Alright, looks like we have everyone here. Good afternoon, everyone. I'll call us to order. We're here today in docket number 20 six-00070. In ray petition of Limestone water utility office.
Operating company LLC to elect and opt into an annual rate review mechanism and arm tariff pursuant to tennessee code annotated section 60 five-five-one oh 3D6. I'm Aaron Conquinn, the administrative judge assigned to this docket. The purpose of this proceeding today is to hear.
No argument on the consumer advocates motion to dismiss limestone's petition for arm as premature. As you've just heard, this proceeding is being recorded on Webex. At this point I'll ask the parties to introduce themselves for the record.
Vans Romeo with the consumer Advocate division of the Tennessee Attorney General. Sheilena Brown with the consumer advocate division.
Melbourne along with Butler Snow.
All right, that, that's all of our attorneys that are assigned in this that we'll be arguing today. Looks like we're ready to proceed with oral argument. Just for procedure purposes, we'll hear from the consumer advocate, then we'll hear limestone's response. And as the final word goes to the moving party, we'll hear a brief reply then from the consumer advocate. So we are ready for the consumer advocate. You can proceed.
Thank you. May please the court I'm Vance Bowmell with the consumer advocate Division of the Tennessee Attorney Jungle, and this is the consumer advocates motion to dismiss limestone's petition to opt in and elect and arm.
Or an annual rate review mechanism. Our argument is very simple and direct. Limestone should not be allowed to apply for an arm and elect an arm until a final order has been issued in the case upon which Limestone is basing the calculations, the methodologies underline the arm.
And the law allowing an arm, allowing utilities to request an arm makes it clear that the arm must be based upon a methodology adopted in its most recent rate case, and the right case we're talking about is not finished, therefore, this petition is premature and should be dismissed. Now the right case.
Based upon which life zone is basing its request for an arm is TPOC docket 20 four-0044. This case was divided by the commission into two phases. Now phase one has been completed according to the commission.
And an order was issued 10 July 2025, and so refers to this in its response to the consumer advocates mostly to dismiss is the 2025 rate case order, but, and that they do that even though the rate case was by NO means completely.
In July of 2025, and in particular, the commission ordered a phase two, which had not yet be gone as the time of that order and was in fact, phase two was only generally sketched out as to the procedure.
Now Limstone is arguing that even though NO written order has been issued for phase two, there was an oral decision on 7 May 2026 and that this oral decision combined with a so called rate case order is sufficient to base an arm on.
This argument by limestone, however, ignores long standing practice at TPOC and its predecessor agencies of in great cases of making a rather brief oral decision at the conclusion of a hearing.
And then following that brief oral decision, which usually takes the form of emotion by a commissioner, they follow that with a much longer more detailed. Now, the brief oral motion and the decision.
Generally sets out the main points of decision in almost a bullet point fashion. That's not to say there's anything wrong with that decision. It's been done many times and we have NO problem with it.
But it isn't until you get a written order that you can see how all the parts in the oral decision are related and what evidence the decision was based on and what the different decision positions of the parties were. Now, of course, the main reason for use.
Being a brief oral decision 1st is that the commission is usually up against a very tight timeline in a lot of these cases. It could be a six month time limit for a rate case, a hundred and 20 days for an arm.
Or the procedural schedule sets a date and the hearing has to be held by that time. Now, the later written order is generally not written to the deadlines recognized by the party such as six month, a hundred 20 days.
Now that I just referred to, previously, and this allows the commission to be have a much more detailed and adventure to say much sweated over reviewed and re reviewed order from the commission because there's NO secret that.
Parties are looking at this order to see, you know, if everything is alright and that if there's any issue for appeal. Now Lionstone, however, wants to ignore this long standing practice of an oral decision followed by a later.
Written decision which contains extensive citations to the record, and Lifestyle wants to rely on the phase one written order in the very brief phase two decision. Now.
We have a good example. This was brought to my attention actually yesterday by people in our division that the way an oral motion can differ, marketedly from a later written decision.
