Appeal of Town of Hampton

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2019-0512, Appeal of Town of Hampton, the
court on July 23, 2021, issued the following order:

Having considered the briefs and record submitted on appeal, we
conclude that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1).
The plaintiff, the Town of Hampton (town), appeals a decision of the New
Hampshire Public Utilities Commission (commission) dismissing its complaint
against the defendant, Aquarion Water Company (Aquarion).1 The town argues
that the commission erred in dismissing its complaint without an investigation
or hearing. See RSA 365:4 (2009). The town also argues that the commission
erred in concluding that Aquarion is not responsible for clearing snow from
public fire hydrants. We affirm.

RSA chapter 541 governs our review of commission decisions. Appeal of
Lakes Region Water Co., 171 N.H. 515, 517 (2018). Under RSA 541:13 (2007),
we will not set aside the commission’s order except for errors of law, unless we
are satisfied, by a clear preponderance of the evidence, that it is unjust or
unreasonable. Id. The commission’s findings of fact are presumed prima facie
lawful and reasonable. RSA 541:13. In reviewing the commission’s findings,
our task is not to determine whether we would have found differently or to
reweigh the evidence, but rather, to determine whether the findings are
supported by competent evidence in the record. Appeal of Pennichuck Water
Works, 160 N.H. 18, 26 (2010). We review the commission’s rulings on issues
of law de novo. Id.

RSA 365:1 (2009) provides that a person may complain to the
commission regarding any act claimed to have been done by a public utility
“in violation of any provision of law, or of the terms and conditions of its
franchises or charter, or of any order of the commission.” On March 26, 2019,
the town complained to the commission that Aquarion, a public utility
supplying water service to parts of the town, had been earning returns on
equity for the years 2013 to 2017 that exceeded its authorized rate of return.
The town sought an order requiring the utility to pay reparations. See RSA
365:29 (2009). The town also sought an order requiring the utility to clear
snow from public fire hydrants. Aquarion responded that it did not charge
more than the rates set by the commission in 2013, with approved
adjustments, and that it was not responsible for removing snow from public
fire hydrants.

1 The Town of North Hampton, as intervenor, joins in the appeal.
 RSA 365:4 provides that, if the charges in the complaint are not satisfied
by the utility, “and it shall appear to the commission that there are reasonable
grounds therefor, it shall investigate.” The commission, “after notice and
hearing,” may then “take such action within its powers as the facts justify.”
RSA 365:4. In this case, the commission found “no basis for the complainant’s
dispute and no need for an independent investigation,” stating that the town
“has not demonstrated a violation of law, the terms and conditions of
Aquarion’s franchise or charter, or a Commission order.”

On appeal, the town first argues that the commission erred in dismissing
its complaint because, according to the commission’s own audit staff,
Aquarion’s actual returns on equity for the years 2013 through 2017 exceeded
the rate of return authorized by the commission in 2013. Thus, the town
argues, there are reasonable grounds for investigation. In its order, the
commission implicitly acknowledged that Aquarion’s actual returns on equity
had exceeded its authorized rate of return. However, the commission also
noted that the return on equity “was only an input into the Commission’s
calculations of the rates the Commission set for the Company.” See New Eng.
Tel. & Tel. Co. v. State, 104 N.H. 229, 232 (1962) (noting that the authorized
rate of return “marks the minimum rate of return to which the company is
lawfully entitled” (quotation omitted)). The commission ruled that “examining
the individual issue” of Aquarion’s rate of return “outside the context of setting
appropriate rates leads to single-issue ratemaking,” which it “does not favor.”
The commission ruled that “[t]he preferred mechanism to address the issue of
overearning or underearning by a utility is a full rate proceeding.”

With regard to public fire hydrants, the commission found that, although
Aquarion was required to maintain the fire hydrants, no law, rule, tariff, or
contract required the utility to remove snow from the hydrants.

The town argues that the commission’s policy disfavoring “single-issue
ratemaking” is not a proper basis for dismissing its complaint because the
policy is “not embodied in any statute or rule.” The record shows that, in
2019, the parties entered into a settlement agreement pursuant to which
Aquarion agreed to file a full rate case no later than 2020. The record also
shows that Aquarion did, in fact, file a full rate case in 2020, which is now
pending. We note that the town has intervened in the pending rate case,
raising the same issues it raised in its complaint in this case. We also note
that the parties do not dispute that Aquarion did not include snow removal in
its estimated cost of providing fire protection service to the town. We conclude
that the commission’s decision to address the town’s issues as part of the
pending rate case is neither unjust nor unreasonable. See Appeal of Lakes
Region Water Co., 171 N.H. at 517.

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 The town argues that, notwithstanding the pending rate case, dismissal
of its complaint was improper because RSA 365:29 authorizes the commission
to order the utility to pay reparations for any “illegal or unjustly discriminatory
rate, fare charge, or price.” The town argues that Aquarion owes its customers
reparations for having charged excessive rates. The town also argues that the
commission was required to act on its complaint pursuant to RSA 378:7
(2009), which provides that “[w]henever the commission shall be of opinion,
after a hearing had upon its own motion or upon complaint, that the rates,
fares or charges demanded or collected” by a public utility are “unjust or
unreasonable,” it “shall determine the just and reasonable or lawful rates.”
The commission found no evidence, however, that Aquarion “violated its tariff
or charged illegal rates.” The town does not dispute that Aquarion has been
charging the rates that were authorized by the commission in 2013, with
approved annual adjustments.

Based upon our review of the record, we conclude that none of the
statutes cited by the town compelled the commission to investigate or hold a
hearing on its complaint, and that the town has not met its burden to prove
that the commission’s order is unjust or unreasonable. See Appeal of Lakes
Region Water Co., 171 N.H. at 517.

Affirmed.

MacDonald, C.J., and Hicks, Bassett, and Donovan, JJ., concurred.

Timothy A. Gudas,
Clerk

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