Appalachian Power Co. v. Commonwealth

132 Va. 1 | Va. | 1922

Sims, J.,

delivered the opinion of the court.

This is an appeal of the Appalachian Power Company from an order, or judgment, of the State Corporation Commission, entered on April 13, 1921, in the proceeding instituted by the National Carbide Corporation by its petition, filed before the commission on January 11, 1921, praying that the rates for electric power furnished the latter by the former (which were 3.3 mills per kilowatt hour for secondary power, the power company guaranteeing to furnish the carbide company with not less than 10,000,000 kilowatt hours of secondary power per annum, and 7.2 mills per kilowatt hour for primary power) be reduced to six mills per kilowatt hour for primary power, and that the rate for secondary power remain at 3.3 mills per kilowatt hour, but that the power company be required to guarantee to furnish the carbide company not less than 15,000,000 kilowatt hours of secondary power per annum—which would have the practical effect of reducing the rate on secondary power also.

It appears from the record that by agreement in writing between the two companies, of date July 25, 1917, the carbide company undertook ^TFÓrthwittí^design and construct a plant for the production of calcium carbide at or near Ivanhoe, Va., within two miles of the power company’s hydro power station No. 4, and fully equip such plant with an initial installation of three electric furnaces of the electric power consuming capacity of approximately 15,333,333 kilowatt hours each, or approximately 46,000,000 total kilowatt hours, per annum; to purchase such power of the power company and pay therefor 3.3 mills per kilowatt hour for the secondary and six mills per kilowatt hour for primary power, the minimum charge to be $50,000.00 per year which should begin to run and be effective from the date of the completion and putting into operation of the power company’s then proposed new steam plant at Glen Lyn, Va., but not earlier than March 1, 1918. Such agreement provided that the power company would supply to the carbide company all the power necessary and required for the operation of said plant, such power to consist of primary power and secondary power, secondary power being, for the purposes of the agreement, defined to be the hydro or water genérated electric power which the power company “may have available from time to time over and above the requirements of all its other customers;” all other power, however obtained, being for the purposes of the agreement, defined to be primary power, the power company to be the sole and exclusive judge of whether or not and when it has secondary power available, its judgment in the premises to be conclusive and binding upon the carbide company, and the power company guaranteed that it Would furnish to the carbide company not less than 15,-000,000 kilowatt hours of secondary power per annum.

This agreement by its terms was to be in force until March 1, 1923, with the option to the carbide company to renew the agreement for a further period of five years, the rates, however, for such further period to be fixed in a certain way set forth in the agreement, based on the then prevailing cost of coal.

At the time this agreement was entered into the business of the power company had been in operation only about five years, and was in process of development, which process was expected to continue and did thereafter continue up to the time of the entry of the order, or judgment, of the commission under review; and, as appears from the record, is likely to continue to further develop for many years in the future if it is allowed to receive a fair return upon the money it. has actually invested and which good business judgment may require to be and is actually further invested in the business in order to supply the growing demands of the public which it serves.

[1] The power company filed its answer, and evidence was introduced both in behalf of the complainant and respondent. By the pleadings and the proof there were a number of issues of fact before the commission. But there is no certificate of the findings of fact by the commission, nor any opinion or any statement of the reasons upon which the action of the commission appealed from was based; both of which are required by clause (f) of section 156 of the Constitution. We have no means of knowing what issues of fact the commission considered as material to its decision; what its findings of fact were on any issue; or what any of its conclusions of law were upon the issues of law presented.

[2, 3] We have nothing before us but the order of the commission appealed from and such portions of the evidence as have been certified in the record, much of it conflicting, and some of it conflicting on subjects about which experts seem to differ. Seemingly important exhibits referred to in the testimony of witnesses as filed in evidence have been left out of the record. If there were a certificate in the record of facts found, by the commission, that, under the provisions of the Constitution on the subject, would evidence prima facie what such facts are; and the holding of such prima facie case to be conclusive as to all the facts not appearing to the contrary from the record as presented on the appeal, would be a result of which the appellant could not complain. But where on the appeal there is neither a complete record, nor a certificate of facts found, it is impossible for the appellate court to ascertain what the facts are.

The order appealed from states that the case was heard before the commission “upon the testimony and briefs of complainant and respondent and upon the report of the commission’s engineer,” and the chairman of the commission certified, under date of May 4, 1921, “that the following contains and sets out all of the facts and evidence upon which the action of the commission in the said proceeding was based, and which are essential to a proper decision of the appeal to be taken from such action.” (Italics supplied.) This certificate is at the conclusion of the whole record as printed and presented on appeal, except the certificate of the clerk of the commission that proper notice was given of the intention to apply for a transcript of the record as the basis for appeal as required by statute, and except the report of the commission’s engineer, Judson C. Dickerman, which is referred to in said order, which report is dated March 28, 1921, was filed with the commission that day, is certified by the chairman of the commission under date July 22, 1921, and appears at the end of the printed record.

