Court Opinion

ID: 3854007
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:37:44.122996+00
Date Added: 2024-06-11T07:41:03.238630
License: Public Domain

Argued April 12, 1923.
The appellant is a public service company engaged in the manufacture and sale of artificial gas in the City of Lebanon. It established a rate which is the subject of this litigation. Three elements enter into the rate, respectively described as (1) "customers' charge," (2) "demand charge," (3) "consumption charge." The first is in substance a service charge as that term is commonly understood. The third is based on the quantity of gas furnished and is a consumption charge. The second is new to Pennsylvania rate making as applied to artificial gas companies and is authorized as claimed by the appellant because of the cost to which it is subjected in keeping its plant in condition to meet the heaviest demand for service. It is a fixed charge depending on the number and kind of appliances for the consumption of gas used by the patrons of the company. It is worked out on an alleged theory of fairness taking into consideration the service value, the gas consumed, and the cost of readiness to serve to the limit of the demand. In the present case, however, it would seem to be a method of so obscuring the basis of the total charge to customers that they could not readily understand what was the consideration for their monthly bills. It was found by the commission an analysis of the rate showed that only about 28.7% of the total cost to customers arose from the consumption charge, the amounts varying *Page 25 
with the season and the quantity of gas consumed. The balance of each customer's charge was made for what is commonly known as the customer's charge, and the charge for readiness to serve. We think it unnecessary to enter into a discussion to show that a rate system which imposes on the patrons of the company nearly three-fourths of the total cost of service for something that is not gas involves an element of unfairness. The justification of the use of a rate so constructed is said to be that if a greater portion of the charge is placed on consumption the large consumers would abandon the use of gas and thereby diminish the demand to a point which would render the business of the company unproductive; but this is largely a theoretical or speculative contention and does not appear to be a warrant for shifting the burden of maintaining the company's plant from the persons who use large quantities of the product to those who use smaller quantities. If the plant is to operate at all it must be adequate to such service as will be remunerative and what the company is authorized to do under the Act of 1874, P.L. 73, is to manufacture and supply gas. The contention of the appellant that they sell "customer service," "peak service," and "gas" each at his own price is not supported by their charter. While allowance may be made in a reasonable way for what is known as customer's service, the essential and principal thing for which the company is authorized to charge is gas furnished the public. We think therefore that the commission was clearly within its statutory authority in setting aside such a rate. Its disallowance does not prevent the company from establishing an adequate rate. The commission has not found that the aggregate income is excessive — the only objection to the rate being that it introduces a factor, unknown in this State or throughout the country generally, which imposes an unfair burden and involves complications of construction not tending to equality. We are unable to find any element of confiscation involved in the case. *Page 26 
There is no denial to the company of the right to have a sufficient rate. This should be based on elements not obscure nor introduced for the purpose of producing an income out of proportion to the service rendered. The learned counsel for the appellant have presented in an elaborate argument various aspects of the case which are interesting, but we are not convinced that the action of the commission is not within its power. The opinion of the commission clearly sets forth the basis of the conclusion reached and we are unable to hold that it is unlawful or unreasonable.
The report of the commission is affirmed and the appeal dismissed at the cost of the appellant.