dissenting.
I concur in the majority’s holding that the Commission Staff was not a party in these proceedings, and that there was no impermissible shifting of the burden of proof. However, I disagree with the majority’s characterization of the hearing as “one conducted merely to consider the reasonableness of the Proposed Settlement.” It is my firm belief that the Commission conducted a full due process hearing as to all contested issues in the case.
Prior to the hearing, the Commission Staff arranged and participated in a settlement conference between the relevant parties. At this conference the Staff assisted the parties in reaching tentative agreements on several of the issues, but not on a “bottom-line” rate increase. Through negotiation, the Staff persuaded Kentucky American Water Company (KAWC) to lower the amount of its requested rate increase from $1,732,386 to $842,610, approximately a 50% reduction. However, the Attorney General (AG) and the Lexington-Fayette Urban County Government (LFUCG) disagreed with any rate increase and refused to enter into the Proposed Settlement Agreement. The parties were dead-locked on the issue, and a hearing was scheduled to determine whether KAWC’s request for a rate increase, and not the Proposed Settlement, was “fair, just, and reasonable.”
At the hearing, KAWC presented evidence sufficient to establish that a rate increase of $842,610 was appropriate under the law. The AG and LFUCG presented testimony to the Commission in opposition to the requested rate increase and were afforded the opportunity to cross-examine all witnesses. Due process requires nothing further.
I also disagree with that portion of the majority opinion which holds that due process subjects Commission Staff to discovery and examination by the parties. While due process entitles a party to know what evidence is being considered and an opportunity to test it by cross-examination, explain or refute that evidence, I discover no denial of due process in the procedures employed here.
KAWC and its witnesses were subject to all of the discovery provisions provided by law. This furnished a complete opportunity for the AG and LFUCG to inform themselves of the evidence which would likely be presented at the hearing. In addition, they were granted, and fully exercised, the opportunity to “test, explain and/or refute” KAWC’s evidence at the hearing. Although the majority correctly states that AG was not given an opportunity to cross-examine the Staff witnesses, it should be noted that no Staff witnesses testified at the hearing, nor did the Staff produce any evidence.
Furthermore, the record in this case does not show that “the staff acted in an adverse manner by negotiating, signing, and publicly recommending a compromise of the case which did not include the AG and the City.” To the contrary, it reflects that the Staff acted in strict accordance with its stated role, as expressed on pp. 3-4 of the majority opinion. The Proposed Settlement about which so much fuss is made was nothing more than a Staff recommendation to the Commission, and as the majority concedes, had no binding effect on the Commission.
As I can deduce no violation of due process from the record in this case, I see this as a triumph of form over substance. The majority has been misled by the appearance of a “Proposed Settlement” and failed to inquire sufficiently into the substance of the case. As described herein, the hearing which occurred before the full Commission was adversarial, informed by virtue of discovery, and without any due process violation. I would reverse the Court of Appeals and reinstate the decision of the Public Service Commission.