Appeal of Public Service Co.

King, C.J., with whom Batchelder, J.,

concurs, dissenting: Public Service Company of New Hampshire (PSNH) argues that the public utilities commission had no authority to prohibit the use of the proceeds of future issuances of securities for the construction of Seabrook Unit Two until certain conditions were met. Because I would hold that the PUC possessed such authority pursuant to RSA 369:1, which governs the PUC’s authority to approve the issuance of securities by public utilities, I dissent.

The PUC has express authority to approve the issuance of securities by a utility and to impose reasonable conditions on its approval necessary for the public interest. RSA 369:1 provides in part:

“A public utility lawfully engaged in business in this state may, with the approval of the commission but not otherwise, issue and sell its stock, bonds, notes and other evidences of indebtedness payable more than twelve months after the date thereof for lawful corporate purposes. The proposed issue and sale of securities will be approved by the commission where it finds that the same is consistent with the public good. Such approval shall extend to the amount of the issue authorized and the purpose or purposes to which the securities or the proceeds thereof are to be applied, and shall be subject to such reasonable terms and conditions as the commission may find to be necessary in the public interest....”

*1078The majority accepts PSNH’s argument that once a site-and-facility certificate is issued, any utility proposal for the issuance of securities must be approved if the purpose for which the proceeds would be used is one which is proper for a private corporation, in other words, for a lawful corporate purpose. The court ignores the plain language of the statute which requires that the issuance of the securities be for a lawful corporate purpose and requires that the PUC find that the issuance is consistent with the public good. The majority also ignores the language of the statute which allows the PUC to impose reasonable conditions on its approval of the issuance of securities.

RSA chapter 162-F, which establishes a procedure for the issuance of certificates of site and facility, does not limit the PUC’s authority to impose conditions on a utility’s issuance of securities. PSNH argues that it has a vested right to complete Seabrook Two and that the application of RSA 369:1 unconstitutionally infringes on that right. PSNH maintains, in effect, not only that it has a right to complete the project with its own funds, but-also that it has the right to issue any securities that it believes are necessary to finance the project.

The majority agrees that PSNH has a vested right to complete the project and to issue securities to fund the project, citing our decisions in Henry and Murphy, Inc. v. Town of Allenstown, 120 N.H. 910, 424 A.2d 1132 (1980) and Grondin v. Town of Hinsdale, 122 N.H. 882, 451 A.2d 1299 (1982). The instant case is easily distinguished. PSNH received its certificate of site and facility after the adoption of RSA 369:1. Therefore, PSNH knew when it received the certificate that it could not issue securities to fund the construction of the Seabrook plant without PUC approval. In contrast, both the Allenstoum and Grondin cases involved regulations that were adopted after the parties’ rights had vested.

RSA 369:1, which requires the PUC to approve the issuance of securities, reflects a recognition by the legislature that the PUC must have some control over the issuance of securities by utilities because of the relationship between the cost of a project and the fair rate of return to which a utility is entitled. See State v. New Hampshire Gas & Electric Co., 86 N.H. 16, 24, 163 A. 724, 728-29 (1932); 64 Am. Jur. 2d Public Utilities § 255, at 761 (1972). The court’s decision renders the PUC a rubber stamp for any financing proposal advanced by a utility. It gives PSNH a blank check to obtain as much money as it desires from the issuance of securities and to spend it exactly as it wants. To paraphrase our decision in Appeal of Public Serv. Co. of N.H., 122 N.H. 919, 922, 451 A.2d 1321, 1324 (1982), PSNH cannot ride two horses; it cannot claim to have *1079unfettered power to decide how to finance a project, and still expect the PUC to pass on the cost of such financing to ratepayers. Nor can it expect the legislature to bail it out in the future, if its unbridled power to issue securities ends in financial disaster.

The majority’s criticism of the PUC for its intemperate remarks at prior hearings is ironic in light of the record of those hearings. The record discloses that the PUC showed constant concern about the financial health of PSNH, and about its continued viability as a utility. Beginning in May 1979, when PSNH filed a request with the PUC to permit it to divest itself of twenty-two percent ownership in Seabrook, thereby reducing its ownership interest to twenty-eight percent, the PUC has shown a willingness to work with PSNH to improve its financial position. Although a request for emergency rates that was filed in January 1981 was denied, the PUC allowed a rate increase of $28,900,000 in April 1981. In granting this order, the PUC stated that a major change in the company’s plans for Seabrook was necessary to improve PSNH’s financial plight. It ordered PSNH to reduce its ownership interest in Seabrook to twenty-eight percent.

In March 1982, PSNH filed a request for the PUC to approve the issuance of three million shares of common stock. The PUC approved the issuance of the shares but stated that the proceeds of the issuance could not be used for any additional commitments of materials, labor, or services for Seabrook Two. The PUC made clear that it would reopen proceedings in three months to determine if PSNH had made progress in reducing its ownership interest in Seabrook. PSNH then requested the approval of the PUC for the issuance of sixty million dollars in general and refunding mortgage bonds. The PUC also approved this financing, imposing the same conditions as it imposed on the common stock issuance.

Finally, in May 1982, the PUC opened Docket No. DF 82-141 to determine whether PSNH had made progress in reducing its ownership interest in Seabrook. Only after a hearing showed that PSNH had made no progress in reducing its ownership of Seabrook did the PUC impose the conditions at issue in this case, prohibiting the use of future financing for work on Seabrook Unit Two.

Contrary to the assertion of the majority that the PUC acted intemperately, this history indicates that the PUC acted reasonably in the prior proceedings and with concern for the financial health and long-term viability of PSNH.