Town of Narragansett v. Malachowski

621 A.2d 190, 1993 R.I. LEXIS 63, 1993 WL 52219
Supreme Court of Rhode Island·Decided March 1, 1993·No. No. 91-573-M.P.·Published·Cited by 2 cases

Opinion

OPINION

WEISBERGER, Justice.

This case comes before us on a statutory petition for certiorari brought by the town of Narragansett (petitioner or town) pursuant to G.L.1956 (1990 Reenactment) § 39-5-1 against James J. Malachowski, Lila M. Sapinsley and Paul E. Hanaway in their capacities as chairman and members of the Public Utilities Commission (commission); [192] the Wakefield Water Company (company); and the Division of Public Utilities and Carriers (division). In its petition, the town seeks reversal of two orders of the commission issued in docket No. 2006. The town advances three arguments in support of its petition for certiorari. First, the petitioner contends that the commission’s order approving the agreement and settlement negotiated by the company and the division, which related to a general rate increase for the company, violated the statutory notice provisions of G.L.1956 (1990 Reenactment) § 39-3-11. Second, petitioner contends that the commission’s denial of the town’s motion to intervene out of time and its motion to reopen public hearing constituted an abuse of discretion by the commission. Third, petitioner argues that the notice given of the changes in the proposed rate increase did not comply with G.L.1956 (1988 Reenactment) § 42-35-9. We deny the town’s petition and affirm the commission’s orders issued in docket No. 2006. The facts insofar as pertinent to this petition for certiorari are as follows.

On March 15, 1991, the company filed a notice of proposed changes in rates with the commission. Filed and published in compliance with §§ 39-3-10 and 39-3-11, the proposed rate schedules were designed to collect additional revenues in the amount of $439,608 or an overall increase of 28.39 percent. This increase was to become effective on April 14, 1991. Generally the company proposed in its filing to adopt a rate tariff which would consist of a customer-service charge plus a volume charge reflecting the volume of water actually used by the customer. The company’s filing included prefiled testimony and exhibits, as well as references to revised tariff sheets. Those references indicated a specific increase in rates for the company’s two wholesale customers, petitioner and the town of South Kingstown (South Kingstown).

The wholesale-customer class is also referred to as the sales-for-resale customer class. In a public utility matter where the utility in question is water, the sales-for-resale class purchases water at a discount rate from the company in order to resell the water to the wholesaler’s customers. In the present filing, the company had proposed a rate for its wholesale customers of $0.54 per thousand gallons of water. Additionally a notice contained in the rate-increase filing stated that “[t]he proposed increase has been allocated to the various classes of customers through a cost allocation study.”

Prior to the filing, on March 11,1991, the company’s vice president and manager, Stanley J. Knox (Knox), sent letters to Vincent Izzo and Steven Alfred, in their capacity as town managers of the two sales-for-resale customers (hereafter wholesale), petitioner, and South Kingstown, respectively. In accordance with § 39-3-12.1, the communication informed the town managers that the company was applying for a rate increase and offered to be available to answer any questions either customer might have had with respect to the rate-increase application.

Subsequent to the filing of the proposed change in rates, the commission, pursuant to § 39-3-11, issued a suspension order that suspended the effective date of the rate increase for five months. The dual purpose of the suspension order was to allow time for the commission to conduct a “thorough and complete” investigation of the proposal and to hold public hearings with respect to the rate increase.

Thereafter, on or about May 13, 1991, the commission clerk mailed a copy of the schedule for the matter’s docket to the division, the company, and other interested parties, including the town managers of petitioner town and South Kingstown. Contained within the schedule was a notification to petitioner that the date to file a motion to intervene had been extended to May 17, 1991, and that the date for the division, the company, and the intervenors, if any, to file direct testimony with respect to the filing was July 23, 1991. On June 4, 1991, the commission sent a revised schedule to the parties, including the town managers of petitioner town and South Kingstown. This second notification also contained the dates to intervene and to file testimony in this matter. On July 23,1991, [193] the division filed its direct testimony. As of that date, petitioner had neither intervened nor filed direct testimony in the case.

Pursuant to a commission notice dated August 6, 1991, the hearings in this matter were scheduled to begin on August 19, 1991, and a public hearing was to be held on August 20, 1991, in South Kingstown. After conducting an investigation of the company’s proposal, the division, in its direct testimony filed on July 27, recommended that the company’s request to increase rates be reduced to $282,532 or 18.24 percent over revenues at existing rates. Thereafter, the division and the company engaged in settlement discussions relating to the company’s revenue requirements, as well as its rate design. The division and the company advised the commission that a settlement was probable and that the parties would likely file a stipulation prior to the date the hearings were scheduled to begin. Consequently on August 20, 1991, the company and the division filed an agreement and settlement with the commission.

Generally the agreement and settlement provided that the company would implement new rates designed to collect annual revenues in the approximate amount of $1,882,549. This figure represented an increase in annual revenues of approximately $320,000 or 20.6 percent over revenues at existing rates. Of significance for the purposes of this petition was the rate change proposed to be charged to petitioner as a wholesale customer. Apparently the rate in existence prior to the filing of the notice of proposed changes in rates was $0.44 per thousand gallons of water. As was previously noted, the rate proposed in the filing was $.54 per thousand gallons of water. The rate agreed to by the company and the division as part of the agreement and settlement was $0.76 per thousand gallons of water.

On August 21, 1991, a hearing was held to give the commission the opportunity to question the parties with respect to their proposed agreement and settlement. Gerald M. Hill (Hill), director of rates, economics and accounting for General Waterworks Management and Service Company, and Knox testified on behalf of the company. Stephen Scialabba (Scialabba), chief accountant, testified on behalf of the division. Both Hill and Scialabba testified that, in their opinion, the agreement and settlement was fair and equitable to both the company and to ratepayers.

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Town of Narragansett v. Malachowski, 621 A.2d 190, 1993 R.I. LEXIS 63, 1993 WL 52219 (R.I. 1993).

621 A.2d 190 (Town of Narragansett v. Malachowski) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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