BEFORE THE DEPARTMENT OF PUBLIC SERVICE REGULATION

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 38.2.601 and 38.2.3301 pertaining to investigation and discovery

) ) ) )

NOTICE OF AMENDMENT

 

TO: All Concerned Persons

 

1. On December 24, 2020, the Department of Public Service Regulation published MAR Notice No. 38-2-247 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 2320 of the 2020 Montana Administrative Register, Issue Number 24.

 

2. The department has amended ARM 38.2.3301 as proposed.

 

3. The department has amended ARM 38.2.601 as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

 

38.2.601  DEFINITIONS  (1) through (1)(m) remain as proposed.

(n)  "Party" means an individual, partnership, corporation, governmental body,

or other identifiable group or organization, who initiates a commission proceeding by filing a complaint, application, protest or a petition with the commission; or who is named as a defendant or respondent; or who is named or admitted by the commission or hearings examiner to a formal proceeding and whose legal rights, duties and privileges will be determined by the commissioners' final decision.

(o) remains as proposed.

 

AUTH: 69-1-110, 69-2-101, 69-2-103, 69-3-103, 69-12-201, MCA

IMP: 69-2-101, 69-2-103, MCA

 

4. On January 26, 2021, the department held a virtual public hearing on the proposed amendments and received various oral and written comments. The department has thoroughly considered the comments received.  A summary of the comments and the department's responses are as follows:

 

COMMENT NO. 1:  The commenter is generally supportive of the proposed change to ARM 38.2.601, though the commenter "opposed and will continue to oppose attempts by staff to intervene as an actual party in contested case dockets in the future."

 

The commenter is generally supportive of the proposed changes in ARM 38.5.3301: "While we would request the Commission consider broader adoption of its standard procedures, the proposed amendments are a good start to improving the transparency of the Commission's procedural rules."  The commenter states "it is important for the Commission to formalize its procedures through administrative rule, rather than continuing to rely on case specific procedural orders to govern general procedures."  The commenter notes this approach "has the added benefit of increasing the transparency of the Commission's practices and procedural rules to participants who are not familiar with the Commission's practice."

 

The commenter does "not take a position on the issue of the appropriate role of the Commission or hearing examiners in conducting discovery or offer comment on the specific inclusion of 'the commission, [or] hearing examiner,' in the revised ARM 38.5.3301."

 

RESPONSE: The proposed rule amendment aligns with the comment above, to improve transparency of the commission's procedural rules.  Further, this rule does not contemplate the ability of staff to intervene and appear as an actual party in a contested case docket, whether authorized by existing statutes or other regulations.  

 

COMMENT NO. 2:  The commenter opposes both amendments.  The commenter "has long stood in opposition to proposed ARM amendments or PSC procedures that would improperly insert either the Commission or Commission staff into Class D contested cases as what could only be described as interested parties."  Rather the commenter believes that "the more proper role of the Commission is to sit as a disinterested quasi-judicial body in contested cases, with staff serving in an advisory role."  For the commenter, this means refraining from issuing discovery, because doing so "would improperly place the Commission on a particular side in a contested case, create the appearance of bias, and/or open up Class D contested cases to due process challenges."

 

The commenter makes three additional points.  First, motor carrier cases are not utility cases.  The commenter notes that protested motor carrier hearings are adversarial proceedings, where applicants and protestants present witnesses and evidence, and the applicant has a burden of proof.  In these proceedings "the Commission should maintain its posture as a quasi-judicial, impartial decision maker."  This means denying an application where there is insufficient evidence, and granting an application where there is.

 

Second, the commenter raises a due process concern.  "If the Commission intends to discover, develop, and introduce evidence that necessarily supports one adversarial party over another, procedural due process requires providing adversarial parties with the concomitant right to rest the Commission's evidence and engage in discovery with the Commission."  The commenter believes that the proposed discovery rule "would violate constitutional due process requirements because the proposed amendments would permit the Commission to act both as an interested party collecting and presenting evidence and as a quasi-judicial body that would then rule upon its own evidence."

