{ "id": 4132529, "name": "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; PUBLIC STAFF-UTILITIES COMMISSION, Intervenor-Appellees v. CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant-Appellant and CHARLOTTE-MECKLENBURG UTILITIES, A DEPARTMENT OF THE CITY OF CHARLOTTE, Intervenor-Appellant", "name_abbreviation": "State ex rel. Utilities Commission v. Carolina Water Service, Inc.", "decision_date": "2013-01-15", "docket_number": "No. COA12-475", "first_page": "120", "last_page": "136", "citations": [ { "type": "official", "cite": "225 N.C. App. 120" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "126 S.E.2d 325", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1962, "pin_cites": [ { "page": "333" } ], "opinion_index": 0 }, { "cite": "257 N.C. 560", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569176 ], "year": 1962, "pin_cites": [ { "page": "569-70" } ], "opinion_index": 0, "case_paths": [ "/nc/257/0560-01" ] }, { "cite": "385 S.E.2d 451", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "453-54" } ], "opinion_index": 0 }, { "cite": "325 N.C. 463", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2491830 ], "year": 1989, "pin_cites": [ { "page": "467" } ], "opinion_index": 0, "case_paths": [ "/nc/325/0463-01" ] }, { "cite": "375 S.E.2d 147", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1989, "pin_cites": [ { "page": "147" }, { "page": "154", "parenthetical": "internal quotation marks, brackets, and citation omitted" }, { "page": "155" }, { "page": "155" } ], "opinion_index": 0 }, { "cite": "323 N.C. 630", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2561952 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/nc/323/0630-01" ] }, { "cite": "269 S.E.2d 142", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "149" } ], "opinion_index": 0 }, { "cite": "301 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561018 ], "year": 1980, "pin_cites": [ { "page": "11" } ], "opinion_index": 0, "case_paths": [ "/nc/301/0001-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 62-23", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 62-2", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "pin_cites": [ { "page": "(b)" }, { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "269 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "561", "parenthetical": "\"The powers and authority of administrative officers and agencies are derived from, defined and limited by constitution, statute, or other legislative enactment.\"" } ], "opinion_index": 0 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "year": 1980, "pin_cites": [ { "page": "399", "parenthetical": "\"The powers and authority of administrative officers and agencies are derived from, defined and limited by constitution, statute, or other legislative enactment.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0381-01" ] }, { "cite": "306 S.E.2d 435", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "445", "parenthetical": "\"The Commission, in both of these cases, exceeded its statutory authority to the prejudice of the substantial rights of the ratepayers and thus. the orders in both cases were affected by error of law.\"" } ], "opinion_index": 0 }, { "cite": "309 N.C. 195", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4763743 ], "year": 1983, "pin_cites": [ { "page": "213", "parenthetical": "\"The Commission, in both of these cases, exceeded its statutory authority to the prejudice of the substantial rights of the ratepayers and thus. the orders in both cases were affected by error of law.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/309/0195-01" ] }, { "cite": "379 S.E.2d 30", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "37", "parenthetical": "\"Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.\"" } ], "opinion_index": 0 }, { "cite": "324 N.C. 373", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2483734 ], "year": 1989, "pin_cites": [ { "page": "384", "parenthetical": "\"Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0373-01" ] }, { "cite": "473 S.E.2d 661", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1996, "pin_cites": [ { "page": "665" }, { "page": "664" }, { "page": "663", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 623", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11914647 ], "year": 1996, "pin_cites": [ { "page": "628" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0623-01" ] }, { "cite": "472 S.E.2d 193", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1996, "pin_cites": [ { "page": "199", "parenthetical": "stating that the Policy's future applicability was not properly before this Court" }, { "page": "196" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 43", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11911587 ], "year": 1996, "pin_cites": [ { "page": "51", "parenthetical": "stating that the Policy's future applicability was not properly before this Court" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0043-01" ] }, { "cite": "555 S.E.2d 333", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "337", "parenthetical": "\"[T]he appellate court. . . may not substitute its judgment, either with respect to factual disputes or policy disagreements, for that of the Commission.\"" } ], "opinion_index": 0 }, { "cite": "147 N.C. App. 182", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9378814 ], "year": 2001, "pin_cites": [ { "page": "187", "parenthetical": "\"[T]he appellate court. . . may not substitute its judgment, either with respect to factual disputes or policy disagreements, for that of the Commission.\"" } ], "opinion_index": 0, "case_paths": [ "/nc-app/147/0182-01" ] }, { "cite": "334 S.E.2d 772", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1985, "pin_cites": [ { "page": "775", "parenthetical": "internal quotation marks and citation omitted" }, { "page": "775", "parenthetical": "holding that the Commission's findings of fact were supported by the evidence and binding on appeal despite being \"somewhat skimpy\" and \"more like conclusions\"" }, { "page": "776" }, { "page": "776" } ], "opinion_index": 0 }, { "cite": "314 N.C. 509", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4697252 ], "weight": 4, "year": 1985, "pin_cites": [ { "page": "515", "parenthetical": "internal quotation marks and citation omitted" }, { "page": "515" }, { "page": "515" }, { "page": "515" } ], "opinion_index": 0, "case_paths": [ "/nc/314/0509-01" ] }, { "cite": "324 S.E.2d 28", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "33" } ], "opinion_index": 0 }, { "cite": "316 N.C. 238", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4699893 ], "year": 1986, "pin_cites": [ { "page": "244-45" } ], "opinion_index": 0, "case_paths": [ "/nc/316/0238-01" ] }, { "cite": "199 S.E.2d 731", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1973, "pin_cites": [ { "page": "733" } ], "opinion_index": 0 }, { "cite": "19 N.C. App. 597", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8555123 ], "year": 1973, "pin_cites": [ { "page": "601" } ], "opinion_index": 0, "case_paths": [ "/nc-app/19/0597-01" ] }, { "cite": "503 S.E.2d 697", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1998, "pin_cites": [ { "page": "699-700", "parenthetical": "\"[W]here there are two reasonably conflicting views of the evidence, the appellate court may not substitute its judgment for that of the Commission.