Old Dominion Comm. for Fair Util. Rates v. State Corp.
Old Dominion Comm. for Fair Util. Rates v. State Corp.
Opinion of the Court
Appellants, Old Dominion Committee For Fair Utility Rates ("Old Dominion"), VML/VACO APCO Steering Committee ("VML") and Karen E. Torrent ("Torrent"), challenge in these consolidated appeals of right the decision of the State Corporation Commission ("Commission") upholding the constitutionality of Code § 56-585.1:1. This statute suspended the Commission's biennial base rate reviews for Appalachian Power Company (APCO) and Virginia Electric and Power Company, d/b/a Dominion Virginia Power ("Dominion Power") under Code § 56-585.1 until the years 2020 and 2021, respectively. In reaching its decision, the Commission rejected appellants' argument that Code § 56-585.1:1 violates Article IX, § 2 of the Constitution of Virginia. We agree with the Commission and affirm.
I. BACKGROUND
A. Overview of Electric Rates Regulation in Virginia
This constitutional challenge to Code § 56-585.1:1 arises in the context of the General Assembly's exercise of constitutional and legislative authority over the Commission's authority to regulate the rates electric utility companies charge their customers.
1. Commission's Constitutional Ratemaking Authority
The Commission, while created under the 1902 Constitution of Virginia, was not given constitutional authority to regulate electric
rates until the passage of the 1971 Constitution of Virginia, under Article IX, § 2, clause 3, which provides: "
Subject to such criteria and other requirements as may be prescribed by law
, the Commission shall have power and be charged with the duty of regulating the rates ... of ... electric companies." (Emphasis added.)
See
Commonwealth v. Virginia Electric & Power Co.
(
VEPCO
),
2. Commission's Statutory Ratemaking Authority
Long before the Commission received the above-stated constitutional ratemaking authority, the General Assembly first conferred statutory authority upon the Commission to regulate the rates of electric companies in 1914.
VEPCO
,
In 1999, approximately 28 years after the passage of Article IX, § 2, the General Assembly enacted the Virginia Electric Utility Restructuring Act (former Code § 56-576
et seq.
), which deregulated parts of the electric utility industry and introduced competition among the providers of electric generation. 1999 Acts ch. 411;
see
Appalachian Power Company
,
In 2007, the General Assembly ended the deregulation program effective December 2008, and enacted Code § 56-585.1, which established a new regulatory regime. 2007 Acts chs. 888, 933;
see
Appalachian Power Company
,
Then in 2015, the General Assembly enacted Code § 56-585.1:1, which suspended APCO's biennial reviews until 2020 (to review 2018-2019) and prohibited the Commission from adjusting APCO's base rates for any part of this interim period (the "Transitional Rate Period"), except for possible temporary,
emergency increases requested by APCO.
B. Old Dominion's Petition Challenging Code § 56-585.1:1
Old Dominion, an association of large industrial customers of APCO, filed a petition asking the Commission for: (a) a declaratory judgment that Code § 56-585.1:1 violates Article IX, § 2 of the Constitution of Virginia and, accordingly, that APCO is required under Code § 56-585.1 to make biennial review filings in 2016 and 2018; and (b) an order directing APCO to make such filings.
In the petition, Old Dominion asserted that even though the Commission's constitutional authority to regulate electric utility rates under Article IX, § 2 is expressly "[s]ubject to such criteria and other requirements as may be prescribed by law," this provision does not grant to the General Assembly the power to transfer the Commission's ratemaking authority to itself. While giving the General Assembly "wide latitude to determine the standards that must be used by the Commission in regulating rates," according to Old Dominion, "the Constitution reserves for the Commission-and the Commission alone-the power to set electric utility rates." (Citation and internal quotation marks in petition omitted.) "By suspending biennial reviews and prohibiting the Commission from changing base rates (except at the utility's request, on a temporary basis, in emergencies)," Old Dominion argued, Code § 56-585.1:1 unconstitutionally "fixes the base rates that a utility will charge its customers for a period well into the future, and deprives the Commission of any power to reduce or otherwise regulate those rates." In other words, "[i]t leaves the Commission utterly powerless to protect customers from unfair and unreasonable base rates, even when the rates are designed to provide significant excess revenues for the utility and its shareholders." By doing so, the statute, in Old Dominion's view, unconstitutionally prohibits the Commission from discharging "its constitutional power and duty."
