State ex rel. Utilities Commission v. North Carolina Natural Gas Corp.

WEBB, Judge. The appellant argues that there is no statutory authority for the Commission to enter the order of 11 May 1984. G.S. 62-32(b) says: The Commission is hereby vested with all power necessary to require and compel any public utility to provide and furnish to the citizens of this State reasonable service of the kind it undertakes to furnish and fix and regulate the reasonable rates and charges to be made for such service. G.S. 62-130(a) and (d) provide that the Commission shall fix and from time to time adjust rates so that they will be just and reasonable. We hold that pursuant to this statutory authority when the Commission found that NCNG had received payments in lieu of what it would have received under a service contract and the customers of NCNG are bearing NCNG’s contract costs, it was within the power of the Commission under G.S. 62-32(b) and G.S. 62430(a) and (d) to take these payments into account in setting a reasonable rate. We believe we are supported in this conclusion by Utilities Comm. v. Edmisten, Attorney General, 26 N.C. App. 662, 217 S.E. 2d 201 (1975), affirmed, 291 N.C. 361, 230 S.E. 2d 671 (1976) and Utilities Comm. v. Edmisten, Attorney General, 29 N.C. App. 258, 224 S.E. 2d 219, affirmed, 291 N.C. 327, [332] 230 S.E. 2d 651 (1976). In those cases it was held that the statutory authority of the Utilities Commission was adequate to allow the implementation of a fuel adjustment clause although the statute did not specifically provide for it. The Commission did not order the distribution of a refund to the customers of NCNG. G.S. 62436(c) does not apply. The appellant also contends that no finding of an excessive rate of return was made pursuant to G.S. 62436(a) so that its rate could be adjusted prospectively to bring its revenues down. The Commission was not acting under G.S. 62436(a). That section refers to rate fixing as envisioned by G.S. 62-133. See Utilities Commission v. Edmisten, 30 N.C. App. 459, 227 S.E. 2d 593 (1976), rev’d on other grounds, 291 N.C. 451, 232 S.E. 2d 184 (1977). This is not a general rate case. The appellant argues that the decision of the Commission is arbitrary and capricious and unsupported by competent, material and substantial evidence in view of the entire record. It contends specifically that the Commission found that the settlement proceeds were “in lieu of payments that would have been required of CFI pursuant to the Service Agreement” when all the evidence showed that NCNG could not have required CFI to pay anything. It says this is so because NCNG was able to sell the gas to other customers which it would have delivered to CFI under the service contract. We do not know why CFI agreed to make the payments to NCNG. It was a settlement of its contract obligations, however, and this supports the finding of the Commission. The appellant also argues that the Commission ignored undisputed evidence that the customers of NCNG received substantial benefits from the contract settlement. This was not the question before the Commission. If the customers of NCNG realized substantial benefits from the contract settlement they should nevertheless not pay more for natural gas from a public utility than allows the utility a reasonable return. Affirmed. Chief Judge Hedrick and Judge Whichard concur.