\"" } ], "opinion_index": 0 }, { "cite": "130 N.C. App. 636", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11469526 ], "year": 1998, "pin_cites": [ { "page": "639", "parenthetical": "\"[W]here there are two reasonably conflicting views of the evidence, the appellate court may not substitute its judgment for that of the Commission.\"" } ], "opinion_index": 0, "case_paths": [ "/nc-app/130/0636-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 62-94", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 4, "year": 2011, "pin_cites": [ { "page": "(e)" }, { "page": "(e)" }, { "page": "(b)" } ], "opinion_index": 0 }, { "cite": "189 S.E.2d 705", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1972, "pin_cites": [ { "page": "717" }, { "page": "717" }, { "page": "717", "parenthetical": "collecting cases" }, { "page": "717" } ], "opinion_index": 0 }, { "cite": "281 N.C. 318", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8575227 ], "weight": 4, "year": 1972, "pin_cites": [ { "page": "336" }, { "page": "337" }, { "page": "336-37" }, { "page": "336-37" } ], "opinion_index": 0, "case_paths": [ "/nc/281/0318-01" ] } ], "analysis": { "cardinality": 1305, "char_count": 41210, "ocr_confidence": 0.734, "pagerank": { "raw": 5.061447019797991e-08, "percentile": 0.3185593059672591 }, "sha256": "98e00fd8baf674b48adebe5180593dc50fcd9965bf49c103744078a2c4ba1441", "simhash": "1:a43d5609312be85c", "word_count": 6557 }, "last_updated": "2023-07-14T19:12:03.865649+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges CALABRIA and ELMORE concur." ], "parties": [ "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; PUBLIC STAFF\u2014UTILITIES COMMISSION, Intervenor-Appellees v. CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant-Appellant and CHARLOTTE-MECKLENBURG UTILITIES, A DEPARTMENT OF THE CITY OF CHARLOTTE, Intervenor-Appellant" ], "opinions": [ { "text": "STEPHENS, Judge.\nFactual Background and Procedural History\nThis case arises out of an agreement between the Applicant-Appellant, Carolina Water Service, Inc. of North Carolina (\u201cCWSNC\u201d or \u201cthe Utility\u201d) and the Intervenor-Appellant, Charlotte-Mecklenburg Utilities (\u201cCMU\u201d), which is a branch of the City of Charlotte (\u201cthe City\u201d). CWSNC is a publicly franchised utility that provides water and sewer services to customers in the State of North Carolina. Among its customers are the residents of an area referred to as the \u201cCabarrus Woods Systems,\u201d which exists just east of the Mecklenburg County line in Cabarrus County, North Carolina.\nOn 30 June 2009, the City annexed the Cabarrus Woods Systems, making it a part of the City of Charlotte. By doing so, the City took on a legal obligation to provide the area with water and sewer services under chapter 160A of the North Carolina General Statutes and the City\u2019s own policies. In order to avoid duplicating the current infrastructure and still meet its obligation to provide water and sewer services, CMU entered into a \u201ctentative agreement\u201d with CWSNC in early 2009 to purchase the Utility\u2019s existing water and sewer facilities and adapt them for use by the City. Under that agreement, CMU would pay CWSNC $25.7 million for the right to use CWSNC\u2019s existing water and sewer infrastructure. Because the current infrastructure was valued at approximately $6.5 million (as of 30 August 2011), CWSNC would realize a \u201cgain on sale\u201d of approximately $19.2 million with the completion of its $25.7 million transaction with the City. The contract between CMU and CWSNC also includes an \u201cescape clause,\u201d which allows CWSNC to terminate the agreement if the North Carolina Utilities Commission (\u201cthe Commission\u201d) does not approve assignment of 100% of the gain on sale to CWSNC\u2019s shareholders.\nWith regard to the allocation of customers, the agreement between CWSNC and the City would result in the transfer of between 10% and 25% of those individuals serviced by CWSNC to the City. Specifically, 2,849 of CWSNC\u2019s 21,650 water customers (13.2%) and 3,359 of CWSNC\u2019s 13,585 sewer customers (24.7%) would be transferred from CWSNC to the City. Because of the nature of economies of scale (i.e., those cost advantages that come with having a larger customer base), customers who would be transferred from CWSNC to CMU could expect an average reduction of $34.53 in their monthly water and sewer bill (from $80.70 to $46.17 per month- \u2014 a 42.8% decline), and customers staying with CWSNC could expect an average increase of $4.78 in their monthly water and sewer bill (from $80.70 to $85.48 per month \u2014 a 5.9% rise). As a result, the newly inducted members of CMU\u2019s water and utilities service could expect an average yearly bill of $554.04 if they paid for both services, and CWSNC\u2019s remaining customers could expect an average yearly bill of $1,025.76 if they did the same.\nOn 3 March 2011, CWSNC filed an application with the Commission to transfer the current water and sewer infrastructure located in the Cabarrus Woods Systems to the City. Two and a half months later, on 17 May 2011, CMU moved to intervene and participate as a full party in CWSNC\u2019s application. The Commission granted CMU\u2019s motion to intervene and set the matter for an evidentiary hearing on 23 August 2011.\nFour months after the hearing, on 23 December 2011, the Commission published its order and determined as a matter of fact that \u201c[t]he transfer of the Cabarrus Woods Systems will have a significant adverse impact on the rates of the remaining [CWSNC] customers . ...