Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-05
SUPREME COURT
A|DSPOWERCURB
Movement for Federal Regu-
Iation of Electric Rates
Gets Boost.
BY DAVID LAWRENCE.

ADDED impetus to the movement of
recent years to obtain congressional
action with reference to the regula-
ton of rates on electric power has
been given by the decision of the St-
preme Court of the United States rem
dered this week in the case involving
Rhode Island corporation supplying
electric current to a Massachusetts
company distributing the same to the
consumer.
The text of the opinion, rendered by
Justice Stanford, when analysed, dis
closes no hesitancy on the part of the
Supreme Court to place the RESPONSE
bility for further regulation on Con-
gress. Broadly speaking, the public
utility business has been conducted
on the theory that the various State
commissions have the right to regu
late rates and that in the few in
stances of interconnection the prob
lem is local. rather than national.
National i'm Character.
regulation" says the Supreme Court,
"is not the character of the general
business of the company, but whether
the particular business which is regu-
lated is essentially local or national
in character, and If the regulation
places a direct burden upon its in
terState business it is none the less
beyond the power of the State be-
cause this may be the smaller part of
it's general business. Furthermore, If
Rhode Island could place a direct bur-
den on the interstate business of the
NarraganSett Co., because this would
result in indirect benefit to the GUS
toners of the Narragansett Co. in
TrIn
by parity of reasoning, reduce the
rates on such interstate business in
order to benefit the customers of the
Attleboro Co. in that State who would
have in the aggregate an interest in
the interstate rate, correlative to that
of the customers of the Narragan.
sett Co. in Rhode Island.
Plainly, however, the paramount
in the Interstate business car
rfed on between the two companies
is not local to either State, but is
national in character. The
rate Is therefore not subject to regu-
lation by either of the two States in
the guise Of protection to their re-
spective local interests, but if such
regulation is required, it can only be
attained by the exercise Of the power
vested in Congress"
May Need Statute.
Thus it will be seen that some
Federal statute to cover the inter-
state rate question may be found
necessary unless there is continuous
agreement between companies engag
ing in interstate business. The public
utility industry is opposed to Federal
control of rates, believing that the
problems are for the most part local.
or rather regional, and that they can
be handled equitably by the States in
cooperation with each other Some
looking toward the legalizing
of State cooperation may be devised
as a way out, but the latest deci-
sion Of the Supreme Court indicates
that orders by one State commission
on the consumers in another State
cannot be made effective even though
IL means the transmission of the cur
rent up to the boundary line of a
State and no farther.
The Supreme Court in affirming
the decision of the lower court,
the contention outlined
in the Kansas Gas Co. case which
involved the sale of natural gas by
continuous pipe lines from wells
in oklahoma and Kansas into Mis-
souri,.
I'm holding that the rate which
the company charged" said Justice
Sanford, "for gas sold to the distri-
buting company was not subject to
regulation by the Public Utilities
Commission of Missouri, the court
said that while in the absence of
action State may
generally enact laws of internal
police. although they have an indirect
effect on interstate commerce, the
commerce clause of the Constitution,
of it's own force, restraints the States
from imposing direct burdens on in
terstate commerce and State en-
actment imposing such a direct bur-
den must fall, being a direct restraint
of which in the absence of Federal
regulation, it should be free"
1t is expected that the question
hardly will come before the present
session of Congress for decision,
though discussion is not improba BILE.
Copyright. 1927