 

Third, the commenter notes that the Constitution "already contains a mechanism for proper supplementation of the record on behalf of the consumer in Class D cases: the Montana Consumer Counsel."  The commenter also notes that the 1972 Montana Constitutional Convention specifically rejected a proposal that would have directed the commission to represent the consumer.  Mont. Const. Conv., Verbatim Transcript, 2397–2400 (Mar. 15, 1972).  This history raises the question of "which perspective the Commission would represent when it issues discovery or 'data requests' to develop, present, and rule upon its own evidence."

 

COMMENT NO. 3: The commenter opposes both amendments.  The commenter "is concerned that—while this may not be the Commissioners' intent—these most recent proposed amendments will effectively result in the Commission becoming a third party in adjudicative proceedings over which it also effectively serves as the judge."  This action "raises obvious and serious due process concerns."  Similarly: "Simply put, combining the Commission's two separate powers of quasi-legislative (i.e. rulemaking/policy) and quasi-judicial (i.e. adjudicative) both in an adjudicative proceeding—as the Proposed Amendments purport to do—is contrary to law."  The commenter requests the commission withdraw and terminate this proposed rulemaking.

 

The commenter presents two primary comments: (1) the proposed rulemaking violates party rights to procedural due process, raises ex parte communication concerns, and runs contrary to the commission's statutory authority; and (2) if the commission seeks to become an advocate in contested case proceedings "its structure must be reformed by the legislature to include a firewalled advocacy staff."

 

To avoid these various issues, the commenter recommends the commission withdraw the entire rulemaking or, at minimum, withdraw both proposed amendments.

 

COMMENT NO. 4:  The commenter largely opposes the proposed rulemaking.  The commenter questions the commission's intent:  "The commissioners need only look at staff's recent attempts to intervene in Montana-Dakota Utilities Co.'s (2020.10.103) and NorthWestern Energy's ("NorthWestern") (2020.08.091) dockets to see that staff's proposed amendments are intended to get the Montana Public Service Commission (commission) to depart from its commitment to the advisory staff model."  Accordingly, the commenter opposed the rulemakings, with the exception of striking the last sentence in the definition of "Party" in ARM 38.2.601.

 

The commenter opposes the amendment to ARM 38.2.601 on several grounds.  First, the commission should not strike the language that excludes staff from party.  "Since staff is advisory, the language excluding staff from party status must remain.  Otherwise, staff may attempt to intervene as a party, as it has done recently."  Second, the commenter opposes the addition of "or hearings examiner" because it believes that this permits the commission or hearings examiners from naming or admitting a party to a proceeding without that party filing a motion for intervention, which commenter opposes.  Third, the commenter opposes the addition of the word "final," because the purpose of this change was not included in the notice.  Fourth, the commenter supports striking the last sentence of the rule.

 

The commenter provides five comments regarding the amendments to ARM 38.2.3301.  The commenter is opposed to striking the reference to the Montana Rules of Civil Procedure, as the commenter notes this is "an ineffective attempt to disguise discovery as an 'investigation,'" but instead proposes a "prehearing investigation" term not contemplated by statute.  The commenter notes this amendment is misleading and inaccurate:  "Procedural orders have never provided for a 'pre-hearing investigation' in a contested case, and the Commission's authority to conduct investigations is unrelated to the discovery procedures for contested cases."

 

The commenter opposes changing the rules to allow the commission and hearing examiners to issue discovery:  "The change is unnecessary and allows staff to tip the scales to assist a party of its choosing."  The commenter opposes an amendment to allow the commission and hearing examiners to raise additional issues:  "There is no reason for the Commission to expand its role to create controversy that does not exist between the parties, which is a process the Montana Supreme Court already criticized."

 

The commenter opposes the amendment which seeks to limit the forms of discovery to data requests, and only allow other forms of discovery, such as depositions, upon commission approval.  The commenter believes this is an unnecessary amendment which will complicate the process, which requires more vetting prior to adoption.

