Ark. Code Ann. § 23-2-423 (2026)

Research References

U. Ark. Little Rock L.J.

Legislative Survey, Civil Procedure, 8 U. Ark. Little Rock L.J. 555.

Case Notes

Construction.

This section is mandatory, and strict compliance with its provisions is necessary before any order of the Arkansas Public Service Commission may be reviewed by the Court of Appeals. Brown v. Arkansas Pub. Serv. Comm'n, 17 Ark. App. 258, 707 S.W.2d 780 (1986).

In General.

Judicial review of appeals from the Arkansas Public Service Commission is limited by the provisions of subdivisions (c)(3), (4), and (5) of this section, which define the standard of review as determining whether the commission's findings of fact are supported by substantial evidence, whether the commission has regularly pursued its authority, and whether the order under review violated any right of the appellant under the laws or the Constitutions of the State of Arkansas or the United States. Bryant v. Arkansas Pub. Serv. Comm'n, 46 Ark. App. 88, 877 S.W.2d 594 (1994).

This section and § 26-24-123 are easily distinguishable, inasmuch as this section pertains to public utility regulatory matters and § 26-24-123 governs judicial review on Arkansas Public Service Commission decisions concerning taxation matters. Ark. Elec. Coop. Corp. v. Ark. Pub. Serv. Comm'n, 307 Ark. 171, 818 S.W.2d 935 (1991).

Fact that customers were proceeding pro se before the Arkansas Public Service Commission did not warrant them special treatment because pro se parties were held to the same standard as a licensed attorney. Pressler v. Arkansas Pub. Serv. Comm'n, 2011 Ark. App. 512, 385 S.W.3d 349 (2011).

Allocation of Rates.

The commission does not have to rely on a particular cost-of-service study to decide how rates should be allocated among the various classes of customers, nor must the commission announce the method it used in the allocation. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

Burden of Proof.

The burden was on local exchange carriers to justify revised tariffs and show without such rates they would be unable to earn their allowed rate of return. Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 58 Ark. App. 145, 946 S.W.2d 730 (1997).

Collateral Attack.

The order or determination of an administrative body, acting within its jurisdiction and under authority of law, is not subject to collateral attack; this is so in the absence of fraud or bad faith, or, under some authority, even on the ground of fraud, since the only method of attack available is by appeal as provided by statute. Bryant v. Arkansas Pub. Serv. Comm'n, 54 Ark. App. 157, 924 S.W.2d 472 (1996).

Constitutional Rights.

Provisions of former similar section as to review of orders of commission were adequate to protect constitutional rights of telephone company which maintained integrated exchange serving subscribers in both Arkansas and another state and were “plain, speedy and adequate” within the meaning of the federal Johnson Act, so that federal district court did not have jurisdiction to enjoin rate order of commission relating to rates in Arkansas. General Tel. Co. v. Robinson, 132 F. Supp. 39 (E.D. Ark. 1955) (decision under prior law).

Local exchange carriers were not denied due process in proceedings before the Arkansas Public Service Commission, where the commission advised them of all issues before it and they were given the opportunity to present evidence to the commission in support of all the components of their proposed tariffs. Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 58 Ark. App. 145, 946 S.W.2d 730 (1997).

Subsection (c)(4) of this section did not give the court jurisdiction to address the merits of the plaintiff's constitutional claims where the plaintiff did not argue that the Arkansas Public Service Commission failed to regularly pursue its authority and agreed with the commission that it lacked jurisdiction to decide the constitutional claims. AT&T Communications of the Southwest, Inc. v. Arkansas Pub. Serv. Comm’n, 67 Ark. App. 177, 994 S.W.2d 494 (1999), aff’d in part, rev’d in part, 344 Ark. 188, 40 S.W.3d 273 (2001).

Customers were afforded due process because they had the opportunity to subpoena witnesses but failed to do so; the Arkansas Public Service Commission's Rules of Practice and Procedure provide that parties before the Commission may request subpoenas from the Commission to secure the testimony of witnesses, but those rules do not specify a time in which subpoenas are required to be served. Pressler v. Arkansas Pub. Serv. Comm'n, 2011 Ark. App. 512, 385 S.W.3d 349 (2011).

Discretion of Commission.

The commission has broad discretion in choosing an approach to rate regulation and is free, within its statutory authority, to make any reasonable adjustments which may be called for under particular circumstances. Associated Natural Gas Co. v. Arkansas Pub. Serv. Comm'n, 25 Ark. App. 115, 752 S.W.2d 766 (1988).