And, someone in Rosalie Gunsher in our office is going to show an exhibit from the decision in phase one and this is dated, I believe 11 April 2024.
Bye, and it has NO reference to commercial rates and and I think this will be apparent if she can pull it up, it's highlighted here and and so in that if if you were looking at this, if one was to try to rely on this oral, you know, well, I say oral decision it was an oral motion, and then there was some attachments to the.
Statement it was, you know, it was written as a motion. There's nothing about commercial rates and it wasn't until the written order, which was dated 10 July 2025. It does have a, and Rosalie, could you pull up?
It won't let us share because he's restricted. It won't if we could share the screen. Oh judge conflict. We would like to share that, but we're unable to because we're restricted. Is it possible for you to unrestrict that?
Let me see if I can.
Oh, we certainly didn't mean to put you on the spot. I.
That's ok. Miss Gunger, I've just changed you to a presenter, so see if you can try to share that now.
Okay so did we have the 1st one that showed NO co.
We did not we did not see the 1st one.
Oh, she's looking at that now. Is that it? Yeah. Okay, so, and, and again, I recognize this is a difficult thing to do in this, this format, if it was that we were cheapoke we could hand this out and everyone.
But the point I it's really not debatable or it's it's simply that there was nothing about commercial rates in the initial decision and then more in the written order. And the point of this is to show that.
Until you get a written order, you know, you could be very off base and in relying on the, that initial oral decision at at usually at a at the conclusion of a hearing.
And this situation, I'll call it a problem because of the motion to dismiss here that we're bringing this up, lights just went out here, but we got it. Thank you.
The T POC general Council on the oral motion in phase two stated that it was provided on, and I quote, provided only as a courtesy and does not supplement or replace the official action of the commission.
As will be memorialized and written order, and that that's what, you know, we're saying that needs to be presented by our Lionstone. They need to have an official action.
Of the commission memorialized in a written order and argue that arms could be complicated enough with the many terms and and disputed.
Positions of the parties without worrying whether a later written order will come to question the arm request that was before filed before the case is concluded. And here's an example of an arm. Now you might think that, well, there's been a number of arms.
They're pretty straightforward, you get the same categories, but in this limestone case, we have a unique issue of a $4 million grant from the legislature to build a super plant. How will this be accounted for? Now, at the moment there are NO costs to be charged against it, but it's something we may well want to explore.
In discovery and and maybe reach a resolution about how to handle this with the parties, but if given the the hundred and 20 day deadline and the fact that this was.
Case was actually filed 4 August with the clocks running. It it really becomes very difficult to, to do the kind of work you need. Again, as I was saying with a possible change in in positions.
In light of this later written order, so for all these reasons, we urge you to dismiss limestone's requests for an arm as being premature since NO final order has been issued. And I would also add that limestone's proposal to suspend it.
Until I think September 21 is not well taken. They don't cite any authority for this. This, you know, we have a hundred and 20 day statutory deadline that they, they really were serious about this.
They should have explained, you know, is this a tolling or a suspension or whatever because again this is very important, you know, could set a precedent of of how arms will be handled and whether they can be paused like that. So again, we urge you to.
You dismiss, this petition for an arm is premature. Thank you.
Thank you mr. Mel. Mr. Moan, you're ready to proceed. You're on mute, so we can't hear you quite yet.
You might regret, letting me know I was on mute. Let me start where mr. Bravel ended about the suspension and enough providing NO authority.
Perhaps we didn't because that was not an issue raised in the, the, the motion but a Tennessee law is replate with courts.
Determining that that courts or regulators should treat statutes that have timelines in there as directory rather than jurisdiction. Garrett versus Department of safety, 07:17, Southwest second, two 90.
Murray versus wood, nine, well that's unreported, so I'll just stay with the reporting case. And then also a Castillo versus Rex MD, 07:15 southwest 3rd 03:21 as a 2025 Supreme court decision.