\u201d In support of that finding, the Commission cited \u201can increase in the average water bill of $2.37 per month and [an increase] in the average sewer bill of $2.41 per month\u201d for the remaining CWSNC customers. After considering a number of factors, the Commission determined that \u201coverwhelming and compelling evidence [existed] to justify an exception to the Commission\u2019s . . . policy [(\u201cthe Policy\u201d)] of assigning 100% of the gain on sale of water and/or sewer utility systems to utility company shareholders____\u201d In so holding, the Commission emphasized that it was employing a recognized and longstanding exception to the Policy. In conclusion, the Commission determined that \u201can estimated $3.36 million or 17.5%\u201d of the $19.2 million gain on sale should be allocated to CWSNC\u2019s remaining ratepayers. The remaining $15.83 million would be assigned to CWSNC\u2019s shareholders. Commissioner Tonola D. Brown-Bland filed a separate opinion, concurring in part and dissenting in part, arguing that \u201closses caused by losing the advantages of scale, no matter the magnitude, [do] not present overwhelming and compelling evidence to stray from the position of awarding 100% of gain to shareholders.\u201d\nCWSNC and CMU appeal the Commission\u2019s 23 December 2011 order assigning $3.36 million of the $19.2 million gain on sale to the CWSNC ratepayers.\nStandard of Review\nThe extent of appellate review of decisions from the North Carolina Utilities Commission is described in the North Carolina General Statutes, chapter 62, section 94. State ex rel. Utils. Comm\u2019n v. Gen. Tel. Co. of Se., 281 N.C. 318, 336, 189 S.E.2d 705, 717 (1972). There the General Assembly has stipulated that \u201cany . . . order made by the Commission under the provisions of [chapter 62, section 94] shall be prima facie just and reasonable.\u201d N.C. Gen. Stat. \u00a7 62-94(e) (2011).\nA reviewing court may affirm or reverse an order of the Commission, declare it null and void, or remand the case for further proceedings if \u2014 after a review of the whole record \u2014 the Commission\u2019s findings, inferences, conclusions, or decisions prejudiced the substantial rights of the appellants (here, the rights of CWSNC and CMU) and were:\n(1) In violation of constitutional provisions, or\n(2) In excess of statutory authority or jurisdiction of the Commission, or\n(3) Made upon unlawful proceedings, or\n(4) Affected by other errors of law, or\n(5) Unsupported by competent, material and substantial evidence in view of the entire record as submitted, or\n(6) Arbitrary and capricious.\nId. at \u00a7 62-94(b)-(c). The Commission\u2019s findings may not be \u201creversed or modified by a reviewing court merely because the court would have reached a different finding or determination upon the evidence.\u201d Gen. Tel. Go. of Se., 281 N.C. at 337, 189 S.E.2d at 717; see also State ex rel. Utils. Comm\u2019n, Carolina Power & Light Co. v. Carolina Indus. Group for Util. Rates, 130 N.C. App. 636, 639, 503 S.E.2d 697, 699-700 (1998) (\u201c[W]here there are two reasonably conflicting views of the evidence, the appellate court may not substitute its judgment for that of the Commission.\u201d).\nDiscussion\nCWSNC and CMU argue on appeal that the Commission\u2019s decision was: (1) erroneous as not supported by competent, material, and substantial evidence; (2) arbitrary and capricious; (3) an error of law; and (4) a violation of constitutional provisions. We will address these arguments in the order they are presented.\nI. Competent, Material, and Substantial Evidence\nIf the Commission\u2019s findings of fact are supported by competent, material, and substantial evidence, then they are considered to be conclusive on appeal. Gen. Tel. Co. of Se., 281 N.C. at 336-37, 189 S.E.2d at 717 (collecting cases). \u201cSubstantial evidence\u201d is defined as \u201cmore than a scintilla or a permissible inference\u201d and consists of \u201csuch relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\u201d State ex rel. Utils. Comm\u2019n v. S. Coach Co., 19 N.C. App. 597, 601, 199 S.E.2d 731, 733 (1973). A court typically presumes that the Commission has given proper consideration to all competent evidence presented \u201c[i]n the absence of an express statement by the Commission to the contrary, some record evidence to the contrary, or a summary disposition which indicates to the contrary . . . .\u201d State ex. Rel. Utils. Comm\u2019n v. Thornburg, 316 N.C. 238, 244-45, 324 S.E.2d 28, 33 (1986). Further, in determining the validity of evidence presented before the Commission, the North Carolina Supreme Court has held that \u201cit is for the administrative body, in an adjudicatory proceeding, to determine the weight and sufficiency of the evidence and the credibility of witnesses, to draw inferences from the facts, and to appraise conflicting and circumstantial evidence.\u201d State ex. Rel. Utils. Comm\u2019n v. Thornburg, 314 N.C. 509, 515, 334 S.E.2d 772, 775 (1985) (internal quotation marks and citation omitted) [hereinafter Thornburg I].\nIn support of its conclusion that \u201cit is reasonable and appropriate to assign an estimated $3.36 million or 17.5% of the gain on sale to the remaining ratepayers [at CWSNC],\u201d the Commission made three pertinent findings of fact. First, the Commission found that, absent regulatory action, the transfer of the Cabarrus Woods Systems would have a \u201csignificant adverse impact\u201d on the rates of the remaining CWSNC ratepayers, estimated to be an increase of $2.37 (5.8%) per month in the average water bill and $2.41 (6.0%) per month in the average sewer bill. Second, the Commission found that these significant adverse effects would be caused by the transfer of a large number of customers (6,208 ratepayers) from CWSNC, which constituted overwhelming and compelling evidence to justify an exception to the Policy. Third, the Commission found that \u201c[t]he apportionment of 17.5% of the gain on sale to the remaining [CWSNC] ratepayers is necessary in order to offset the extraordinary and exceptional negative impact to such customers.\u201d\nIn support of its findings, the Commission cited to the testimony of Public Staff witness Katherine A. Femald (\u201cFemald\u201d), Supervisor of the Water Section of the Public Staff \u2014 Accounting Division, who determined that the transfer of the Cabarrus Woods Systems from CWSNC to CMU would have a negative impact on the remaining CWSNC ratepayers without some sort of sharing in the gain on sale.