United Utilities, Inc. v. Alaska Public Utilities Commission

935 P.2d 811, 1997 Alas. LEXIS 41, 1997 WL 149701
CourtAlaska Supreme Court
DecidedMarch 28, 1997
DocketS-7019, S-7099
StatusPublished
Cited by3 cases

This text of 935 P.2d 811 (United Utilities, Inc. v. Alaska Public Utilities Commission) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Utilities, Inc. v. Alaska Public Utilities Commission, 935 P.2d 811, 1997 Alas. LEXIS 41, 1997 WL 149701 (Ala. 1997).

Opinion

OPINION

FABE, Justice.

I. INTRODUCTION

This appeal arises from a decision by the Alaska Public Utilities Commission (APUC) to grant the application of Summit Telephone Co. (Summit) and to deny the application of United Utilities, Inc. (United) to provide telephone service to the communities of Coldfoot and Wiseman. United contends that the APUC failed to follow its prior decisions regarding the factors to be considered in choosing between competing applications and that the APUC’s decision is not supported by the record. United also argues that the APUC violated its right to due process under the Alaska and United States constitutions. The superior court upheld the APUC’s decision. We affirm.

II. FACTS AND PROCEEDINGS

Coldfoot is a small village located at the southern edge of the Brooks Range on the Dalton Highway. Wiseman is an old mining town about ten mules from Coldfoot. Both communities currently have expensive and unreliable telephone service. All calls from Wiseman must be routed through an interconnection in Coldfoot to the long-distance carrier. Summit and United filed applications to provide modern telephone service to these communities. The APUC scheduled a hearing for January 25,1992, to consider the competing applications.

Summit and United proposed different methods of linking Coldfoot and Wiseman. United’s filings called for a permanent microwave system that would transmit signals between two towers. Summit proposed to handle traffic between the two communities by Basic Exchange Telephone Radio Service, to be replaced within five years by buried cable. The applications also revealed the difference in the size of the two companies. United provides telephone service to fifty-six communities and employs more than 100 people. Summit has four employees and provides service to about sixty subscribers in two areas.

In Summit’s written testimony filed with the APUC, Perry Stoop, the founder, general manager, and part owner of Summit, stated that United’s plan to use a microwave system would not work as proposed because of obstacles in the signal’s path. He testified that the system would work only if United, at a cost higher than its estimate, built taller towers or installed a repeater. In response, United filed supplemental testimony from B. Charles Russell, the vice president of operations and engineering for United, stating that United had recently developed a “better path” between Coldfoot and Wiseman. Russell stated that the new path, while still obstructed and $10,000 more expensive than the original proposal, would provide “a workable system.” The supplemental testimony was based on the work of Jack Reed, a consultant hired by United, but United did not file testimony from Reed or include Reed on its witness list.

After Russell’s testimony, United offered to call Reed as a witness and sought to introduce two new exhibits to support Reed’s testimony. The hearing officer refused to admit the testimony and exhibits, stating that United was “simply too late.”

On February 24,1993, the APUC approved Summit’s application to serve Coldfoot and Wiseman and denied United’s application. The APUC noted that its “decision [was] based primarily on two important points.” First, it concluded that United “simply has *814 not ... demonstrated” its ability to “extend satisfactory service to Wiseman.” Second, the APUC found that Summit’s plan “to install cable between Coldfoot and Wiseman is the best way to ensure adequate and satisfactory service in Wiseman.”

After United’s motions for reconsideration and a trial de novo were denied by the APUC, it appealed to the superior court. Superior Court Judge Karen Hunt affirmed the APUC’s decision in its entirety.

III. DISCUSSION

A. Standard of Review

We apply a “reasonable basis standard of review to administrative determinations of complex issues involving agency expertise and specialized knowledge.” Cook Inlet Pipe Line Co. v. Alaska Pub. Utils. Comm’n, 836 P.2d 343, 348 (Alaska 1992). Under this standard of review “we give deference to the agency’s determination ‘so long as it is reasonable, supported by the evidence in the record as a whole, and there is no abuse of discretion.’ ” Id. (citations omitted). This is the appropriate standard of review in determining whether the APUC abused its discretion by failing to follow its own adjudicative precedents.

We review the APUC’s findings of fact under the substantial evidence test. Municipality of Anchorage, Police & Fire Retirement Bd. v. Coffey, 893 P.2d 722, 726 (Alaska 1995). Substantial evidence exists if; considering the record as a whole, the quantum of evidence is substantial enough such that a reasonable mind might accept the APUC’s decision. Id. at 726. Under this standard, we do not independently weigh the evidence but only determine whether such evidence exists. Id.

In considering an appeal from a judgment of the superior court acting as an intermediate court of appeal, we give no deference to the superior court decision. Cook Inlet Pipe Line Co., 836 P.2d at 348.

B. Did the APUC Abuse Its Discretion by Failing to Follow Its Own Adjudicative Precedents?

United argues that the APUC abused its discretion by basing its decision on the quality of the applications rather than on an “analysis of which applicant is best suited to serve the public interest.” The APUC has stated that under AS 42.05.241, “[w]here competing applicants seek a certificate that may be issued only to one entity, the [APUC] must select the applicant it considers the most fit, willing and able of those who demonstrate threshold levels of fitness, willingness and ability to serve.” Re Applications for a Certificate of Public Convenience and Necessity to Operate as a Telecommunications (Cable Television) Public Utility in the Anchorage Area, 2 A.P.U.C. 527, 533-34 (1979). The factors relevant to the selection process may be divided into three categories: (1) internal strengths; (2) external strengths; and (3) miscellaneous indicia of fitness and ability. Id. at 538. The category of “internal strengths” includes “organization; financial backing; technical facilities and equipment, including proposals for engineering and construction of plant to be built; operations expertise; and management and administrative experience.” Id. These five factors establish a “threshold” that all applicants must meet. Id. Once the APUC has made this initial inquiry, it considers “external strengths.” Id. at 539. These factors “focus on the interface between the applicant and the public” and include the rates proposed by the utility, its track record, and its demonstrated alertness to consumer needs or desires, as well as any indications of consumer preferences. Id.

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935 P.2d 811, 1997 Alas. LEXIS 41, 1997 WL 149701, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-utilities-inc-v-alaska-public-utilities-commission-alaska-1997.