delivered the opinion of the court:
This сase began in 1955 when the Northern Illinois Gas Company, hereinafter referred to as the company, filed a proposed rate change with the Commerce Commission. The rate was suspended рending a hearing. The village of May-wood, hereinafter referred to as Maywood, intervened, and following hearings the Commission entered an order finding that the proposed rate change was just and reasonable and should become effective. On appeal to the circuit court of Cook County, the order of the Commission was affirmed. Maywood has appealed directly to this сourt to review the order of the circuit court.
The rate change granted originally involved a 3% increase in the gas rates for consumers in the villages of May-wood, Bellwood and Melrose Park, whiсh increase was requested to reimburse the company for the expense of franchise payments made to these villages. The company was operating in these villages under franchisе ordinances providing for payment by the company to the villages of an annual franchise payment amounting to 3% of the gross receipts of the company from its operations in said villagеs. While the present proceedings were pending before the Commission, the company made lump sum payments to the municipalities of Bellwood and Melrose Park, which had the effect of еliminating the annual franchise payments to these municipalities. The company then withdrew its original rate schedule and filed a revised schedule applicable only to the village of Maywood. This schedule continued to call for an additional charge of 3 % to be assessed against the users of gas in the village of Maywood to compensate the company for the annual 3% franchise payment which it was compelled to make to the village under the terms of the franchise ordinance.
The evidence before the Commission showed that the franchise ordinance had been adopted by Maywood in 1900, prior to the creation of a regulatory commission to supervise the service rendered and the rates charged by utility companies. At that time there was considerable competition on the part of utility companies to secure long-term franchises for providing gas service within municipalities, and, in order to obtain the right to operate in Maywoоd, the predecessor of thé present company accepted the franchise ordinance, and payments under the ordinance have been made since 1922. It appeared frоm the evidence that it was not the usual practice to include such percentage provisions in franchise ordinances although there were several instances where this was done. In the early years during which the company operated under this ordinance, the franchise payments were quite small, but in recent years, due to the increased use of gas, the amount of the franchise рayments has greatly increased, so that in 1955, at the time of the hearings before the Commission, the payment to May-wood amounted to almost $25,000 annually. The company’s gross receipts from all of its operations in the entire area which it served, amounted to more than $67,000,000. The annual payment to Maywood, therefore, represented a very small fraction of the total amount of revenue derived from the company’s entire operation. A witness for the company testified at the hearing that if the proposed rate schedule was approved and the company wаs permitted to recapture this payment, the additional expense incident to the receipt of the income, such as the utility tax and the Federal income tax, would reduce the amount thus rеcaptured by more than 50%. This testimony referred to the amounts paid to the three villages which were originally involved, since the hearing was held prior to the lump sum payments to the other villages, and that testimony showed that the net amount of revenue which the company would derive from the increased rate, if applied to consumers in all three municipalities, would amount to only about %oth оf 1 % of the company’s entire revenue.
The company relies upon the case of City of Elmhurst v. Western United Gas and Electric Co.
In the present case, Maywood seeks to distinguish the Elmhurst case by arguing that in that case the Commission had previously approved a rate permitting recapture of the franchise payments, and that therefore it should be presumed that the uniform rate apрlicable to cities other than the cities to which franchise payments were made was lower than it would have been otherwise, since the Commission must have taken into account the increased revenue derived by the company from the recapture of the franchise payments from certain municipalities. In our opinion this assumption is unjustified. Rate making is not a scientifically exaсt procedure, and the fixing of a fair and reasonable rate involves a question of sound business judgment rather than a mathematical or legal formula. (Iowa-Illinois Gas and Electric Co. v. Commercе Com.
Maywood also contends that since the Elmhurst case originated as a complaint preceding, it must be distinguished from the present case which originated by the filing of а rate change by the company. We are unable to agree. If a rate is unjust and discriminatory, it may be corrected by a rate hearing initiated by the company as well as in a complaint рroceeding initiated by a consumer.
Maywood argues that the amount involved here is so inconsequential that no adjustment should be made. We can not subscribe to a doctrine which would hold that discriminаtion cannot be corrected because it is small in amount. The issue in such cases is whether there is unjust discrimination, regardless of amount. Our holding in Elmhurst makes it clear that a rate is unjust when it does not impose thе burden of franchise payments on users in the community which receives the payment.
Finally, Maywood contends that the Elmhurst case held only that a rate schedule permitting recapture was not discriminatory and did not hold that a schedule not providing for such recapture was discriminatory. Because of the manner in which the question was presented in Elmhurst, the precise holding of that case was limited tо a holding that the rate structure involved therein was not discriminatory. However, the necessary implications of Elmhurst and the language used in that case make it clear that the burden of franchise payments should be borne by communities deriving the benefit of such payments. The case held that recapture of the payments from the consumers in such communities was proper. Since that is precisely what the rate in the present case accomplishes, we consider Elmhurst to be controlling here.
Maywood has cited cases from other jurisdictions and has referred to decisions of regulаtory bodies in other States. Since in our opinion this case is governed by our holding in the Elmhurst case, and since we are satisfied that our holding in that case was correct, we do not find it necessary to discuss the authorities from other jurisdictions.
There was little, if any, dispute as to the facts in this case, and the findings of the Commission are amply supported by the evidence. It is the rule that orders of the Commerce Commission are presumed to be valid and can be set aside on judicial review only if the findings are manifestly against the weight of the evidence or the order is directly contrary to some established rulе of law. Village of Apple River v. Commerce Com.
The order of the Commission was in accord with the established rule of law as set forth in the Elmhurst case. The order of the circuit court of Cook County affirming the order of the Commission is therefore affirmed.
Order affirmed.