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PENNSYLVANIA ELECTRIC COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (11/18/83)

decided: November 18, 1983.

PENNSYLVANIA ELECTRIC COMPANY, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT. OFFICE OF CONSUMER ADVOCATE ET AL., INTERVENORS. METROPOLITAN EDISON COMPANY, PETITIONER V. PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT. OFFICE OF CONSUMER ADVOCATE ET AL., INTERVENORS



Appeals from the Orders of the Pennsylvania Public Utility Commission in cases of Pennsylvania Electric Company v. Pennsylvania Public Utility Commission, No. C-80072106; Pennsylvania Public Utility Commission v. Pennsylvania Electric Company, No. R-80051197; Metropolitan Edison Company v. Pennsylvania Public Utility Commission, No. C-80072105, and Pennsylvania Public Utility Commission v. Metropolitan Edison Company, No. R-80051196.

COUNSEL

Samuel B. Russell, with him W. Edwin Ogden, Ryan, Russell & McConaghy, and James B. Liberman, Berlack, Israels & Liberman, for petitioners.

Bohdan R. Pankiw, Assistant Counsel, with him Steven A. McClaren, Deputy Chief Counsel, and Joseph J. Malatesta, Jr., Chief Counsel, for respondent.

David M. Barasch, Assistant Consumer Advocate, with him Walter W. Cohen, Consumer Advocate, and Maurice A. Frater, McNees, Wallace & Nurick, for intervenor, Office of Consumer Advocate.

John M. Quain, for intervenor, American Society of Utility Investors.

President Judge Crumlish, Jr. and Judges Rogers, Blatt, Williams, Jr. and MacPhail. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 78 Pa. Commw. Page 404]

We have consolidated for argument and disposition the four appeals of Pennsylvania Electric Company (Penelec) and Metropolitan Edison Company (Met-Ed) from four orders of the Public Utility Commission (Commission) entered June 8, 1981 and July 27, 1981. The two Commission orders entered June 8, 1981 dismissed the complaints of Penelec and Met-Ed against temporary rates previously fixed by the Commission by orders entered May 23, 1980. The two Commission orders of July 27, 1981, allowed Penelec and Met-Ed annual rate increases of $55,445,000 and $51,804,000, respectively. We affirm.

History of the Case

This proceeding is another repercussion of the March 28, 1979 accident at the Three Mile Island nuclear-powered generating station Unit No. 2 (TMI-2). Met-Ed and Penelec own a 50% and 25% interest, respectively, in the generating station.*fn1 In response to the accident, the Commission set temporary rates for Met-Ed on April 19, 1979 and for Penelec on April 25, 1979, reflecting the removal of TMI-2 related costs. The Commission adopted an order on June 15, 1979,

[ 78 Pa. Commw. Page 405]

    concluding in part that TMI-2 was no longer used and useful in public service and all costs associated with that unit must be removed from rates.*fn2 Pursuant to this conclusion, the Commission made permanent the temporary rates then in effect.

At the time of the accident, Unit No. 1 (TMI-1) had been shut down for refueling. On September 20, 1979, the Commission ordered Met-Ed and Penelec to show cause why TMI-1 should be considered used and useful and why all costs associated therewith should not be removed from rates.*fn3 On November 27, 1979, Met-Ed and Penelec proposed that a future test year be utilized to provide the necessary factual basis for revision of the rates of the companies if TMI-1 were to be removed from their respective rates. In a pre-hearing order adopted December 21, 1979, the Commission declined to set a test year for such purposes on the grounds that the level of just and reasonable rates for Met-Ed and Penelec were not then an issue before the Commission in that proceeding.

By order of May 23, 1980, the Commission determined that TMI-1 was not used or useful in the public service. Accordingly, TMI-1 was excluded from the rate bases of Met-Ed and Penelec. Pursuant to Section 1310 of the Public Utility Code (Code), 66 Pa. C.S. ยง 1310, the Commission established temporary rates for Met-Ed and Penelec at an annual level which was $26.9 million and $11.7 million, respectively, less than their existing rates. This decrease reflected the exclusion of TMI-1 from the companies' rate bases.

[ 78 Pa. Commw. Page 406]

On July 29, 1980, both Met-Ed and Penelec filed complaints against the respective temporary rates, alleging that these temporary rates were unjust and unreasonable. Pursuant to Section 1308(d) of the Code, Met-Ed and Penelec also filed Tariff No. 44 seeking a $76.4 million increase in rates and Tariff No. 75, seeking a $67.4 million increase in rates, respectively. Testimony was taken before the ALJ on twenty-two days between October 20, 1980 and January 23, 1981. The ALJ recommended in his March 20, 1981 decision that Met-Ed's and Penelec's complaints against temporary rates be dismissed. The Commission's order of June 8, 1981, adopted this decision. The Commission's final orders of July 27, 1981, allowed Met-Ed an annual rate increase of $51,804,000 (including $11 million covering ...


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