Court Opinion

ID: 9578228
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:43:08.467946+00
Date Added: 2024-06-11T13:25:19.365919
License: Public Domain

Barnhill, J.,
concurring: While I concur fully in the majority opinion, there are certain facts appearing of record to which I wish to *466direct particular attention. The petitioner, a wholly owned subsidiary of Alcoa, began business as a public utility or gwasi-public corporation in 1929. It then bad one plant with a capacity of 1400 KWH. When the petition herein was filed it had increased its plants to seven with a capacity of 19,435 KWH — 56.7 times greater than 'at the beginning. One plant has been put in operation since this proceeding was instituted. Two other plants are now in process of construction. This has been accomplished without increasing its capital stock or incurring any bonded indebtedness. The parent company has furnished the necessary funds.
Petitioner’s fiscal year ends on June 30. During the fiscal year 1947 it delivered 92% of its total output to Alcoa, in 1948, 89%, in 1949, 90%, in 1950, 89%, in 1951, 84%, and in 1952, 81.35%. Mead paid 5.09 mills per KWH for the power it consumed, and Alcoa paid 2.3 mills which was approximately the cost of production. “The price paid by Alcoa is just about cost.”
In 1952 Alcoa, which received 81.35% of petitioner’s total production of power, paid only 47.3% of petitioner’s total revenue while those who purchased only 18.65% paid 52.7% thereof.
Thus it appears that petitioner has sold to local consumers a minimum of 8% and a maximum of 18.65% of its total production during the past seven years. Why then this constant increase in productive capacity? The answer is self-evident.
In view of these and other facts appearing in the record, to assert that the electric power retailed to North Carolina customers constitutes all the primary power produced by petitioner and the total amount delivered to Alcoa is secondary power so as to justify the present and proposed dis-criminations in rates in favor of Alcoa, or to contend that this is a proper basis for the decided differential in rates serves only to challenge the intelligence of the Court.
But Alcoa is under contract to purchase all the secondary power produced by petitioner. By reason thereof, Alcoa is compelled at times to accept and pay for electric current it cannot use. So it is argued. I have no doubt the contract between petitioner and Alcoa, upon its face, is wholly sufficient to make it appear that it is a contract between a public service corporation and a customer for the purchase and sale of secondary power. No doubt every wherefore and whereas to that end is included, and not a jot or tittle is omitted. Even so, the fact remains that this record will not sustain the contention that more than 81% of the petitioner’s production is secondary power.
“Giving it the wrong label does not conjure away the reality, and no amount of judicial legerdemain can change its true character and make undependable that which is in fact dependable . . . Calling it secondary power does not make it so.”
*467Corporations must operate on a profit motive basis. Not so with petitioner. Financed as it is, it can afford — indeed it proposes — to operate at an apparent loss. By so doing it can evade tbe payment of its fair portion of State and Federal taxes.
Unquestionably local customers of petitioner enjoy special benefits from tbe arrangement now in existence between it and Alcoa, and tbe arrangement bas contributed to tbe development of tbe extreme western section of North Carolina. Local customers are entitled to these benefits in exchange for tbe special advantages and privileges acquired and enjoyed by petitioner and its parent corporation. It could well afford to retail tbe minor percentage of its total product which it sells to local customers in exchange for these privileges. Certainly tbe mere fact its rates are lower than those of other companies who aré not financed and controlled by a giant parent-customer does not justify increasing the cost to Mead by $2,000 per month so as to further protect Alcoa and assure the continued delivery to it, at cost, of more than 80% of petitioner’s total output of electric power.
Judge Gwyn’s judgment reversing the order of the Utilities Commission appears in full in the statement of facts which accompanies the majority opinion. I therefore refrain from quoting some of the more striking and thought-provoking comments and observations therein contained. (See p. 456 et seq. of majority opinion.) Suffice it to say at this time that they should command the careful attention of all the right-thinking-citizens of the State.
Judge Qwyn possesses a fine judicial temperament and sound judgment. His fairness to all litigants is generally recognized. He is painstakingly deliberate in the discharge of his judicial duties. He has never posed as the guardian and protector of “the people” against the “predatory aims of entrenched wealth.” I am therefore confident that he incorporated these pertinent comments in his judgment only after long and prayerful consideration. In my opinion, the facts disclosed by this record fully justify what he has to say.
Neither this Court nor his can give relief against the conditions he so graphically points out. Yet his comments should serve to give notice to the public officials or agencies, having the power to act, that the time is at hand when these conditions should receive prompt and careful attention. If they will only cut through the form to the substance, they will find just another hydroelectric power producing agency of Alcoa, retailing just enough of its production — less than 20% — to permit it to pose as a grosi-public corporation with the right to use the water power resources of this State, exercise the power of eminent domain, and enjoy the other monopolistic privileges accorded a public utility while it was, in fact, *468created and exists primarily to serve its master which seeks and must have low-cost hydroelectric power.
Fortunately, the corporations of North Carolina, both large and small, have diligently sought to exercise their corporate powers under the law in accord with the free enterprise concept of our form of government. Seldom indeed is a situation such as the one disclosed by this record brought to light in the course of litigation or otherwise. I am certain its parallel does not exist elsewhere in this State.
Perhaps some may think the question it poses is no concern of this Court or any of its members. Certainly this Court cannot remedy the condition in this proceeding. We may only decide the legal questions presented by the appeal. Even so, I would not surrender or forego the right to direct attention to the note of warning contained in Judge Gwyn’s judgment in exchange for any office within the purview of our system of government.
It must be distinctly understood that nothing I have said is intended or should be construed as a criticism of attorneys who represent petitioner. It was entitled to counsel, and the attorneys selected are men of recognized ability and standing in the legal profession. They presented the cause of petitioner in a concise, logical, and forceful manner, in accord with the best traditions of the legal profession. In so doing, their conduct at all times has been above reproach.
I join the other members of the Court in voting to affirm the judgment entered in the court below.