Opinion ID: 2452678
Heading Depth: 1
Heading Rank: 1

Heading: Invalid Delegation of Legislative Power

Text: It is the plaintiffs' contention that the blanket authority vested in the board to fix utility rates [11] constitutes an invalid delegation of legislative power. Although plaintiffs cite several cases about unlawful delegation of legislative power, none is a utility case. No authority has been cited which supports the claim made here nor do the plaintiffs question the reasonableness of the rates set by the board in 1981. Moreover, the purpose in making this argument is difficult to perceive. The claim, carried to its logical extreme, would invalidate the entire utility system, for utilities cannot operate without charging their patrons for the services furnished. The authority to operate a municipal utility connotes the authority to operate it on a sound basis. Oswald v. City of Blue Springs, 635 S.W.2d 332, 333-34 (Mo. banc 1982). Were this not so, the utilities would either cease to operate or else they would constitute a permanent drain on the city treasury and on taxpayers in general. Such obviously was not the intention of the legislature in authorizing municipal utilities. It should not be difficult to determine how much the utilities must charge in order to maintain their operations on a sound basis and to provide for reasonable returns. The plaintiffs argue that there must be some restraints on the power of the board to prescribe rates, because rates for municipal utilities, in contrast to those of investor-owned utilities, are not subject to regulation by the Missouri Public Service Commission. The argument is not persuasive because there is a vital distinction between municipal utilities and investor-owned utilities. [12] The latter have as their ultimate purpose the realization of a profit for the shareholders. The legislature, in its wisdom, might well have concluded that investor-owned utilitites, endowed with natural monopoly, should not be allowed complete discretion as to rates charged, because they would be tempted to maximize profits free from competitive inhibition. The legislature might also conclude that normal political pressures would be sufficient to keep rates of municipal utilities in line. [13] There is no particular motive for turning a profit. We need not speculate as to whether some sort of lawsuit might be filed to prevent a municipality from charging unreasonable rates for utility service. No such claim has been presented here. The claim of unlawful delegation of legislative power, for whatever purpose advanced, is not meritorious. The trial judge did not err in refusing the relief sought.