After Old Dominion filed the petition, VML, comprised of representatives of local governments and other political subdivisions in Virginia located within APCO's service area, and Torrent, a Virginia residential customer of Dominion Power proceeding pro se, among others, filed responses with the Commission in support of Old Dominion, making the same argument that Code § 56-585.1:1 is unconstitutional under Article IX, § 2.
The Attorney General of Virginia, APCO, and Dominion Power filed responses with the Commission opposing Old Dominion's
petition, arguing that the statute is constitutional.
C. Commission's Final Order
Concluding that Code § 56-585.1:1 is constitutional under Article IX, § 2, the Commission issued a final order denying Old Dominion's petition, to which Commissioner Dimitri dissented. The dissent discussed extensively what it views as the statute's negative public policy outcomes. The Commission rejected the public policy arguments against the statute made by Old Dominion, the dissent and others, as immaterial. The Commission focused instead on the purely legal issue of whether Old Dominion had carried its burden of overcoming the presumption in favor of the statute's constitutionality-which the Commission acknowledged is among the strongest presumptions in Virginia law. Thus, its "duty in this case," the Commission explained, "is to decide the legal question of constitutionality without regard to our public-policy preferences and not to conflate the two."
The Commission reasoned that the temporary base rate freeze under Code § 56-585.1:1 on the base rates it had previously set for APCO and Dominion is "not unprecedented and must be considered in light of [this] Court's unequivocal instruction that any alleged unconstitutionality must be clear and palpable and that any reasonable doubt renders the statute constitutionally valid." As such, the Commission determined, this temporary rate base freeze "can reasonably be considered [as falling] within the 'criteria and other requirements' " that may be prescribed by the General Assembly under Article IX, § 2.
The Commission expressly rejected the theory implicit in the arguments made by Old Dominion, the dissent and other proponents of the petition challenging Code § 56-585.1:1 to the effect that Article IX, § 2"grants to the Commission a plenary power to legislate that is both exclusive of , and superior to , that of the General Assembly. Under this theory, the General Assembly apparently can enact purely procedural , but not substantive , criteria and requirements, or it can enact some substantive criteria and requirements as long as they don't cross a line, which is neither clearly located or defined." (Emphases in original.) In any event, while under this theory the General Assembly "can 'prescribe' how the Commission regulates rates," it "cannot 'remove' the rate-setting authority." Based on such a test, the Commission explained, numerous ratemaking related legislative enactments prior to Code § 56-585.1:1 would have been unconstitutional-with no limiting principle having been proposed. This would include the 1999 Virginia Electric Utility Restructuring Act's removal of the Commission's authority to set rates for electric utilities in favor of deregulation. That legislation would have been unconstitutional because "the General Assembly could never make the public policy decision to deregulate services of the types of companies listed in Article IX, § 2 [i.e., railroad, telephone, gas and electric companies] by removing the Commission's authority to set the rates for such services and thereby allowing prices to be set by the market." (Emphasis in original.)
Eschewing this interpretation of Article IX, § 2, the Commission concluded "[t]here is no historical evidence that those who adopted the 1971 Constitution intended such a grant of plenary policy-making power to the Commission," quoting as support for its conclusion
VEPCO
,
II. ANALYSIS
A. Standard of Review
The constitutionality of Code § 56-585.1:1 presents an issue of law subject to de novo review.
Appalachian Power Company
,
This strong presumption reflects the breadth of legislative power in Virginia. "Unlike the Congress of the United States, the General Assembly of Virginia functions under no grant of power."
Carter v. City of Norfolk
,
In deference to this broad legislative authority, we have repeatedly said that a statute will be upheld as constitutional unless it is "plainly repugnant" to some provision of the Virginia or Federal Constitutions.
Elizabeth River Crossings
,
B. Code § 56-585.1:1 is constitutional under Article IX, § 2
Applying these principles, we agree with the Commission that Old Dominion, with its support from the other appellants, has not overcome the strong presumption that Code § 56-585.1:1 is constitutional under Article IX, § 2. To prevail, the appellants are required to show that Article IX, § 2 prohibits the General Assembly from suspending the Commission's biennial base rate reviews. The Commission's status as a creation of the Constitution of Virginia is not enough, as "[i]t is well established that the [Commission] 'has no inherent power simply because it was created by the Virginia Constitution.' "
Elizabeth River Crossings
,
In the context of the Commission's authority to regulate the rates that electric utility companies charge for services furnished to governmental entities, we concluded in
VEPCO
that the "clear and unambiguous meaning" of the disputed subject-to-such-requirements language is that such authority of the Commission is "subordinate to the power of the General Assembly to command otherwise."