In denying certain of the Attorney General's discovery requests in a suit involving a telephone company, the Arkansas Public Service Commission regularly pursued its authority. Bryant v. Arkansas Pub. Serv. Comm'n, 55 Ark. App. 125, 931 S.W.2d 795 (1996).

The commission has wide discretion in choosing its approach to rate regulation, and it is not bound by a particular method of evaluation. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

The appellate court is generally not concerned with the method used by the commission in calculating rates as long as the commission's action is based on substantial evidence and the total effect of the rate order is not unjust, unreasonable, unlawful, or discriminatory. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

Entitlement to Review.

A city is entitled to review of order by commission even though no constitutional rights are violated, since proceedings might be regular, and still order could be void if arbitrary, unreasonable, and without substantial evidence. City of Ft. Smith v. Southwestern Bell Tel. Co., 220 Ark. 70, 247 S.W.2d 474 (1952) (decision under prior law).

Utility is entitled to examination of order by commission, if order amounts to confiscation of property, or if order results in violation of constitutional rights under state and federal Constitutions. City of Ft. Smith v. Southwestern Bell Tel. Co., 220 Ark. 70, 247 S.W.2d 474 (1952) (decision under prior law).

Jurisdiction.

An objection to an order of the Arkansas Public Service Commission may not be considered by this court unless the objection has been urged before the commission in the application for rehearing. Lavaca Tel. Co. v. Arkansas Pub. Serv. Comm'n, 65 Ark. App. 263, 986 S.W.2d 146 (1999).

Notice of Appeal.

Attorney General's notice of appeal regarding evidentiary issues held sufficient. Bryant v. Arkansas Pub. Serv. Comm'n, 54 Ark. App. 157, 924 S.W.2d 472 (1996).

Notice of appeal may be filed within thirty days of one of two dates: (1) the date on which the Arkansas Public Service Commission (PSC) enters an order upon the application for rehearing, or (2) the date on which the application is deemed denied, and Ark. R. App. P. Civ. 4 does not apply; therefore, a motion to dismiss an appeal as untimely was denied because it was filed within 30 days of the PSC denying rehearing, even though the deemed denied date had already passed when the PSC decided to reconsider the case. Commercial Energy Users Group v. Arkansas Pub. Serv. Comm'n, 369 Ark. App. 13, 250 S.W.3d 225 (2007).

Scope of Review.

Where one seeking review does not claim that the order of the Department of Public Utilities (now Arkansas Public Service Commission) complained of violated any of its constitutional rights, the review of such order should not extend further than to determine whether the department has regularly pursued its authority. Department of Pub. Utils. v. Arkansas La. Gas Co., 200 Ark. 983, 142 S.W.2d 213 (1940) (decision under prior law).

Allowance by commission would not be changed by court, since to do so would be to substitute opinion of court for opinion of commission. City of Ft. Smith v. Southwestern Bell Tel. Co., 220 Ark. 70, 247 S.W.2d 474 (1952) (decision under prior law).

The court reviews the commission's findings on the record before the commission. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956) (decision under prior law).

The Arkansas Public Service Commission has broad legislative and administrative powers, and review of its findings and orders by the court is considerably limited in its extent. Incorporated Town of Emerson v. Arkansas Pub. Serv. Comm'n, 227 Ark. 20, 295 S.W.2d 778 (1956) (decision under prior law).

The granting or denial of a petition for a rehearing is a matter resting largely within the discretion of a regulatory agency in rate-setting cases, and the general rule is that the denial of a petition for rehearing by an agency such as the Arkansas Public Service Commission should be set aside on judicial review only for the clearest abuse of discretion. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).

The judicial branch of the government must generally defer to the expertise of the Arkansas Public Service Commission; however, judicial review is not reduced to a formality, and it is for the courts to say whether there has been an arbitrary or unwarranted abuse of the commission's discretion, even though considerable judicial restraint should be observed in finding such an abuse. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).

The courts may not pass upon the wisdom of the commission's actions or say whether the commission has appropriately exercised its discretion; however, it is for the courts to say whether there has been an arbitrary or unwarranted abuse of discretion, even though considerable judicial restraint should be observed in finding such an abuse, and the question of reasonableness of the commission's actions relates only to its findings of fact and to a determination of whether its action was arbitrary. Russellville Water Co. v. Arkansas Pub. Serv. Comm'n, 270 Ark. 584, 606 S.W.2d 552 (1980).

