Court Opinion

ID: 8657129
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:17:05.853095+00
Date Added: 2024-06-11T16:56:46.821181
License: Public Domain

GIDEON, J.
(dissenting in part). As pointed oat in the foregoing opinion of the Chief Justice, this court, in U. S. Smelting R. & M. Co. v. Utah P. & L. Co., 58 Utah 168, 197 Pac. 902, concluded, and so held, that the Public Utilities Law gave jurisdiction to the Commission over contracts entered into by public utilities prior to the enactment of that law; also, if such contracts are found to be preferential or discriminatory, to make the necessary investigation and determine the rate to be paid for the services covered by the contracts. In this case the sole query is whether the Commission, having determined that the contract rate was discriminatory as compared with the rates charged the general public, can, without further investigation, order a new or temporary rate to be enforced during the time necessary to enable the Commission to make a sufficient investigation to determine a reasonable rate for the services covered by the contract in question. It is one thing to determine that a contract rate is discriminatory when compared with what 'the general public is paying, and quite another and different thing to determine whether a rate is discriminatory when ascertaining the rate a public utility is entitled to charge. It might well be that the rate fixed in the contract would be found not to be discriminatory or preferential, but that the discrimination existed in the rate charged the general public. The history of the development and gradual substitution of electrical energy in the industries of this country, and by the municipalities in public lighting, warrants the conclusion that it was the thought of the Legislature that the descending scale of the cost' of producing that energy would continue rather than cease, and the scale begin to ascend. New methods and inventions tending to reduce the cost of producing this power had followed each other with ever-increasing regularity, until it had become fixed in the mind of the public that such decreasing cost would continue. The law was enacted by the Legislature with such facts as the controlling reason for any legislation on the subject. I have never thought, nor do I now think, that it was the intent of the Legislature to relieve a utility from the legal effects of bad finaneiéring or from the *213result of disadvantageous contracts made by it. Tbe primary intent was to see tbat the public apd every one received fair treatment, and should have the benefit of the reduced cost of production.
In the very nature of things, some investigation is contemplated and necessary before a commission, court, or any one, can determine a rate to be discriminatory against a utility. In this case no claim is made that any facts were ascertained upon which to base and determine a reasonable or fair rate prior to the order made in October, 1920, save a tariff schedule prepared by the utility itself (the Power Company). It should be kept in mind that no emergency or urgent need existed on the part of the utility for an increase in rate. No receivership was threatening the utility, as was the fact in many of the cases cited. The opening statement, found in the record, by counsel for the Power Company at the beginning of the hearing before the Commission negatives any such claim. We have therefore this situation: A valid contract existing between the parties prior to the enactment of the Public Utilities Law, a contract admittedly binding and enforceable between the parties except for the intervention of that law. That act was held by this court to be an assertion of the poliee power reserved to the state for the public good, and entering into and becoming a part of all contracts made with a public utility, whether made before or after the law became effective. The act undertakes to, and does, give to the Commission the power to investigate and from the facts ascertained fix by order the rate to be charged by the utility. Under the facts shown by this record, it would seem to be a reasonable and fair construction of the statute to hold that the state had done its full duty to a public utility by relieving it from the burden of a rate fixed in a solemn contract only after an investigation sufficiently thorough to intelligently and with a reasonable degree of certainty determine the rate the utility is entitled to charge for the services rendered: Such construction has .the further merit of regularity to support it. In that way the Commission leaves the parties just where they placed themselves by a voluntary contract until *214such time as the facts have been ascertained upon which to base a determination of what the rates should be. That is all that plaintiff is asking in this proceeding. The defendant Power Company, the utility involved in this litigation, Ivas organized as a corporation in the year 1912. The record be-for this court is full of testimony tending to establish the fact that during the period of organization and of financing the enterprise its officers and agents were diligent in attendance in the anterooms of plaintiff and other consumers of electrical energy, as well as the outer rooms of municipal council chambers, soliciting the privilege of furnishing electrical energy for the rates stipulated in the contracts now abrogated by order of the Commission. There is little dispute that by virtue of these contracts the utility was enabled to finance its enterprise. By reason of these facts, and others appearing in this record, it can, at least with some degree of plausibility, be said that this utility feels that it has the right to make a practical application of the scriptural admonition, “Ask, and it shall be given you; * * * knock, and it shall be opened unto you. ’ ’
At the time case known as No. 230 was first brought to this court I entertained serious doubts as to the state’s power to give to the Commission authority to inquire into existing contracts, and by order determine a different rate to that provided in the contract. The authorities, I am now convinced, amply support the right of the state to assert its power respecting the rate to be- charged by a public utility for any service rendered by such utility regardless of prior contracts. Not only do the authorities support that conclusion, but it is, in my judgment, in the interest of sound public policy that such rights should always remain in the sovereign. But what I do doubt, however, is the wisdom or the necessity, under the facts shown in this voluminous record, during this period of reconstruction, of the Commission’s policy in concluding that its duty required it to fix a rate to be charged by this utility so as to guarantee a fixed income of 8 per cent, on the investment. That order could well have been left to a later date, at a time when the economic conditions had become more *215nearly normal. Investors in other industries are compelled to await incomes on investments, and I do not find anything in this record to.support the claim that the public interest would suffer'if a different policy had been adopted by the Commission.
In my judgment, the Commission went beyond the intent of the Legislature in making its order of March, 1.921, retroactive to take effect at a date prior to the order or finding determining the rate the utility should receive for the'services covered by the contract. I therefore withhold my approval from that part of the Commission’s ruling making its order of March, 1921, effective in October, 1920. I concur in the court’s order denying to the Holley Milling Company and others the right to become parties to this review.