because it does not allocate 100% of the demand factors for Nantahala and Tapoco; and (8) that Alcoa and Tapoco are not North Carolina public utilities. We overrule all these assignments of error on the basis of our opinion reported at 65 N.C. App. 198, 309 S.E. 2d 473 (1983).

Nantahala argues that the Commission has erroneously assumed that our Supreme Court directed in its opinion that the Commission set rates through the implementation of a roll-in. Nantahala contends that as a result the Commission treated certain statements in the Supreme Court’s opinion as findings of fact and did not consider some of the evidence. Nantahala says that the Commission did not consider uncontradicted evidence that on an hour to hour basis, which is the only way it can be considered, that Nantahala’s generation is poorly suited to meet its load. It [549]*549argues that the Commission ignored evidence as to the distinction between primary and secondary energy, which evidence shows that under the NFA and the 1971 Apportionment Agreement, Nantahala fares better than Tapoco and Alcoa. Nantahala also argues that the Commission ignored evidence that Nantahala and Tapoco are not an integrated company but quoted from our Supreme Court’s opinion that they are, and accepted our Supreme Court’s conclusion as an established fact.

Nantahala argues that the Commission did not properly analyze the NFA and the 1971 Apportionment Agreement and if it had it would have concluded the power exchange agreements are fair and the roll-in used is not fair. It contends that the Commission assumed that Nantahala traded its generation for something of less value, which assumption is not correct. Nantahala argues that the value of its generation as a stand-alone system is not as valuable as the Commission assumed. It does not generate enough power at the right time to serve its customers and not enough reserve for maintenance allowance was assigned to it by the Commission. Nantahala argues that the only way the Commission could assign so small a reserve is by considering it a part of the TVA system which cannot be done without the NFA and the 1971 Apportionment Agreement which the Commission refused to recognize in setting rates.

Nantahala argues further that the Commission erroneously assumed that its generation is of the same value to its customers that it is to TVA. This is not correct because TVA can utilize all the energy when generated by Nantahala while Nantahala’s customers cannot do so. For this reason, in a bargain with TVA, Nan-tahala has to take less energy than it gives in order to secure firm energy which is useful to its customers. Both Nantahala and Tapoco received less energy than they gave, but this does not prove Nantahala was shortchanged in the bargain. It simply proves that neither could bargain with TVA to get the same amount of energy they generated. No analysis was made to determine whether Tapoco had benefitted at the expense of Nantahala in the power exchange agreements, and if such an analysis had been made, it would be found that there was no such benefit.

Nantahala argues that the Commission is wrong in its finding that the NFA is unfair to Nantahala. The evidence is that Nan-[550]*550tahala received sufficient energy under it to meet its needs for the first ten years of its existence. It says the evidence shows that the 1963 Agreement was negotiated in conjunction with a sales contract under which Nantahala sold energy to Tapoco. The Commission voided this sales contract and the parties then renegotiated the apportionment agreement. It does not mean the 1971 Agreement is unfair because the 1963 Agreement contained terms more favorable to Nantahala.

Nantahala makes a persuasive argument which we might accept if our function were the same as the Utilities Commission. It is not our function to find the facts or to dictate to the Utilities Commission the weight to be given material facts. The evidence in this case as to the unfairness of the NFA and the 1971 Apportionment Agreement to the customers of Nantahala was similar to the evidence adduced in the case previously decided. See Nantahala Power, 65 N.C. App. at 209-10, 309 S.E. 2d at 482-83. The Commission’s findings of fact were similar in both cases. We believe the evidence was sufficient to support these findings of fact and we cannot disturb the weight given to the facts found.

The appellants argue that the Commission has set rates that will not allow Nantahala to recover its costs, has required a refund in excess of the net worth of Nantahala and that this confiscates the assets of Nantahala and Alcoa in violation of the Fourteenth Amendment to the Constitution of the United States and Article I, § 19 of the North Carolina Constitution. They also argue that this violates G.S. 62-133 which requires that a public utility be given an adequate rate of return. In light of our holding that the Utilities Commission set a reasonable rate of return we overrule these assignments of error.

Alcoa and Tapoco contend that the cause should be remanded to the Utilities Commission to consider the evidence. We believe that the Commission has made findings of fact based on the evidence which supports its order. This assignment of error is overruled.

Alcoa and Tapoco contend they were denied a fair hearing because the same panel of the Utilities Commission conducted the hearing that conducted the hearing in the previous case. Prior to the hearing, Nantahala made a motion that none of the Commissioners who heard the case in the previous docket be assigned to [551]*551this case. This motion was denied. Alcoa and Tapoco argue that since the panel’s findings of fact and order in this docket is almost identical to its findings of fact and order in the previous docket, although the evidence is different, this shows the bias of the panel. We do not believe we should hold that because the panel made very similar findings of fact and conclusions of law in both cases that this shows they were biased. We believe the evidence in this case supports the findings of fact. We presume the panel based its findings on the evidence. We do not believe the members of the panel had to be disqualified because they had heard a previous case involving the same parties and issues.

Alcoa and Tapoco argue that the Commission could not pierce the corporate veil of Alcoa and Tapoco. Although the Commission recited “that it should pierce the corporate veil” we do not believe this was done.

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Related

State ex rel. Utilities Commission v. Nantahala Power & Light Co.
309 S.E.2d 473 (Court of Appeals of North Carolina, 1983)

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Bluebook (online)
311 S.E.2d 619, 66 N.C. App. 546, 1984 N.C. App. LEXIS 2921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-utilities-commission-v-nantahala-power-light-co-ncctapp-1984.