 

The commenter states that the addition of the language "Nothing in this rule limits the Commission's additional broad statutory investigation powers otherwise found in Title 69" is surplusage:  "The Commission's authority to conduct investigations is undisputed.  But, as the Montana First Judicial District Courts already ruled, the Commission's statutory powers differ from its quasi-judicial powers."  Accordingly, "If the Commission wishes to adopt procedural rules to govern its investigations, the Commission must do so separate from its rules for contested cases."'

 

COMMENT NO. 5:  The commenter generally opposes the amendments.  The commenter suggests that "waiting to consider amendments until after court orders have issued with respect to the pending litigation discussed above would likely lead to a more reasoned rulemaking process that comports with statutory and constitutional constraints placed upon the PSC."

 

The commenter provides three principal comments regarding the amendments to ARM 38.2.601.  The commenter notes that the amendments bring "into question what role the PSC intends to take in future contested case hearings."  Whether "framed as a party, or as an investigator, having Commission staff appear at hearing, cross-examine witnesses, introduce evidence, and conduct discovery, does not comport with the parties' due process right to a fair and open hearing before a neutral adjudicator."

 

The commenter notes that the proposed rulemaking allowing hearing examiners to name parties "should only be allowed if there is a motion for intervention which would allow other parties to the contested case an opportunity to respond to the request, in order to ensure fundamental fairness."  The commenter notes that the insertion of the word "final" lacks a reasoning in the proposed rule.  Without this reasoning, the commenter opposes the amendment, because it is "concerned that this addition is an attempt to bolster positions the Commission has previously taken, and lessen parties' ability to seek judicial redress."

 

The commenter provides four comments regarding the amendments to ARM 38.2.3301.  The proposed rulemaking "is unnecessary and creates impediments to the timely ability of the parties to proceed in contested cases."  Instead these issues should be left to each docket's procedural order, "as Commission contested cases can vary significantly, and are governed by wholly different statutory regimes."

 

The commenter notes that "it is inappropriate for the Commission or its staff to issue discovery in a contested case."  The commenter opposes the amendments for the PSC or staff to issue discovery "while also serving as an adjudicator in the matter, as such action is contrary to contested case parties' due process rights to a fair and open hearing before a neutral adjudicator."

 

The commenter also notes that it "is inappropriate for the Commission or its staff to raise additional issues in the context of a contested case."  The commenter says that this process directly contradicts Montana Supreme Court precedent.

 

The commenter also notes that references "to investigatory powers are inappropriate in the context of discovery rules."  Further "the reference to additional discovery rules is unnecessary if the rulemaking is rejected, as the current version of the rule addresses discovery needs in different matters in a more holistic fashion than this proposed rule.  Moreover, the new process is entirely devoid of procedures for requesting and conducting other forms of discovery, and are not practical given statutory timelines."  Additionally, "it would be a violation of parties' due process rights to a fair and neutral hearing to combine those investigatory activities with a contested case proceeding."'

 

RESPONSE TO COMMENTS 2 through 5:

 

1. Whether the commission has statutory authority to investigate issues, either by data request or by the additional issues process. 

 

The commission has several specific grants of rulemaking authority to adopt regulations governing commission proceedings.  69-1-110(3), 69-2-101, 69-2-103(3), 69-3-103(2), 69-3-310, 69-12-201, 69-12-204, MCA.  Each provides sufficient rulemaking authority to adopt the rules in question.  2-4-305(3), MCA.

 

On the merits, a panoply of statutes within Title 69, MCA, and the Montana Rules of Evidence, support the ability of the commission to investigate issues in proceedings—many of which provide the independent and adequate grounds to do so.

 

Within Title 69, MCA, 69-2-102 is most squarely on point.  In cases that are "actively contested by the consumer counsel," the commission "shall leave representation of the interests of consumers to the consumer counsel." Id.  However, the statute "does not prohibit the commission or its staff from investigating and interrogating in any hearing to clarify the case or present an issue." Id.  Similarly: "Evidence may be introduced by the commission on an issue that has not been adequately addressed by any part if the commission firsts request counsel of record to address the issue and counsel fails to introduce sufficient or adequate evidence. Id.