\n[Fernald] opined that in the past the large regulated water and sewer companies who were selling systems, such as [CWSNC], were growing in customer base at such a rate that the addition of new customers in other areas would quickly offset the loss of the customers being transferred. . . . [I]n recent years the rate of customer growth for water and sewer companies has declined, and for [CWSNC], the number of customers has actually decreased [during certain years].\nOn that reasoning the Commission concluded \u201cit is likely that the increase in the cost of service for the remaining ratepayers . . . will not be offset by customer growth anytime soon,\u201d noting Fernald\u2019s clarification that \u201cthe detrimental impact on the remaining ratepayers will be especially acute\u201d given the loss of 13.2% of the uniform water rate customer base and 24.7% of the uniform sewer rate customer base in this case.\nThe Commission also relied on the testimony of Fernald that CWSNC\u2019s slow growth rate would likely mean that this adverse rate impact would persist for many years. At that time, CWSNC had experienced a net increase of only fifteen customers since June of 2006. Given the average rate increases for CWSNC\u2019s remaining ratepayers of 5.8% ($2.37) per month for water operations and 6.0% ($2.41) per month for sewer operations, Fernald estimated that $3.36 million would be required \u201cto protect [the remaining ratepayers] from the adverse effects of the sale for a five-year period.\u201d Though Lubertozzi, witness for the Utility, testified that CWSNC \u201ccontinued to seek to grow its customer base,\u201d the Commission cited as evidence undercutting that aspiration his own acknowledgement that \u201cthe housing market has suffered significant downturns over the past five years, so organic customer growth has not been as robust as CWSNC would have hoped.\u201d The Commission also pointed to Lubertozzi\u2019s concession on cross-examination that \u201cthe proposed transfer would cause diseconomies of scale [for CWSNC],\u201d which would not be offset by cost reductions.\nBased on that evidence, the Commission took pains to lay out specific distinguishing factors between this case and its previous decisions, all of which had assigned 100% of the gain on sale to shareholders since the Policy was first implemented on 7 September 1994. First, this was the only case in which the adverse impact on rates had been quantified. Second, the evidence showed that the adverse impact on remaining customers was, for the first time in seventeen years, likely to persist \u2014 due in part to CWSNC\u2019s lack of growth. Third, the transfer resulted in \u201cextraordinarily large numbers of customers ... subject to being transferred.\u201d Fourth, CWSNC sought to transfer fifteen additional utility systems above and beyond CMU\u2019s required annexation area. According to the Commission, CMU initially approached CWSNC about purchasing only nine subdivisions in what eventually came to be a twenty-four-subdivision agreement for transfer. \u201cThe remaining [fifteen] subdivisions were included in the purchase to accommodate [CWSNC]\u2019s business plan.\u201d Therefore, unlike past Commission-approved transfers, the Commission reasoned that \u201c[CWSNC] faced no threat of being paralleled and losing [the Cabarrus Woods Systems] customers as a \"result.\u201d These four circumstances, taken together, were enough for the Commission to determine that there was overwhelming and compelling evidence sufficient to justify assigning a portion of the gain on sale to the ratepayers remaining with CWSNC.\nAs a consequence, the Commission determined that CWSNC was \u201cnot likely to offset the loss of the Cabarrus Woods Systems customers through growth anytime in the near future.\u201d The Commission recognized \u201cthe policy trade-off this transfer creates\u201d (i.e., the fact that those individuals transferred to CMU would benefit from lower rates while those who stayed with CWSNC would experience even higher rates unless CWSNC were to grow enough to offset the loss of customers), but cited to CWSNC\u2019s lack of significant growth since 2006 and the \u201cslow growth in the economy in general\u201d for support. Accordingly, the Commission found that \u201cthe proposed transfer would increase the cost of service for the ratepayers who would remain with [CWSNC] after the transfer,\u201d resulting in \u201can explicit significant adverse impact,\u201d and concluded that it was reasonable and appropriate to assign an estimated $3.36 million to CWSNC\u2019s remaining ratepayers.\nCWSNC and CMU (\u201cthe Appellants\u201d) argue that the Commission\u2019s findings and conclusion are not based on competent evidence because the Commission has previously assigned 100% of the gain on sale to shareholders on a consistent basis for the past seventeen years. They contend that losses of economies of scale are the \u201cinevitable consequence\u201d of the preferable process of transferring systems to a municipality and cite to a previous decision by the Commission, which found that such losses \u201cdo not justify awarding a portion of the gain on sale to remaining ratepayers.\u201d The Appellants also contest the Commission\u2019s finding that CWSNC is unlikely to grow its customer base as \u201cspeculative, opinion testimony, which is incompetent evidence.\u201d We are not persuaded.\nWhile the Appellants provide valid reasons for why the Commission might not have chosen to allocate a portion of the gain on sale to ratepayers, they are not sufficient to show that the Commission\u2019s decision was not based on competent, material, and substantial evidence. We presume a decision of the Commission to be just and reasonable. See N.C. Gen. Stat. \u00a7 62-94(e). Accordingly, our Supreme Court has held that the final decision of the Commission should be upheld as based on competent evidence even when it is based on evidence that is \u201csomewhat skimpy\u201d or \u201cmore like conclusions.\u201d See Thornburg I, 314 N.C. at 515, 334 S.E.2d at 775 (holding that the Commission\u2019s findings of fact were supported by the evidence and binding on appeal despite being \u201csomewhat skimpy\u201d and \u201cmore like conclusions\u201d). Even if we disagree with the Commission\u2019s rationale, we are not empowered to overturn its order when that order is based on competent evidence. See Gen. Tel. Co. of Se., 281 N.C. at 336-37, 189 S.E.2d at 717.