In re Central VT Public Service Corp.

In re Central Vermont Public Service Corp.  (97-148); 167 Vt. 626; 
711 A.2d 1158


[Filed 20-Mar-1998]

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 97-148

                             DECEMBER TERM, 1997


In re Tariff Filing of Central  }     APPEALED FROM:
Vermont Public Service Corp.    }
                                }
                                }     Public Service Board
                                }
                                }
                                }     DOCKET NO. 5835


       In the above-entitled cause, the Clerk will enter:

       Appellants Philip Goodman and John H. Macomber appeal from a decision
  of the Public Service Board approving the redesign of rates that Central
  Vermont Public Service Corporation (CVPS) charges its customers. 
  Appellants contend that: (1) the decision was not supported by the
  evidence; (2) evidence was improperly admitted; and (3) the decision
  violated the Due Process and Commerce Clauses of the United States
  Constitution.  We affirm.

                                     I.

       In May 1995, CVPS filed a proposal with the Board to redesign its
  rates under 30 V.S.A. §§ 218 and 225.  Appellants later received limited
  permission to intervene.  After a number of hearings, CVPS and the
  Department of Public Service entered into a Memorandum of Understanding
  (MOU) that proposed a comprehensive settlement of issues raised in the
  proceedings.  Among other provisions, the MOU embodied a modification of
  existing rates by providing that short-term residential rentals subject to
  the Vermont Rooms and Meals Tax under 32 V.S.A. § 9202(3) would not be
  eligible for service under the residential rate, but rather would be
  subject to the general service rate.  Following additional evidentiary
  hearings, the Board issued its decision approving those portions of the MOU
  relating to the Company's rate redesign.  This appeal followed.

                                     II.

       We apply a deferential standard of review in appeals from the Public
  Service Board.  See In re Green Mountain Power Corp., 162 Vt. 378, 380, 648 A.2d 374, 376 (1994).  Orders issued by the Board enjoy a strong
  presumption of validity.  See id.  Decisions regarding rate-making in
  particular "are subject to great deference in this Court so long as it can
  be shown that they are directed at proper regulatory objectives."  In re
  Green Mountain Power Corp., 142 Vt. 373, 380, 455 A.2d 823, 825 (1983).  We
  accept the Board's findings and conclusions unless the appealing party
  demonstrates that they are clearly erroneous.  See Green Mountain Power,
  162 Vt. at 380, 648 A.2d  at 376; 30 V.S.A. § 11(b) (the Board's findings
  "shall be accepted unless clearly erroneous").  In reviewing such findings,
  "we give great deference to the particular expertise and informed judgment
  of the Board."  In re East Georgia Cogeneration Ltd. Partnership, 158 Vt.
  525, 531, 614 A.2d 799, 803 (1992).

       With this deferential standard in mind, we turn to appellants'
  principal claim that the evidence failed to support the Board's conclusion
  that the proposed rate redesign was "just and

 

  reasonable."  30 V.S.A. § 218(a).  The essence of appellants' argument is
  that the Board's decision cannot stand because it rests, in part, upon a
  flawed cost-of-service study.  The study was offered in support of CVPS's
  assertion that the load patterns, or usage of electric service, of dwelling
  units rented on a short-term basis differ from the typical load patterns of
  long-term residential consumers.  The Board's hearing officers were aware
  of the study's shortcomings, noting the small size of the study group and
  the fact that it failed to control for variables other than short-term use.

       The Board acknowledged these deficiencies, and consequently based its
  decision principally on other "evidence suggesting that the occupancy and
  usage patterns of [short-term rental] units differs from the typical
  residential dwelling."  Expert testimony was adduced indicating that the
  intermittent occupancy of short-term rental units "result[ed] in a load
  pattern that is very different [from] the typical load shape of residential
  class consumers," and that intermittent use billed at the residential rate
  did not contribute proportionately to the recovery of fixed costs in
  electrical plant and equipment.  Thus, providing service to short-term
  customers at the residential rate resulted in their not paying bills that
  fairly reflected their impact on the system, and simultaneously "end[ed] up
  unfairly pushing up the unit prices to everyone else on the tariff."  These
  disparities were considered by the Board in determining the fairness of
  both the current and the proposed rate classifications.  See 30 V.S.A. §
  218(a) (Board shall not approve rates that are "unjustly discriminatory, or
  are found to be preferential").