 

Because "the commission or its staff" can investigate and interrogate "in any hearing to clarify the case or present an issue," and can introduce its own evidence, it follows that a regulation which provides the commission the ability to ask data requests (investigate or interrogate), or raise additional issues (investigate, interrogate, and introduce evidence), reasonably effectuates the purpose of 69-2-102, MCA.

 

If there are any lingering concerns about the commission's ability to issue data requests or raise additional issues, several additional statutes in Title 69, MCA, affirmatively resolve the issue.  69-3-106(1), 69-3-106(2), 69-3-202(5), 69-3-203(2), 69-3-303(2), 69-3-324, 69-3-327, 69-3-328, 69-3-330, 69-3-106(3), 69-12-206(1), 69-12-203(2), 69-12-210, 69-12-407(1), MCA.

 

In addition to this broad Title 69, MCA authority, the commission adheres to the Montana Rules of Evidence when conducting contested case proceedings.  2-4-612, MCA; see also 69-3-303(2), MCA.  Rule 614 provides that the court "may, on its own motion or at the suggestion of a party, call witnesses and all parties are entitled to cross-examine witnesses," similarly, the court "may interrogate witnesses, whether called by itself or a party."  Importantly, this applies to both evidentiary hearings, and pre-hearing questioning.  As permitted by statute, most commission cases involve pre-filed written testimony in advance of evidentiary hearings.  2-4-612(2), MCA.  As such, data requests by the commission on pre-filed testimony, or raising additional issues and requiring parties to respond to each, is a reasonable extension of the commission's ability to interrogate witnesses during an evidentiary hearing.

 

These authorities—several of which provide independent and adequate ground to support the commission's rulemaking—indicate this proposed rulemaking does not engraft additional, contradictory, or consistent requirements not envisioned by the Legislature.  Additionally, because the commission's historical practice of issuing data requests and raising additional issues has been questioned, this regulation is reasonably necessary to codify this long-standing practice.

 

2. Whether the amendments, regardless of their statutory authority, are constitutional.

  

The commission takes seriously any allegations that its actions have the potential to violate a party's rights to due process under both the United States and Montana Constitutions.

 

All commission rulemakings must be lawful.  The commission must also provide the reasons for overruling opposing comments.  Assuming that the commission has the substantive statutory authority to implement this rulemaking, as well as the rulemaking authority to do so, and that the proposed rulemaking falls within the commission's substantive statutory authority, the rulemaking must nonetheless be constitutional.

 

Due process does not attach in all commission proceedings.  Due process requires a legitimate claim of entitlement.  Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972).  For example, developers do not have a vested property interest prior to approval of a subdivision.  Kiely Constr. L.L.C. v. City of Red Lodge, 2002 MT 241, ¶¶ 34, 47 312 Mont. 52, 57 P.3d 836.  Miners do not have a vested property interest prior to gaining a mining permit.  Seven Up Pete Venture v. Mont., 2005 MT 146, ¶ 33, 327 Mont. 306, 114 P.3d 1009.  And fundamentally important for commission proceedings, motor carriers do not have a vested property interest prior to receiving a license.  Billings Yellow Cab, LLC v. State, 2014 MT 275, ¶ 14, 376 Mont. 463, 335 P.3d 1223.  Reasonably, in certain commission proceedings, parties are not entitled to due process because no vested property interests are at issue.

 

This is because procedural due process does not apply to legislative acts.  Bi-Metallic Inv. Co. v. State Bd. of Equalization, 239 U.S. 441, 445–46 (1915).  Setting utility rates is a legislative act.  Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 226 (1908).  Unlike a judicial inquiry that investigates, declares, and enforces liabilities based "on present or past facts and under laws supposed already to exist," legislative action "looks to the future and changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power.  The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial, in kind . . ." Id.