I don't want, I I respect the, the motion that the consumer advocate has filed that's different than saying I agree with it. And I'm gonna largely stand on our written response to that motion and not be repetitive here. That's gonna be my aim anyway.
Mr. Bramel brought up two primary arguments this morning.
And and one is just what he described as a long standing practice at the commission of having, three motions and then having those motions fleshed out in a written order.
Well, I I don't know if I would characterize motions brief or not because it depends. But we do know this when the commission deliberates.
Parties often parties are allowed to take action upon those deliberations, whether that's.
Changing the terror or putting rights into effect or or or whatever the agency is acting upon, the permission's long standing practice considers the action taken.
During deliberations. So we know that. We also know that when parties comply with the deliberations with some filing, we also know that the commission determines at that point whether or not.
The, the, the party making that filing actually complies with the order.
Now if mr. Ramel was correct, you wouldn't be able to comply with the deliberations because he said there's there's some brief summary, so there wouldn't be enough information there to comply.
But we know that's not correct, because we know time and again, parties file responsive pleadings complying with the deliberations of the commission.
So mr. Bramel's whole discussion about motions and summaries and how brief they are and tight time frames, it's neither him or there because of how the commission operates.
Mr. Barnell also said that he gave an example of a situation where you might have a filing that attempts to comply with.
Deliberations, and that filing might have an error in it that's later corrected. But the most important part of that example.
Is that there is a process to correct it. It's not left in place, and if, if that correction results in, let's just for the sake of a hypothetical, let's say that resulted.
In a an overcharge, well when that correction is made, the overcharge has to be accounted for. So the fact that there might from time to time be an error.
And an attempt to comply with with the commission deliberations is like pulling one of a thousand orders and you pull one where, where the correction was needed.
And you omit the most important part is there's a process for that correction. There's, there's some harm to the consumer in that instance. And lastly, the 3rd thing Mr. Mello said.
Was that the general council of the commission noted that the motion was provided to the parties as a courtesy.
But mr. Barrel is overlooking entirely the fact that the deliberations are in a transcript. So the fact that the agency made that motion publicly available.
It's not dispositive whether that was a courtesy or not, because the transcript is available and it is that transcript upon which the courts have determined.
That if that transcript has findings of facts and conclusions of law, then that transcript satisfies the requirements of the statute.
You know, there's a I was gonna quote a whole saying that stated in litigation all the time. I mean, you know.
I'm not going to do that. I'm just gonna say this. There's a re, there must be a reason mr. Bramel didn't talk about what the courts had decided. He didn't he didn't mention that.
He talked about the statute and the suspension and we've given some cases about that, but he didn't talk about the fact. He said it was a long standing policy of the commission to issue brief deliberations and I I don't know I would probably take issue with that. Sometimes the deliberate to the brief.
Sometimes they're not, but what he didn't mention is that there's a long standing holding by the courts that if an agency, and the court was talking specifically about the commission, that if an agency.
Oh, Makes its decisions based on findings of facts and conclusions of law that satisfies the requirements for a written order. So.
What the courts have stated is that the transcript evidencing the decisions of the commission, they meet the requirements of the statute. I don't.
Let me close and say this. There are dockets in which.
Okay. When a party files to comply with the deliberations where the consumer advocate has filed and said, hey, nope, that filing doesn't comply. They didn't do that in this case.
I didn't do that in this case.
Limestone took the deliberations of the 1st of all, I don't even think as we said in her response I don't even think you need it.
The phase two water, but we haven't because I don't think 2nd phase two negates the methodology that the commission established in phase one. But for the sake of argument, Limestone filed a complic complied with the deliberate.
Issues.
On 8 June, the commission issued a letter saying this is to acknowledge receipt of your original terriff and your revised tariff, which reflects the phase two adjustments per the commission's approved rate increase.
And includes the additional information explaining the MRU methodology. The terraft filing is consistent with the decision in this matter from the commission conference on June one. So not only do the courts.
Have the courts declared that the transcript is sufficient, the commission has said that Linestone complied with the commission's order. So two things have happened.