\nUnlike Thornburg I, the evidence relied on by the Commission in this case is comprehensive, thorough, and well thought out. It is based on the testimony of witnesses for the Public Staff as well as the Utility and supported by precise data concerning the nature of the transfer. Thus, given the Commission\u2019s allotted authority to determine the weight and sufficiency of the evidence, and after a thorough review of said evidence and its relation to the Commission\u2019s findings, we hold that those findings are supported by competent, material, and substantial evidence, and that they justify the Commission\u2019s conclusion to allocate an estimated $3.36 million of the gain on sale to CWSNC\u2019s remaining ratepayers.\nII. Arbitrary and Capricious\n\u201cDecisions are arbitrary and capricious when, among other things, they indicate a lack of fair and careful consideration or fail to display a reasoned judgment.\u201d Thornburg I, 314 N.C. at 515, 334 S.E.2d at 776. If this Court merely disagrees with the Commission on factual or policy grounds, it may not substitute its judgment for that of the Commission. See In re Utils., Inc., 147 N.C. App. 182, 187, 555 S.E.2d 333, 337 (2001) (\u201c[T]he appellate court. . . may not substitute its judgment, either with respect to factual disputes or policy disagreements, for that of the Commission.\u201d) (emphasis added) (internal quotation marks and citation omitted).\nA. Validity of the Policy\nThe Appellants argue that the Commission\u2019s order should be overturned as arbitrary and capricious because the Policy and its exception are poorly defined. In support of that point, CMU characterizes the Policy as \u201cfraught with uncertainty as it provides no objective standard for what evidence is required to make an exception to the Commission\u2019s gain on sale policy.\u201d CWSNC asserts that the Commission\u2019s decision was arbitrary and capricious because it \u201cnever articulated a standard that can be uniformly and fairly applied to transactions involving a gain on sale\u201d and none of the Commission\u2019s orders define the term \u201coverwhelming and compelling evidence.\u201d We are not persuaded.\nThis Court has already addressed the validity of the Policy. In Public Staff I, this Court addressed the Commission\u2019s first application of the Policy and determined that it was not arbitrary and capricious, but refrained from addressing the Policy\u2019s validity outside of that factual circumstance. State ex rel. Utils. Comm\u2019n v. Public Staff \u2014 N.C. Utils. Comm\u2019n, 123 N.C. App. 43, 51, 472 S.E.2d 193, 199 (1996) (stating that the Policy\u2019s future applicability was not properly before this Court) [hereinafter Public Staff I], We affirmed that decision in Public Staff II and established that the Policy was valid in and of itself. State ex. rel. Utils. Comm\u2019n v. Public Staff \u2014 N.C. Utils. Comm\u2019n, 123 N.C. App. 623, 628, 473 S.E.2d 661, 665 (1996) [hereinafter Public Staff II]. In so holding, we reasoned that \u201cenactment of the policy by the Commission within an adjudicative proceeding\u201d was not \u201ccapricious, unreasonable, or arbitrary action or disregard of law\u201d and, thus, was not an abuse of discretion. Id. at 627, 473 S.E.2d at 664.\nIn both cases, we thoroughly vetted the extent to which the Commission\u2019s policy could be considered arbitrary and capricious and found that it was not, despite the Commission\u2019s failure to more fully define the terms used therein. Accordingly, we apply those decisions and affirm the Commission\u2019s use of the Policy here. See In re Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989) (\u201cWhere a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.\u201d).\nB. Application of the Policy\nAlternatively, the Appellants argue that the Policy is arbitrary and capricious as applied, contending that the order in this case is not consistent with the Commission\u2019s prior determinations on similar facts. Most notably, the Appellants cite to the Commission\u2019s opinion in Aqua, decided on the same day as this case. There the Commission assigned 100% of the gain on sale to the shareholders of the public water and sewer utility Aqua North Carolina, Inc. (\u201cthe Aqua utility\u201d) under similar factual circumstances. Importantly, Aqua was at that time the only case other than this one in which the Commission had been able to quantify the adverse impact against ratepayers. In so doing, the Commission determined that the Aqua ratepayers would be subject to a $1.96 increase in their monthly sewer bill as a result of the transfer. Appellants argue that the Commission\u2019s disparate orders in this case and Aqua constitute an arbitrary and capricious application of the Policy. We disagree.\nFor the Commission\u2019s order to be arbitrary and capricious, it must lack fair and careful consideration or fail to display a reasoned judgment. Thornburg I, 314 N.C. at 515, 334 S.E.2d at 776. Though the Commission\u2019s opinions in Aqua and in this case share similarities, the two cases are based on different facts. The average rate increase for customers of the Aqua utility was 3% (or $1.96) per month for sewer services. Water bills were not impacted. In this case, the average rate increase for CWSNC customers would be 5.8% (or $2.37) per month for water services and 6% (or $2.41) per month for sewer services. While the difference between these numbers may seem slight, they are consistently higher in this circumstance and apply to both water and sewer services, unlike in Aqua.\nIn addition, a larger number of people would be transferred in this case than Aqua. Here, approximately 6,208 customers would be transferred from CWSNC to CMU. This accounts for approximately 17.6% of the CWSNC sewer customers and approximately 13.2% of its water customers. In Aqua, only 910 customers were transferred. That accounted for approximately 7.06% of the Aqua utility\u2019s sewer customers. We also note that the Aqua utility has a policy disfavoring the loss of customers and, unlike CWSNC, the Commission characterized \u201c[the Aqua utility\u2019s] business model [as] one of purchase, improvement, and long-term ownership and operation,\u201d clearly establishing it as \u201ca growth company.\u201d\nCWSNC has not established itself as a growth company. The Utility lost ratepayers from 2008 to 2009 and from 2009 to 2010, and its customer base has only experienced a \u201cnet increase\u201d of fifteen ratepayers since its original peak in June of 2006. Further, CWSNC recently lost additional customers with the sale of the Corolla Light/Monteray Shores water system. While CWSNC argues that the Commission should not base its decision on mere speculation regarding CWSNC\u2019s ability to add customers in the future, the raw data show a persistent plateau effect, if not a downturn, in CWSNC\u2019s customers.