 

Montana follows Prentis: "The legislature itself has the undoubted authority to regulate public utilities, and by means of a duly constituted commission it operates through its administrative medium. The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial, in kind."  Billings Util. Co. v. Public Serv. Comm'n, 62 Mont. 21, 33, 203 P. 366, 368 (1921) (citing Prentis).  Montana has adhered to this precedent for close to a century.  Mt. Water Company v. Mont. Dep't of Pub. Serv. Regulation, 254 Mont. 76, 79-80, 835 P.2d 4, 6 (1992) ("Rate-making is a legislative activity and is therefore prospective only in its effect.") (citing Billings Util. Co.).

 

However, without overruling nor addressing the Prentis authorities, the Montana Supreme Court has extended due process rights to certain commission proceedings.  Montana Power Co. v. Public Serv. Comm'n, 206 Mont. 359, 371, 671 P.2d 604, 611 (1983); Allied Waste Servs. v. Dep't of Pub. Serv. Regulation, 2019 MT 199, ¶ 17, 397 Mont. 85, 447 P.3d 463; Wilson v. Dep't of Pub. Serv. Regulation, 260 Mont. 167, 172, 858 P.2d 368, 371 (1993).

 

Accordingly, due process attaches to some property interests, though not all, and only in certain commission proceedings.  The question is whether the commission's proposed rulemaking, and related procedural regulations and statutes, provide constitutionally adequate procedures in those circumstances where a constitutionally protected property interest exists.

 

Due process "requires a fair and impartial tribunal."  In re Best, 2010 MT 59, ¶ 22, 355 Mont. 365, 229 P.3d 1201.  Due process prohibits agencies from combining prosecution and decision powers.  Id. ¶ 33 ("When investigatory and adjudicatory functions are combined, the risk of unfairness from the combination of those functions may, under certain circumstances, be too high.").  However, courts have consistently rejected the public commenters' concerns that mixing investigation and decision-making powers is a per se due process violation.  Rather, without allegations of bias, due process permits agencies to combine investigation and decision-making powers, even in the same commissioner.

 

The commission is statutorily precluded from prosecuting actions.  69-3-110(3), MCA.  The Montana Supreme Court has found that "proceedings before the commission are investigative on the part of the commission, although they may be conducted in the form of adversary proceedings."  Williamson, ¶ 31 (quoting MAR 38.2.302(1), and MCA 69-3-103(2)(a)).  This is because the commission can obtain information from utilities "in any manner necessary to perform its duties."  Qwest Corp. v. Mont. PSC, 2007 MT 350, ¶ 37, 340 Mont. 309, 174 P.3d 496.  This is unique to utility commissions:  "Agencies charged with protection of the public interest are not created simply to provide a forum for the private parties to a proceeding."  1 Leonard Saul Goodman, The Process of Ratemaking 69 (1998).  Rather the commission is legally obligated to ensure, for example upon a "hearing and due investigation," that rates are not "unjust, unreasonable, or unjustly discriminatory . . . or otherwise in violation of the provisions" of Title 69, chapter 3, MCA.  69-3-330(1), MCA.  Accordingly, commission proceedings utilize investigative, not prosecutorial, powers.

 

The combination of investigation and adjudication functions, even in a single commissioner, is not a per se due process violation, and a party challenging that combination carries a "difficult burden" of overcoming the "presumption of honesty and integrity in those serving as adjudicators."  Withrow v. Larkin, 421 U.S. 35, 47 (1975); accord Goldstein v. Commission on Practice, 2000 MT 8, ¶ 24, 297 Mont. 493, 955 P.2d 923 (citing Withrow).  "That sort of mixing is endemic in agencies, and has been since the beginning of the Republic."  Kisor v. Wilkie, 139 S. Ct. 2400, 2421–22 (internal quotation omitted).  Public commenter's authorities recognize this distinction between an investigative–adjudicative combination and a prosecutorial–adjudicative combination.  See Botsko v. Davenport Civil Rights Comm'n, 774 N.W.2d 841, 849 (Iowa 2009) ("there is no due process violation based solely upon the overlapping investigatory and adjudicatory roles of agency actors. . . . A more serious problem, however, is posed where the same person within an agency performs both prosecutorial and adjudicative roles."); Horne v. Polk, 394 P.3d 651, 659 (Ariz. 2017) (one person cannot serve as the "accuser, advocate, and final decisionmaker" when prosecuting campaign finance violations); Dorr v. Wyoming Bd. of CPAs, 2001 WY 37, ¶ 20, 21 P.3d 735, 745 (declining to reach due process claim, but emphasizing problems associated with one attorney both prosecuting a licensing complaint and advising the decision maker).

