Court Opinion

ID: 9545043
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:05:07.316253+00
Date Added: 2024-06-11T15:13:56.907497
License: Public Domain

Robb, J.
(dissenting): The majority opinion in this consolidated case appears to me to be an effort to reverse the trial court and yet cover the questions which were involved in the appeal from the corporation commission to that court. My opinion has always been that the supreme court deals primarily witih questions of law in such an appeal, and proceeding on that premise, I think the principal question now before us is whether the trial court acted illegally in entering its order reflected in paragraph (4) of its journal entry of judgment dated January 4, 1961, holding the commission’s orders of May 27, 1960, and June 29, 1960, were to be set aside because they were unreasonable and unlawful in the respects set forth in the referee’s report submitted to the district court in December, 1960.
My first disagreement with the majority opinion goes to the fundamental element of establishing a rate base wherein the value of the property used by a public utility in providing service to the consuming public is determined under G. S. 1949, 66-110 and 66-128. The value of such property is to be the reasonable value and the latter statute sets out what the corporation commission may consider in arriving at such reasonable value. Our previous case of State, ex rel., v. Telephone Co., 115 Kan. 236, 282, 223 Pac. 771, interpreted the statute as meaning that the original cost was not the measure of reasonable value resulting in a reasonable rate. There can be no quarrel with the authority supporting the majority opinion that the United States Supreme Court has ruled the replacement or reproduction cost also is not the reasonable value but that the original cost may be considered. Thus we have two distinct but separate poles of limitation. In this case the commission established the original cost as the reasonable value which, under the circumstances, happens to be the lowest value. Under G. S. 1949, 66-118b to 66-118l, inclusive, the district court, on appeal thereto, has authority to review the reasonableness and lawfulness of the commission’s determination of the value of the company’s property, which was done in this case. The district court likewise has the *90power to set aside such order if it is found to be unlawful and unreasonable, which was done in this case. Thereafter the agrieved party may, and did, appeal to this court and we have the same jurisdiction herein as in other civil actions. (G. S. 1949, 66-118d.) Thus it is our duty to determine whether there is sufficient evidence to uphold the trial court’s judgment in regard to fixing the value of the company’s property and further, we must determine whether the trial court acted legally or illegally. This matter was very well presented before this court by capable counsel on both sides, the record was meticulously abstracted and has been presented to us in four printed volumes together with numerous exhibits. There is expert testimony by especially well qualified witnesses and, as is usually the case, divergent views were expressed by the different witnesses. In view of this record I cannot, and will not, consider that the trial court did not have ample and sufficient evidence upon which to base its opinion that the commission’s order was unreasonable and unlawful. It may be noted the commission made certain allowances for equipment outlays, replaced or reproduced on the basis of the original cost thereof because the replacement or reproduction thereof was so recent it was impossible to value it otherwise.
Under the authorities set out in the majority opinion, I am of the firm conviction that somewhere in between the limitation the commission deemed reasonable value based on original cost, less depreciation, and the other limitation of replacement and reproduction value, less depreciation, used by the trial court, is to be found what the legislature meant in sections 66-110 and 66-128 when it used the words, “reasonable value.” I believe this in-between value is the value that should be used as the actual “reasonable value” of the company’s property when figuring the rate base. This interpretation of the legislative intent would be applicable during both inflationary or deflationary periods of our economy as obviously it is only coincidental here that the original cost, less depreciation, is also the lowest value.
It may be suggested that any error in figuring the rate base may be corrected by shuffling the rate of return and thereby making up the difference between the actual reasonable value of the property and what it is held to be in this particular case, but I know of no such provision in the public utility law and none has been shown to me. It appears that if such were the law, courts would need no definite rules whatsoever governing the commission’s treatment *91of rates of public utilities and such statutes would be meaningless.
Other matters which the majority opinion deems to be insignificant should be applied in favor of the trial court’s ruling and not in an attempt to set aside its ruling and usurp the jurisdiction of that court by finding the commission’s interpretation is correct and should, therefore, be afiirmed, and the judgment of the trial court should be reversed.
In my opinion the trial court should be affirmed after its judgment has been modified to the following extent: That instead of making its own determination of the reasonable value of the property, the trial court should follow the procedure under 66-118k so as to give the company an opportunity to value its property reasonably instead of following the previous telephone case, and also give the commission an opportunity to correct its unlawful and unreasonable determination of such value. The legislature has given us ample tools with which to handle such matters and this court should see that the statutes are strictly adhered to. I would, therefore, affirm, as modified, the judgment of the trial court.