In light of this authority of the General Assembly, we have repeatedly stated in other cases since the passage of the 1971 Constitution of Virginia that the Commission's authority to regulate
the rates of electric utility companies has been "delegated" to it by the General Assembly under various legislative enactments. See
Virginia Elec. & Power Co. v. State Corp. Comm'n
,
Appellants, however, now seek to re-plow the same ground covered in VEPCO by arguing that the terms "criteria" and "requirements" in Article IX, § 2, clause 3, mean essentially the same thing, which is to limit the General Assembly's power to setting procedural standards or rules that the Commission must use in exercising its ratemaking authority. But as we explained in VEPCO , the "ready and complete answer" dispelling this argument is found in Article IX, § 3 of the Constitution of Virginia, providing that "[t]he Commission may prescribe its own rules of practice and procedure not inconsistent with those made by the General Assembly. The General Assembly shall have the power to adopt such rules, to amend, modify, or set aside the Commission's rules, or to substitute rules of its own."
This paragraph from § 3, dealing specifically with the subject of rules of practice and procedure, vests in the General Assembly full and complete power to prescribe such rules or to alter or repeal those which may be promulgated by the [Commission]. It is difficult to believe that the General Assembly, in approving this paragraph for submission to the electorate while at the same time adding the [disputed] language to § 2, intended only to accomplish a single end in both instances-the reservation of the right to prescribe rules of procedure. If the language in § 2, "[s]ubject to such criteria and other requirements as may be prescribed by law," means only that the General Assembly may prescribe rules of procedure, then most of the quoted paragraph of § 3 would be completely superfluous, and that cannot be.
VEPCO
,
The Commission therefore correctly decided that Code § 56-585.1:1 is constitutional because it is not plainly repugnant to Article IX, § 2. We accordingly reject appellants' argument that Article IX, § 2 alters the General Assembly's plenary power to set public policy relative to the regulation of rates of electric utility companies, as it did here in suspending the Commission's biennial base rate reviews of APCO for two cycles with the enactment of Code § 56-585.1:1. In this regard, we recognize that this Court has "no constitutional authority to judge whether a statute is unwise, improper, or inequitable because the legislature, not the judiciary, is the sole author of public policy."
Tvardek v. Powhatan Village Homeowners Ass'n
,
III. CONCLUSION
For the foregoing reasons, we affirm the Commission's order dismissing Old Dominion's petition challenging the constitutionality of Code § 56-585.1:1.
Affirmed.
Code § 56-585.1:1(A) provides, in relevant part:
No biennial reviews of the rates, terms, and conditions for any service of a Phase I Utility, as defined in § 56-585.1 [i.e., APCO], shall be conducted at any time by the State Corporation Commission for the four successive 12-month test periods beginning January 1, 2014, and ending December 31, 2017. No biennial reviews of the rates, terms, and conditions for any service of a Phase II Utility, as defined in § 56-585.1 [i.e., Dominion Power], shall be conducted at any time by the State Corporation Commission for the five successive 12-month test periods beginning January 1, 2015, and ending December 31, 2019. Such test periods beginning January 1, 2014, and ending December 31, 2017, for a Phase I Utility, and beginning January 1, 2015, and ending December 31, 2019, for a Phase II Utility, are collectively referred to herein as the "Transitional Rate Period."
For Dominion Power, Code § 56-585.1:1 effected a five-year base rate freeze, in suspending its biennial reviews until 2021.
The Attorney General did so despite having opposed the passage of Code § 56-585.1:1 on policy grounds.
Like the Attorney General, the Commission had opposed the passage of Code § 56-585.1:1 on policy grounds.
That is to say, we so construed the disputed language without the "need [to] resort to extrinsic evidence in the form of legislative debate or contemporaneous construction to supply the meaning."
