THE DOOR SHOP, INC.
ALCORN COUNTY ELECTRIC POWER ASSOCIATION
OF JUDGMENT: 06/08/2017
COUNTY CIRCUIT COURT TRIAL JUDGE: HON. JAMES LAMAR ROBERTS,
COURT ATTORNEYS: DAVID L. SANDERS NICHOLAS RYAN BAIN WILLIAM
HULL DAVIS, JR.
ATTORNEY FOR APPELLANT: NICHOLAS RYAN BAIN
ATTORNEY FOR APPELLEE: WILLIAM HULL DAVIS, JR.
From November 2004 to January 2011, The Door Shop, Inc.,
utilized $36, 081.86 of electricity from Alcorn County
Electric Power Association (ACE). But because of a billing
error, it was charged only $10, 396.28. Upon discovering the
error, ACE sought to recover the $25, 658.58 difference via
supplemental billing. The Door Shop refused to pay, which
prompted ACE to file suit in the Alcorn County Circuit Court.
ACE maintained that The Door Shop was liable for the
underbilled amount and moved for summary judgment, which the
circuit court granted. This appeal followed. We affirm.
AND PROCEDURAL HISTORY
ACE is the state-authorized entity charged with providing
electric-power services to Alcorn County, Mississippi. It
receives and distributes its electric power via a wholesale
contract with the Tennessee Valley Authority (TVA). The Door
Shop, an Alcorn County business, applied for new services
from ACE in October 2004. By executing ACE's
"Application for Service," The Door Shop bound
itself to ACE's bylaws.
ACE's Engineering and Operations Manager, Jason Grisham,
explained ACE's procedures for establishing new accounts.
First, ACE installs an electric meter, which must be linked
to a current transformer. The transformer decreases the
amount of current registered by the meter, as the actual
current transferred through the electric cable is greater
than the current rating of the meter. The result is that the
meter measures only a fraction of the actual electricity
used. Here, The Door Shop's meter operated on a 40:1
ratio-that is, for every 40 kilowatt hours of electricity
used, The Door Shop's meter would register only 1
kilowatt hour of use. Therefore, The Door Shop's meter
should have been corrected with a "multiplier" of
Once the meter is installed and the multiplier is determined,
ACE's billing department is made aware of the multiplier
so that it may be applied to the customer's account. But
The Door Shop's multiplier-though reported to ACE's
billing department-was not applied, leaving in place the
default multiplier of 1. ACE's mistake resulted in The
Door Shop's being charged for only 1/40 of the
electricity actually used. The error persisted from November
2004 until late January 2011. After discovering the error,
ACE corrected the multiplier, adjusted its billing to reflect
The Door Shop's actual amount of electricity used, and
calculated the difference. ACE ultimately determined that The
Door Shop had been underbilled by $25, 685.58.
ACE then sent The Door Shop a supplemental bill for the
underbilled amount. ACE did so under Article II, Section 12,
of its bylaws, which outlines ACE's rights and procedures
for collecting undercharged amounts due to billing errors.
With The Door Shop unwilling to pay, ACE filed suit to
collect the amount due.
The Door Shop filed a motion to stay the proceedings, arguing
that the dispute pertained to ACE's quality of service.
And as a service issue, The Door Shop asserted that the
Mississippi Public Service Commission (MPSC), by statute,
possessed exclusive jurisdiction over the matter. But the
circuit court rejected The Door Shop's characterization,
instead finding that the claims regarded "rates,"
which encompassed amounts charged and efforts at collection.
Holding further that the MPSC lacks jurisdiction over matters
involving rates, the circuit court denied The Door Shop's
petition to stay the proceedings. Because no dispute existed
as to ACE's adjusted accounting or the actual amount of
electricity used by The Door Shop, ACE then moved for, and
was granted, summary judgment. The Door Shop timely appealed.
Decisions granting or denying motions to stay proceedings are
reviewed for abuse of discretion. Prescott v. Leaf River
Forest Prods. Inc., 740 So.2d 301, 307 (Miss. 1999).
