Opinion ID: 1668628
Heading Depth: 1
Heading Rank: 4

Heading: water rates

Text: Durbin contends that water rates charged by the Board which became effective on June 18, 1979, and a subsequent increase effective December 18, 1980, were prejudicial to Durbin and were much higher than the cost of providing the service to Durbin. Durbin states in its brief: The purpose of Durbin's attack on the water rates was to have the trial court order the Board to conduct a proper cost of service study, utilizing accepted and proper principles in the industry, to determine fair and equitable rates to Durbin. Durbin contends that the Board failed to develop proper customer classifications, misallocated various expenses and failed to take into account non-operating income. The Board presented testimony concerning five cost of service studies performed during the period 1978 through 1980. These studies indicate that the cost of producing and distributing water to Durbin substantially exceeded the sale price to Durbin during this period. Durbin disagrees with the methodology used in arriving at these figures. In Birmingham Electric Co. v. Alabama Public Service Commission, 254 Ala. 140, 146, 47 So.2d 455, 459 (1950), this Court stated: Much has been written on the question of what constitutes just and reasonable rates. We shall make no attempt to analyze all the authorities dealing with the subject. The question cannot be determined with mathematical precision or the use of any set formula or formulae. It must be determined in the exercise of a fair, enlightened and independent judgment in the light of all the relevant facts. It must be just and reasonable to both the investors' interest and the consumers' interest. . . . . In St. Joseph Stockyards Co. v. United States, 298 U.S. 38, 56 S.Ct. 720, 725, 80 L.Ed. 1033, it was said: `The fixing of rates is a legislative act. In determining the scope of judicial review of that act, there is a distinction between action within the sphere of legislative authority and action which transcends the limits of legislative power. Exercising its rate-making authority, the Legislature has a broad discretion. It may exercise that authority directly, or through the agency it creates or appoints to act for that purpose in accordance with appropriate standards. The court does not sit as a board of revision to substitute its judgment for that of the Legislature or its agents as to matters within the province of either.... In such cases the judicial inquiry into the facts goes no further than to ascertain whether there is evidence to support the findings, and the question of the weight of the evidence in determining issues of fact lies with the legislative agency acting within its statutory authority.' We are of the opinion that there was substantial evidence presented that the rates charged to Durbin were closely related to the cost of providing service to this customer. The trial court was not in error in holding that the water rates were reasonable and this portion of the order is due to be affirmed.