VEPCO
,
In reference to the addition of the disputed prefatory phrase in Article IX, § 2, clause 3, "[s]ubject to such criteria and other requirements as required by law," this language was not included by the Commission on Constitutional Revision in the proposed draft of Article IX in what became the 1971 Constitution of Virginia. The language was instead added by the General Assembly when it approved the proposed constitution prior to its submission to the electorate.
VEPCO
,
Dissenting Opinion
"Subject to such criteria and other requirements as may be prescribed by law, the [State Corporation] Commission shall have the power and be charged with the duty of regulating the rates, charges, and services and, except as may be otherwise authorized by the Constitution or by general law, the facilities of railroad, telephone, gas, and electric companies." Va. Const. art. IX, § 2.
This case boils down to a simple question: what does that sentence mean? The majority holds that it means the General Assembly may suspend the Commission's power and duty to set rates for electric companies. I disagree. I reject the premise that the rate-making authority granted to the Commission by the Constitution is subordinate to the General Assembly. Article IX, § 2 allows the legislature to control the general aspects of rate-making by establishing, by statute, standards and prerequisites for the Commission's exercise of its constitutional power. Article IX, § 2 does not empower the General Assembly to suspend the Commission's constitutionally-conferred rate-making authority. I therefore must respectfully dissent. A. THE CASE ON WHICH THE MAJORITY PRINCIPALLY RELIES WAS WRONGLY DECIDED AND SHOULD BE OVERRULED, STARE DECISIS NOTWITHSTANDING
1. THE COURT INCORRECTLY CONSTRUED ARTICLE IX, § 2 IN 1974
The majority principally relies on our precedent in
Commonwealth v. Virginia Electric & Power Co.
(
VEPCO 1974
),
First, the Court rejected VEPCO's assertion that the clause "[s]ubject to such criteria and other requirements as prescribed by law" merely reserved to the General Assembly the power to prescribe procedural rules for the Commission. The Court noted that Article IX, § 3 expressly provided that "[t]he Commission may prescribe its own rules of practice and procedure not inconsistent with those made by the General Assembly. The General Assembly shall have the power to adopt such rules, to amend, modify, or set aside the Commission's rules, or to substitute rules of its own." The Court held that if the "subject to" clause from Article IX, § 2 meant only that the General Assembly could prescribe procedural rules for the Commission, as VEPCO argued, the "subject to" clause and the "rules of practice and procedure" sentences in Article IX, § 3 would be redundant, and such an interpretation is impermissible.
Id.
at 464-65,
Second, it rejected VEPCO's assertion that Article IX, § 2 allowed the General Assembly to overrule the Commission when it came to the regulation of railroad, telephone, gas, and electric
facilities
, but not when it came to regulating their rates, charges,
and services.
The Court's conclusion in
VEPCO 1974
that "the authority of the [Commission] to regulate the rates charged by electric companies ... is subordinate to the power of the General Assembly to command otherwise,"
id. at 465,
The principal defect in the
VEPCO 1974
decision is its selective view of which provisions
would be impermissibly made redundant. For example, by choosing to reject VEPCO's second argument because it would (in the Court's view) give the words "criteria" and "requirements" the same meaning and thereby impermissibly make them redundant, the Court ruled that "any difference between [the 'subject to' clause and the 'except as' clauses] becomes insubstantial."
Id.
at 465,
"Criterion" means "a standard on which a decision or judgment is based." Webster's Third New International Dictionary 538 (1993). "Requirement" means "a requisite or essential condition."
Id.
at 1929. The definitions themselves are sufficient to show that the two words are not the same, and therefore are not redundant. However, that conclusion sheds little light on what they mean. "Words, like syllables, acquire meaning not in isolation but within their context. [Someone] looking up the separate word 'foreign' in a dictionary might ... interpret the phrase 'I have a foreign object in my eye' as referring, perhaps, to something from Italy."
K Mart Corp. v. Cartier, Inc.
,
Read in context within Article IX, § 2's "subject to" clause, the meaning of "such criteria and other requirements" is unambiguous: it means the standards the Commission must consider while setting a rate and the prerequisites the Commission must fulfill before it does so.
See
Webster's Third New International Dictionary,
supra
, at 1791 (defining "prerequisite" as "something that is required"-i.e., a requirement-"beforehand"). These are two separate concepts: what must the Commission consider when deciding, and what must the Commission do before it decides.