Jurisdiction, on the other hand, is a question of law, which
we review de novo. Pekin Ins. Co. v. Hinton, 192
So.3d 966, 970 (Miss. 2016). This Court likewise reviews a
circuit court's grant of summary judgment de novo.
Daniels v. Crocker, 235 So.3d 1, 6 (Miss. 2017).
The pertinent issues on appeal are, first, whether the
circuit court erred in denying The Door Shop's motion to
stay the proceedings by holding that the MPSC lacked
jurisdiction, and, second, whether the circuit court erred in
granting ACE summary judgment. The classification of
ACE's claim and its jurisdictional effect, however, are
the principal issues to be resolved, as the former directly
affects the latter. We hold that the circuit court correctly
classified the dispute as one involving "rates,"
the ultimate jurisdictional issue. We likewise conclude that
the circuit court correctly granted ACE summary judgment.
Whether the circuit court erred in denying The Door
Shop's motion to stay the proceedings by
holding that the MPSC lacked jurisdiction.
"Subject matter jurisdiction is a threshold inquiry
which must be determined before a court may proceed to the
merits." Schmidt v. Catholic Diocese of Biloxi,
18 So.3d 814, 821 (Miss. 2009). Much of The Door Shop's
argument hinges on its belief that the MPSC-not the circuit
court-possessed exclusive jurisdiction over the matter. To
resolve this jurisdictional issue, we simply look to
Mississippi Code Section 77-3-5-the statute outlining the
MPSC's jurisdictional parameters. See Miss. Code
Ann. § 77-3-5 (Rev. 2018).
On one hand, Section 77-3-5 vests the MPSC with
"exclusive original jurisdiction over the intrastate
business and property of public utilities." Id.
On the other hand, however, Section 77-3-5 divests the MPSC
of jurisdiction in certain realms, providing,
[T]he [MPSC] shall not have jurisdiction over the
governance, management or other internal affairs of entities
as described by paragraphs (b) and (c) below. Moreover,
[MPSC] shall not have jurisdiction to regulate the
rates for the sales and/or distribution:
. . . .
(b) Of gas or electricity by cooperative gas or
electric power associations to the members thereof as
consumers, except as provided by Section 77-3-17, where
service is rendered in a municipality[.]
Id. (emphasis added). Thus, the MPSC lacks jurisdiction
in all matters relating to the governance, management, or
internal affairs of entities like ACE, as well as to the
"rates" for sale and distribution of electricity by
the same. See id. And so, by concluding this case
pertained to "rates," the circuit court held that
Section 77-3-5 divested the MPSC of exclusive jurisdiction.
For that reason, we must determine whether ACE's claims
fall within the definition of the term "rate" as
referenced in Section 77-3-5.
On this question, The Door Shop insists that the issues
presented involve "quality of service" rather than
"rates." ACE is responsible, The Door Shop argues,
for installing a customer's electrical meter. And, after
installation, ACE is responsible for applying a multiplier.
Thus, failure to apply a correct multiplier results in
improper installation. And because ACE failed to apply the
multiplier here, it provided The Door Shop with defective
service; and defective service pertains to quality of
service-not rates. Like the circuit court, however, we find
this argument lacks merit.
We begin with service quality. The Door Shop points to our
Public Utilities Act, where "service" is defined as
"the sale or other disposition of energy at the lowest
cost consistent with sound economy, public advantage[, ] and
the prudent conduct of the business of the
authority." Miss. Code Ann. §
77-5-3(l) (Rev. 2018) (emphasis added). To The Door
Shop, ACE's failure to apply the correct multiplier means
that ACE failed to act in a "prudent" manner. This
all but concludes The Door Shop's argument as to service
quality and prudence. So, keeping in mind that ACE instituted
this suit to collect an underbilled amount, let us now turn
Mississippi Code Section 77-3-3(e) defines what constitutes a
The term "rate" means and includes every
compensation, charge, fare, toll, customer deposit,
rental and classification, or the formula or method by
which such may be determined, or any of them, demanded,
observed, charged or collected by any public
utility for any service, product or commodity described
in this section, offered by it to the public, and any
rules, regulations, practices or ...