We of course look to the substance and not to the mere form of the certificates just mentioned. We take the certificates to refer to what appears preceding and not “following” the certificate. It is, however, a certifying of the evidence merely, and not of any facts within the meaning of the constitutional requirements aforesaid.

[4] In the absence of any finding of facts by the commission or any opinion of the commission or statement of the reasons upon which its action appealed from was based, touching the questions involved in the case, we cannot with proper efficiency undertake to consider and determine “the reasonableness and justness of the action of the commission.” Indeed, under the above mentioned provisions of the Constitution on the subject, it may be seriously questioned whether we have the jurisdiction to do so. Certainly if we did undertake to do so, we would! set at naught the plain provisions of the Constitution on the subject.

Clause (f) of section 156 of the Constitution, in reference • to appeals from the State Corporation Commission, so far as material, provides as follows:

“* * * yjg chairman of the commission, under the seal of the commission, shall certify to the appellate court all the facts upon which the action appealed from was based and which may be essential for the proper decision of the appeal, * * *. The commission shall, whenever an appeal is taken therefrom, file with the record of the case, and as a part thereof, a written statement of the reasons upon which the action appealed from is based, and such statement shall be read and considered by the appellate, court upon disposing of the appeal. The appellate court shall have jurisdiction on such appeal to consider and determine the reasonableness and justness of the action of the commission appealed from, as well as any other matter arising under such appeal; provided, however, that the action of the commission appealed from shall be regarded as

* ❖ prima facie just, reasonable and correct, * * *." (Italics supplied.)

[5, 6] These constitutional mandates should be obeyed both by the commission and ourselves in all cases, including the case before us. As the Constitution gives to the action of the commission appealed from, the prima fade presumption of correctness, it is plain that it intends that the commission shall certify both the facts found and shall also, state the conclusions reached, upon which the action appealed from is based, separately from the evidence certified, otherwise it would be impossible for the appellate court to know to what facts or conclusions to give such presumption. Moreover, the language of the Constitution expressly requires this to be done. The certificate of facts also should be in such detail, by schedule or otherwise, as to the several items which must be considered by the commission in reaching its decision, as to show such items separately.

[7] Further: It appears from the record that the tariff of rates fixed by the order appealed from follows verbatim. the tariff recommended by the report of the commission’s engineer, Judson C. Dickerman, which was dated and filed before the commission on March 28, 1921, as aforesaid, but a few days before the order appealed from was entered that such tariff departed radically in character from the tariff ¿X concerning which issues were made by the pleadings and upon which all the proof both for complainant and respondent was taken, in that it does not fix .separate rates upon primary or secondary power, as both complainant and respondent contemplated would be done, but. a uniform flat ■rate, not dealt with by the pleadings or the proof; and that neither complainant nor respondent were given any opportunity to consider or object to such report or its conclusions before it was considered by the commission.

One of the assignments of error before us by the power company is that the commission erred in receiving said report and in considering same, because—

“(a). It was made and returned without notice to your petitioner and received and considered without any opportunity to it to except thereto or to controvert its findings;

“(b). Its findings of facts are contrary to the evidence produced before the commission and without evidence to support them; and

“(c). The rate recommended by said report is unjust, insufficient and confiscatory, and, if put into effect, will deprive your petitioner of its property without just compensation and without due process of law, contrary to the Constitution of the United States in such case made and provided.”

We think that this assignment of error is certainly in part well taken. In view of the fact that the report in question recommended a different kind of rate schedule from that contemplated by the pleadings and with reference to which the proof for both the power company and the carbide company was taken, the action of the commission in considering such report and in adopting the rate thereby recommended, without any opportunity given the power company of considering such report, or the subject of the uniform flat rate, which was fixed by the order appealed from, or of presenting its views on the subject by exception to such report, or otherwise, before the order appealed from was entered, amounted to a denial of a hearing to the power company on the subject. That is to say, the commission in such action deprived the power company of due process of law.

[8] The case will have to be remanded to the commission for further proceedings. That being so, as the evidence in the record with reference to many of the elements entering into the expected cost of the service following the entry of the order appealed from and with reference to the actual net return to the power company expected to result from the rates which have been in force since that order was entered, was necessarily speculative, because of the dates at which it was introduced, the accuracy or inaccuracy of which can now be checked up by comparison with actual conditions and results which have followed the entry of said order down to the time at which the case is again taken up by .the commission for further consideration, we feel that we should say (practically in the language of another portion of clause (f) of section 156 of the Constitution not above quoted), that we deem it necessary, in the interest of justice, to require the case to be further investigated by the commission and reported upon to the court, in the event of the appeal being still insisted upon by appellant (together with a certificate of such additional evidence as may be tendered before the commission by any party in interest), before the appeal is finally decided.

The case will accordingly be remanded to the commission for further proceedings,, and for certificate of facts upon which the final action of the commission may be based, and for a written statement by the commission of the reasons upon which such action is based, in the event of an appeal being still insisted upon by appellant, all in accordance with the views expressed in this opinion. Meanwhile, the appeal will be considered as still pending in so far as the respective rights of the two companies are concerned, 'and no order as to costs will be entered at this time.

Remanded for further proceedings.