Cazier v. Ga. Power Co.

RICKMAN, C. J., DILLARD, P. J., and MERCIER, J.

RICKMAN, CHIEF JUDGE

This is the third appearance of this matter before this Court. In 2011, plaintiff Amy Cazier and others filed a putative class action against Georgia Power Company for its allegedly improper collection of sales tax generated by a franchise fee charged to customers of municipalities. After lengthy proceedings, including two prior appeals to this Court, ^[1] the Supreme Court of Georgia asked the trial court to consider a remand to the Georgia Public Service Commission (PSC) for that body's determination as to whether Georgia Power had properly charged its customers in this

respect. Georgia Power Co v. Cazier, 303 Ga. 820, 826 (2) (815 S.E.2d 922) (2018) ("Cazier III"). After the trial court sent the case to the PSC, the regulatory agency determined that the relevant terms "usage revenue" and "total revenue" had the same meaning and that Georgia Power had properly implemented its schedule to recover its municipal franchise fee ("MFF"). The trial court then adopted the PSC's determination, certified the class, and granted summary judgment to Georgia Power. In Case No. A21A1346, plaintiffs argue the trial court erred when it granted summary judgment to Georgia Power. In the cross-appeal, Case No. A21A1347, Georgia Power argues that the class should not have been certified. We affirm in the first appeal and dismiss the second as moot.

The relevant facts are not in dispute. In 2007, the PSC revised its fee schedule guidelines for, among other rates, an MFF cost recovery charge, mandating different charges for customers within and without municipal boundaries. Because the MFF covers some of Georgia Power's expenses incurred by purchasing access and right-of-way easements from municipalities, the PSC found that municipal customers should bear a greater percentage of the cost recovery charge. Specifically, the PSC's January 2007 order provided that through a process of gradual implementation to be completed by 2009, Georgia Power would collect 2 percent of its "usage revenue

entirely by inclusion of [MFF] amounts in its rate base," as well as "that portion of franchise [fees] representing 2 percent of usage revenue exclusively from its customers located within the municipality to which such franchise fees are paid." (Emphasis supplied.)

On December 31, 2007, the PSC issued a second order finding that Georgia Power's proposed rates detailed in the January 2007 order were "fair, just and reasonable." One of the rates proposed by Georgia Power included a MFF "calculated on total revenues and charged to each customer on the basis of the customer's contribution to total revenues" at the PSC-approved rate. (Emphasis supplied.) After revisions to other tariffs required new compliance filings, Georgia Power filed a revised fee schedule, including a MFF charge, collected by applying the "rates to the total revenues of each bill." (Emphasis supplied.) In March 2008, the PSC issued a third order concluding that Georgia Power's proposed tariff schedule was "designed to collect the proper level of revenue and properly allocate the collection of revenue in compliance with" the December 2007 order. Georgia Power submitted compliance filings to the PSC again in 2010 and 2013, and while rate percentages changed slightly in both cases, the relevant language concerning MFF calculation based on "total revenues" remained the same.

Plaintiffs are Georgia Power customers whose monthly bills featured an itemized list of charges, including a nuclear construction cost recovery fee ("NCCRF") and the MFF. In their original suit, filed in 2011, plaintiffs alleged that Georgia Power improperly collected sales taxes on top of those fees, and that Georgia Power improperly calculated the MFF by including cost recovery items like the NCCRF as well as an environmental compliance cost recovery fee ("ECCR") in the revenue sum to which the MFF percentage was applied. See Cazier I, 321 Ga.App. at 577. Georgia Power moved to dismiss, claiming in part that the consumers' only remedy was set forth in OCGA § 48-2-35, which prescribes the procedure by which a taxpayer can claim a refund of taxes improperly collected. The trial court denied the motion but authorized an interlocutory appeal. Id.

In our first opinion on the matter, we concluded that OCGA § 48-2-35 did not authorize a cause of action for refund directly from the dealer, and that the trial court erred both when it authorized a direct claim against Georgia Power for improper collection of sales taxes and when it denied Georgia Power's motion to dismiss plaintiffs' first two claims. Cazier I, 321 Ga.App. at 581. We also concluded, however, that plaintiffs' third claim (that Georgia Power improperly calculated the MFF) did not infringe on the PSC's exclusive authority to establish utility rates, and

we therefore affirmed the trial court's denial of Georgia Power's motion to dismiss this count. Id. at 583.

On remand from our ruling in Cazier I, plaintiffs amended their complaint to add a claim for improper MFF calculation under OCGA § 46-2-90, which authorizes claims against entities subject to PSC jurisdiction. See Cazier II, 339 Ga.App. at 507. After Georgia Power moved for summary judgment, the trial court accepted Georgia Power's contention that plaintiffs had failed to exhaust their administrative remedies, denied class certification, and dismissed the entire action. Id.

In Cazier II, we held that under Georgia's Administrative Procedure Act ("APA"), plaintiffs were required to exhaust their administrative remedies before bringing suit only if they were "'aggrieved by a final decision in a contested case'" or had an "'objection to any order or decision' of the relevant agency." Cazier II, 339 Ga.App. at 508 (1). Because plaintiffs did not claim to be aggrieved by or object to any action or order by the PSC, we concluded, the exhaustion doctrine did not preclude their claim against Georgia Power for its alleged improper calculation of the MFF, and we therefore vacated the trial court's ruling and remanded for further proceedings. Id. at 510 (2).

The Supreme Court of Georgia granted certiorari and, in Cazier III, affirmed our conclusion that plaintiffs were not precluded from bringing suit against Georgia Power because the merits of the claim were not within the PSC's exclusive jurisdiction. Cazier III, 303 Ga. at 823-824 (2). The Court noted, however, that the regulatory agency's exclusive rate making power might be infringed if the trial court were to "misconstrue" the PSC's orders in the case. Id. at 824 (3). The Court thus remanded the case to the trial court using the doctrine of "primary jurisdiction," under which a trial court may, in its discretion, consult an administrative body for its opinion on any issue within that body's special competence. Id. at 825 (3). The Court encouraged the trial court to consider whether the revenue terms it deemed ambiguous should be referred to the PSC for technical clarification or simply interpreted by the court itself as a question of law. Id. at 827 (3).

On remand from Cazier III, the trial court applied the doctrine of primary jurisdiction and sought a determination from the PSC as to the meaning of the ratemaking terms "revenue," "usage revenue," and "total revenue." The trial court also conditionally certified the class but noted that, as then defined, it included every member of the Fulton County trial court.

After hearing argument, the PSC issued a written determination that Georgia Power had properly calculated the MFF when it applied the charge as a percentage of total revenue from each customer's bill. Noting that Georgia Power's rates are approved by the PSC to recover all "usage" from customers, the PSC found that it would be unreasonable to exclude cost recovery items from the MFF calculation, especially when considering the minimum monthly bill, which included the NCCRF and other similar charges, even if a customer had no kilowatt-hour usage for that month. The PSC observed that nuclear construction costs and environmental compliance costs had previously been included in Georgia Power's total consumption rate charge but had become...