City of Ishpeming v. Public Service Commission

121 N.W.2d 462, 370 Mich. 293
CourtMichigan Supreme Court
DecidedMay 9, 1963
DocketCalendar 123, Docket 49,823
StatusPublished
Cited by8 cases

This text of 121 N.W.2d 462 (City of Ishpeming v. Public Service Commission) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Ishpeming v. Public Service Commission, 121 N.W.2d 462, 370 Mich. 293 (Mich. 1963).

Opinion

Kelly, J.

The Upper Peninsula Power Company (hereinafter referred to as the company) renders a similar service with a common facility' to an integrated area consisting of the counties of Alger, Baraga, Delta, Ploughton, Keweenaw, Mackinac, Marquette, Menominee, Ontonagon, and Schoolcraft.

The public service commission (hereinafter referred to as the commission), on March 18, 1960, requested that the company eliminate the 4 separate rate schedules being charged for similar service in the area and develop an area uniform rate.

The company complied with the commission’s request and filed an application with the commission for approval of a uniform rate it had developed, which resulted in reducing the company’s 1959 earnings by $12,000.

On July 27, 1961, the commission entered an order creating a uniform rate for the area which increased the rate in Ishpeming and Munising, and these 2 cities appealed the order to the Ingham county circuit court. Prom a decree upholding the commission’s order, the city of Ishpeming appeals. Munising did not appeal.

The city of Ishpeming appeals, claiming the court erred (1) in approving the rates governing-the sale of electric energy within the city of Ishpeming as the commission lacked jurisdiction because of franchises, contracts, or ordinances, establishing the rates; (2) in holding that the commission did not violate the provisions of CL 1948, § 460.557 (Stat Ann § 22.157), in establishing the rate upon uniformity; (3) in holding that in establishing uniform rates the commission could take judicial notice of *298 official reports filed with the commission by the company and made available to the city of Ishpeming; (4) in holding that the matter of instituting and conducting the hearing did not violate due process.

Appellant claims the commission could not legally establish rates for Ishpeming because of the Higgins and the Cliffs Power & Light Company franchises; the street lighting, and the March 7, 1945, contracts; the 1948 ordinance; and the provisions of the city charter.

The city granted H. C. Higgins a franchise in 1888, which did not contain a provision requiring the grantee to negotiate with the city as to rates, the sole provision in this franchise pertaining to rates being found in section 8, which reads in part that “the charge for such electricity shall not exceed the average charge made for the same where supplied within a radius of 100 miles of this city.”

The rate established by the commission meets this requirement of section 8 of the Higgins franchise.

The city entered into a contract March 7, 1945, with Michigan Gas & Electric Company (appellee’s predecessor), which contract, after stating that certain differences had arisen between the company and the city over rates and the city had commenced .proceedings before the Michigan Public Service Commission seeking an adjustment of the rates, established residential and commercial light rates, with the provision:

“During the period of 3 years from and after the dismissal of the presently pending proceedings as herein agreed, the city will not instigate or prosecute or take any steps or proceedings looking toward a further readjustment of the company’s rates for electricity, heat, light or power either to the city or to its inhabitants, and the company is hereby released from any obligation to reduce its street lighting rate *299 under article 8 of the contract between the company and the city dated July 14, 1943.”

This 1945 contract concluded with a provision that neither the city nor the utility was waiving any of their respective claims or rights concerning the franchise rights of the utility to serve within the city.

The city, by a 1948 ordinance, authorized the company’s predecessor (Cliffs Power & Light Company) and “its successors and assigns” the right to use the streets for the construction and maintenance of electric transmission lines. The ordinance did not regulate rates, and section 3 of this ordinance reads in part as follows:

“If the Cliffs Power & Light Company, its successors or assigns, shall at any time undertake to supply the consumers of said city with electricity for light or other purposes, it shall he under such rules and regulations as the city council shall from time to time prescribe under the authority granted by section 12.3 and 12.4 of the charter of the city of Ishpeming.”

The company, acquired distribution properties from Michigan Gas & Electric Company in 1953, and commenced rendering electric service to the city.

December 17, 1957, the city and the' company entered into a 5-year “Street Lighting Contract” whereby the city agreed that it would take from the company during the 5-year period all electric energy which it shall require for lighting all streets within the municipal limits, and the commission’s August 13, 1961, order recognized its lack of jurisdiction in regard to the rates established in this street lighting contract.

The city offered in evidence before the commission the city charter adopted on December 7, 1943, and the city charter adopted on June 15, 1960. Both of. *300 these charters, in regard to franchises, contained similar provisions, as follows:

“All franchises heretofore granted by the city of Ishpeming and now in operation shall continue until the expiration of such franchises. All irrevocable public utility franchises and all renewals, extensions and amendments thereof shall be granted only by ordinance. No such ordinance shall be adopted before 30 days after application therefor has been filed with the city council, nor until a full public hearing has been held thereon. No exclusive franchise shall ever be granted and no franchise shall be granted for a longer term than 30 years. No franchise shall be transferable, directly or indirectly, except with the approval of the city council expressed by ordinance.”

Appellant cites City of Mt. Pleasant v. Michigan Consolidated Gas Company, 325 Mich 501 (81 PUR NS 589), as authority sustaining its contention that the authority of the commission could not be invoked until good faith attempts had been made to reach an agreement between the company and the city as to rates and proof that said negotiations resulted in failure.

The pertinent section of the Mt. Pleasant franchise reads (p 507):

“ ‘Sec. 7. Alteration of rates. The rates specified in this franchise shall remain in force throughout the term of this franchise, subject to the following provisions: At the end of 3 years and at any time thereafter from and after the date of this franchise, said rates with the mutual consent of said grantee, successors and assigns, and the city commission of the city of Mount Pleasant, Michigan, or its successors, may be reviewed, altered and changed.

“ ‘In the event that said grantee, its successors and assigns, and the city commission of Mount Pleasant, Michigan, or its successors cannot agree to an altered or changed rate, then either *301

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Bluebook (online)
121 N.W.2d 462, 370 Mich. 293, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-ishpeming-v-public-service-commission-mich-1963.