182 A. 94 | Pa. Super. Ct. | 1935
Argued October 3, 1935.
Chambersburg Gas Company, on May 1, 1929, filed with the Public Service Commission a new schedule of rates to become effective June 1, 1929. Before the effective date, complaints were filed alleging that the proposed rates were unreasonable, discriminatory, and unduly preferential to certain consumers. The effect of the proposed tariff was to increase the cost of gas to those using less than nineteen hundred cubic feet per month and reduce the price to those using more than that amount, and likewise to decrease the average price of all gas consumed. After hearing, the commission, on November 15, 1932, handed down its report fixing the fair value of the plant and various other elements necessary to determine a fair return and then prescribed a new tariff to be filed by the utility and calculated to yield the proper return. From that order an appeal was taken to this court and the order was, in part, reversed (
Under the Public Service Company Law of this state, prior to July 1, 1933, a claim for reparations was a proceeding separate and distinct from a proceeding to test rates: N.Y. Penna. Co. v. N.Y. Cent. R.R.,
The Public Service Company Law (Act July 26, 1913, P.L. 1374, art. V, §§ 3-5, inc.; 66 PS 492, 493, 511) not only prescribed a separate procedure for rate and reparation proceedings, but the decisions recognize essential distinctions in the questions involved in the two proceedings. "But awarding reparation for the past and fixing rates for the future involve the determination of matters essentially different. One is in its nature private and the other public. One is made by the [Interstate Commerce] Commission in its quasijudicial capacity to measure past injuries sustained by a private shipper; the other, in its quasi-legislative *211
capacity, to prevent future injury to the public": Baer Bros. v. Denver and R.G.R.R. Co.,
We held in the cases of Centre Co. Lime Co. v. P.S.C., supra, and Alan Wood I. S. Co. et al. v. P.S.C.,
The objection of the appellant to the order of the commission is two-fold. It is contended first that the commission was without power in this proceeding to fix schedules of rates or tariffs for the period intervening between the filing of the complaint and the final order of the court, and second that the commission had no power to require the utility to file a tariff in accordance with the order of the commission for such period and thereby require the company to admit that such action determined the right to reparations in a fixed *213 amount. We will consider the questions raised in the same order.
The appellant does not attack the schedule of rates which the commission has fixed for the future, but insists that the action of the commission in prescribing a schedule or tariff of rates for the period of this contest and prior to the final order constituted an unwarranted attempt on the part of that body to prejudge anticipated claims for reparations. The problems presented to us, however, are to be determined by a consideration of what matters are relevant to the present issue and not by how any pertinent and relevant findings may affect a subsequent claim for reparations. In a complaint against rates the commission is required by the statute (Act July 26, 1913, P.L. 1374, art. V, §§ 3, 4; 66 PS 492, 493) to determine, after hearing, whether the rates existing or proposed are unjust, unreasonable, or inadequate, discriminatory or unduly or unreasonably preferential. If the rate is found to be unreasonable the commission must then "determine and prescribe by a specific order" the rates to be thereafter collected for the service to be performed. It is important to consider these two requirements separately even though they are related to each other. The primary problem of the commission in a rate case is to determine whether the rate is reasonable, etc. To determine the reasonableness of a rate it is necessary to consider fair value of the property, reasonable return, operating expenses, and like matters, but in the end all these investigations are for the purpose of determining what would be a reasonable rate. It would not be a sufficient answer to the complaint to find that the rate was reasonable or unreasonable, but the parties concerned are entitled in addition to know to what extent, if any, the rate is unreasonable. This cannot be determined without examining the schedule of rates and applying such schedule to the conditions then being examined. But frequently, *214 as here, higher rates may be and are charged those who consume small amounts of the commodity furnished than those using large amounts (art. III, § 1 [b]; 66 PS 152). Consequently, the graduation of the schedule and classification of service become important matters in determining the return that will be received by the utility, for such return will vary and depend upon the relative proportion of large and small consumers. A certain charge for one thousand cubic feet of gas per month might be grossly excessive for a million feet per month charged at the same rate, and such matters must be considered and the schedule examined before it can be determined that a proposed rate is unreasonable.
