86 W. Va. 536 | W. Va. | 1920
By an order of May 10, 1920, so far as it is involved in this proceeding, the Public Service Commission requires the West Virginia Water & Electric Company, a public service corporation, hereinafter called the Water Company, (1) not to furnish the City' of Charleston or any of its inhabitants, persons or corporations therein engaged in any form of business or occupation, water without charging and collecting for such service the rates fixed in the order; (2) to charge, the city and from it
The City of Charleston alone complains of this order and bases its claim for relief on two grounds only: (1) Because the Commission in ascertaining the valuation of the Water Company’s property for rate making purposes fixed it at too high a figure and twice included the cost of improvement and betterments contemplated, but not completed, by the Water Company on the occasion of a former valuation; and (2) because the order in effect invalidates an inviolable contract consummated in November, 1913, by the grant of a franchise by the city authorities to the Water Company, authorizing it to use and.occupy the streets and alleys of the city for the purpose of laying water mains, and the acceptance of the franchise by the Water Company, in consideration for which right and privilege the, Water Company bound itself to furnish to the city free water for certain purposes definitely prescribed by the franchise and other water service at specified'rates.
The first contention of petitioner is that the present fair value of the Water Company’s property for rate making purposes should be fixed at 'approximately $1,000,000 instead of $1,500,000 as ascertained by the Commission. In support of this contention it is urged that in an order entered on the, 20th day of November, 1918, the Commission ascertained the value for rate making purposes to be approximately $1,000,000, and expressly included therein all additions to capital then completed as well as those in contemplation of construction but not completed. That order, however, was admittedly temporary in its nature and did not foreclose further investigation with respect to value. According to the opinion of the Commission filed with the record in the case it was not the intention to include the value of all the extensive improvements and addi
That a state may, in matters of proprietary right, as distinguished from those phases of the police power relating to the public safety, health and morals, authorize a municipal corporation to establish by an inviolable contract the conditions and rates under which service shall he rendered by a public service corporation, for a definite term, not grossly unreasonable in point of time, is settled by the Supreme Court of the United States, though the effect of such a contract is to suspend, during the life of the contract, certain of the state’s inherent governmental functions. Vicksburg v. Vicksburg Water Works Co., 206 U. S. 496; Columbus Ry., Power & Light Co. v. City of Columbus, 249 U. S. 399. But since the inevitable result of such a contract is to foreclose the exercise of one of the. most important functions of government, the police power in its proprietary aspect, the cases uniformly hold that the authority of the municipality so to restrict and limit the power of the state
The charter of the City of Charleston in force when the franchise in question was granted to the Water Company (Chapter 2, Acts 1909), after providing in section 46 that no franchise granting the right of occupancy of any portion of the streets shall be made without requiring the grantee to indemnify the city against all damages caused by the construction, maintenance or operation of such works, contains this additional clause: “All reasonable additional provisions and conditions may be made for the protection of the public, necessary damage: or inconvenience by reason of the construction, maintenance or operation thereof.” The, provision for free water, it is urged by petitioner, was included in and made part of the franchise as a
That the free water provision is discriminatory becomes apparent upon first glance. The company is entitled to receive, a fair return upon its investment, and when that has been determined afte,r proper investigation, rates must be so adjusted as to yield a net income equivalent to the return fixed. If the city receives 'its water free of charge,, the burden of contributing to the'sum named may rest solely or mainly upon the rate payer to the exclusion or partial exoneration of the taxpayer. The former pays not only for the water which he uses, but also for that which the city consumes, the benefit of which accrues to the citizens as a whole, and for which they as taxpayers should pay. Service of this character is contrary to the policy of the
A distinction is urged, however, between the power of a municipality, through a franchise, to fix rates for itself and its power to fix rates for its inhabitants, and the case, of People ex rel. South Glen Falls v. Public Service Commission, 225 N. Y. 216, is cited therefor. This case in turn rests upon Kings County Lighting Co. v. City of New York, 221 N. Y. 500, affirming without opinion 176 App. Div. 175. We can see, no valid basis for such distinction. Upon what theory are franchise provisions which grant to a city water free of charge or upon a stated rate of higher dignity than those .guaranteeing to the inhabitants of the city service at a fixed rate? The former affect the inhabitant in his capacity of taxpayer, while the latter affect him as rate payer, but no solid basis appears for a difference in rule based upon such distinction. A conclusive answer to this contention is given in City of Salem v. Salem Water, Light & Power Co., 255 Fed. 295, 298, where the court says: “It is said, however, that these cases are to be distinguished, in that here the right to obtain hydrant service at rates not to exceed those specified in the franchise was held by the city in its proprietary capacity. But as the municipal corporation is but a political subdivision of the state, and exists by virtue, of the exercise of the power of the state through its legislative department, it is our opinion that the city has no absolute property right to demand continued hydrant service at a given rate as against the right of the state to modify such rates of service * *
But there is an added reason why the franchise in question does not operate, to deprive the state of any of its governmental functions. That instrument clearly indicates that the City of Charleston did not intend by contract to withdraw from the state any of its regulatory power, even assuming that it had authority to do so. The franchise was granted subsequent to the enactment of the Public Service Commission Act, and with that act in mind, no doubt, the city carefully provided — “that neither the granting of this franchise, nor anything herein contained, shall tape from the Public Service Commission of the
Tor these reasons, therefore,, we deny the relief sought and dismiss the petition.
Belief denied and petition dismissed.