Philadelphia Suburban Transportation Co. v. Public Utility Commission

281 A.2d 179, 3 Pa. Commw. 184, 1971 Pa. Commw. LEXIS 335
CourtCommonwealth Court of Pennsylvania
DecidedSeptember 7, 1971
DocketAppeal, No. 293 C.D. 1970
StatusPublished
Cited by24 cases

This text of 281 A.2d 179 (Philadelphia Suburban Transportation Co. v. Public Utility Commission) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Suburban Transportation Co. v. Public Utility Commission, 281 A.2d 179, 3 Pa. Commw. 184, 1971 Pa. Commw. LEXIS 335 (Pa. Ct. App. 1971).

Opinion

Opinion by

Judge Kramer,

This is an appeal from an order of the Pennsylvania Public Utility Commission (PUC) dated November 23, 1970, dismissing a complaint filed by the appellant, the Philadelphia Suburban Transportation Company (PST) against the Philadelphia Electric Company (PE), intervening appellee, alleging discrimination and preferential electric rates among customers to the detriment of PST. The complaint, as later twice amended, requested the PUC to fix, determine [186]*186and prescribe a special rate schedule for PST, together with refunds for any unlawful collection of rates by PE from PST. The thrust of PST’s complaint is that because PE had established a rate schedule designed for the Philadelphia Transportation Company (PTC) arising out of a 192D contract, and had continued to charge PTC for electric service under what was referred to in the record of this case as “Former Rate T” while “arbitrarily” not making that same rate schedule available to PST (PTC and PST both being street railway mass transit companies serving the Philadelphia area) resulted in the alleged discrimination and preferential treatment.

Because both PTC and PST, in 1968 and 1970 respectively, had all of their assets acquired by the Southeastern Pennsylvania Transportation Association (SEPTA), a mass transit municipal authority, the practical intent of the owners of the stock (or what remains of the assets) of PST is to claim refunds for those electric rate sums of money which PST alleges were overcharged to it by virtue of the alleged discrimination and preferential treatment. To understand what the PUC (which becomes the appellee on appeal) determined in its adjudication dismissing the complaint of PST, it will be necessary to set forth certain pertinent factual background and a description of the various rate schedules involved.

PTC was a mass transit railway public utility. On October 1,1929, PE and PTC (formerly known as Philadelphia Rapid Transit Company) entered into an agreement whereby PTC agreed to cease generating its own electricity and to purchase its entire electric requirements from PE. Under the contract, PTC’s electric generating facilities were leased to PE. In return for PE investing in, and providing facilities to supply the entire requirements of PTC, the railway company [187]*187agreed to pay for the electric service rendered under certain guarantees provided for in a three-part rate schedule. For purposes of this opinion, this rate schedule, which was designated Rate T, will be referred to herein as Former Rate T, because the three-part design of the rate schedule continued to June 16, 1966, when a new Rate T became effective. This new Rate T which continued after June 16, 1966, will be designated herein as “Current Rate T”.

The three parts in the design of Former Rate T were: (1) The capacity charge was intended to recover the fixed costs on PE’s investment in facilities to serve any customers taking electric service under Former Rate T. It contained a minimum billing demand provision under a formula which required PTC to pay the capacity charge (expressed in money) based upon 64,880.4 kilowatts regardless of its actual demands during the month. (2) The energy charge was designed to recover PE’s operating costs at a designated sum of money per kilowatt hour for serving the electric energy to the customers taking service under Former Rate T. (3) The third part was a transmission and distribution investment charge (T & D charge), which was designed to recover for PE, on an annual basis, an amount equal to 13% per cent of all of the investments which PE made in facilities. required exclusively for service to PTC. Although written in terms of availability to anyone, there can be no question that Former Rate T was intended for only one customer, namely, PTC.

In 1936, PST was organized and became a customer of PE. PST was also a mass transit railway public utility. Its requirements for electric service were only one-tenth that of PTC. Although sendee to both PTC and PST was to be used for the same kind of customer with similar load factors and peak requirements, PST, because of its requirements, was not able to qualify for [188]*188service under the Former Rate T. PST did qualify to take its electric service under Rate HT, a high tension rate schedule for customers receiving energy at 13,000 volts and above. (The only exceptions to this statement of fact were three railroad and railway companies which, because of special circumstances were billed under special tariff classifications.) Rate Schedule HT is a two-part rate schedule with capacity and energy charges blocked in such a way that the larger the customer, the higher the demand, and the better the load factor, the lower unit price per kilowatt hour.

During the years involved, all of the rate schedules mentioned in this opinion were properly filed, approved by the PUC, and made a matter of public record. After about 29 years of service under Rate Schedule HT, PST filed (on March 11, 1965) the original complaint against PE alleging that PE had improperly and arbitrarily excluded PST from the use of Former Rate T. In the complaint, PST demanded to be permitted to utilize Former Rate T. The record indicates that PE thereafter offered to charge PST for electric service under Former Rate T, but by virtue of the calculations made in applying PST’s receipt of energy to the Former Rate T formula (described above) PST realized that its monthly bill for electricity would be higher than had been charged under Rate Schedule HT. Therefore, on May 11, 1965, PST amended its complaint in which it alleged that the high billing demand, which was appropriate for PTC, made Former Rate T unavailable to PST and that therefore the rate schedule was discriminatory. Later, PE filed a supplement to its Rate T which became effective June 16, 1966, in which the rate schedule was changed from a three-part rate to a two-part rate. This Current Rate T had blocked capacity and energy charges and completely eliminated the T & D charge found in Former Rate T.

[189]*189Current Rate T was designed to recover in the capacity charge all of those charges which formerly had been recovered in the T & D charge. Under Current Rate T, PST still did not qualify for service under Rate T, and therefore PST on June 15, 1967, filed a second amended complaint still alleging discrimination by virtue of the minimum billing demand requirement, but adding further that the T & I) charge of the Former Rate T was likewise discriminatory against PST. In effect, PST was requesting the PUC to permit PST to take electric energy service under Former Rate T and Current Rate T without two of the major provisions or parts of Former Rate T and without the minimum billing demand of Current Rate T.

In its adjudication the PUC found that the separate classification of PTC under Former Rate T was proper, that the provisions of Rate T were appropriate for the special requirements of PTC, and that Rate HT as applied to PST yielded no more than a lawful return. It found further that PST was not in competition with PTC, that PST did not qualify under terms and conditions of the Former Rate T, and that PST paid no more than a reasonable rate of return for the service rendered to it under Rate HT. The PUC in its adjudication concluded that the service rendered to PTC and PST under the various rate schedules was not discriminatory nor was it preferential and that consequently PST was not entitled to any refund.

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Bluebook (online)
281 A.2d 179, 3 Pa. Commw. 184, 1971 Pa. Commw. LEXIS 335, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philadelphia-suburban-transportation-co-v-public-utility-commission-pacommwct-1971.