 

Public commenters have concerns about this proposed rulemaking.  However, without allegations of unconstitutional decisionmaker bias, those concerns are unfounded.  The appropriate resolution of their concerns is to seek judicial review of a specific contested case decision.  Unequivocally, Montana has declared these procedures provide constitutionally sufficient due process.  Wiser v. State, 2006 MT 20, ¶ 30, 331 Mont. 28, 129 P.3d 113 ("where the statutes provide for judicial review of a particular order made or agreed upon by a prejudiced commissioner there is no denial of due process"); accord Schneeman v. Dep't of Labor & Indus., 257 Mont. 254, 259, 848 P.2d 504, 507 (1993), and Cascade County Consumer's Ass'n v. PSC, 114 Mont. 169, 394 P.2d 856 (1964), and State ex rel. Holt v. District Court, 103 Mont. 438, 63 P.2d 1026 (1936), and Montana Power Co. v. Public Service Commission, 12 F.Supp. 946. (D. Mont. 1935), and State ex rel. Mueller v. District Court, 87 Mont. 108, 285 P. 928 (1930).

 

3. Whether the amendments are prohibited by judicial precedent, or other regulations regarding the commission's organizational structure. 

  

The public commenters state that the proposed rulemaking is prohibited by three judicial decisions, which preclude the commission's proposed rulemaking.  The commission respectfully disagrees.

 

First, the L&L court denied the petition for a temporary restraining order and immediate review of the commission's action.  The court denied the question of whether the petitioner in that case had made a prima facie showing that it would suffer actual, irreparable harm prior to final resolution on the merits.  Nothing in that order prevented the commission from applying its routine contested case procedures in the case at issue, or in subsequent cases.  Further, the proceeding was later voluntarily dismissed, resulting in a lack of final judgment on the merits, which prevented any opportunity to litigate the constitutionality of commission procedures.  It is unclear how a district court denial of a temporary restraining order could preclude the commission from proceeding with this rulemaking.

 

Second, the Big Foot decisions were preliminary orders, which cannot be construed as final decisions on the merits. In fact the parties explicitly agreed that the opportunity for briefing on the merits of the constitutionality of the issue would follow after the preliminary injunction hearing.  Accordingly, the merits of any due process issue were not fully and fairly litigated.  On appeal, the court explicitly declined to reach the constitutionality of the commission's investigative powers, even though amicus parties requested the court to address the issues. Allied Waste, ¶ 17, n. 6 ("Many of these arguments were not made below and decline to reach them here.").  It is unclear how decisions which explicitly declined to reach the constitutionality of the commission's investigative powers, even when requested by the parties, precludes this rulemaking proceeding.  To the contrary, this proceeding aligns with the Big Foot decisions, because it attempts to clarify the commission's authority to issue data requests as noted in the Big Foot decision.

 

Similarly, MTSUN is not on point.  MTSUN concerned neither the constitutionality of the commission combining investigation and decision-making powers, nor the commission's additional issues process.  Rather, MTSUN considered the commission's substantive statutory obligations under proceedings where a qualifying small power production facility and an electric utility "are unable to mutually agree to agree to a contract."  MTSUN, ¶ 73.  In those circumstances, the commission's review "must be narrowed to only those controversies and issues that are disputed by the parties, not those issues on which the parties have reached mutual agreement."  Id.  It is unclear how this decision precludes this rulemaking proceeding.

