Court Opinion

ID: 9699096
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:10:20.314718+00
Date Added: 2024-06-11T18:20:46.429316
License: Public Domain

Dissenting Opinion by
Mr. Justice Cohen :
Historically, all of the steam heating companies in the Commonwealth of Pennsylvania were originally formed for the utilization of the by-products of some other endeavor. Here, the steam heating company utilized the by-product of a plant previously devoted *405primarily to the generation of electricity. Very few (if any) instances exist where a plant was originally devoted solely to the production of steam for a steam heating utility. Since this formerly was a by-product plant which is now for the first time solely devoted to the production of steam, the Commission’s treatment of this utility’s plant as an original acquisition with no historical original cost and with a reproduction cost evidenced only by the arm’s length acquisition cost is justified. The employment of any other concept in arriving at fair value under these facts, requires that we resort to fantastic, unrealistic and uneconomical valuations.
I agree with Judge Weight of the Superior Court that, under the peculiar circumstances in this case, the Commission was correct “in treating the purchase price as a separate and independent measure of value and according predominant weight to it.” I cannot believe that a publicly owned utility, such as the Pennsylvania Power & Light Company, Avould have disposed of these assets to the detriment of its shareholders were it not convinced that the sale price of $250,000 adequately represented its true value at the time of disposition. The Pennsylvania Power & Light Company could not conceive that as a steam heating plant alone the fair value for rate purposes Avould be determined by such egregious formulae as original cost and reproduction cost. The Pennsylvania Power & Light Company knew the true and fair value of the steam plant facilities devoted to the service of steam heating customers and, apparently being satisfied with the rate of return, did not seek increased rates for the services now under consideration. These fantastic and unrealistic values of original cost and reproduction cost should on remand he given only passing consideration by the Commission. I feel, under the circumstances of this case, the Commission was justified in ignoring them completely. *406Hence, I would reverse the action of the Superior Court and affirm the order of the Commission.
Mr. Justice Eagen joins in this dissenting opinion.