The Minnesota Supreme Court has ruled that Minnegasco may recover revenues it had lost when the state public utility commission improperly cut rates to recognize goodwill supposedly contributed by ratepayers to an unregulated affiliate.
An intermediate appeals court had agreed that the rate cut was improper, but had believed that the rule against retroactive rate making had barred any commission move to recoup the money for the utility.
The case involved an unregulated utility affiliate that performed appliance repair service. The PUC had first ruled that the affiliate enjoyed goodwill contributed by utility ratepayers, who therefore deserved compensation, but the appeals court reversed the finding. The supreme court upheld that order, adding that the PUC enjoyed "implied powers" to compensate a public utility for loses directly attributable to a rate order exceeding commission authority. It explained that state law granted the commission the authority to recalculate rates where a prior order is overturned, and that the same law "does not clearly limit the force of the commission orders to solely prospective effect." Re Minnegasco, a division of Arkla, Inc., No. C2-95-876, July 3, 1997, 565 N.W.2d 706 (Minn.).