Petition of the Off. Of People's Counsel
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The Supreme Court of Maryland reviewed a decision by the Maryland Public Service Commission ("Commission") that approved a rate increase for the Washington Gas and Light Company ("Washington Gas"). The rate increase came after the Commission approved the acquisition of Washington Gas by AltaGas Limited ("AltaGas"). The Commission had imposed conditions on the merger, including a condition that required Washington Gas customer rates to reflect "merger-related savings" of "not less than $800,000 per year over the five years" following the merger’s closing. The Office of People’s Counsel ("OPC") objected to the Commission's interpretation of this condition and the approved rate increase.
The court held that the appropriate standard of review for the Commission’s interpretation of its own prior order is the arbitrary or capricious standard. Using this standard, the court found that the Commission’s interpretation of the merger-related savings condition was not arbitrary or capricious. The court determined that the Commission had reasonably explained the inclusion of the condition in the merger order and OPC had not shown that this explanation was arbitrary or capricious. Therefore, the court affirmed the Commission's decision to approve the rate increase for Washington Gas.
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