214 A.D. 108 | N.Y. App. Div. | 1925
The petitioner supplies gas and electricity in the city of Oswego and adjacent territory. It has separate departments for gas and electricity and keeps its accounts for these departments separate and distinct. The Commission has made separate orders, one fixing the rate to be charged for electricity and the other fixing the rate to be charged for gas. These two orders are under review in this proceeding. The petitioner attacks them claiming that the ' rates as fixed by the Commission are too low.
It is now too well established to admit of discussion that a public utility is entitled to a reasonable return on the value of its property used in the public service at the time of the inquiry. (Willcox v. Consolidated Gas Co. of New York, 212 U. S. 19; State of Missouri ex rel. Southwestern Bell Telephone Co. v. Public Service Commission of Missouri, 262 id. 276; Bluefield Water Works & Improvement Co. v. Public Service Commission of West Virginia, Id. 679; Matter of Pennsylvania Gas Co. v. Public Service Commission, 211 App. Div. 253; People ex rel. Kings County Lighting Co. v. Willcox, 210 N. Y. 479; Smyth v. Ames, 169 U. S. 466; Minnesota Rate Cases, 230 id. 352.) In determining the value of the property due weight must be given to its cost of reproduction and any determination which fails to properly appraise such reproduction cost is erroneous. (Bluefield Water Works & Improvement Co. v. Public Service Commission of West Virginia, supra; Matter of Adirondack Power & Light Corporation v. Public Service Commission, 211 App. Div. 272; Georgia Railway & Power Co. v. Railroad Commission of Georgia, 262 U. S. 625.) These principles the Commission recognized but has failed to apply.
In the consideration of the case by the Commission the property of the petitioner was divided into three classes, viz., general property used in both the electric and gas service; electric property used
As to the question of going value the Commission summarily disposes of it with this terse sentence: “ There is no evidence before the Commission upon which going value can be allowed.” If this means that there is no evidence which would support a finding of going value it indicates a misapprehension of the situation. That going value is an element which must be taken into consideration in fixing rates is authoritatively established by both the Federal and State courts. (Des Moines Gas Co. v. City of Des Moines, 238 U. S. 153; City of Houston v. Southwestern Bell Telephone Co., 259 id. 318, 324; Georgia Railway & Power Co. v. Railroad Commission of Georgia, 262 id. 625; Galveston Electric Co. v. City of Galveston, 258 id. 388; People ex rel. Kings County Lighting Co. v. Willcox, 210 N. Y. 479.) Of course there are cases where a property has no going value. But here is a long-established plant supplying a large number of customers, the property of which as the Commission says is maintained in a good state of efficiency and in respect to which there is oral testimony of competent witnesses as to the amount of the going value. This latter kind of evidence was justified in People ex rel. Kings County Lighting Co. v. Willcox (supra, 493). The petitioner is a going concern and has been for a long time. It seems to go well and if such is the case it has a going value. To establish such a business and to develop it so that it functions properly costs more than the mere cost of assembling the materials constituting the buildings and providing the necessary tangible equipment. The Commission has summarized the different items constituting the rate base established but it does not appear that any allowance has been made for going value. In the Des Moines Case (supra), cited by respondents, the element of going value was included in other items constituting the rate base. It is a fair inference in this case that no such allowance has been made. We need not, however, pursue this question further
The determination should be annulled and the proceedings remitted to the Public Service Commission, with fifty dollars costs and disbursements.
All concur.
Determination annulled and proceedings remitted to the Public Service Commission, with fifty dollars costs and disbursements.