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DAVID M. BARASCH v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (09/29/86)

decided: September 29, 1986.

DAVID M. BARASCH, CONSUMER ADVOCATE, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT. W. WILSON GOODE, MAYOR, CITY OF PHILADELPHIA, PETITIONER V. PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT. TOWNSHIP OF CHELTENHAM, TOWNSHIP OF ABINGTON, TOWNSHIP OF LOWER MERION, TOWNSHIP OF UPPER DUBLIN, TOWNSHIP OF UPPER MERION, TOWNSHIP OF UPPER MORELAND, TOWNSHIP OF WHITEMARSH AND BOROUGH OF ROCKLEDGE, PETITIONERS V. PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



Appeals from the Order of the Pennsylvania Public Utility Commission, in case of Pennsylvania Public Utility Commission et al. v. Philadelphia Electric Company, No. R-842590.

COUNSEL

Scott J. Rubin, Assistant Consumer Advocate, with him, Irwin A. Popowsky, David Wersan and Robert P. Haynes, III, Assistant Consumer Advocates and David M. Barasch, Consumer Advocate, for petitioner, David M. Barasch, Consumer Advocate.

Kathryn S. Lewis, Chief Deputy City Solicitor, with her, Ralph J. Luongo and Charles E. Rainey, Jr., Assistant City Solicitors, and Barbara W. Mather, City Solicitor, for petitioner, W. Wilson Goode, Mayor, City of Philadelphia.

George B. Ditter, Jenkins, Tarquini & Jenkins, for petitioners, Townships of Cheltenham, Abington, Lower Merion, Upper Dublin, Upper Merion, Whitemarsh and Borough of Rockledge.

Veronica A. Smith, Assistant Counsel, with her, Daniel P. Delaney, Deputy Chief Counsel, Albert W. Johnson, III, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.

David B. MacGregor, with him, Robert H. Young, Donald F. Clarke and Jack E. Jerrett, Morgan, Lewis and Bockius, and of counsel: Edward G. Bauer, Jr., Vice President and General Counsel, for intervenor, Philadelphia Electric Company.

President Judge Crumlish, Jr., Judges Craig, MacPhail, Barry and Colins. Opinion by President Judge Crumlish, Jr. Judge Colins dissents.

Author: Crumlish

[ 101 Pa. Commw. Page 78]

The Office of Consumer Advocate (OCA), the City of Philadelphia (City) and eight suburban Philadelphia municipalities (municipalities)*fn1 separately appeal a Pennsylvania Public Utility Commission (Commission) order granting Philadelphia Electric Company (PECO) a base rate increase of $149,636,000. These appeals were consolidated for argument and disposition. We affirm the Commission order as to all three appeals.

On April 27, 1984, PECO filed Supplement No. 23 to Tariff Electric -- Pa. P.U.C. No. 26, to become effective

[ 101 Pa. Commw. Page 79]

January 27, 1985. This supplement contained a base rate increase of approximately $252,000,000 predicated upon historic and future test years ending December 31, 1983, and December 31, 1984, respectively. After complaints were filed against PECO's proposed rate increase by the OCA, the City, the municipalities, and other parties, the Commission suspended Supplement No. 23 for seven months and instituted an investigation into its lawfulness and reasonableness. Following public hearings, an administrative law judge (ALJ) issued a November 27, 1984 recommended decision. Ruling upon exceptions to the ALJ's recommended decision, the Commission on January 25, 1985, issued the order granting the $149,636,000 rate increase*fn2 from which the appeals now before us were taken.

Our scope of review of a Commission order in a rate case is limited to determining whether the Commission violated constitutional rights, committed an error of law, or made findings of fact that are not supported by substantial evidence. Green v. Pennsylvania Public Utility Commission, 81 Pa. Commonwealth Ct. 55, 473 A.2d 209 (1984), aff'd sub nom., Barasch v. Pennsylvania Public Utility Commission, 507 Pa. 430, 490 A.2d 806 (1985).

OCA Appeal

Surplus on Cancellation of Construction Contracts

In its appeal, the OCA challenges the Commission's decision not to deduct from PECO's rate base a surplus of $7,448,362 in payments received from General Atomic Corporation (GAC) in settlement of GAC's cancellation

[ 101 Pa. Commw. Page 80]

    of contracts for construction of two nuclear generating stations, Fulton and Summit, in which PECO had invested funds.*fn3

The OCA contends that the Commission erred in not deducting the $7,448,362 surplus from rate base because these monies were not supplied by investors. We disagree.

The ALJ and the Commission both declined to reduce PECO's rate base to reflect the surplus of the GAC payments because the cancelled construction projects were funded entirely by PECO's shareholders, not by its ratepayers.*fn4 They cited our decision in Philadelphia Suburban Water Co. v. Pennsylvania Public Utility Commission, 58 Pa. Commonwealth Ct. 272, 427 A.2d 1244 (1981), where we held that the Commission erred by ...


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