Court Opinion

ID: 9624213
Source: CourtListenerOpinion
Date Created: 2023-08-22 06:54:17.647736+00
Date Added: 2024-06-11T18:05:41.251799
License: Public Domain

*1144ROONEY, Justice, specially
concurring.
My concurrence in this matter is with express recognition of the power and authority of the Public Service Commission to regulate and control the services and rates of public utilities. Section 37-3-101, W.S. 1977, et seq.
I believe it to be with consideration of such that the trial court found the ordinance to be a taxing device — misplaced as the consideration may have been.
In regulating the rates (and, thus, the profits) of a public utility, the Public Service Commission must consider the expenses of the utility. If the expenses are a proper cost of doing business, they enter into the computation in determination of the rates to be charged to the consumer. The consumer ultimately pays the expense. All contracts in which a utility is a party must be filed with the Public Service Commission as an adjunct to this process. Section 37— 3-111, W.S.1977.
And so it is with franchise fees. The . Public Service Commission must determine if the fees are a legitimate cost of doing business and a fair rental for the use of the streets and alleys. If so, the Public Service Commission will allow the utility to include the expense in computation of its rate structure; and all of the customers of the utility, both within and without the municipal corporation boundaries, will pay their proportionate cost of the fees as part of their utility service charges. If, however, the Public Service Commission determines that the fees are in fact a taxing device, it will not allow the utility to use it in establishing a rate base, and it will require the utility to include the fee as a separate item on the billings to the customers of the utility who reside within the boundaries of the municipal corporation. It will not allow the municipal corporation”to use the franchise fee as a device for securing revenue to pay municipal expenses from utility customers outside of the municipality.
All of this is well recognized and apparent. My special concurrence is for the purpose of indicating that I do not want to indicate an approval of a change therein. The franchise was presented to the Public Service Commission. The amount of the fee was 1%. In The Matter of the Application of Montana-Dakota Utilities Company for Authority to Increase its Rates and Charges for Natural Gas and Electric Utility Services Within the Municipalities of (1) Sheridan, Buffalo and Kaycee and Environs for gas, and (2) Sheridan, Dayton, Ranches-ter, Big Horn and Story and Environs for electric, in Commission Dockets No. 9308 and 9309, the Public Service Commission approved, in 1956, a 1% franchise fee as a proper cost of doing business.
In the 26-page opinion, findings of fact and conclusions of law, the Commission reviewed the tax aspect of a franchise fee and its authority to act in the premises. After referring to extensive case law on the subject, the Commission found that it had such authority and stated:
“We are endowed with authority to fix just and reasonable rates for public utilities and, in the rate making process, we have authority to consider their operating expenses, to determine the reasonableness thereof and to prescribe the treatment to be given discriminatory operating costs which they must lawfully incur in the pursuit of their business. [Citing that which is now §§ 37-2-121, 37-2-122, 37-3-104 and 37-3-112, W.S.1977.]”
After quoting extensively from State ex rel. Pacific Telephone & Telegraph Co. v. Department of Public Service et al., 19 Wash.2d 200, 142 P.2d 498 (1943), the Commission found that it
“ * * * is vested with authority to consider and determine the reasonableness of any item of contract expense incurred by public utilities in determining what are just and reasonable rates for them to charge their consumers, i. e., such determinations are a part of the rate making process. Consequently, we are empowered to determine whether the payments called for by Franchise Ordinance No. 944 of the City of Sheridan constitute a fair and reasonable amount for MDU to pay said municipality as rental for the occupancy and use of its *1145streets, alleys and public grounds or whether, in fact, a portion thereof amounts to a tax.”
The Commission then authorized the filing of a rate schedule by the utility, which would, among other things, authorize and empower the utility to pass on
“pro rata to all consumers residing in any municipality within the Sheridan Division of the Company any payments amounting to more than 1% of its gross revenues collected from them for either natural gas or electric utility service, payable under any franchise ordinance hereafter negotiated by it with said municipalities as compensation for the use of their streets, alleys and public grounds in conducting its respective utility operations within the corporate limits thereof, plus 2% of such excessive franchise payments to cover costs of accounting and billing such consumers for their pro rata share thereof, in the manner hereinafter ordered.”
In 1972, the Commission noted that it had not approved a fee higher than 1% since the 1956 opinion, but it considered a number of factors which could indicate a basis for change in individual cases. It rejected a request for approval of a 3% franchise fee and approved a 2% fee. See In The Matter of the New Franchise Agreement Between the City of Cheyenne and Cheyenne Light, Fuel and Power Company, Public Service Commission Docket No. 9563.
The jurisdiction and action of the Public Service Commission in this respect was, and is, proper.
In the case before us, the franchise fee was within the 1% limit. It will ultimately be paid by all of the utility customers. My concurrence herein is only because we need not here consider the questions of Public Service Commission jurisdiction or exhaustion of administrative remedies.
The construction and legal effect of a contract, as here done, is properly to be determined by the court as a question of law, in the absence of an issue of fact. Shepard v. Top Hat Land & Cattle Co., Wyo., 560 P.2d 730 (1977); Bosler v. Coble, 14 Wyo. 423, 84 P. 895 (1906); Reed & Martin, Inc. v. City and County of Honolulu, 50 Haw. 347, 440 P.2d 526 (1968). I concur with the interpretation here made by the court.