California Mutual Water Companies Ass'n v. Public Utilities Commission

287 P.2d 748, 45 Cal. 2d 152, 1955 Cal. LEXIS 305
CourtCalifornia Supreme Court
DecidedSeptember 23, 1955
DocketS. F. No. 19181
StatusPublished
Cited by1 cases

This text of 287 P.2d 748 (California Mutual Water Companies Ass'n v. Public Utilities Commission) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Mutual Water Companies Ass'n v. Public Utilities Commission, 287 P.2d 748, 45 Cal. 2d 152, 1955 Cal. LEXIS 305 (Cal. 1955).

Opinion

SHENK, J.

— This is a proceeding pursuant to section 1756 of the Public Utilities Code to review portions of an order of the Public Utilities Commission affecting the rates of the Southern California Edison Company for the sale and distribution of its electrical energy. (Decision No. 50449, 53 Cal. P.U.C. 385.)

The petitioner California Mutual Water Companies Association is an unincorporated association of mutual water companies. The other petitioners are 18 duly incorporated mutual water companies engaged in pumping and delivering irrigation water to their shareholders and members at cost, and one irrigation district. The mutual water companies and the irrigation district are consumers of electrical energy from Edison’s system. These petitioners had been receiving and paying for electrical energy under a schedule applicable to irrigation pumping facilities only, and designated by Edison as Schedule PAP-2. Under this schedule each was entitled to a conjunctive billing feature which permitted a single facility to receive electrical energy at several metering points but to pay for the total energy consumed as if received through a single meter. As electrical energy was billed at a rate which diminished as consumption increased, a decreased overall rate resulted to those entitled to conjunctive billing.

Edison applied for a general rate increase and proposed, as applicable to consumers in the position of petitioners, that Schedule PAP-2 be replaced by a schedule designated as [154]*154PA-3, which differed in some respects from PAP-2, bnt continued the conjunctive billing feature. Edison further proposed that at the end of five years after its effective date Schedule PA-3 would terminate and be replaced by other schedules applicable generally to agricultural consumers and not containing the conjunctive billing feature. By its application Edison sought an increase of approximately $16,000,000 in its annual income. That sum was claimed to be necessary for a fair return on its investment and to maintain its operations. The rate change from PAP-2 to PA-3 was calculated, according to Edison’s computations, to produce a proportionate share of increased income when the new rate was to go into effect.

The decision of the commission in general reduced the overall increase requested by Edison but adopted for the most part the form of schedules proposed by Edison. It provided for an increased annual revenue in the amount of $9,835,000 which would be realized at the time the new schedules should become effective. Among the changes found justified was that from Schedule PAP-2 to Schedule PA-3. However, Schedule PA-3 differs from that proposed by Edison in that it “will expire on October 1, 1956,” two years after its effective date instead of continuing for five years after its effective date as contemplated by Edison.

The petitioners assert that the commission acted beyond its power on the record before it in authorizing the termination of Schedule PA-3 at the end of two years or at any time in the future. They claim that at the termination of Schedule PA-3 Edison will realize an increased revenue from consumers now entitled to conjunctive billing in addition to the increase authorized by the commission to become effective upon the substitution of Schedule PA-3 for Schedule PAP-2, and that there is no showing before or finding by the commission that such an increase at that time is justified as required by section 454 of the Public Utilities Code. That section provides as follows: “No public utility shall raise any rate or so alter any classification, contract, practice, or rule as to result in any increase in any rate except upon a showing before the commission and a finding by the commission that such increase is justified.” It is not disputed that in the absence of a showing and finding referred to in the foregoing section the Public Utilities Commission is without power to authorize an increase in rates. It is argued that Edison has already increased its rates by the whole amount to which it was found [155]*155justified, and any further increase now or in 1956 lacks the necessary finding of justification.

Without question there is evidence in the record to show that the conjunctive billing feature was inaugurated some 20 years ago to meet the economic needs of the time; that today it is unfair and discriminatory as to consumers not entitled to such billing privileges, and that by its application Edison sought in effect to completely eliminate the feature from its schedules over a five-year period. Section 532 of the Public Utilities Code provides in part: “. . . no public utility shall . . . extend to any corporation or person any form of contract or agreement or any rule or regulation or any facility or privilege except such as are regularly and uniformly extended to all corporations and persons. ...” (See also Pub. Util. Code, § 453.) Thus it appears that the commission might properly have determined on the record before it that the termination of the conjunctive billing feature would be justified. The question is whether such a determination was in fact made. The commission and Edison contend that the commission’s findings contemplate and justify the termination and the resulting increase in revenue in 1956, although no finding is made as to the specific amount of increase in annual revenue which might accrue to Edison at that time.

There is support in the record for the commission’s and Edison’s contention. It appears in the views expressed in the opinion and decision of the commission that changes in conditions made it undesirable that the conjunctive hilling feature be continued; that the five-year transitory period contemplated by Edison was “longer than necessary” to eliminate the conjunctive billing feature and that “the approximate two-year transitory period should give ample time for the irrigation consumers to revise their budgets and arrange for rewiring so as to consolidate delivery points for single metering where practicable.” New schedules adopted by the commission eliminated the conjunctive billing feature as of October 1, 1954, as to new consumers who might otherwise be entitled thereto. The commission sought to justify the shorter transitory period on the ground that it was authorizing a smaller immediate increase in revenue than Edison might otherwise be entitled to. The commission’s order authorized Edison to revise its “tariff schedules with rate changes and conditions” as set forth by the commission. The termination of the conjunctive billing feature must be deemed one such condition.

[156]*156The petitioners recognize that the commission found that increases which became effective on October 1, 1954, were justified, but the substance of their contention is that findings of justification extend only to the amount of the increased revenue which Edison would immediately realize. The statute, on the other hand, contemplates a justification of “rates” and “classifications.” It provides that public utilities shall not so raise any “rate” or alter any “classification ... as to result in any increase in any rate” without first a showing and finding of justification. Thus the changes in rates and classifications which took place on October 1, 1954, were found to be justified by the commission. On October 1, 1956, Edison will not, pursuant to the order of the commission, change its rates or alter its classifications to result in any increased rate. The alteration in classification which will result in possible increased revenue in 1956 was made in 1954.

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Bluebook (online)
287 P.2d 748, 45 Cal. 2d 152, 1955 Cal. LEXIS 305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-mutual-water-companies-assn-v-public-utilities-commission-cal-1955.