\nThe Commission\u2019s decision to rely on the data presented here is reasoned. Accordingly, we hold that the Commission\u2019s application of its Policy, even when compared with the Commission\u2019s decision in Aqua, was carefully considered, the result of reasoned judgment, and not arbitrary and capricious. Therefore, we affirm the order of the Commission and hold that it was not arbitrary and capricious as applied.\nIII. Error of Law\nAn error of law sufficient to overturn a decision of the Commission exists when the Commission exceeds its statutory authority in such a way that the substantial rights of the appellants are prejudiced. N.C. Gen. Stat. \u00a7 62-94(b); see also State ex rel. Utils. Comm\u2019n v. Public Staff \u2014 N.C. Utils. Comm\u2019n, 309 N.C. 195, 213, 306 S.E.2d 435, 445 (1983) (\u201cThe Commission, in both of these cases, exceeded its statutory authority to the prejudice of the substantial rights of the ratepayers and thus. the orders in both cases were affected by error of law.\u201d).\nCWSNC argues that the Commission committed an \u201cerror of law\u201d by assigning a portion of the gain on sale to its ratepayers. In constructing that argument, the Utility characterizes the Commission\u2019s assignment of $3.36 million as a \u201csubsidy\u201d to remaining ratepayers and alleges that this subsidy constitutes reversible \u201cerror of law.\u201d CWSNC justifies this quasi-syllogism by asserting that its customers from the Cabarrus Woods Systems, who would be transferred to the City if the deal proves successful, are \u201clow-cost\u201d customers and, thus, essentially provide a subsidy to CWSNC\u2019s other, \u201chigh-cost\u201d customers elsewhere. Therefore, CWSNC claims, the removal of the Cabarrus Woods Systems customers would mean that the remaining customers would simply have to pay the \u201cactual cost\u201d of their utilities. As such, any money allocated to the remaining customers from the gain on sale would constitute an improper \u201csubsidy\u201d in \u201cblatant violation of cost of service legal principles, resulting in ratepayers paying rates that are lower than the actual cost of providing service.\u201d We disagree.\nCWSNC supports its argument by citing to an eighty-five-year-old opinion of the United States Supreme Court, which states that customers do not have an ownership interest in a company that provides a service to them and \u201c[property paid for out of moneys received for service belongs to the company . . . .\u201d The Utility characterizes this pronouncement as one component of certain overarching and ethereal \u201cgeneral ratemaking principles,\u201d which are neither codified nor violable. Such a principle is not applicable here.\nThe Commission\u2019s authority exists under chapter 62 of the North Carolina General Statutes, not \u201cgeneral ratemaking principles.\u201d See State ex rel. Comm\u2019r of Ins. v. N.C. Rate Bureau, 300 N.C. 381, 399, 269 S.E.2d 547, 561 (1980) (\u201cThe powers and authority of administrative officers and agencies are derived from, defined and limited by constitution, statute, or other legislative enactment.\u201d). Chapter 62 empowers the Commission \u201cto regulate public utilities generally, their rates, services and operations, and their expansion . . . .\u201d N.C. Gen. Stat. \u00a7 62-2(b). The Commission is considered \u201can administrative board or agency of the General Assembly\u201d and is empowered to promulgate rules and regulations and fix utility rates. N.C. Gen. Stat. \u00a7 62-23. By enacting chapter 62, our General Assembly conferred \u201cbroad powers to regulate public utilities and to compel their operation in accordance with the policy of the State . . . .\u201d Public Staff II, 123 N.C. App. at 625, 473 S.E.2d at 663 (citation omitted).\nChapter 62, section 2 declares the policy of the State of North Carolina to be the fair regulation of public utilities in the interest of the public, just and reasonable rates and charges for public utility services without unjust discrimination, and, inter alia, the assurance that rates are set in a manner fair to utilities and customers. N.C. Gen. Stat. \u00a7 62-2(a). The allocation of a portion of the gain on sale falls within the auspices of that policy. Accordingly, we hold that the Commission did not exceed its statutory authority by allocating a portion of the gain on sale to ratepayers and, thus, committed no error of law.\nTV. Constitutional Challenges\nCWSNC argues that the Commission\u2019s order violates Article I, section 19, of the North Carolina Constitution because (A) it arbitrarily and capriciously distinguished between CWSNC and the Aqua utility, without justification, and (B) it was confiscatory and constituted a taking without just compensation. Article I, section 19 of the North Carolina Constitution provides, in pertinent part: \u201cNo person shall be ... deprived of his life, liberty, or property, but by the law of the land. No person shall be denied equal protection under the laws . . . .\u201d N.C. Const, art. I, \u00a7 19.\nA. Substantive Due Process and Equal Protection\nPublic utilities are protected against disparate treatment under Article I, section 19, unless the government action at issue is rationally related to a legitimate government interest. See Texfi Indus., Inc. v. City of Fayetteville, 301 N.C. 1, 11, 269 S.E.2d 142, 149 (1980). CWSNC first argues that the Commission\u2019s assignment of $3.36 million of the gain on sale violated these provisions because it was (1) arbitrary and capricious in the context of the Aqua decision and (2) constituted disparate treatment without a rational basis. We disagree.\nAs we noted in section 11(B), supra, the Commission\u2019s order was based on reasoned decision making. Though the Aqua case is factually similar to this one, we determined that there were sufficient distinguishing factors to warrant the Commission\u2019s allocation of a portion of the gain on sale. We find that reasoning persuasive in this context as well and hold that the Commission\u2019s allocation of a portion of the gain on sale was not arbitrary and capricious under Article I, section 19.\nIn addition, we are not persuaded by CWSNC\u2019s contention that its equal protection rights were violated. CWSNC contends that the Commission\u2019s order stemmed solely from the Commission\u2019s belief that, given the large size of the gain on sale in this case, the Utility \u201ccan afford it.