The order in phase one has been issued. That means all that was necessary to establish the methodology. But even for the sake of argument, if we needed the order in phase two, we have it, and we have compliance with that order via the commission's 8 June letter saying you have complied with the deliberations of the commission in phase two.
Thanks.
Thank you mr. Mong. Mr. Ramelle, you get the last word.
Judge Conclin you're on mute. Oh, thank you. Thank you Judge Conquin. The consumer advocate certainly recognizes that actions can be taken based on an oral decision. That that's not an issue. Well, we're, and that happens all the time.
What we're saying is that there's something unique about an arm when you have a statute that says that you have to have a methodology from your last, from your most recent rate case. And, and that's a very different.
Requirement and we're not just talking about a decision where general parameters are laid out the revenue requirement is X and, you know, we find that appreciation should be such and such. We're we're talking about methodologies and, and that can be.
It's really necessary to to have a fuller explanation of that, how all the parts worked and so and and furthermore.
We are not. The consumer advocate is not looking for, and we don't think the statute, which sets forth the requirements for a number is looking for a bare minimum of findings of facts and conclusions of.
Law. I mean, we're looking for methodologies and it's very, very specific. As we found before in the atmos case, which we cited, there, there were certainly findings of facts and conclusions of law that they decided what the rates would be.
But there were NO methodologies in there. And our point is that as we illustrated with the citation, which miss Gunger called out, the oral decision had nothing. There was NO methodology, how are you gonna get a commercial rate? There was nothing there.
And then this later it was put in and that that's what we're looking for. And as far as you know looking to the courts, certainly we respect the courts and, and the concept of of what goes into a decision, but.
I don't mean this lightly, but we're hoping to avoid courts here if we can possibly do it. We, you know, we we want not an appeal. We we want to keep this in the agency to have a requirement that you have a final order.
And everything's spelled out and and the case will flow smoothly. And furthermore, the council for lunch still said, well, there's there's not gonna be any contradiction to the phase one order and and.
That may, you know, may not be contradiction. We're not talking about necessarily contradiction. We're talking about a full explanation of the many many components that go into rate making. And finally, we'd point out that the, the order that the lifestone is putting so much reliance on is dated what 10 July 2025. If they really believed in their argument in their argument this was sufficient.
Why have they waited over a year to file a petition for an arm? It just, it doesn't add up. It's not sufficient and, and the case is not over, therefore, you should dismiss this petition as premature. Thank you.
Thank you mr. mr. Bromel. I want to thank the parties for their briefs and their presentations today. Preliminarily I wanna at 1st address limestone's voluntary request that the commissions suspend limestone's armed petitioned until September 2120 26 and agreeing to a decision.
On the armed petition on the merits 120 days from that date on or before January 1920 27. In docket number fourteen-00146 in her order establishing procedural schedule, the administrative judge explained that the commission then known as the tennessee Regulatory authority, has interpreted the 120 day deadline applicable to the determination on proposed alternative regular.
Methods is a strict deadline for which the statute does not allow for a waiver. Holding to that interpretation, the commission is not authorized to suspend the petition or otherwise permit the adjudication of a petition for a proposed alternative alternative regulatory method. The commissioner's previous.
Held that where an amended petition is filed or material changes are made to a petition such filings will be treated as a new petition under the statue, under the statute. Establishing the commencement of a new 120 day deadline. And you can refer to docket 21.
Dash 00135 the order acknowledging filing as a new petition and setting new statutory deadline for that decision. We do not have an amended filing or a material change to consider in this docket at this time therefore the commissioner has NO statutory authority to suspend the petition in this.
Matter. With that preliminary issue aside, the consumer advocates motion to dismiss limestone's petition is premature is a motion to dismiss for failure to state a claim upon which relief can be granted under commission rule 1220-01-02- .03 paragraph two, subparagraph E The basis for the motion is that the allegate allegations contain in the petition when considered alone and taken as true.
