2024-11-25 1250 Oceanside LLC Response to PD

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Application of Hawaii Elec. Light Co., Inc.,60 Haw.625 (1979) 594 P.2d 612 12 P.U.R.4th 106 (1975) (denied utility's proposal for declining block structure); Re Consumers Power Co., 3 P.U.R.4th 321 (1974) (flat rates); Re **627 Public Service Co., 9 P.U.R.4th 224 (1975); Re Madison Gas and Electric Co., supra, 5 P.U.R.4th 28;Re Detroit Edison Co.,2 P.U.R.4th 188(1973).Redesigning rates to meet the policy considerations hereinbefore stated can be accomplished by placing a heavier burden on larger users than on smaller users. Re Carolina Power and Light Co., 8 P.U.R.4th 449 (1975); Application of Arkansas Louisiana Gas Co., 558 P.2d 376 (Ok1.1976); Re Public Service Co., Supra, 9 P.U.R.4th at 230. While rate fixing need not be controlled exclusively by precise cost allocation 15 it is not enough to discriminate within the residential rate schedule,as HELCO does,without a rational basis. For the foregoing reasons,we affirm as to the first issue on the reasonableness of the 8.95%rate of return on HELCO's rate base; but remand with respect to the second issue on the reasonableness of the declining block residential rate structure with directions that the Commission hold further proceedings and make the necessary findings of fact and conclusions of law in accordance with part II of this opinion.In the interim pending the outcome of the Commission's further consideration of the reasonableness of the residential rate structure,the declining block structure is to be maintained.Should the Commission be unable to determine the reasonableness of the declining block residential rate structure and find that it is unreasonably discriminatory in that one or more classes have been and continue to be unreasonably burdened and one or more classes unjustly enriched,it shall order prospectively,to the respective classes,the necessary adjustments to the rates to be billed in the future.The revenue requirement is to remain the same and is not to be affected. The amounts to be prospectively refunded or surcharged, calculated from the effective date of the rates approved in Decision and Order No.4123,can be determined by comparing the amounts paid by the residential customer classes under the declining block rate structure with what they would have paid under the new structure developed by the Commission. All Citations 60 Haw. 625, 594 P.2d 612 Footnotes 1 See note 3,Infra. 2 A more succinct formulation of the Bluefield standard appears in 141Federal Power Commission v.Hope Natural Gas Co.,320 U.S. 591,603,64 S.Ct. 281,288,88 L.Ed.333 (1944): (T)he fixing of"just and reasonable"rates involves a balancing of the investor and the consumer interests....(T)he return to the equity owner should be commensurate with returns on investments in other enterprises having corresponding risks. That return, moreover, should be sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital. 3 HELCO relies on Southern Bell Telephone and Telegraph Co.v.Bevis,279 So.2d 285(Fla.1973)as permitting"make- whole"proceedings in which only limited proof is offered by the utility. We wish to point out, however,that Southern Bell involved a proceeding pursuant to emergency procedures. Since HELCO adduced evidence sufficient to justify the 8.95%Rate of return previously authorized,we need not decide the possible due process problems inherent in a make- whole proceeding in which only limited proof is offered. 4 HELCO's request to be allowed to earn its authorized rate of return is not unusual. With inflation, earnings are unable to keep pace with the increasing rate base so that, for many utilities, the authorized rate of return is never achieved. Increasingly, utilities have sought interim or emergency relief,pending a determination of final rates and subject to a 1 ESTL AVii CD 2024 Thomson Reuters. No claim to original U.S. Government Works. 13