\u201d We disagree. The purpose of assigning gain on sale to shareholders is to provide an incentive for utilities to sell water and sewer services to municipalities, which are typically better stewards of such services. In this case, as the Public Staff rightly noted, the Commission had determined that $15.83 million was a sufficient incentive for CWSNC to make such a transfer, \u201cespecially given the risk that CMU could parallel their systems and deprive CWSNC of any gain on sale . . . .\u201d We find this reasoning to be sensible and hold that the Commission\u2019s order is rooted in a rational, legitimate, government purpose. Accordingly, we affirm the Commission\u2019s order as neither arbitrary and capricious nor lacking a legitimate government purpose.\nB. Taking Without Just Compensation\nSecond, CWSNC asserts that the allocation of a portion of the gain on sale constituted a confiscation of property without just compensation in violation of Article I, section 19, of the North Carolina Constitution. CWSNC again characterizes the $3.36 million portion of the gain on sale that was assigned to ratepayers by the Commission as a \u201csubsidy\u201d and argues that CWSNC held vested rights in the entire gain on sale because of its reliance during contracting on the Commission\u2019s longstanding policy against assigning anything less than 100% of the gain on sale to a utility\u2019s shareholders. That argument is not applicable here.\nOur Supreme Court addressed a similar challenge in State ex rel. Utils. Comm\u2019n v. N.C. Nat. Gas Corp., 323 N.C. 630, 375 S.E.2d 147 (1989). In that case, a natural gas corporation argued that the Commission\u2019s order requiring that monies collected by the gas utility be allocated to certain customers amounted to an unlawful taking of property without due process. Id. at 631, 375 S.E.2d at 147. There our Supreme Court pointed out that \u201cunder the police power the state [sic] has authority to enact legislation to regulate the charges and business of a public utility.\u201d Id. at 643, 375 S.E.2d at 154 (internal quotation marks, brackets, and citation omitted). Recognizing that \u201c[a]ny exercise by the State of its police power is, of course a deprivation of liberty,\u201d the Court looked to the degree of the reasonableness of the execution of that power when determining its constitutionality. Id. at 644, 375 S.E.2d at 155. Because an order of the Commission is legislative in nature, the Court subjected it to the same constitutional tests as other legislative enactments employing the police power. Id. Accordingly, the Supreme Court held that the Commission\u2019s actions were not an unconstitutional taking because the \u201cbenefit to the public outweighs any deprivation of [the utility\u2019s] constitutional rights.\u201d Id. at 645, 375 S.E.2d at 155. We apply that line of reasoning here.\nAs has been discussed, supra, the Commission is empowered by the legislature to regulate utilities and, with that, allocate a portion of the gain on sale to either the utility or its ratepayers. The Commission\u2019s decision to employ that power here, while contrary to the general rule established in its Policy, is not an unconstitutional taking. As discussed above, the Commission allocated $3.36 million out of a $19.2 million gain on sale to the ratepayers because of (1) the significant adverse impact on ratepayers, (2) the likely persistence of that adverse impact, (3) the large number of customers being lost, and (4) its determination that $15.83 million was a sufficient incentive to live up to its policy goal of incentivizing the transfer of customers from utilities to municipalities.\nAt the outset, we note that \u201cit is not and should not be this Court\u2019s role to determine the merits of policy positions adopted or rejected by the Commission.\u201d Public Staff I, 123 N.C. App. at 46, 472 S.E.2d at 196. However, to the extent that we must review the merits of the Commission\u2019s policy as an exercise of the Commission\u2019s police power under the North Carolina Constitution, we find that the benefit to the public realized by the Commission\u2019s exercise of its police power in assigning $3.36 million of the gain on sale to ratepayers is not outweighed by any constitutional deprivation to CWSNC. We do not comment on the merits of the Commission\u2019s policy beyond that. Accordingly, we hold that the Commission did not violate Article I, section 19 of the North Carolina Constitution and affirm its 23 December 2011 order.\nAFFIRMED.\nJudges CALABRIA and ELMORE concur.\n. In its brief, CWSNC defined \u201cgain on sale\u201d as \u201cthe difference in the purchase price of a utility system as compared to the utility system\u2019s actual value.\u201d\n. Though a lengthy discussion of the nature of economies of scale is unnecessary, Mr. Steven M. Lubertozzi (\u201cLubertozzi\u201d), Executive Director of Regulatory Accounting and Affairs at Utilities, Inc., of which CWSNC is a subsidiary, provided a helpful explanation of the concept during his testimony. There he pointed out that a utilities system with a larger customer base is more easily \u201cable to \u2018share\u2019 employees and costs associated with customer service, billing, and operations. Such costs are spread across a larger customer base, thus reducing the amount each customer pays toward such expenses. Customers also receive the savings associated with the utility\u2019s increased purchasing power . . . .\"\n. The Commission noted, however, that it was in the process of deciding another case, Order Determining Regulatory Treatment of Gain on Sale in the Matter of the Application by Aqua North Carolina, Inc., Docket No. W-218, Subs 325, 327, and 319 (23 December 2011) [hereinafter Aqua], in which rates were also being quantified. In Aqua, the Commission eventually found that there was not overwhelming and compelling evidence to justify excepting the Policy \u2014 despite the fact that the adverse impact on rates was similarly quantified. That disparity is a part of the Appellants\u2019 contention in Part II, infra.\n. The deal would result in the transfer of 6,208 individuals (i.e., 17.6% of CWSNC\u2019s customer base).\n. Chief engineer for CMU, Barry Shearin, has described the paralleling process as follows:\n[If the agreement falls through, t]he City must. . . provide water and wastewater service to the areas that were annexed effective June 30, 2009.... CMU would need to install basic water and sewer systems in the annexed areas if it does not acquire [CWSNC\u2019s] systems.