Opinion
No. CX-97-1603.
Filed February 17, 1998.
Appeal from the Minnesota Public Utilities Commission, Docket No. P-421/CI-97-498.
Martha J. Keon, James A. Gallagher, David G. Seykora, (for relator)
Hubert H. Humphrey III, Attorney General, Dennis D. Ahlers, Asst. Attorney General, (for respondent)
Considered and decided by Harten, Presiding Judge, Huspeni, Judge, and Klaphake, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Relator US West seeks review of an order by respondent Minnesota Public Utilities Commission denying a price increase. Because the MPUC had authority to determine the propriety of the price increase and because the MPUC's decision is supported by the record, we affirm.
FACTS
On October 19, 1995, relator US WEST filed with respondent Minnesota Public Utilities Commission (MPUC) a proposed price increase for Customized Call Management Services (CCMS). Call transfer, one of the three services offered as part of the CCMS package, was priced at $5/month, the same price as the entire CCMS package. Thus, US WEST sought MPUC approval to increase the price of CCMS to $6/month. US WEST notified its customers of the proposed price increase, but said it did "not intend to implement the change until approval for the proposed changes ha[d] been received from the Commission."
CCMS is a cluster of three services marketed to businesses that includes call hold, call transfer and 3-way conferencing.
In comments filed in response to this notice, the Department of Public Service (department) pointed out that the current rate structure was established as the result of a settlement filed less than four months before US WEST's October 19 filing. The department went on to propose correcting the pricing anomaly by lowering the cost of business call transfer still further to $4/month. The department also argued that an additional pricing anomaly should be investigated (US WEST charged $6/month for residential call transfer and $5/month for business call transfer). US WEST objected to the department adding the irrelevant issues of decreasing call transfer and investigation of residential services, reiterated that it did not intend to implement the price increase, and argued that the commission was bound by the time frames contained in Minn. Stat. § 237.60, subd. 2(b), the statute supporting the filing.
As part of that settlement, US WEST addressed the same pricing anomaly by lowering the price of call transfer from $6 to $5 and agreeing to leave the cost of CCMS at $5. An earlier request by US WEST to increase the price of CCMS from $5 to $6 was dropped as part of the settlement.
By order dated January 22, 1997, after a hearing in December 1996, the MPUC found that an investigation under the authority of Minn. Stat. § 237.081 was required to resolve the issues raised by the proposed rate increase. It also found that US WEST had waived the procedure for automatic approval contained in section 237.60, subdivision 2(b). The commission denied US WEST's request to increase rates and ordered an investigation.
In addressing US WEST's petition to reconsider the January 22, 1997, order, the MPUC recognized US WEST's original waiver of the statute's deadlines but ordered:
Upon reconsideration, the Commission agrees with the Company that the rate increase proposal should be implemented at this time, pending the ongoing investigation. US WEST could not have contemplated the length of time the filing would remain pending when the Company waived the automatic approval process under Minn. Stat. § 237.60, subd. 2(b).
Notwithstanding the April 7, 1997, order, the company chose not to implement the interim price increase.
Finally, by order dated July 31, 1997, after a hearing in July 1997, the MPUC denied US WEST's price increase request that had been filed nearly two years earlier.
DECISION
A reviewing court will affirm an administrative decision unless it violates constitutional rights, exceeds statutory authority or jurisdiction, results from unlawful procedures, is affected by an error of law, is unsupported by substantial evidence, or is arbitrary or capricious. Minn. Stat. § 14.69 (1996).
Call transfer and the other services that make up CCMS are categorized by statute as services subject to emerging competition. See Minn. Stat. § 237.59 (1996). US WEST argues that once the ten-month statutory deadline for automatic approval passed, the MPUC had no authority to act. See Minn. Stat. § 237.60, subd. 2(b) (1996) (governing price increases for services subject to emerging competition and allowing for automatic approval within ten months absent commission action). We must evaluate US WEST's statutory argument, however, in the context of the MPUC's determination that US WEST had, in fact, waived the procedure for automatic approval contained in section 237.60, subdivision 2(b). In finding a waiver, the MPUC stated:
This section provides in part:
A company may increase the rate for a service subject to emerging competition * * * effective 30 days after notice is given to affected customers, the commission, and the department. * * *
An interested party may file comments on the proposed rate increase within 30 days of the filing. If no party objects to the increase within that time, the rate is deemed approved. * * * If interim rates are not ordered, the rate increase is not refundable. * * * [I]f a contested case hearing before an administrative law judge is required the commission shall make a final decision within ten months of the date the price change was filed. If the commission does not do so, the price change is deemed approved.
Id .
US WEST's statement in its initial petition that it "does not intend to implement the changes in CCMS until the Commission has approved the proposal" was reasonably construed by the Commission and the Department as a waiver of the automatic approval process under Minn. Stat. § 237.60, subd. 2(b). This reasonable assumption caused the agencies to choose a line of action different from their usual course under the statute: the Department did not attempt to adhere to the 30 day time limit to lodge its objections to the filing and the Commission did not attempt to make a determination on the public interest of the filing or to declare the rate increase interim in nature within 60 days.