If it were practicable to dispose of a case such as this in a few weeks or even months, the question here presented would not arise for a rate found to be just and reasonable would ordinarily remain so for such period. Experience, however, has demonstrated that such cases require not only months but years (in this case more than six years) to reach an end. In such proceedings marked changes may take place (Scranton-Spring Brook W.S. Co. v. P.S.C.,
Now, if we examine the findings of the commission, we discover that what they have done is to assume that all of the elements essential to a determination of a proper rate were on the average the same for the period of this contest with the exception of a new element. By a change in the federal income tax laws, a change was effected which imposed a substantial addition to the *215 operating expenses of this utility. Such law did not become operative until January 1, 1934. Consequently, the commission, while it held that the rates were excessive for the entire period, recognized the fact that there was a change in the burden on the company after January 1, 1934, and that there was an additional increase in the burden by reason of a construction of the income tax law as of January 1, 1935.
The commission then constructed a tariff or schedule of rates as they were directed to do by this court affecting the future. In addition, the commission indicated by setting up schedules for two previous periods the amount by which the proposed schedule exceeded just and reasonable rates for the respective periods. We see no objection to such procedure. Just as a commission is frequently required to develop present fair value from previous findings and disclose the changes that have taken place, so in this case it was proper to indicate not only the manner in which the final conclusion was reached, but likewise the amount by which the rates were excessive for any period subsequent to the time when the company attempted to put in effect the new rates. We cannot comprehend how just complaint can be made against the action of the commission in saying not only that the rates for such period were excessive, but also indicating the amount by which they were unreasonable. The portion of the report which is complained of was not made pursuant to the mandate of the statute requiring a schedule of rates to be thereafter charged by the utility, but was made pursuant to the primary requirement that the commission determine whether the rates were unreasonable. We believe our conclusions do not conflict with the decisions of our Supreme Court in Ben Avon Boro. v. Ohio Valley W. Co., supra; N.Y. Penna. Co. v. N.Y. Cent. R.R., supra; and Greensburg Boro. v. P.S.C.,
The appellant calls attention to the fact that section 3 of the Public Service Company Law prescribes that in the event rates are found to be unreasonable they shall then fix the rates "to bethereafter established." The answer to this contention is, we think, apparent. The determination of reasonableness and the fixing of rates are two separate matters. The new rates are not prescribed or substituted for those of the company until it is determined that the company's rates are unreasonable. Consequently, a schedule would be established and filed by the company thereafter that is for the future. This, however, does not in any way affect the prior requirement that the commission shall first determine the reasonableness of the rates. Since an examination of the schedule and the effect of various schedules or tariffs are essential to an answer to the question, they form a part of the duties of the commission.
We are of the opinion that the commission, taking into account the time which expired before a final order could be made and the changed conditions that occurred in the interim, did not err in finding what would be fair and reasonable rates for the different periods. As we said in the case of Scranton-Spring Brook W.S. Co. v. P.S.C., supra, "There is warrant for this action where conditions justify it," citing Lindheimer v. Illinois Bell Tel. Co.,
By article III, § 7 (66 PS 261), of the statute, it is made unlawful for a public service company to furnish service without having filed a tariff. "There can be no legal rate except the last tariff rate published as provided by law: Section 7, article III; section 1 (E and F) article II; section 41, article VI; and the effective rate thus published supersedes all prior rates covering the service therein called for": Suburban Water Co. v. Oakmont Boro.,
The order of the Public Service Commission as modified is affirmed.
1. Rates applicable from June 1, 1929, to December 31, 1933:
Gross Net
First ................. 500 C.F. $1.10 $1.00
Next .................. 1600 C.F. per M. 1.45 1.35
Next .................. 2900 C.F. per M. 1.25 1.15
Excess ................ 5000 C.F. per M. 1.05 .95
2. Rates applicable from January 1, 1934, to December 31, 1934:
Gross Net
First ................. 500 C.F. $1.10 $1.00
Next .................. 1900 C.F. per M. 1.45 1.35
Next .................. 2600 C.F. per M. 1.30 1.20
Excess ................ 5000 C.F. per M. 1.05 .95
3. Rates applicable from January, 1935, and for the future:
Gross Net
First ................. 500 C.F. $1.10 $1.00
Next .................. 2300 C.F. per M. 1.50 1.40
Next .................. 2200 C.F. per M. 1.30 1.20
Excess ................ 5000 C.F. per M. 1.05 .95