\n[I]t is more efficient and cost-effective for the City to acquire [CWSNCfs facilities than to incur the unnecessary expense of duplicating facilities. . . . [I]t is not in the public interest for a city to have to expend limited public funds to construct duplicate facilities, when adequate facilities are already in place.\nThe City would also be harmed because it has constructed major outfalls and reserved additional treatment capacity . . . [, and] the City would potentially end up with significant \u201cstranded investment\u201d if it is not able to purchase [CWSNC]\u2019s systems ....\n. We note that the past decisions of a previous panel of the North Carolina Utilities Commission are not binding on later panels of the Commission or this Court. See State ex rel. Utils. Comm\u2019n v. Thornburg, 325 N.C. 463, 467, 385 S.E.2d 451, 453-54 (1989); State ex rel. Utils. Comm\u2019n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 569-70, 126 S.E.2d 325, 333 (1962).\n. Under the theory of economies of scale, the more customers a utility is able to add, the more likely it is to be able to offset the negative effects of transferring away large groups of ratepayers.", "type": "majority", "author": "STEPHENS, Judge." } ], "attorneys": [ "Poyner Spruill LLP, by Robert F. Orr, Christopher J. Ayers, and Andrew H. Erteschik, for Applicant-Appellant Carolina Water Service, Inc. of North Carolina.", "Styers & Kemerait, PLLC, by Karen M. Kemerait and M. Gray Styers, Jr., for Intervenor-Appellant Charlotte-Mecklenburg Utilities, A Department of the City of Charlotte.", "Public Staff, Robert P. Gruber, Executive Director, by David T. Drooz, for Intervenor-Appellee the North Carolina Utilities Commission." ], "corrections": "", "head_matter": "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; PUBLIC STAFF\u2014UTILITIES COMMISSION, Intervenor-Appellees v. CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant-Appellant and CHARLOTTE-MECKLENBURG UTILITIES, A DEPARTMENT OF THE CITY OF CHARLOTTE, Intervenor-Appellant\nNo. COA12-475\nFiled 15 January 2013\n1. Utilities \u2014 sale of water system \u2014 allocation of gain \u2014 findings\nWhere the City of Charlotte annexed property and CharlotteMecklenburg Utilities (\u201cCMU\u201d) took over an existing water system (Carolina Water Service, Inc. of North Carolina (CWSNC)), the Utilities Commission\u2019s findings were supported by competent, material, and substantial evidence and justified the Commission\u2019s conclusion to allocate an estimated $3.36 million of the gain on sale to CWSNC\u2019s remaining ratepayers. A decision of the Commission is presumed to be just and reasonable and the evidence relied on by the Commission in this case was comprehensive, thorough, well thought out, based on the testimony of witnesses for the Public Staff as well as the Utility, and supported by precise data concerning the nature of the transfer.\n2. Utilities \u2014 sale of water system \u2014 allocation of gain\u2014 Commission policy \u2014 not arbitrary and capricious\nAlthough appellants argued that a Utilities Commission\u2019s order should be overturned as arbitrary and capricious because the Commission\u2019s policy concerning allocation of the gain from the sale of water systems and its exception were poorly defined, the validity of the policy was addressed in prior cases and found not to be arbitrary and capricious.\n3. Utilities \u2014 sale of water system \u2014 allocation of gain\u2014 Commission\u2019s policy \u2014 not arbitrary as applied\nThe Utilities Commission\u2019s application of its policy concerning gain from the sale of water systems, even when compared with the Commission\u2019s contrary decision in a different case on the same day, was carefully considered, the result of reasoned judgment, and not arbitrary and capricious as applied.\n4. Utilities \u2014 sale of water system \u2014 allocation of gain\u2014 Commission\u2019s authority\nThe Utilities Commission did not exceed its statutory authority by allocating a portion of the gain on sale of a water utility to ratepayers and thus committed no error of law in an action arising from the City of Charlotte's annexation of property and the purchase of an existing water system. Contrary to the argument of the purchased utility, the Commission\u2019s authority exists under chapter 62 of the North Carolina General Statutes, not \u201cgeneral ratemaking principles.\u201d The allocation of a portion of the gain on sale falls within the auspices of the policy established by that statute.\n5. Utilities \u2014 sale of water system \u2014 allocation of gain \u2014 due process and equal protection rights of utility \u2014 not violated\nThe Utilities Commission\u2019s order allocating the gain from the sale of a water system was based on reasoned decision making, and was neither arbitrary and capricious nor lacking a legitimate government purpose. Neither the utility\u2019s due process nor equal protection rights were violated.\n6. Utilities \u2014 sale of water system \u2014 allocation of gain \u2014 not confiscation of property\nThe Utilities Commission\u2019s allocation of a portion of the gain on the sale of a water system did not constitute a confiscation of property without just compensation in violation of Article I, section 19, of the North Carolina Constitution. Although the utility argued that it held vested rights because of its reliance during contracting on the Commission\u2019s longstanding policy, the Commission is empowered by the legislature to regulate utilities and, with that, allocate a portion of the gain on sale to either the utility or its ratepayers. The merits of the Commission\u2019s policy were not commented upon beyond a police power review that found no constitutional violation.\nAppeal by appellants from order entered 23 December 2011 by the North Carolina Utilities Commission. Heard in the Court of Appeals on 26 September 2012.\nPoyner Spruill LLP, by Robert F. Orr, Christopher J. Ayers, and Andrew H. Erteschik, for Applicant-Appellant Carolina Water Service, Inc. of North Carolina.\nStyers & Kemerait, PLLC, by Karen M. Kemerait and M. Gray Styers, Jr., for Intervenor-Appellant Charlotte-Mecklenburg Utilities, A Department of the City of Charlotte.\nPublic Staff, Robert P. Gruber, Executive Director, by David T. Drooz, for Intervenor-Appellee the North Carolina Utilities Commission." }, "file_name": "0120-01", "first_page_order": 130, "last_page_order": 146 }