New Haven Water Co. v. Public Utilities Commission

30 Conn. Supp. 149
CourtPennsylvania Court of Common Pleas
DecidedJuly 31, 1972
DocketFile No. 88265
StatusPublished

This text of 30 Conn. Supp. 149 (New Haven Water Co. v. Public Utilities Commission) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Haven Water Co. v. Public Utilities Commission, 30 Conn. Supp. 149 (Pa. Super. Ct. 1972).

Opinion

Aaronson, J.

This is an appeal by the New Haven Water Company from the finding and order of the public utilities commission dated November 24,1971.

The original application of the New Haven Water Company sought an overall increase in rates of 23 percent, which would produce additional annual operating revenue of $2,694,982. The commission denied the full increase but did allow approximately one-third of the request, authorizing additional revenue of $848,269. Rates and charges were filed by the company on June 14,1971, to become effective [150]*150July 1, 1971. Public hearings were held on the proposals on July 26, 1971, September 7,1971, and September 8, 1971. Found to be appropriate to the facts of the application was the company’s suggested “test year,” beginning May 1, 1970, and ending April 30,1971.

There are five relevant statutory provisions which recite the duty of the commission, the obligation and rights of the petitioner, and the function of the court.

Section 16-19 of the General Statutes reads in part: “If the commission finds any rate to be . . . more or less than just, reasonable and adequate to enable such [public service] company to provide properly for the public convenience, necessity and welfare, ... it may determine . . . just and reasonable maximum rates and charges to be made by such company.”

Section 16-22 states: “At any hearing involving a rate, the burden of proving that a rate under consideration is just and reasonable shall be on the public service company.”

Section 16-37 declares in part: “The court, upon . . . appeal, shall review, upon the record so certified, the proceedings of the commission and examine the question of the legality of the order, authorization or decision appealed from and the propriety and expediency of such order, authorization or decision so far as said court has cognizance of such subject and shall proceed thereon in the same manner as upon complaints for equitable relief.”

Section 16-35 says in part: “Any company . . . aggrieved by any order, authorization or decision of the commission . . . may appeal therefrom . . . within thirty days after the filing of such order

[151]*151Section 16-39 directs: “Each such appeal shall be a supersedeas of the order, authorization or decision appealed from, provided the court . . . may, at any time, order that such appeal shall not so operate ??

The testimony before the commission made it clear that there is no definitive method for determining reasonable utility rates. The legislature gives no guidelines, and the eases on this question refer to no absolutes. Countless factors involving assumptions and estimates and personal judgments of experts are all part of the ultimate decision. The best the commission can do is rule out speculation, conjecture and surmise and arrive at a rate based on an honest consideration of all legal and pertinent facts. The rate, whatever the methodology or theory used to determine it, must be fair and equitable to the utility, to the investors in the utility, and, of course, to the user, consumer and public whom the utility primarily exists to serve. And in regard to this issue there are primary legal rules which are sensible, logical and practical and which guide the court.

“No satisfactory definition of reasonable, as applied to rates, applicable to each case, can be made. Each must be decided upon its own facts and upon a consideration of many varying elements.” Turner v. Connecticut Co., 91 Conn. 692, 698; New Haven v. New Haven Water Co., 118 Conn. 389, 402.

The commission is not bound to accept the testimony of the company’s experts. It is entitled to weigh the evidence and determine its credibility. Conley v. Board of Education, 143 Conn. 488, 492. Although the weight and credibility of the evidence offered are matters within the province of the commission, a conclusion of the commission not legally supported by the evidence would constitute an abuse [152]*152of its powers. Connecticut Television, Inc. v. Public Utilities Commission, 159 Conn. 317, 329; Brook Ledge, Inc. v. Public Utilities Commission, 145 Conn. 617, 619. However, “[t]he court cannot substitute its discretion for that legally vested in the commission but determines on the record whether there is a logical and rational basis for the decision of the commission or whether, in the light of the evidence, it has acted illegally or in abuse of its discretion.” Anthony Augliera, Inc. v. Loughlin, 149 Conn. 478, 481; Kram v. Public Utilities Commission, 126 Conn. 543, 550.

