55 Pa. Commw. 177 | Pa. Commw. Ct. | 1980
Opinion by
The City of Pittsburgh and Mayor Bichard S. Caliguiri (Petitioners) have appealed from an order of the Pennsylvania Public Utility Commission (PUC) adopted September 28, 1978. The order granted an $81 million rate increase to Duquesne Light Company
This case originated on October 1, 1976 when Duquesne filed Tariff Supplement No. 2 with the PUC, proposing an annual rate increase of about $127.9 million, to become effective on November 30, 1976. Included in this rate increase was a request for “emergency rate relief” in the amount of $89 million. On October 20, 1976 Duquesne filed a petition with the PUC reducing its emergency relief request to $87 million. In an “Investigation and Suspension Order” adopted without a hearing December 9, 1976 and entered on December 17, 1976 the PUC suspended the tariff supplement for $127.9 million (December 9,1976 order). In addition to suspending the tariff supplement the order instituted an investigation including consideration of temporary rates under Sections 308 (b) and 310 of the Public Utility Law (Law).
Duquesne filed such a tariff supplement on December 13,1976. The Petitioners, among others, protested the $60 million emergency increase and the PUC referred the matter to an Administrative Law Judge
Temporary rates at the then current level were set by the PUC in an order adopted August 30, 1977, and entered September 15, 1977. The PUC, in an interim order adopted December 20, 1977 and entered December 22,1977, amended the temporary rate order of August 30, 1977 to permit Duquesne to file a tariff supplement to collect additional revenues of $44 million if it chose recoupment or $50 million if recoupment was waived.
The Petitioners assert that the PUC erred by failing to order Duquesne to refund the $35 million. The Petitioners argue that since the PUC had no statutory
At the time this highly contested rate case beg*an, there was no provision in the Law for emergency rate relief. The Law has since been amended.
While we agree with the Petitioners that there is no statutory provision expressly authorizing the exact procedure utilized by the PUC, we do not agree that the rates were therefore illegal and that a refund must be ordered. This Court in City of Erie v. Pennsylvania Electric Company, 34 Pa. Commonwealth Ct. 326, 383 A.2d 575 (1978) permitted the PUC to allow utilities throughout the Commonwealth to adjust their rates to reflect a tax surcharge on their customers without first having the PUC grant individual rate requests from each utility. This Court recognized in that case that the powers of the PUC are limited to those expressly granted by the Law or which arise by necessary implication therefrom. The Court further held that reasonable adjustments in utility rates without prior hearing-may be implied from the PUC’s duty to ensure that rates remain “just and reasonable.”
In the preamble to its December 9, 1976 order the PUC stated that a $127.9 million rate increase might be unjust and unreasonable and therefore suspended the tariff. In that preamble the PUC also permitted but did not order Duquesne to file a $60 million tariff supplement for immediate relief. The December 9, 1976 order did not use the words “emergency rate relief.” In assigning the matter of the $60 million increase to an ALJ on December 16, 1976, however, the PUC did recognize the immediate need to conduct hearings on that portion of the petition designated by Duquesne as an application for emergency rate relief.
This Court in Public Utility Commission v. Commonwealth, 23 Pa. Commonwealth Ct. 566, 353 A.2d 887 (1976) (Commonwealth) recognized the practice
It is well settled that the PUC without notice or hearing may permit rates to become effective or suspend them pending decision concerning their lawfulness. Baker v. Pennsylvania Public Utility Commission, 14 Pa. Commonwealth Ct. 245, 322 A.2d 735 (1974). The reason that no hearing is required on the initial question of the suspension is that the failure to suspend does not amount to commission approval and refunds are available if the increase is later held to be unjustified.
The PUC’s authority to suspend or not suspend a rate increase pending investigation is within the sound discretion of the PUC. City of Philadelphia v. Pennsylvania Public Utility Commission, 164 Pa. Superior Ct. 96, 63 A.2d 391 (1949). Since the PUC has this discretionary power, it could, in the instant case, by the process of granting and lifting the suspension of the $127.9 million rate increase at appropriate times, accomplish what it did by its actions on December 9, 1976. The Law requires tariffs to be filed for all rates charged; therefore, the PUC could not, on its own order, merely reduce the dollar amount of the proposed tariff. To hold that the PUC could accomplish the same result by manipulation but not by a direct method again would produce an absurd result.