The MPUC's finding of waiver is supported by the record. Based on that finding, the MPUC retained jurisdiction to consider the propriety of the price increase beyond the normal ten-month deadline. See Minn. Stat. § 237.60, subd. 2(b) (commission to make determination of propriety of price increase). Therefore, we need not reach the issue of whether, absent waiver, the MPUC would have retained jurisdiction beyond the 10 months stated in the statute. But see Henry v. MPUC , 392 N.W.2d 209, 213-14 (Minn. 1986) (MPUC retains jurisdiction to issue decision in rate proceeding even if it fails to make determination during ten-month suspension period under Minn. Stat. § 237.075, subd. 2(a)); Northwestern Bell v. MPUC , 417 N.W.2d 274, 279 (Minn.App. 1987) (quoting and applying reasoning from Henry ), review denied (Minn. Mar. 18 and Apr. 4, 1988).
US WEST next argues that because all parties agree that CCMS is subject to emerging competition, section 237.60 prohibits the MPUC from investigating the rate hike or disapproving it. Regulation of price increases, argues US WEST, is limited to those instances where a complaint is filed. See Minn. Stat. § 237.60, subd. 5 (1996) (competitive services subject to complaint procedure of section 237.081). In arguing lack of jurisdiction, US WEST focuses on the language in section 237.60, subdivision 2(a) allowing the MPUC to prevent a price decrease "on its own motion, under section 237.081," and argues that statutory interpretation prohibits the MPUC from investigating a price increase under section 237.081 because section 237.60, subdivision 2(b), contains no similar reference. US WEST also cites Minn. Stat. § 645.26, subd. 1 (1996) (to extent provisions cannot be harmonized, specific provisions are construed as exceptions to general provisions).
We need not reach the issue of whether the MPUC had the authority to investigate this price increase under section 237.081. Because we have upheld the determination of the MPUC that US WEST waived the 10-month limitations under section 237.60, it is to that statute we look for authority to investigate. Subdivision 2(b) of that statute provides authority:
[T]he commission, after a contested case hearing or an expedited hearing * * * must make a final decision regarding the propriety of the rate increase * * *.
The MPUC properly exercised authority under section 237.60 to determine the propriety of a price increase for services subject to emerging competition.
We note, further, that reference in section 237.60, subdivision 2(a), (the section addressing price decreases) to section 237.081 recognized that section as a means by which the commission could prohibit a price decrease. Such a reference would have been superfluous in subdivision 2(b) (the section addressing price increases) because that statute explicitly recognizes commission authority to determine the propriety of a price increase. In light of that explicit authority and the commission's finding that US WEST waived the automatic approval provisions, the commission's authority to determine the propriety of the proposed price increase survived the 10-month procedural deadline.
US WEST also relies on a MPUC order filed in In re Proposal of US WEST Comm . to Increase Rates for Certain Operator Servs. , Docket No. P-421/EM-97-1079, Sept. 16, 1997. The facts underlying the two orders are distinguishable. The department did not oppose the increase proposed in Operator Services . The Attorney General's office opposed the increase, triggering the complaint procedure under sections 237.60, subdivision 5 and 237.081. That order was issued as a result of that complaint and addressed a price increase in operator services. Here, the department objected and the justification of the increase was to correct a pricing anomaly. Further, there was no issue of waiver in Operator Services .
US WEST next alleges that there is not substantial evidence to support the MPUC's denial of the price increase. We disagree. When applying the substantial evidence test to administrative decisions, a reviewing court evaluates the evidence relied on by the agency in view of the entire record. Cable Communications Bd. v. Nor-West Cable , 356 N.W.2d 658, 668 (Minn. 1984). Substantial evidence needed to support an agency decision can be (1) adequate evidence to support a conclusion, (2) more than a scintilla, (3) more than some, (4) more than any, or (5) evidence considered in its entirety. Id. The MPUC found that US WEST did not establish that the current CCMS price was unreasonable. The record contained evidence that US WEST, less than four months before it filed its request for a price increase, had agreed to a settlement that included the current price structure. The MPUC found unpersuasive US WEST's evidence that CCMS services in Minnesota were priced below neighboring states. The MPUC also found illogical US WEST's argument that it should be allowed to raise the price in response to a competitive market. The MPUC's decision in light of the record as a whole is supported by the evidence.
US WEST also argues that the commission's order was arbitrary and capricious because it is contrary to its earlier April 7, 1997, order finding that US WEST "ha[d] made a sufficient showing to justify the rate increase." However, this quote from the April 7 order is only part of the commission's longer explanation of why it was willing to reconsider parts of its January 22, 1997, order and allow US WEST to implement an interim increase. The commission did not determine the propriety of the rate increase in its April 7 order, but did acknowledge that its delay may have harmed US WEST. The April 7 order was an attempt to put US WEST in the same position it would have been in without the delay by allowing US WEST to implement interim rates pending a final determination. Notably, US WEST did not implement interim rates after the April 7 order.
Finally, US WEST argues that comments made by a commissioner stating that he did not want a price increase reflected the commission's will and not its reason. See Markwardt v. State , 254 N.W.2d 371, 374 (Minn. 1977) (agency decision arbitrary and capricious if it represents agency's will, not its judgment). However, the commissioner's statement was not the rationale given by the MPUC for its decision. The MPUC's decision that the price increase was not warranted was supported by the record. See Cable Communications Bd. , 356 N.W.2d at 668 (agency decision is supported by substantial evidence when the record contains evidence to support agency decision).