It is axiomatic that every public utility is entitled to a fair return upon the fair value of the property used in providing its services. Cedar Island Improvement Assn. v. Clinton Electric Light & Power Co., 142 Conn. 359, 370; New Haven v. New Haven Water Co., 118 Conn. 389, 401. But the rates must not be so low as to be confiscatory or so high as to exceed the value of the service to the consumer. And, as stated, the commission in determining this is not bound by any single formula or rule. Under the statutory rule of “just and reasonable,” it is the result reached, not the method employed, which is controlling. “The fact that the method employed to reach that result may contain infirmities is not then important.” Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 602.

A study of the 482 pages of transcript, charts, exhibits, schedules, scholarly interpretations and analysis of facts and figures makes it clear how wise it was to remove from the province of the court rate-making power. The court’s function necessarily had to be limited to determining the reasonableness of the rate, with the power and authority to return the entire order of the commission back to it for a reconsideration of all the issues involved if the court [153]*153decided that the commission had in the first instance acted illegally, arbitrarily or in abuse of its discretion. New Haven v. New Haven Water Co., 118 Conn. 389, 403; Turner v. Connecticut Co., 91 Conn. 692.

By way of special defense, the commission asserts that the company has waived its rights and is estopped from taking this appeal because it sought and accepted the commission’s approval of its rates and because it placed those rates in effect prior to commencing its appeal. The record demonstrates that the finding and order of the commission was dated at Hartford, Connecticut, November 24, 1971. Pursuant to this finding and order, the company voluntarily filed with the commission on November 26, 1971, a revised schedule of rates designed to produce the additional revenues granted. Because the applicant substantially complied with the order of the commission, the revised schedule of rates was approved on December 2, 1971, and went into effect December 7,1971.

This issue is not a new one to the New Haven Water Company or to other public utilities and administrative agencies. The problem has been discussed and decided in condemnation matters and in workmen’s compensation cases, among others.

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Related

Federal Power Commission v. Hope Natural Gas Co.
320 U.S. 591 (Supreme Court, 1944)
Brook Ledge, Inc. v. Public Utilities Commission
145 A.2d 590 (Supreme Court of Connecticut, 1958)
Brauer v. Freccia
268 A.2d 645 (Supreme Court of Connecticut, 1970)
Beer v. Ozaukee County Highway Committee
101 N.W.2d 89 (Wisconsin Supreme Court, 1960)
Anthony Augliera, Inc. v. Loughlin
181 A.2d 596 (Supreme Court of Connecticut, 1962)
Conley v. Board of Education
123 A.2d 747 (Supreme Court of Connecticut, 1956)
State v. KRASZYK ET UX.
167 N.E.2d 339 (Indiana Supreme Court, 1960)
Board of Trustees v. Public Service Commission
261 N.E.2d 373 (Indiana Court of Appeals, 1970)
Connecticut Television, Inc. v. Public Utilities Commission
269 A.2d 276 (Supreme Court of Connecticut, 1970)
Jenkins v. Indemnity Insurance Co. of North America
205 A.2d 780 (Supreme Court of Connecticut, 1964)
Cedar Island Improvement Assn. v. Clinton Electric Light & Power Co.
114 A.2d 535 (Supreme Court of Connecticut, 1955)
City of New Haven v. New Haven Water Co.
172 A. 767 (Supreme Court of Connecticut, 1934)
MacKay v. Aetna Life Insurance
173 A. 783 (Supreme Court of Connecticut, 1934)
Turner v. Connecticut Co.
101 A. 88 (Supreme Court of Connecticut, 1917)
Kram v. Public Utilities Commission
12 A.2d 775 (Supreme Court of Connecticut, 1940)
Department of Labor & Industries v. Stone
67 P.2d 320 (Washington Supreme Court, 1937)

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Bluebook (online)
30 Conn. Supp. 149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-haven-water-co-v-public-utilities-commission-pactcompl-1972.