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In re Laclede Gas Company's Verified Application To Reestablish

Court of Appeals of Missouri, Western District, Third Division

May 30, 2017

In the Matter of: LACLEDE GAS COMPANY'S VERIFIED APPLICATION TO REESTABLISH and EXTEND THE FINANCING AUTHORITY PREVIOUSLY APPROVED BY THE COMMISSION, Appellant,
v.
MISSOURI PUBLIC SERVICE COMMISSION; OFFICE OF PUBLIC COUNSEL, Respondents.

         Appeal from the Public Service Commission

          Before Alok Ahuja, P.J., and Victor C. Howard and James E. Welsh, JJ.

          Alok Ahuja, Judge.

         Laclede Gas Company applied to the Public Service Commission (the "PSC" or "Commission") for authority to issue long-term financing. The Commission granted Laclede only part of the financing authority it requested. Laclede appeals. We affirm.

         Factual Background

         Laclede is a public utility which distributes, transports, and sells natural gas to approximately 640, 000 retail customers in eastern Missouri, and approximately 500, 000 customers in western Missouri under the name Missouri Gas Energy. Laclede is subject to the Commission's jurisdiction.

         Pursuant to § 393.200, [1] Laclede must seek PSC approval for the issuance of long-term financing. On April 15, 2015, Laclede applied for authority to issue up to $550 million in long-term financing through September 30, 2018. Staff opposed the petition and recommended that the PSC approve financing authority of only $300 million.

         The PSC held an evidentiary hearing, and issued its Report and Order on February 10, 2016. In its order the Commission concluded that "Laclede's currently-known financing needs are less than the amount of the authority requested, " and that Laclede "only expects to issue $300 million in financing between [the date of the order] and 2018." The Commission found that, although "Laclede anticipates approximately $550 million in capital expenditures" during the relevant time period, it "expects to cover $250 million of this amount through operating cash flow rather than through financing." The Commission noted that, in presentations to rating agencies, Laclede had stated that it expected to issue $300 million in long-term financing through 2018. The Commission also noted that $370 million of the authority the Commission had approved in Laclede's prior financing case remained unissued.

         Based on its findings, the PSC authorized Laclede to issue $300 million in long-term financing for the specified purposes of "refinancing short-term debt, funding capital expenditures, and retiring long-term debt schedule to mature." Because Laclede had no current plans to issue the remaining $250 million in financing for which it had requested authorization, the PSC declined to authorize that additional amount simply to give Laclede the "flexibility" to respond to unknown future developments in the industry or in financial markets. The PSC adopted the conclusion of its order in Laclede's 2010 financing case, where it denied Laclede's request for additional long-term financing authority to afford the company such financial "flexibility." The PSC noted that Laclede was free to make future requests for additional financing authority in a "specified amount supported by a specified purpose as the law requires."

         Laclede appeals.

         Standard of Review

Pursuant to section 386.510, the appellate standard of review of a PSC order is two-pronged: first, the reviewing court must determine whether the PSC's order is lawful; and second, the court must determine whether the order is reasonable. The burden of proof is upon the appellant to show that the order or decision of the PSC is unlawful or unreasonable. The lawfulness of a PSC order is determined by whether statutory authority for its issuance exists, and all legal issues are reviewed de novo. An order's reasonableness depends on whether it is supported by substantial and competent evidence on the whole record, and the appellate court considers the evidence together with all reasonable supporting inferences in the light most favorable to the Commission's order. The Commission's factual findings are presumptively correct, and if substantial evidence supports either of two conflicting factual conclusions, the Court is bound by the findings of the administrative tribunal.

State ex rel. AG Processing, Inc. v. Pub. Serv. Comm'n, 120 S.W.3d 732, 734-35 (Mo. banc 2003) (footnotes omitted); see also State ex rel. Union Elec. Co. v. Pub. Serv. Comm'n,399 ...


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