PSC Exceeded Rate‐making Power

Abstract

Crescent Estates Water Company Inc., a private water company, served 1,650 residential customers in Clifton Park, N.Y. In 1988, Crescent sought expansion approval for 110 homes outside its approved service area. Shortly thereafter, Crescent also filed tariff revisions with the state Public Service Commission (PSC) designed to increase its operating revenues effective April 1, 1988. Included in Crescent's projections was an extra $11,124 expected to be paid by new customers in the expanded service territory. The PSC disapproved the joint petitions because Crescent had not obtained the approval of the Department of Environmental Conservation and because the PSC believed the proposed hookup charges were unjust, unreasonable, and discriminatory. However, the PSC agreed that the proposed expansion was prudent. Because of the disapproval, Crescent sought to delete the projected income from its forecast, but an administrative law judge ruled against them. The PSC then issued its final order, which approved the inclusion of the anticipated revenues. On further appeal, an intermediate appellate court concluded that the revenues should be excluded.