Opinion ID: 286422
Heading Depth: 1
Heading Rank: 1

Heading: The Interim Order

Text: 9 In Order No. 656 the Commission found, as we have said, that without a fare increase, Transit would suffer a net operating loss of $726,033 for the year 1967. It noted that there was 'little or no dispute' 13 as to this projection of operating results, and its finding has not been challenged here. The Commission further found that the company's embedded cost of debt for the future annual period would 'exceed a million dollars,' and concluded: 10 'To require the company to operate at such a substantial loss for even a relatively short period of time would be unwise, and indeed could imperil its financial health. Concomitantly, the standard of service rendered by a company in such a condition usually deteriorates drastically; thus, the company and the public would be disadvantaged and possibly suffer irreparable harm.' 14 11 But though the Commission found that existing fares were 'unjust and unreasonable in that (they)    will produce an operating deficit in 1967 that will imperil the Company financially,' 15 it was unable to determine, because of the inadequacy of the record then before it on the question of rate of return, whether the fares proposed by Transit would be just and reasonable. In particular, it felt there was insufficient evidence in the record to permit 'the exercise of judgment, or the reaching of conclusions,' 16 with respect to such matters as the risks to which the company is subject, for purposes of comparing its earnings with those of other companies, and its cost of capital. It thus concluded that there was compelling need for supplementation of the record, before it could confidently fulfill its responsibility to prescribe the 'lawful fare    to be in effect.' 17 And it decided to take the course of reopening the record and instructing its staff to 'engage the services of an expert having expertise in, and knowledge of, the subject matter.' 18 12 Faced with these circumstances, the Commission sought some means by which it could alleviate Transit's financial crisis without sacrificing the public's right to pay no more than just and reasonable fares. Laying aside the solution which it ultimately devised, the choices before the Commission were either to permit Transit's proposed tariffs to go into effect pending completion of the additional hearings and issuance of a final order, with the substantial probability that the public would thus be charged unreasonably high fares during that period, or suspending the proposed tariffs in toto for an additional length of time, thereby jeopardizing Transit's financial stability and its continued ability to render service to the public. Petitioners in No. 20,714 claim, in effect, that no lawful means existed by which the Commission could escape this dilemma-- and that, even assuming statutory authority for what was done, the Commission's action constitutes an abuse of discretion. We disagree. 13 We think there can be little doubt of the Commission's general authority to issue interim orders 'although the evidence introduced does not enable the tribunal to dispose of the issues completely or permanently   .' 19 It is true that the Commission did not make a finding, as required by Section 6(a)(2) of the Washington Metropolitan Area Transit Regulation Compact, 20 that the proposed rates filed by the carrier were 'unjust, unreasonable, or unduly preferential or unduly discriminatory.' But the Commission did find that the existing rates were 'unjust and unreasonable,' and Section 6(b) of the Compact 21 gives the Commission authority to modify existing rates upon making such a finding. 22 14 The interim rate increase in this case was ordered by the Commission during the pendency of a rate proceeding initiated by the carrier's filing of new tariffs, pursuant to Section 6(a) of the Compact. Accordingly, the Commission limited the effectiveness of the interim rates to the period during which it had suspended Transit's proposed tariffs. The rates prescribed by the Interim Order also were designed to do little more than compensate Transit for its operating expenses and the cost of servicing its debt. 23 We do not decide whether in similar circumstances the Commission would have authority to prescribe interim rates to be effective for a period longer than the Section 6(a) suspension period, 24 or higher than necessary to enable the company to 'break even.' 15 From what we have said regarding the Commission's authority to order an interim rate increase, we think it necessarily follows that in doing so it was not required to make the full and complete findings as to margin of return and fare structure that must accompany an exercise of its authority to prescribe permanent rates. This is not to say that its discretion must not be exercised rationally, nor that it may act without making relevant findings, supported by the record, to sustain its action. We hold, however, that given the circumstances presented here-- the inadequacy of the record and the need for further inquiry, the danger of serious consequences to Transit and the public if no fare increase were granted in the interim, and the undesirability of imposing unreasonably high fares on the public-- the Commission's solution was within the bounds of its authority and supported by the findings it made.