Court Opinion

ID: 9850044
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:51:24.115551+00
Date Added: 2024-06-11T09:20:30.863367
License: Public Domain

Nichols, Justice,
concurring specially. While I concur in the judgment of the court in this case, I feel that one specific area of the court’s opinion needs some additional clarification.
The United States Supreme Court in Federal Power Comm. v. Hope Natural Gas Co., 320 U. S. 591, 605 (64 SC 281, 88 LE 333) set forth certain standards for utility rates which included the following: the rates must (1) permit a fair opportunity to earn a return comparable to that earned by other enterprises of a similar risk, (2) preserve the financial integrity of the utility, and (3) permit the utility to attract capital on a reasonable basis.
My concern is the failure of the commission to take into consideration "Construction Work in Progress.”
It has been said that the rates paid by the customers of a utility should be based on the cost of purchasing the product supplied and a fair return to the owners of the utility and that today’s customers should not have to pay for facilities to provide for tomorrow’s customers.
Such argument may well have been rational in the days of a *346static society, when any demand upon such a utility for increased production was small and its "construction work in progress” small when considered with its present production and present income from the sale of its product. Such, however, is not the case here.
It appears undisputed that the growth of the area served by this utility is tremendous and that demand for increased energy is approximately 10% each year over the previous year, which means that it must double its capacity each seven years. The construction cost of new plants also is increasing each year and the "cost of money” has continued to escalate with each passing year. Another facet of this problem is the tremendous amount of time that funds must be tied up between the beginning of construction and the time any revenue is produced as a result of providing the product.
The contention is made that such funds should be provided by the utility for a period of years without any current return on investment and that rate payers in the future (after such plant is in operation) should pay rates to provide for a return on such investment. If such funds were being provided for a short period of time, such argument might well have some merit, but where years intervene between the beginning of construction and first operation, such argument cannot stand.
The real question is whether such additional facilities are "used and useful” in providing the product furnished current rate payers. If the question is limited to the product currently furnished, the answer may well be no, but when the question is looked at in its broader scope, to wit: Will the rate payer of today have the product in desired quantities next year when demand by all rate payers will have increased 10% or seven years hence when demand will have doubled, the answer is yes; such additional plants are useful to today’s rate payer, and are used today, not to provide the product today but to assure that the product will be provided in the future.
In this day and time the "construction work in progress” should be included in determining what is a reasonable return to the utility in this case and the Georgia Public Service Commission should be made aware that a failure to take such cost into consideration in fixing rates could amount to confiscation.
I am authorized to state that Presiding Justice Grice and Justice Jordan concur in this special concurrence.