       The Board also found that determining the proper rate class, based on
  the obligation to pay rooms and meals tax, established a clear and uniform
  standard, in place of the "haphazard" arrangement for assigning customers
  then in effect.  This was a "positive step" in the Board's estimation for
  both CVPS and its customers.  Finally, in approving the rate redesign, the
  Board observed that it would be open to "further refinement" of the rate
  structure if new evidence were adduced in future proceedings.

       As noted, "the standards of 30 V.S.A. § 218 call for and expect the
  application of the expert judgment and expertise of the Board."  In re
  Continental Tel. Co., 150 Vt. 76, 78, 549 A.2d 639, 640 (1988).  Under this
  standard the Board was entitled to exercise its judgment in determining the
  weight to be accorded the expert evidence presented, and we may not second-
  guess that determination.  When conflicting or, as here, imperfect evidence
  is admitted, it is not our province to reweigh such evidence, or reassess
  its credibility.  See In re Quechee Lakes Corp, 154 Vt. 543, 554-55, 580 A.2d 957, 963-64 (1990).  Accordingly, on this record we cannot say that
  the Board's approval of the proposed rate redesign was clearly erroneous. 
  See Green Mountain Power, 162 Vt. at 380, 648 A.2d  at 376.

       Appellants' remaining contentions are equally without merit.  They
  argue that the Board improperly relied on non-record considerations when it
  observed that "the present movement towards restructuring the electric
  industry may affect how we examine this issue in the future." Contrary to
  appellants' assertion, this observation at the end of the Board's decision
  does not appear to have played any role in its approval of the rate
  redesign.

       Appellants next assert that the hearing officers improperly admitted
  "explanation of pre-filed testimony when the affiants were not present." 
  Appellants have not identified the hearing or hearings when this
  "explanation" was allegedly admitted, the witnesses it concerned, the
  testimony it involved, or whether it was relied upon by the Board and
  influenced its decision. We do not engage in a search for errors that have
  not been adequately referenced and briefed. See Buttura v. Buttura, 143 Vt.
  95, 98, 463 A.2d 229, 230 (1983).  Accordingly, the claim is waived.

 

       Appellants further allege that the Board's ruling violates the
  Commerce Clause of the United States Constitution by discriminating against
  second-home owners who pay the rooms and meals tax.  The
  rate-classification rule adopted by the Board makes no distinction between
  instate and out-of-state residents, and there is no record evidence that it
  impacts out-of-state residents disproportionately.  Accordingly, there was
  no constitutional violation.  Cf. Camps Newfound/Owatonna v. Town of
  Harrison, 117 S. Ct. 1590, 1599-1600 (1997) (invalidating state tax
  exemption that expressly excluded organizations operated for benefit of
  non-residents); see also Commonwealth Edison Co. v. Montana, 453 U.S. 609,
  619 (1981) (rejecting claim that generally applicable state tax violated
  Commerce Clause because it had disproportionate impact on out-of-state
  businesses).

       Finally, appellants assert that the notice of the proposed rate
  redesign was inadequate and violated due process.  Appellants do not
  contend that the filings and notices provided by CVPS failed to comport
  with the notice requirements of 30 V.S.A. § 225(a).  Moreover, appellants
  plainly were on notice of the proposed rate redesign and had the
  opportunity to present evidence, cross-examine witnesses, and file briefs
  and proposals for decision.  This was all the process that was due.  See
  Ratepayers Coalition of Rochester v. Rochester Elec. Light & Power Co., 153
  Vt. 327, 330-32, 571 A.2d 606, 607-09 (1989) (compliance with 30 V.S.A. §
  225 notice requirements satisfies due process).

       Affirmed.





                              BY THE COURT:



                              _______________________________________
                              Jeffrey L. Amestoy, Chief Justice

                              _______________________________________
                              John A. Dooley, Associate Justice

                              _______________________________________
                              James L. Morse, Associate Justice

                              _______________________________________
                              Marilyn S. Skoglund, Associate Justice

                              _______________________________________
                              Stephen B. Martin, Superior Judge
                              Specially Assigned