Court Opinion

ID: 9844977
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:13:02.264245+00
Date Added: 2024-06-11T09:15:48.714284
License: Public Domain

SHEPARD, Justice,
dissenting.
The very foundation of the public utility concept is that a monopolistic supplier of a commodity or service to the public should be regulated in the rates and tariffs it may charge the public. The corollary of that proposition is that since rates are regulated a public utility must be allowed a fair rate of return. That rate of return is calculated upon the various costs incurred in the furnishing of the service or the supplying of the commodity. It was for those reasons that the statutes governing public utilities were enacted and the Public Utilities Commission was created. Among the duties of that commission are to determine rates which are just and reasonable. Correlatively unjust and unreasonable charges are prohibited and declared unlawful. I.C. §§ 61-301, 61-302. Rates granting preference or advantage or creating prejudice or disadvantage are prohibited and the Public Utilities Commission is specifically granted the power to determine any such question of fact. I.C. § 61-315.
The essence of the holding of the majority is “Lemhi’s position may result in a division of revenues which is excessive in terms of the contract. This, however, does not bestow jurisdiction on the commission because, as we have noted, the commission may interpret contracts only when the public interest is adversely affected.” (emphasis supplied). Therein the majority allows Lemhi Telephone Company and its subscribers a financial advantage and/or rate preference over every other connecting telephone company and their subscribers and rate payers. As a necessary corollary Mountain States and its subscribers and rate payers are prejudiced and disadvantaged.
In its complaint Mountain Bell alleged that the procedure utilized by Lemhi had resulted in an “unfair, unreasonable, discriminatory and unduly preferential apportionment of toll revenues” to the detriment of that portion of the public using the services of Mountain Bell and other companies with which Mountain Bell connects. The commission, pursuant to its authority set forth in I.C. § 61-315, found as a fact that the procedure of Lemhi was unfair, unjustly discriminatory, unduly preferential and in violation of § 61-315, Idaho Code.
It further found that such procedure resulted in excessive and discriminatory charges. It further found that Lemhi’s revenues were increased and such increased revenues bore no relation to any increase in costs to Lemhi.
It would be difficult to postulate a more compelling set of facts to demonstrate the necessity of commission action in the protection of the public interest. To hold as does the majority that a utility may engage in a practice which confers an unjust and discriminatory preference to some and imposes an unjust prejudice and disadvantage to others because the public interest is not adversely affected is in my judgment a departure from the world of reality.
As the Chief Justice wrote for a unanimous Court a scant eight months ago in Agricultural Products v. Utah Power and Light Company, 98 Idaho 23, 557 P.2d 617 (1976):
“On the other hand, the state has a well established right to regulate public utilities. * * * Pursuant to that power, it has been settled that the state may fix *701rates for public utilities service which will supersede rates previously fixed by private contract. Interference with private contracts by the state regulation of rates is a valid exercise of the police power, and such regulation is not a violation of the constitutional prohibition against the impairment of contractual obligations. * * * Private contracts with utilities are regarded as entered into subject to reserved authority of the state to modify the contract in the public interest.”
The Court then went on to point out that while the Public Utility Commission has the authority to “annul or supersede contract rates” that power is not unlimited and “it is the intervention of the public interest which justifies and, at the same time conditions its exercise.” It was further noted that public utility commission interference with contract rights must be based on a finding by the commission that it “casts upon other consumers an excessive burden or be unduly discriminatory.”
Although the majority labors mightily with the problem of “an unreasonable discrimination in favor of Burlington Northern,” such is completely beside the point. Whether the Burlington Northern is the parent corporation of Lemhi and if any of the monies were thus unfairly paid to Burlington Northern are facts which have no bearing on the ultimate question. The practice of Lemhi as found by the commission resulted in an unjust, unfair and discriminatory preference. What Lemhi did or did not do with those windfall revenues may be of concern to the corporate ownership but not to the general public and its statutory protector, the Public Utilities Commission.