 

Without precedent to the contrary, it appears that the commission's combination of investigation and decision-making powers as proposed in the rulemaking, without allegations of bias from a specific proceeding, is not a per se procedural due process violation.

 

4. Whether the amendments improperly assume the role of the Montana Consumer Counsel (MCC), insert commission staff as parties in commission proceedings or commission staff as parties in proceedings, or raise ex parte concerns. 

The amendments do not contemplate the commission assuming the role of the MCC, advocating for the interests of the consumer, or insert commissioners or commission staff as parties in proceedings.

 

Various statutes support the commissioners or its authorized agents performing agency responsibilities.   2-4-612(7), 69-1-115(2), 69-3-106(2), 69-3-202(5), 69-3-327, 69-3-203(1), 69-3-208(4), 69-12-206(1), 69-12-203(2), 69-12-407(1), MCA.  Even in cases where the Montana Consumer Counsel actively contests an issue, this "does not prohibit the commission or its staff from investigating and interrogating in any hearing to clarify the case or present an issue."  69-2-102, MCA.  "Evidence may be introduced by the commission on an issue that has not been adequately addressed by any party if the commission first requests counsel of record to address the issue and counsel fails to introduce sufficient or adequate evidence."  Id.

 

These statutes underscore the reality of commission proceedings: both individual commissioners and commission staff stand in the shoes of the agency when either performs statutorily authorized commission functions.  Neither individual commissioners nor commission staff are parties.  The amendment to ARM 38.2.601 codifies that reality.

 

Because neither the staff nor commissioners are a party to the docket, no ex parte concerns are present.  These issues only arise when the commission appears as a party in a contested case docket.  In those circumstances, it is necessary to separate the necessary staff from commissioners.  However, where commission staff do not appear as a party, there are no ex parte concerns.

 

5. Whether the amendments establish improper hearing examiner powers. 

 

The commenters note that hearing examiners in recent dockets have unilaterally appointed commission staff as advocacy staff to the docket.  Parties have contested this process, and the authority of a hearing examiner in doing so.  Reasonably, the public is concerned whether amending ARM 38.2.601 to empower hearings examiners to name or admit parties in proceedings, is an attempt to codify this recent practice.  

 

These rules are not intending to permit hearing examiners with the authority to unilaterally appoint commission staff as advocacy staff in parties.  Rather these rules are intended to permit hearing examiners, in addition to the commission, the ability to name or admit parties to commission dockets.  This is a clarifying amendment, because as written the regulation is ambiguous regarding whether only the commission, and not hearings examiners, would have the power to name or admit parties to proceedings.  This removes the uncertainty, and explicitly provides hearing examiners the ability to name or admit parties in the same manner as the commission—typically accomplished through the filing of a motion to intervene.

 

6. The public commented that the deletion of "with the exception of the commission staff" and the addition of "final" in the proposed amendment of ARM 38.2.601, appear to lack an adequate description in the proposal notice. 

 

The deletion of "with the exception of the commission staff" is not adequately described in the proposal notice, but it is reasonably related to the purpose of the proposed rulemaking.  The proposal notice indicates that the amendments are an attempt to "better reflect department staff's role in investigating facts and issues in contested cases not as a party, but as technical advisors to the department . . ."  The deletion of "with the exception of the commission staff" reasonably aligns with this intent.  The commission retains this addition.

 

The addition of "final" lacks an adequate description, and it is inappropriate for the commission to amend the rule without providing the public with the opportunity to comment.  The commission removes this addition.

 

Reviewed by:                                                DEPARTMENT OF PUBLIC SERVICE REGULATION

 

 

/s/ LUKE CASEY                                        /s/ JAMES BROWN

Luke Casey                                                James Brown

Rule Reviewer                                            Chairman

                                                                    Department of Public Service Regulation

           

Certified to the Secretary of State, May 4, 2021.