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North Carolina v. CF Industries Inc.

Filed: October 2, 1979.

STATE OF NORTH CAROLINA EX REL. UTILITIES COMMISSION, NORTH CAROLINA NATURAL GAS, APPLICANT, AND THE PUBLIC STAFF, INTERVENOR, APPELLEES
v.
CF INDUSTRIES, INC., INTERVENOR, APPELLANT



Appeal by intervenor from order of North Carolina Utilities Commission entered 4 April 1978. Heard in the Court of Appeals 6 April 1979.

Webb, Judge. Judge Mitchell concurred in the result. Judge Martin (Robert M.) dissents.

Webb

The question posed by this appeal is whether the North Carolina Utilities Commission was legally correct in allowing North Carolina Natural Gas to roll forward an undercollection produced by the CTR for the entitlement period ending 31 October 1976 so that it was collected in the entitlement period ending 31 October 1977. The appellee contends that the order of the Commission of 15 February 1977 from which no appeal was taken should determine this case. That order provided:

"4. That 'true-up' of the proposed annual CTR will be necessary at the end of the entitlement year with over or undercollections rolled forward in the next annual CTR."

The order also provided:

"Any over or undercollections computed at the end of the annual entitlement period will be distributed equitably among the company's customers through the next annual rate."

The appellee contends that since NCNG did not appeal from this order, it is bound by it and cannot now appeal from a later order which approves a true-up based on the order of 15 February 1977. We do not put our decision on that ground.

We hold that under the CTR approved for NCNG in this case, undercollections in one entitlement year can be rolled forward for collection in the next entitlement year. If this is not done, there is no way the profit margin of NCNG may be protected if the annual true-up at the end of an entitlement period shows there was an undercollection. Utilities Commission v. Public Service Co., 35 N.C. App. 156, 241 S.E.2d 79 (1978) involved what was called a volume variation adjustment factor (VVAF) which worked in a manner similar to the CTR in the case sub judice. In that case the utility was required to make cash refunds of overcollections during an entitlement period. If it is proper to require a refund, we believe undercollections should be rolled forward so that a utility may recoup them.

The appellant contends this case is governed by Utilities Commission v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977) and Commissioner of Insurance v. North Carolina Automobile Rate Administrative Office, 292 N.C. 1, 231 S.E.2d 867 (1977) which prohibit retroactive rate-making. Those were cases involving general rate-making. In the case sub judice, a general rate is not involved.

Affirmed.

Disposit ...


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