Colorado-Ute Elec. v. Public Utilities
In Colorado-Ute Elec. v. Public Utilities, 760 P.2d 627 (Colo. 1988), the Colorado Supreme Court held that the Public Utilities Commission (PUC) had the authority to investigate and hold hearings concerning utility rates. 760 P.2d at 636. In construing the Colorado statutes, the court held that "under certain circumstances the Commission is required to investigate a tariff change." 760 P.2d at 638.
The language CURB wishes this court to adopt comes from that portion of the decision dealing with allocation of $ 24 million of electric generation fixed costs (demand costs) to the energy component of the demand-energy rate. 760 P.2d at 645.
The Colorado Supreme Court affirmed the district court's ruling that there was insufficient evidence to support such a shift. 760 P.2d at 647.
The court then stated:
"We have held that where an order of the Commission is issued solely as a matter of administrative convenience, or in the absence of sufficient investigation into pertinent considerations, the order is arbitrary, capricious, and invalid. City of Montrose v. Public Utilities Comm'n, 197 Colo. 119, 123, 590 P.2d 502, 505-06 (1979) (commission's order arbitrary and capricious, where no study commissioned regarding cost-of-service breakdown, although study was feasible, and no discussion in commission's order of disparate service cost; therefore, order issued solely as a matter of administrative convenience). Further, orders of the Commission which are arbitrary and capricious must be set aside. Peoples Natural Gas Div. v. Public Utilities Comm'n, 698 P.2d 255, 265 (Colo. 1985) . . . .
"The same factors which cause us to conclude that the Commission's conclusions are not supported by substantial evidence, also lead us to find this portion of the Commission's decision arbitrary and capricious. The proposed shift to demand costs represents little more than an ad hoc and unsupported analytical shortcut invented and adopted simply because the necessary rate design studies had not been performed by the Commission staff. The evidence clearly shows that such a study was entirely feasible, had the staff collected the necessary data. The district court, therefore, was fully justified in holding that this portion of the Commission's order was arbitrary and capricious." 760 P.2d at 648.