Court Opinion

ID: 3250288
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:21:22.211094+00
Date Added: 2024-06-11T18:23:19.703174
License: Public Domain

The opinion prepared on submission is not to be understood as holding that, upon an investigation provided for by section 54, Title 48, Code, the commission must grant or refuse the increased rate designated in the new schedule filed by the utility company. The commission may, when justified by the evidence, grant an increase other than that designated in the new schedule filed by the utility and suspended by the order of the commission.
On rehearing much argument is devoted to the question of the rate base and the evidence in regard thereto. The following excerpts are taken from the testimony of appellant's witness Mr. Reynolds:
"President Persons: Section 52 of the Act states this, that the rates and charges for the services rendered and required shall be reasonable and just to both the utility and the public. Every utility shall be entitled to such just and reasonable rates as will enable it at all times to fully perform its duties to the public and will under honest, efficient and economical management earn a fair net return on the reasonable value of its property devoted to public service. Now I will ask you this. What do you think is the reasonable value of the property devoted to the public service in the Transportation Division of the Birmingham Electric Company?
"The witness: The reasonable value of property is the fair value of the property.
"President Persons: All right, sir, now the fair value of the property among other things of course the base of it is the original cost, and then that property depreciates with age. The maintenance of that property of course, does not come into the picture, because that is an operating expense and chargeable directly to the rate payer or the rider as an operating expense. Now what do you consider the fair value of the property *Page 153 
of the Birmingham Electric Company devoted to its transportation system?
"The witness: Well, a fair value is a determination from various kinds of values that may have been placed on the property of what the property was worth.
"President Persons: What do you place that at?
"The witness: I have no value that I would place on it other than saying in placing any fair value, any values which had been placed on the property would have to be considered. For instance, in a case in 1934 the Alabama Public Service Commission, the commission engineer placed a value on the property, which was fair value, at December 31, 1930 of $32,000,000.
"President Persons: Of the transportation department?
"The witness: Of the property as a whole.
"President Persons: I am speaking of the Transportation Department.
Mr. White: Was that not separated in the commission's order, Mr. Reynolds?
"The witness: Yes, it was.
"Mr. White: Well look at it and give Mr. Persons the figure.
"The witness: This is Docket No. 6242 of the commission, decided January 30, 1932 and reads as follows: 'Included in such information, which is a part of the record, is an estimate of the commission's engineering department of the fair value of the utilities properties for rate making for the year 1930 as follows' and it shows the street railway as 17 million dollars.
"President Persons: What do you consider the fair value today?
"The witness: Mr. Persons, the fair value today would be to me the value of the property at the present time. The value ofthe property at the present time has not been determined. To determine the value of the property as of today you would have to take the price of construction indices and determine what that property that you put in 1940 or 1941 or some other year, would cost you today. In fact when we replace property today, maybe the same piece of property, we have to pay from 150 to 175 per cent of what that property might have originally cost. * * * (Italics ours.)
"Commissioner Owen: Do you know how much, do your figures there indicate how much actual cash the Birmingham Electric Company paid for its transportation properties from 1924 to 1947?
"The witness: I just gave you the amount that they spent in actual additions, gross additions at cost since 1924 by department. I don't have the total — yes, I do, — it is $12,813,436, the gross addition.
"Commissioner Owen: And you started off with $9,069,000. Is that right?
"The witness: Yes, sir. And we retired $8,752,286, or added to the total property in the 25 years $4,051,150.
"President Persons: But you don't know the fair value of yourproperty for rate making purposes? You have no estimate onthat?
"The witness: No, not what the fair value of it is today, Mr. Persons. * * * (Italics ours.)
"Mr. Porter: May I ask him a question?
"President Persons: Yes, sir.
"Mr. Porter: Do you have a valuation of any figure that you expect to use to support the allegation in the petition that the rates requested are just and reasonable?
"The witness: Mr. Porter, we think in accordance with section 319 of the Code that all of the values should be considered in determining what is a fair value.
"Mr. Porter: I am asking do you have a value?
"The witness: Do I have a what?
"Mr. Porter: A valuation figure to support the allegation in your petition that the rate is just and reasonable, and if you do, what is it?
"The witness: We have several values, Mr. Porter.
"Mr. Porter: Will you state them?
"Mr. Bronaugh: This is getting a little ahead of us. We were going to put these figures in later on but it is all right to do it now. *Page 154 
"The witness: One value which might be considered is Perkins appraisal, original cost as of July 1st, 1922.