The "subject to" clause means that the General Assembly may impose standards and prerequisites that the Commission must adhere to when exercising its power and duty to set rates. It does not mean that the General Assembly may suspend that power and duty. By contrast, the "except as" clause (which is also unambiguous) does permit the General Assembly to eliminate or reassign the Commission's power and duty to regulate facilities. Read in context, the meaning of the two clauses is clear. First, "[s]ubject to such [standards] and other [prerequisites] as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services ... of railroad, telephone, gas, and electric companies." Second, "the Commission shall have the power and be charged with the duty of regulating" "the facilities of railroad, telephone, gas, and electric companies," "except as may be otherwise authorized by this Constitution or by general law." Because these two clauses have different meanings and effects, they cannot be redundant. The Court therefore erred in VEPCO 1974 by giving them the same meaning. It was incorrect in light of both the plain meaning of the words used and the structure of the sentence. Making them redundant is also impermissible.
Similarly, the "subject to" clause in Article IX, § 2 has a different meaning and effect from the "rules of practice and procedure" sentences in Article IX, § 3. "Such criteria and other requirements" are not the same as "rules of practice and procedure." "Criteria and other requirements" to engage in rate-making are obligations
the Commission
must satisfy; "rules of practice and procedure" include obligations
those appearing before the Commission
must satisfy.
This substantive difference between Article IX, §§ 2 and 3 is illustrated by comparing the actual requirements set out in § 156(b)
of the Constitution of 1902 and the Commission's current rules of practice and procedure. The former provided that
[b]efore the commission shall prescribe or fix any rate, charge, or classification of traffic, and before it shall make any order, rule, regulation or requirement directed against any one or more companies by name, the company or companies to be affected by such rate, charge, classification, order, rule, regulation or requirement, shall first be given, by the commission, at least ten days' notice of the time and place, when and where the contemplated action in the premises will be considered and disposed of, and shall be afforded, a reasonable opportunity to introduce evidence and to be heard thereon, to the end that justice may be done, and shall have process to enforce the attendance of witnesses....
Constitution of Virginia § 156(b) (1902).
By contrast, the Commission's rules of practice and procedure require, for example, that "[e]ach document must be filed on standard size white opaque paper, 8-½ by 11 inches in dimension, must be capable of being reproduced in copies of archival quality, and only one side of the paper may be used. Submissions filed electronically shall be made in portable document format (PDF)." 5 VAC § 5-20-150. This obligation is imposed on those who file documents with the Commission, not on the Commission itself. Thus, while "rules of practice and procedure" may also include "criteria and other requirements," the former address more subjects and in greater detail than the latter, and they operate on different objects. Thus, because the "subject to" clause in Article IX, § 2 does not have the same meaning as the "rules of practice and procedure" sentences in Article IX, § 3 when examined in context, they cannot be impermissibly made redundant.
Consequently, VEPCO 1974 was wrongly decided because both pillars of its rationale are flawed. The "subject to" clause has a clear, unambiguous meaning that does not duplicate either the "except as" clause that follows it or the "rules of practice and procedure" sentences in Article IX, § 3.
VEPCO 1974 's interpretation of Article IX, § 2 therefore should be overruled.
2. PRECEDENT MUST NOT BE OVERRULED LIGHTLY, BUT IT MUST GIVE WAY WHEN IT IS IN ERROR
I "recognize the importance of the doctrine of stare decisis in our jurisprudence,"
Nunnally v. Artis
,
I believe that VEPCO 1974 is such a case.
B. THE COMMISSION EXERCISES A LEGISLATIVE FUNCTION WHEN SETTING RATES, BUT ITS POWER TO DO SO IS NO LONGER DELEGATED BY THE GENERAL ASSEMBLY
The majority quotes five cases for the proposition that when setting rates, the Commission exercises a legislative power delegated to it by the General Assembly. Although each case was decided after 1971, they all trace their origins to 1955. After the adoption of the Constitution of 1971, the proposition must be re-examined. I believe that such re-examination reveals that the proposition is no longer valid.
