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DUQUESNE LIGHT COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (03/26/86)

decided: March 26, 1986.

DUQUESNE LIGHT COMPANY, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



Appeals from the Orders of the Pennsylvania Public Utility Commission in cases of Pennsylvania Public Utility Commission et al. v. Duquesne Light Company -- Investigation upon the Commission's own Motion into the Extended Outages of the Beaver Valley 1 Nuclear Generating Station, Review Nos. R-80011069 et al.; Orders Nos. I-79070314, I-79040173, I-79070316, I-79070318, P-79040173, and P-79040174, dated July 27, 1979, November 26, 1979, February 20, 1981, November 20, 1981, December 13, 1982 and June 16, 1983.

COUNSEL

Charles E. Thomas, with him, Patricia Armstrong, Charles E. Thomas, Jr., and Thomas T. Niesen, Thomas & Thomas, for petitioner.

Louis G. Cocheres, Assistant Counsel, with him, John A. Levin, Assistant Counsel, Daniel P. Delaney, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.

Irwin A. Popowsky, with him, Scott J. Rubin, Assistant Consumer Advocates, David M. Barasch, Consumer Advocate, and Kenneth R. Pepperney, for intervenor, Office of Consumer Advocate.

President Judge Crumlish, Jr., Judges Rogers, Craig, MacPhail, Doyle, Barry and Palladino. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 96 Pa. Commw. Page 170]

Duquesne Light Company (Duquesne) appeals four Pennsylvania Public Utility Commission (Commission) orders,*fn1 the cumulative effect of which was to direct the

[ 96 Pa. Commw. Page 171]

    refund of over $13.6 million in net energy clause*fn2 charges and interest to its customers. We vacate the Commission's order establishing Duquesne's liability for the refund, and we remand for further proceedings.

The federal Nuclear Regulatory Commission (NRC) ordered Duquesne's Beaver Valley Power Station Unit No. 1 (Beaver Valley I) shut down on March 13, 1979, for re-evaluation of the seismic design of its safety piping. In July 1979 the Commission instituted an investigation into the rate-making consequences of this shutdown.*fn3 Duquesne petitioned to terminate this investigation when Beaver Valley I restarted on August 8, 1979. The Commission denied this petition, explaining that the focus of the probe would center on the impact of past and future Beaver Valley I outages upon Duquesne's rates and net energy clause charges.

Following several days of hearings on this investigation, an administrative law judge (ALJ) issued a recommendation that no rate or net energy clause adjustments were warranted by the shutdown of Beaver Valley I. He based this decision on his conclusion that the seismic design of Beaver Valley I's piping was not imprudent. By order dated February 20, 1981, the Commission rejected this recommended decision as to the net energy clause charges, reasoning that the prudence question turned on whether Duquesne failed to take some responsive action which could have averted the NRC's shutdown order. It concluded that Duquesne was liable for a refund of replacement power cost charges attributed to the shutdown because it had not

[ 96 Pa. Commw. Page 172]

    met its burden of proving that the cost of this replacement power was prudently incurred. The Commission did not at this time order a specific refund. Instead, it remanded to its ...


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