The scope of review by the court is very narrow and limited; on the other hand, the discretion of the commission is very broad. Arkansas Pub. Serv. Comm'n v. Lincoln-Desha Tel. Co., 271 Ark. 346, 609 S.W.2d 20 (1980).

The Arkansas Public Service Commission acts in a legislative capacity and not in a judicial one, and therefore, the appellate court views the orders of the commission as having the same force as would an enactment of the General Assembly. Arkansas Pub. Serv. Comm'n v. Lincoln-Desha Tel. Co., 271 Ark. 346, 609 S.W.2d 20 (1980).

In a telephone rate case, judicial inquiry is concluded if the total effect of the rate order is not unjust, unreasonable, unlawful or discriminatory. Arkansas Pub. Serv. Comm'n v. Lincoln-Desha Tel. Co., 271 Ark. 346, 609 S.W.2d 20 (1980).

The appellate court's duty under this section is to determine whether: (1) the Arkansas Public Service Commission's findings as to the facts are supported by substantial evidence; (2) the commission has regularly pursued its authority; and (3) the order or decision under review violated any of the telephone company's rights under the laws or constitutions of the United States or State of Arkansas. Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 18 Ark. App. 260, 715 S.W.2d 451 (1986).

It is not the theory, but the impact, of the rate order that counts in determining whether rates are just, reasonable, and nondiscriminatory, and if the total effect of the rate order cannot be said to be unjust, unreasonable, or discriminatory, judicial inquiry is concluded and infirmities in the method employed are deemed unimportant. General Tel. Co. v. Arkansas Pub. Serv. Comm'n, 23 Ark. App. 73, 744 S.W.2d 392, aff'd, 295 Ark. 595, 751 S.W.2d 1 (1988); Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 24 Ark. App. 142, 751 S.W.2d 8 (1988); Contel of Ark., Inc. v. Arkansas Pub. Serv. Comm'n, 37 Ark. App. 18, 822 S.W.2d 850 (1992).

Although § 23-2-103(b) required the Arkansas Public Service Commission to consider public hearing comments before issuing a decision about a rate increase, its failure to do so was a harmless error when the Commission addressed the comments in a later order and the State did not argue that the rate increase was not supported by substantial evidence, and therefore, prejudice to the residential ratepayers was not shown. Although the wording of § 23-2-103(b) does not state specifically that the Commission must have the transcript of the public comments before it issues its decision, that is clearly the intent of the statute. Consumers Utils. Rate Advocacy Div. v. Ark. Pub. Serv. Comm'n, 99 Ark. App. 228, 258 S.W.3d 758 (2007).

In an action to increase nongas rates, the Consumer Utilities Rate Advocacy Division of the Attorney General's Office obtained some testimony that the allocation of distribution mains' cost could have been lowered if relevant data was available, but that evidence was not sufficient to convince the court that the Arkansas Public Service Commission's adoption of its staff's customer allocation was not supported by substantial evidence as required by subdivisions (c)(3) and (4) of this section. Consumers Utils. Rate Advocacy Div. v. Ark. Pub. Serv. Comm'n, 99 Ark. App. 228, 258 S.W.3d 758 (2007).

In an action to increase nongas rates, the Arkansas Public Service Commission found that a gas company met its burden of producing sufficient evidence of real potential harm for abuse of the company's system and a consumer group did not demonstrate that the potential for abuse did not exist or offer evidence that the proposal was unreasonable. Therefore, under subsection (c) of this section, substantial evidence supported the Commission's decision to allow the company to lower the imbalance percentages. Consumers Utils. Rate Advocacy Div. v. Ark. Pub. Serv. Comm'n, 99 Ark. App. 228, 258 S.W.3d 758 (2007).

Public Service Commission (PSC) did not act err in declaring that an electric utility's recovery of storm restoration costs in the amount of $47 million would constitute improper, retroactive ratemaking, nor did it err in using a hypothetical debt-to-equity (D/E) ratio of 52/48 to establish the cost of capital instead of the utility's 44/56 D/E ratio; however, in calculating the dividends-payable balance, the PSC erred in using the utility's parent company's lag time. Entergy Ark., Inc. v. Ark. Pub. Serv. Comm'n, 104 Ark. App. 147, 289 S.W.3d 513 (2008).