The five cases are
Virginia Electric & Power Co. v. State Corporation Commission
(
VEPCO 2012
),
Consequently, despite the number of cases the majority cites, they all depend on a single statement that predates the Constitution of 1971. It is true that
Potomac Edison II
,
To the contrary, in
Howell
, in 1975, the Court stated that when it undertakes the legislative function of rate-making, "the Commission is the legislative branch of government" and that it "enjoys the full legislative power of the State." 215 Va. at 557, 211 S.E.2d at 270. It cited for these statements
City of Norfolk v. Chesapeake and Potomac Telephone Co.
(
C&P
),
Obviously,
C&P
and
Norfolk & Western
predate the Constitution of 1971. However, they involve a telephone company, which is a transmission company within the definition supplied by § 153 of the Constitution of 1902, and a railway company, which is a transportation company within the definition supplied by the same
section. Therefore, in both cases, the Commission's rate-making authority was conferred directly by the Constitution of 1902 through § 156(b). It was not contingent on a delegation or grant of authority from the legislature to set rates for other utilities by statute under § 156(c), unlike
VEPCO 1955
, which involved an electric company. The contrast between the two sets of cases is stark: where the Commission acted under § 156(b), it was "
the
legislative branch,"
Norfolk & Western
,
This historical context is not mere digression. The Commission on Constitutional Revision ("the CCR") affirmatively acted in 1969 to draft a constitution that elevated the Commission's authority over electric rates from a power merely delegated by the General Assembly to one with a direct constitutional foundation (like the Commission's authority over telephone and railway rates under the Constitution of 1902). It noted that the Commission lacked direct constitutional authority to set the rates of "companies furnishing gas and electricity, two of the most vital services provided to citizens of Virginia." Report of the Commission on Constitutional Revision 285 (1969). It proposed that the Commission "be given exclusive and paramount jurisdiction
to regulate the rates, charges, and services of" such companies, just as it had existing authority over railroad and telephone companies.
The majority notes that the General Assembly altered the CCR's draft by adding the "subject to" clause to Article IX, § 2. Relying on VEPCO 1974 , it holds that this clause subordinates the Commission's rate-making authority to the General Assembly. But reflect for a moment on the implication of that holding. It means that rather than elevating the Commission's authority over electric rates to a direct constitutional foundation equal to that it already had over railroad and telephone rates under § 156(b) of the Constitution of 1902, the Constitution of 1971 instead diminished the Commission's authority over railroad and telephone rates to a mere statutory foundation like that it had over electric rates under § 156(c) of the Constitution of 1902. In other words, the majority's holding turns Article IX, § 2 upside-down, allowing the Commission to set railroad and telephone rates only with the legislature's indulgence, in effect eliminating the Commission's independence as the "additional" branch of government recognized in C&P and Norfolk & Western.
Surely, if that seismic result had truly been the intention of the General Assembly when it appended the "subject to" clause to the CCR's draft of Article IX, § 2, there would be
some
mention of it in the record of its proceedings and debates. Yet the only mention of the clause or reason for adding it to the draft was made by Senator Edward L. Breeden, Jr., of Norfolk, chairman of the Committee on Insurance and Banking that proposed the amendment. He said that the intention was "to give legislative control over the
general aspects
of rate-making." Proceedings and Debates for the Senate of Virginia Pertaining to the Amendment of the Constitution 269 (Extra Session 1969, Regular Session 1970) (emphasis added). This slender reed will not bear the weight.
I agree with the majority that the Commission has no authority to act simply because it is mentioned in the Constitution. To the contrary, as the Court stated in
Elizabeth River Crossings OpCo, LLC v. Meeks
,
C. IF THE GENERAL ASSEMBLY CAN SUSPEND THE COMMISSION'S RATE-MAKING POWERS FOR A PERIOD OF YEARS, IT CAN SUSPEND THEM FOREVER
If it is true, as the majority holds, that the Commission's rate-making authority is "subordinate to the power of the General Assembly,"
supra
at ---- (quoting
VEPCO 1974
,
As the Court acknowledged in 1920, before the Constitution of 1902 created the Commission "the State, through the legislature, certainly had plenary power over the rates of all public service corporations, but the power had never been exercised. The avowed purpose of the convention, known to all, was to exercise the dormant power of the State for the control of such corporations. It provided for the organization of the commission, and made it the governmental department of the State for the exercise of such powers."
City of Richmond v. Chesapeake & Potomac Telephone Co.
