Opinion ID: 2391090
Heading Depth: 1
Heading Rank: 4

Heading: General Powers of Public Service Commission

Text: The first Public Service Commission law was enacted in 1913, S.B. 1, 1913 Mo.Laws, §§ 1-140, at 556. This court has previously recognized that its purpose was to protect the consumer against the natural monopoly of a public utility, as provider of a public necessity, May Dep't Stores Co. v. Union Electric Light & Power Co., 341 Mo. 299, 107 S.W.2d 41, 48 (1937), while at the same time permitting a recovery by the utility of a just and reasonable return. Prior to its enactment the only protection to consumers as to rates and service was their right to make the best contract they could with utilities in competition with each other for their business. This law was the result of growing feeling that such competition, as existed in this field, was inadequate to protect the public. It provided, in lieu of competition and the right of private bargaining, impartial treatment of every one under regulations approved and enforced by the state. . . . This court also said that the Public Service Law recognized `certain generally accepted economic principles and conditions, to wit, that a public utility . . . is in its nature a monopoly; that competition is inadequate to protect the public, and, if it exists, is likely to become an economic waste; that state regulation takes the place of and stands for competition; that such regulation, to command respect from patron or utility owner, must be in the name of the overlord, the state, and to be effective must possess the power of intelligent visitation and the plenary supervision of every business feature to be finally (however invisibly) reflected in rates and quality of service.' May Dep't Stores v. Union Electric Power and Light Co., 107 S.W.2d at 48, quoting State ex rel. City of Sedalia v. Public Service Comm'n, 275 Mo. 291, 204 S.W. 497, 498 (Mo.1918), appeal dismissed 251 U.S. 547, 40 S.Ct. 342, 64 L.Ed. 408 (1920). In pursuance of these policy objectives, Chapter 386 authorizes a public service commission and Chapter 393 sets forth rules for its regulation of electric, gas, sewer, etc. corporations. The commission is given jurisdiction over the manufacture, sale and distribution of electricity, §§ 386.250(5), 393.140, RSMo 1969. This includes the power to supervise, among other things, the quality of production and of service; to order improvements and to set standards; to investigate the methods and inspect the facilities of the utilities; and to require the filing of a verified annual report on the financial situation and physical condition of the company, etc. Section 393.140. The commission also has the power to require all electric companies to file with the commission and to print and keep open to public inspection schedules showing all rates and charges made, established or enforced or to be charged or enforced, all forms of contract or agreement and all rules and regulations relating to rates, charges and service used or to be used . . . § 393.140(11). No change shall be made without 30 days notice and 30 days publication except as authorized by the commission. Id. Pursuant to § 393.150, a utility may file a schedule stating a new rate or charge, rule or regulation, which shall become valid unless suspended by the commission, see State ex rel. Jackson County v. Public Service Comm'n, 532 S.W.2d 20, 28-29 (Mo. banc 1975), cert. denied, 429 U.S. 822, 97 S.Ct. 73, 50 L.Ed.2d 84 (1976), on its own motion or upon complaint of interested parties as authorized by the statute. If suspended, the commission must within a specified period hold a hearing concerning the propriety of the new rate, charge, rule or regulation. Section 393.150. A hearing may also be had without the filing of a new rate, if a complaint is filed, or on motion of the commission, §§ 393.260, 386.390. The commission may investigate any matter as to which a complaint may be filed, or in order to enable it to ascertain facts requisite to the exercise of any powers conferred upon it. Section 393.270(1). At the conclusion of any hearing and investigation, the commission shall set the maximum price to be charged for the electricity, §§ 392.270(2), 393.270(3). An interim rate increase may be requested where an emergency need exists, State ex rel. Laclede Gas Co. v. Public Service Comm'n, 535 S.W.2d 561, 568 (Mo. App.1976); § 393.150. Such a system of regulation is necessary, despite the expense and time required to investigate utility costs, hold hearings and fix rates because: despite the existence of substantial competition [between types of utilities], actual as well as theoretical, . . . some alternative to price determination by the laws of supply and demand plainly is necessary. Regulation of rates and standards of service is the only technique we have evolved for dealing with the problem, short of [government operation]. Priest, 1 Principles of Public Utility Regulation 2 (1969). This system is designed to protect consumers against exploitation where competition is inherently unavailable or inadequate, and to insure that these industries will serve the public interest. At the same time it provides these companies necessary assurance of an opportunity to earn a reasonable return on their investment and to attract capital for expansion. Id. at 4, quoting Joseph C. Swidler, Chairman, Federal Power Comm'n, speech (February 4, 1965). As is apparent from the above summary of the relevant statutes, in order to carry out its statutory duties and effectuate the legislative policy objectives embodied therein, the commission must supervise, regulate and control the public utilities within its jurisdiction, see Kansas City Power & Light Co. v. Midland Realty Co., 338 Mo. 1141, 93 S.W.2d 954 (banc 1936), aff'd 300 U.S. 109, 57 S.Ct. 345, 81 L.Ed. 549 (1937), rehearing denied, 300 U.S. 687, 57 S.Ct. 504, 81 L.Ed. 888 (1937). It can do so, under the statutes, either by approval of rate schedules filed with it or by order after investigation or hearing. May Dept. Stores, 107 S.W.2d at 57, §§ 393.150, 393.270. The ultimate purpose of such action is to fix a rate which is just and reasonable both to the utility and to its customers, State ex rel. Valley Sewage Co. v. Public Service Comm'n, 515 S.W.2d 845, 851 (Mo. App.1974). The lawful rate is that fixed by the commission, see §§ 393.270(2), (3), which rate has the same force and effect as if set by the legislature, State ex rel. Jackson Co., 532 S.W.2d at 28. Only one exception to this system of fixed, rather than variable, rates is specified in the statutes, the sliding scale rate, § 393.130(4), discussed infra. Since it is purely a creature of statute, the Public Service Commission's powers are limited to those conferred by the above statutes, either expressly, or by clear implication as necessary to carry out the powers specifically granted, State ex rel. City of West Plains v. Public Service Comm'n, 310 S.W.2d 925, 928 (Mo. banc 1958). Thus, while these statutes are remedial in nature, and should be liberally construed in order to effectuate the purpose for which they were enacted, neither convenience, expediency or necessity are proper matters for consideration in the determination of whether or not an act of the commission is authorized by the statute, State ex rel. Kansas City v. Public Service Comm'n, 301 Mo. 179, 257 S.W. 462 (banc 1923). Once it is determined that an act is within the commission's authority, of course, these considerations and others become part of the broad discretion accorded the commission to set just and reasonable rates. It is within this context, giving full consideration to the policy objectives of the legislature, that we must consider the power of the commission to permit a fuel adjustment clause. State v. Kraus, 530 S.W.2d 684, 685 (Mo. banc 1975); State v. Wright, 515 S.W.2d 421, 427 (Mo. banc 1974).