Because a university did not file a petition for rehearing from an administrative law judge's order, it could not argue on appeal that the order erroneously held that facilities agreements the university entered into with an energy company were void and unenforceable in their entirety. Entergy Ark., Inc. v. Ark. Pub. Serv. Comm'n, 2011 Ark. App. 453, 384 S.W.3d 674 (2011).

Arkansas Public Service Commission (PSC) did not err in dismissing customer's complaint alleging that an energy company overcharged them for electric service because there was testimony that the meter on the customers' house was working properly and that the appliances installed in the home could have used the amount of electricity billed under the weather conditions during the time period in question; the administrative law judge specifically credited the testimony of a member of the PSC staff that there was no evidence that the company overbilled the customers or that it violated any of the PCS's rules. Pressler v. Arkansas Pub. Serv. Comm'n, 2011 Ark. App. 512, 385 S.W.3d 349 (2011).

—Performance of Functions.

Apart from the judicial review which may be resorted to, the Supreme Court (now Court of Appeals) will not advise the commission how to discharge its functions. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956) (decision under prior law).

In questions pertaining to the regular pursuit of Arkansas Public Service Commission's authority, the courts do have the power and duty to direct the commission in the performance of its functions insofar as it may be necessary to assure compliance by it with the statutes and constitutions. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).

It is not for the courts to advise the Arkansas Public Service Commission how to discharge its functions in arriving at findings of fact or in exercising its discretion; on the other hand, it is clearly for the courts to decide the questions of law involved and to direct the commission where it has not pursued its authority in compliance with the statutes governing it or with the state and federal constitutions. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).

Local exchange carriers failed to show the Arkansas Public Service Commission failed to pursue its authority regularly because it engaged in single-issue rate making by considering in isolation the rate-of-return component of the algorithm for determining the Arkansas InterLATA Carrier Common Pool tariffs. Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 58 Ark. App. 145, 946 S.W.2d 730 (1997).

—Substantial Evidence.

If the order is supported by substantial evidence, free from fraud, and not arbitrary, it is the duty of the courts to permit it to stand, even though they might disagree with the wisdom of the order. Department of Pub. Utils. v. Arkansas La. Gas Co., 200 Ark. 983, 142 S.W.2d 213 (1940); Allied Tel. Co. v. Arkansas Pub. Serv. Comm'n, 239 Ark. 492, 393 S.W.2d 206 (1965) (preceding decisions under prior law).

Order of commission will not be interfered with by the court, if supported by substantial evidence free from fraud and not arbitrary. City of Ft. Smith v. Southwestern Bell Tel. Co., 220 Ark. 70, 247 S.W.2d 474 (1952); Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956); Incorporated Town of Emerson v. Arkansas Pub. Serv. Comm'n, 227 Ark. 20, 295 S.W.2d 778 (1956) (preceding decisions under prior law); Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 261 Ark. 184, 546 S.W.2d 720 (1977).

Commission order held to be supported by substantial evidence. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956); Barnes v. Arkansas Pub. Serv. Comm'n, 235 Ark. 683, 362 S.W.2d 1 (1962) (preceding decisions under prior law); Arkansas Pub. Serv. Comm'n v. Lincoln-Desha Tel. Co., 271 Ark. 346, 609 S.W.2d 20 (1980); General Tel. Co. of Southwest v. Arkansas Pub. Serv. Comm'n, 295 Ark. 595, 751 S.W.2d 1 (1988).

Commission order not supported by substantial evidence. Arkansas Pub. Serv. Comm'n v. Continental Tel. Co., 262 Ark. 821, 561 S.W.2d 645 (1978); Arkansas Oklahoma Gas Corp. v. Arkansas Pub. Serv. Comm'n, 301 Ark. 259, 783 S.W.2d 350 (1990).

In reviewing an order of the commission the court must determine, not whether the conclusions of the commission are supported by substantial evidence, but whether its findings of fact are so supported. Arkansas Pub. Serv. Comm'n v. Continental Tel. Co., 262 Ark. 821, 561 S.W.2d 645 (1978).

The Court of Appeals is not concerned with the methodology used by the Arkansas Public Service Commission in arriving at the result as long as its findings are based on substantial evidence. Walnut Hill Tel. Co. v. Arkansas Pub. Serv. Comm'n, 17 Ark. App. 259, 709 S.W.2d 96 (1986); General Tel. Co. v. Arkansas Pub. Serv. Comm'n, 23 Ark. App. 73, 744 S.W.2d 392, aff'd, 295 Ark. 595, 751 S.W.2d 1 (1988); Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 24 Ark. App. 142, 751 S.W.2d 8 (1988); Contel of Ark., Inc. v. Arkansas Pub. Serv. Comm'n, 37 Ark. App. 18, 822 S.W.2d 850 (1992).