In addition, even if we were to hold that the PUC committed an error of law, the error in this case would be harmless. We fail to see how the Petitioners have been injured because of a $60 million rate increase subject to refunds when the PUC could have granted the complete $127.9 million increase also subject to .refunds if the rate was found to be unreasonable. The rights of the customers have been protected at all times during the litigation of this rate case.
Petitioners’ argument that Duquesne customers were denied due process has absolutely no merit. This Court considered a similar due process argument in Baker, supra. The Baker Court relied on Holt v. Yonce, 370 F. Supp. 374 (D.S.C. 1973), aff’d per curiam 415 U.S. 969 (1974) for the proposition that
For the reasons set forth above, we affirm the September 28,1978 order of the PUC denying a refund of $35 million to the Petitioners.
Order
And Now, this 8th day of December, 1980, the order of the Pennsylvania Public Utility Commission adopted September 28,1978 denying the City of Pittsburgh and Mayor Richard.S. Caliguiri a request for refund from a rate increase is hereby affirmed.
Act of May 28, 1937, P.L. 1053, as amended, 66 P.S. §§1148(b) and 1150, now codified! in 66 Pa. C. S. §§1308(b) and 1310.
Section 1150(e) of the Law, 66 P.S. §1150 (e) provides:
Temporary rates so fixed, determined, and prescribed under this section shall be effective until the final determination of the rate proceeding, unless terminated sooner by the commission. In every proceeding in which temporary rate's are fixed, determined, and prescribed under this section, the commission shall consider the effect of such rates*181 in fixing, determining, and prescribing rates to be thereafter demanded or received by such public utility on final determination of the rate proceeding. If upon final disposition of the issues involved in such proceeding, the rates as finally determined, are in excess of the rates prescribed in such temporary order, then such public utility shall be permitted to amortize and recover, by means of a temporary increase over and above the rates finally determined, such sum as shall represent the difference between the gross income obtained from the rates prescribed in such temporary order and the gross income which would have been obtained under the rates finally determined if applied during the period such temporary order was in effect.
This Section was codified by Section 1 of the Act of July 1, 1978, P.L. 598, 66 Pa. O. S. §1310(e) and now provides as follows:
Effect and adjustment of rates. — Temporary rates so fixed, determined, and prescribed under this section shall be effective until the final determination of the fate proceeding, unless terminated sooner by the commission. In every proceeding in which temporary rates are fixed, determined, and prescribed under this section, the commission shall consider the effect of such rates in fixing, determining, and prescribing rates to be thereafter demanded or received by such public utility on final determination of the rate proceeding.
Act of October 7, 1976, P.L. 1057, effective October 7, 1977 now codified in 66 Pa. C. S. §1308 (e).
This Court in City of Erie, supra, relied on Section 308(a) of tbe Law, 66 P.S. §1148 (a), which provides in pertinent part:
Unless the commission otherwise orders, no public utility shall make any change in any existing and duly established rate, except after’sixty days’ notice to the commission. . . . The commission, for good cause shown, may allow*183 changes in rates, without requiring the sixty days’ ■ notice under such conditions as it may prescribe. (Emphasis added.)
This Court has also relied on City of Erie in City of Pittsburgh v. Pennsylvania Public Utility Commission, 42 Pa. Commonwealth Ct. 242, 400 A.2d 672 (1979) to support the filing of a tariff effective on one day’s notice for an “emergency surcharge” when the PUC was already considering a request for an increase in the utility’s rate base.
Section 313(a) of the Law, 66 P.S. §1153(a), provides in pertinent part as follows:
If, in any proceeding involving rates, the commission shall determine that any rate received by a public utility was unjust or unreasonable, or was in violation of any regulation or order of the commission, or was in excess of the applicable rate contained in an existing and effective tariff of such public utility, the commission shall have the power and authority to make an order requiring the public utility to refund the amount of any excess paid by any patron, in consequence of such unlawful collection, within two years prior to the date of the filing of the complaint, together with interest at the legal rate from the date of each such excessive payment. In making a determination under this section, the commission need not find that the rate complained of was extortionate or oppressive. Any order of the commission awarding a refund shall be made for and on behalf of all patrons subject to the same rate of the public utility. The commission shall state in any refund order the exact amount to be paid, the reasonable time within which payment shall be made, and shall make findings upon pertinent questions of fact.