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Appeals court rules PSC overstepped authority

Missouri’s Public Service Commission must give the Office of Public Counsel (OPC) and other interested parties a “reasonable” chance to appeal its orders setting new utility rates, a three judge panel of the state appeals court ruled Tuesday.

“By issuing its January 23 order with an effective date of January 26 without any extraordinary circumstances that could justify such a truncated period, the PSC abused its discretion by failing to allow the parties a reasonable time in which to petition for rehearing and/or appeal that order,” Judge Joseph M. Ellis wrote for the Kansas City court’s Writ Division.

Although the specific case involved new electric rates for customers of the Kansas City Power and Light Co. and its KCP&L “General Missouri Operations” division, the ruling likely will affect all Missouri regulated utilities and their customers.

The appeals court panel said its ruling this week was based on a 2007 state Supreme Court ruling involving the same parties — the PSC and the public counsel, a state agency required by law to represent all Missouri utility customers in cases before the PSC, and in any appeals of PSC orders.

In the new case, the two KCP&L companies filed proposed rates in February 2012 and the PSC suspended those rates, creating contested cases that state law says must be considered and ruled on within 11 months.

Last Jan. 9, the PSC issued its order rejecting the proposed tariffs and giving the companies one week to file — in the appeals court’s words — new, “smaller rate increases found by the PSC to be just and reasonable.”

The companies met that deadline and asked for “expedited treatment” so the new rates could go into effect Jan. 26.

On Jan. 23, the PSC overruled the public counsel’s motion to block that three-day turnaround and approved the new rates, effective Jan. 26.

State law gives the public counsel and other parties “the right to apply for rehearing,” the judges noted, but also requires that application to “be filed prior to the effective date of the order,” and to be complete, so that “any issues not raised in a timely filed application for rehearing are not preserved for review by the PSC or in a subsequent appeal from the PSC’s order.”

The OPC asked the appeals court to order the commission to stop its new rates and give parties “an effective date for any new order that provides a reasonably sufficient amount of time for the preparation and filing of a proper application for rehearing.”

Tuesday’s ruling agreed with that request, adding: “While the PSC has discretion to set a time less than thirty days (specified by statute) for the effective date of an order, case law suggests that anything less than ten days is likely unreasonable.”

The appeals court sent the case back to the PSC so it can cancel last January’s order, then “allow the OPC a reasonable time to prepare and file an application for rehearing (from) any subsequent order.”

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