,
The appellants raise the specter of the General Assembly choosing to set rates itself. At oral argument, the Commonwealth repeatedly avoided the issue of whether the asserted "subordination" of the Commission to the General Assembly allowed the legislature to do so. It reiterated that its position was solely that Code § 56-585.1:1 merely froze the existing rates set by the Commission, in effect suspending the Commission's rate-making power. But if Article IX, § 2 confers on the General Assembly the power to suspend the Commission's authority, there is no limit to the duration for which such a suspension may last. Thus, this interpretation restores the precise evil that led the people to create the Commission in 1902; they did so to ensure that someone was exercising the power to set the rates of public service corporations. The conclusion that the General Assembly has the power to suspend the Commission's authority indefinitely, which follows inexorably from the majority's opinion, would thwart that will.
The Commonwealth responded at oral argument that if some limiting principle were required to prevent the General Assembly from suspending the Commission's authority for too long, democracy was the limiting principle-i.e., that the voters would reprimand the legislature. The majority adopts this aphorism as its answer, too. Together, they seem to envision that after some period of sufficient duration, a majority of voters in a majority of the districts will revolt, uniting under the banner that the Commission's authority must be restored, and secure a bicameral legislative majority to compel that outcome. Despite having been previously elected to legislative office, I cannot begin to speculate how many years would have to pass before the esoteric issue of the Commission's constitutional authority to set rates rose to predominate over other public policy issues.
But more to the point, the people already have endured a period of legislative inaction in the field of rate-making. They spoke clearly against it when they created the Commission in 1902. They granted the Commission rate-making authority over railroads and telephone companies then, and expanded that power to include electric companies in 1971. Nothing in the text or history of Article IX, § 2 counsels otherwise.
D. CONCLUSION
For these reasons, I reject the conclusion that the Commission's rate-making authority is subordinate to the General Assembly. The clear and unambiguous language of Article IX, § 2 allows the legislature to control the general aspects of rate-making by establishing, by statute, standards and prerequisites for the Commission's exercise of its constitutional power. Article IX, § 2 does not empower the General Assembly to suspend the Commission's rate-making authority, whether for one year or forever. I therefore respectfully dissent from the majority's holding to the contrary.
VEPCO argued that the words "except as may be otherwise authorized by the Constitution or by general law, the facilities of railroad, telephone, gas, and electric companies" expressly permitted the General Assembly to supersede the Commission's authority to regulate facilities by statute, so the "subject to" clause at the beginning of the sentence could not have the same effect on the Commission's authority to regulate "rates, charges, and services."
The majority's conclusion that "[a] law suspending the Commission's" rate-making process "fits comfortably" within the definition of "requirement," supra at 765, is unclear to me. Even accepting the majority's alternative definition of "requirement," Code § 56-585.1:1 does not impose some condition that the Commission must fulfill before it sets rates. There is no requirement or prerequisite that the Commission may satisfy in order to proceed to setting rates. To the contrary, the statute simply prohibits the Commission from setting rates, regardless of what it does first.
This interpretation shows that VEPCO was incorrect to argue that the "subject to" clause merely empowered the General Assembly to establish rules of practice and procedure. However, it also illustrates that the Court went too far in rejecting VEPCO's mistaken interpretation. There is a middle ground between VEPCO's interpretation of the clause and interpreting it to mean that the Commission's rate-making authority is wholly subordinate to the General Assembly, as the Court ruled.
This provision does not create "criteria," but it does impose a "requirement," further illustrating the difference between the two.
Potomac Edison II
also cites
Hopewell Cogeneration Ltd. Partnership v. State Corporation Commission
,
Central Telephone Co.
also cites
Howell v. Chesapeake & Potomac Telephone Co.
,
To the contrary, the "general aspects of rate-making" are consistent with the meanings of "criteria" and "requirements" in context that I describe above. They include the General Assembly's power to establish standards and prerequisites. They do not include empowering the General Assembly to suspend the Commission's authority to set rates altogether.
Reference
- Full Case Name
- OLD DOMINION COMMITTEE FOR FAIR UTILITY RATES v. STATE CORPORATION COMMISSION, Et Al. VML/VACO APCO Steering Committee v. State Corporation Commission, Et Al. Karen E. Torrent v. State Corporation Commission, Et Al.
- Cited By
- 7 cases
- Status
- Published