City of New York v. Public Serv. Comm., 19 N.Y.2d 242 (1967)

Parties in rate increase proceedings have the right to access factual material that played a part in the rate decision, ensuring a plenary inquiry into the basis for proposed tariff increases.

Summary

The City of New York and the Housing Authority challenged a 5% increase in electric tariffs granted to Consolidated Edison by the Public Service Commission (PSC). The Court of Appeals found that while the PSC’s initial justification for the increase was supported by evidence, the PSC erred in denying the City and the Housing Authority access to the underlying data supporting the rate decision. The Court emphasized the right of adverse parties to fully examine the basis of proposed tariff increases and remitted the case to the PSC to allow for these inquiries, with the approved tariffs remaining in effect pending further review.

Facts

Consolidated Edison Company sought and received a 5% increase in its electric tariffs from the Public Service Commission. The City of New York, representing its citizens, and the Housing Authority, a major consumer of electricity, were parties in the rate proceeding. Both the City and the Housing Authority requested access to the factual data used to support the company’s exhibits and the basis for fixing the company’s required bank balance, which impacted the rate base. The PSC denied these requests.

Procedural History

The Public Service Commission approved the 5% increase in electric tariffs. The City of New York and the Housing Authority appealed this decision. The Appellate Division affirmed the PSC’s decision. The City and Housing Authority then appealed to the New York Court of Appeals.

Issue(s)

1. Whether the Public Service Commission erred in denying the City of New York, as a party in the interest of its citizens, access to the underlying data supporting Consolidated Edison’s exhibits in evidence during the rate increase proceeding.
2. Whether the Public Service Commission erred in denying the Housing Authority, as a large consumer of electricity, access to the bank’s basis for fixing Consolidated Edison’s required balance, which was reflected in part of the rate base.

Holding

1. Yes, because the City, as an adverse party, has the right to a plenary inquiry into the facts on which the proposed tariff increase was based.
2. Yes, because the Housing Authority, as an adverse party, has the right to a plenary inquiry into the facts on which the proposed tariff increase was based; specifically, the bank’s basis for fixing the company’s required balance was a proper subject of inquiry.

Court’s Reasoning

The Court of Appeals held that the Public Service Commission was unduly restrictive in denying the City of New York and the Housing Authority access to factual material that played a part in the rate decision. The Court emphasized that as adverse parties to Consolidated Edison, both the City and the Housing Authority were entitled to a plenary inquiry into the facts underlying the proposed tariff increase. The Court rejected the PSC’s justifications for denying access, stating that the commission’s staff checking the data or the company complying with record-keeping procedures was insufficient to deny the parties their right to examine the underlying data. Regarding the Housing Authority’s request, the Court found that the bank’s basis for fixing the company’s required balance was a proper subject of inquiry because it directly affected the rate base. The Court stated: “These parties were adversaries to the company before the commission and the right of plenary inquiry ought to have been afforded them into the facts on which the proposed increase in tariffs was to be based.” The Court remitted the case to the PSC to allow for these inquiries, but stipulated that the approved tariffs should remain in effect, subject to adjustment if the additional proof warranted a different rate.