Are insufficient to state a claim as a matter of law. In particular the consumer advocates motion for to dismiss, senders on whether the petition is right for just disability due to the order of memorializing the commission's decision in the phase two portion of the Limestone rate case, docket 20 four-000444.
Are not having been filed. A written order satisfies the requirements of the uniform Administrative Procedures Act specifically Tennessee code annotated section four-5- 03:14, that the final decision or order rendered must be in writing and contained a statement of excuse me, a statement of the findings of fact and conclusions.
Of law on which the decision is based. In this docket the commission's oral motion and vote while made on the record and preserved in a transcript of the proceedings do not contain sufficient findings of fact and conclusions of law to satisfy the requirements of the UAPA. Further it is the date of the filing of the order that establishes the deadlines relative to filing for review of that order. It should be NO different with respect to the establishment of the contingent right to file an alternative regulatory method petition. The written.
Order memorializing the commission's decision deliberated and approved on June 12026 has not been filed as of the time of this hearing. The commission's July 1020 25, excuse me, July 1020 25 order setting utility rates established much of the rate making methodology to establish rates. However, rate design is a critical part of the rate making methodology. The calculations necessary to determine where.
Revenue deficiency and sufficiency are only part of the overall methodology as making these determinations without a method to collect or refund a deficiency or sufficiency is a pointless exercise. Limestone's rate case was unique in that the commission ordered a two phase process to recover the calculated revenue.
Efficiency to alleviate the immediate impact on customers. What makes the circumstance, what makes the circumstances even more unique is that because the evidentiary record did not contain sufficient data for commercial sewer customers, the panel opened the rate design for hearing and consideration in 2nd phase.
While it did not open other factors that were considered, it did reopen the rate design for hearing and consideration during 2nd phase. Because rate design is an important part of rate making methodology, the commission's written order on 2nd phase of the rate case is necessary to craft a complete methodology that would serve as the.
Basis for a petition for an alternative regulatory method. Therefore I find that because a final order in phase two of limestone's limestone's rate case was not filed at the time of the filing of its arm petition and has not been filed as the date of this hearing, Limestone's petition to elect and opt into an arm is not just dishipable due to the doctrine of rightness. Therefore, I'm granting the consumer advocate's motion to dismiss is premature. This dismissal is without prejudice and the company may file a petition to elect and opt in opt into an arm when such a petition is right for consideration.
Subject to the following notice requirement. The commission received NO advanced notice that Limestone was filing a petition for arm, and these petitions have a very short and strict deadline for adjudication as they previously discussed. The commission has finite resources to analyze and evaluate such petitions as well as other matters before it and a scheduled pattern of.
Conferences for on which to adjudicate these matters. Therefore, similar to what is required in the commission's July 1020 25 order setting utility rates and commission rule twelve twenty-01-02- .23 paragraph two. Limestone is directed to give not less than.
In 30 days written notice of its intention to file a petition to elect and opt into an arm. This notice should be filed with a docket clerk and will initiate a proceeding that requires the applicable filing fee but will not commence the calculation of time under Tennessee code annotated section 60 five-four-one oh three D are there any matters we need to discuss at this time?
I'm down from the consumer advocate. Thank you.
All right, seeing seeing none, I want to thank every you again Melbourne, you're on mute.
I want to make sure I didn't miss.
That last, the the purpose of that last rule reference, I want to make sure and you sent a limestone should provide 30 days notice of its arm, and then was there another requirement after that based on that last rule you.
Brett.
No, NO, it's it's just 30 days notice that the the last part was just stating that that the filing of the notice opens the docket but does does not start the clock. It, that's kind of what the that is well it's exactly what the rule states that was recently adopted with regard to rate.
Cases that the intent of that was to apply to all cases under one oh three, but unfortunately we we added paragraph A at the end of the citations of the statute so it was only applicable to rate cases rather than arms. So does that, does that clarify? Thank you. Okay. All right. Again, I want to thank everyone for you your excellent briefs and your arguments in this matter. If there's nothing further will be adjourned.
Thank you. Thank you.