The Arkansas Public Service Commission's refusal to set rates based on a times interest earned ratio (TIER), or designed to yield a TIER of at least 1.5 as requested by the telephone company, was not arbitrary, unreasonable, or unsupported by substantial evidence. Walnut Hill Tel. Co. v. Arkansas Pub. Serv. Comm'n, 17 Ark. App. 259, 709 S.W.2d 96 (1986).

To establish an absence of substantial evidence to support a decision, the appellant must demonstrate that the proof before the administrative tribunal was so nearly undisputed that fair-minded persons could not reach its conclusion. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

The proper standard of review on appeal of an assessment of an ad valorem property tax by the Arkansas Public Service Commission was whether the findings of the commission were supported by substantial evidence; de novo review was not appropriate, even though the commission's order decided a question of law. Ozark Gas Pipeline Corp. v. Ark. Pub. Serv. Comm'n, 342 Ark. 591, 29 S.W.3d 730 (2000).

—Testimony.

In reviewing the sufficiency of the evidence to support the stipulated rate allocation, it was appropriate to consider the stipulation itself as the functional equivalent of testimony that the rates included were just and reasonable. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

The evaluation of testimony in a rate case is for the Arkansas Public Service Commission, not the courts, and in order to hold that the testimony does not constitute substantial evidence, the court must find that the testimony has no rational basis. Bryant v. Arkansas Pub. Serv. Comm'n, 57 Ark. App. 73, 941 S.W.2d 452 (1997).

Waiver of Objections.

Consumer which did not appeal decision of the Arkansas Public Service Commission granting a rate change within the required time could not collaterally attack the new rate schedules as discriminatory in an action against the utility and the commission. Commercial Printing Co. v. Arkansas Power & Light Co., 250 Ark. 461, 466 S.W.2d 261 (1971) (decision under prior law).

Although a utility argued that the Public Service Commission violated constitutional guarantees of due process by limiting the cross-examination of witnesses, the utility waived this argument on appeal by not making a timely objection below. Entergy Ark., Inc. v. Ark. Pub. Serv. Comm'n, 104 Ark. App. 147, 289 S.W.3d 513 (2008).

Cited: Arkansas Pub. Serv. Comm'n v. Yelcot Tel. Co., 266 Ark. 365, 585 S.W.2d 362 (1979); Redfield Tel. Co. v. Arkansas Pub. Serv. Comm'n, 273 Ark. 498, 621 S.W.2d 470 (1981); Arkansas Charcoal Co. v. Arkansas Pub. Serv. Comm'n, 299 Ark. 359, 773 S.W.2d 427 (1989); Flower v. Arkansas Pub. Serv. Comm'n, 31 Ark. App. 155, 790 S.W.2d 183 (1990); Arkansas Elec. Energy Consumers v. Arkansas Pub. Serv. Comm'n, 31 Ark. App. 217A, 791 S.W.2d 719 (1990); Lincoln v. Arkansas Pub. Serv. Comm'n, 40 Ark. App. 27, 842 S.W.2d 51 (1992); Lincoln v. Ark. Pub. Serv. Comm'n, 313 Ark. 295, 854 S.W.2d 330 (1993); Bryant v. Arkansas Pub. Serv. Comm'n, 50 Ark. App. 213, 907 S.W.2d 140 (1995); Bryant v. Arkansas Pub. Serv. Comm'n, 64 Ark. App. 303, 984 S.W.2d 61 (1998); Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 68 Ark. App. 148, 5 S.W.3d 484 (1999); Alltel Ark., Inc. v. Arkansas Pub. Serv. Comm'n, 70 Ark. App. 421, 19 S.W.3d 634 (2000); AT&T Communications of the Southwest, Inc. v. Arkansas Pub. Serv. Comm'n, 344 Ark. 188, 40 S.W.3d 273 (2001); Alltel Ark., Inc. v. Arkansas Pub. Serv. Comm'n, 76 Ark. App. 547, 69 S.W.3d 889 (2002); Arkansas Gas Consumers, Inc. v. Arkansas Pub. Serv. Comm'n, 354 Ark. 37, 118 S.W.3d 109 (2003); Hempstead County Hunting Club, Inc. v. Arkansas Pub. Serv. Comm'n, 2010 Ark. 221, 384 S.W.3d 477 (2010).