"The witness: At April 1st, 1924, the labor and material plus direct overheads such as engineering, but exclusive of any working capital, going value, cost of financing of superseded property is a figure of $18,117,910, for the over-all property — exclusive of gas I think I said.
"Mr. Porter: Is that the over-all transportation property?
"The witness: No sir, that is the over-all property of the company.
"Mr. Bronaugh: As of what date?
"The witness: As of April 1, 1924. Now the books as adjusted for these adjustments that I previously gave, and exclusive of gas as of April 1, 1924 is $18,309,776. The commission engineers fair value of December 31, 1930 under the docket which I previously gave you was 32 million dollars. The books as adjusted at December 31, 1930 were $26,916,491, or the commission's engineers fair value as of 12/31/30 in excess of books of $5,083,509. In the sale of the predecessor companys out of receivership in 1924, which was entered in the Federal Court, the value of the property was determined at these years the sales price at that time was an amount of some 29 million dollars, which was represented by the bid price for the BRLP Company of $17,500,000, the Birmingham Tide Water of $750,000, making a total of — I can't find the figure.
"Mr. Porter: What is the last figure you are using?
"Mr. Bronaugh: The price in 1924.
"Mr. Porter: $29,000,000.
"The witness: Something like $29,000,000, which was made up of the sales price of the BRLP, $17,500,000 and Birmingham Tide Water of $750,000, or a total of $18,250,000, plus net liabilities of over nine million dollars that we assumed, which gives a total of 29 million dollars.
"Mr. Porter: Can you break that down to the transportation system?
"The witness: No sir, I can't. It was sold as an overall property.
"Mr. White: The bidder did not bid for the street railway and electric, but bid for the whole property as you know.
"Mr. Porter: I understand, but we are trying to fix a rate, Mr. White, on the transportation system and it seems to me quite pertinent as to what the value of that property is, if you are going to take in consideration whether the rate is or is not reasonable, and if the witness has an opinion as to value I think he ought to tell. He has never answered the question.
"Mr. White: I am not so sure that Mr. Reynolds is qualified as an expert to testify on it.
"Mr. Porter: That is what I am trying to get at.
"Mr. White: Let us wait until we put a witness on who is qualified.
"President Persons: Who will the witness be?
"Mr. White: Well Mr. Thorn is as good an engineer as we have in the district, if you really want a figure, and I don't think Mr. Reynolds is an engineer. He doesn't buy the stuff.
"Mr. Bronaugh: Frankly, Mr. Persons, we had approached this thing from the standpoint of the over-all property. It is true that the transportation department is the thing that is giving us trouble right now, but the over-all picture has always been the way the thing has been treated, as an integrated utility."
The company produced no other witness who gave the information sought by the questions propounded to company's witness Reynolds; nor was like information furnished as to the over-all property of appellant.
Courts are not rate-making bodies. That is a legislative function which has been committed to the Public Service Commission in this State. Authorities, supra.
On an appeal the commission's order is taken as prima facie just and reasonable. Section 82, Title 48, Code. We are not convinced that the commission in entering the order appealed from erred to the prejudice of appellant's substantial rights in its application of the law or that the order *Page 155 
is contrary to the substantial weight of the evidence.
The majority of the Court is of the opinion that the rehearing should be granted, the judgment of the circuit court set aside and the cause remanded to the Alabama Public Service Commission for further proceedings and testimony. With this I cannot agree.
The appeal to this Court is under section 90, Title 48, Code, and not under section 79, Title 48, Code, which provides for an appeal from any final action or order of the commission to the circuit court, in equity, of Montgomery County. Section 82, supra, provides that the circuit court of Montgomery County may, in advance of judgment and upon a sufficient showing, remand the cause to the commission for the purpose of taking additional testimony or other proceeding. So far as this record discloses no such showing was made or attempted in advance of the judgment of the circuit court. I do not think that the judgment of the circuit court should be set aside and that court in effect put in error for a matter never brought to its attention nor acted on by it.
In my opinion, it was not the legislative intent that an appellant in the circuit court, nor in this Court, could speculate on a favorable decision of the court, on evidence submitted by it and, if unsuccessful, have the court remand the cause in order that it might supply evidence which it ought to have submitted before the commission.
Moreover, section 76, Title 48, Code of 1940, provides that: "At any time after an order has been made by the commission, any person interested therein may apply for a hearing in respect to any matter determined therein, and the commission shall grant and hold such rehearing within sixty days after the said application therefor has been filed, and such rehearing shall be subject to such rules as the commission may prescribe." Therefore, this proceeding does not preclude the utility from again presenting the matter of increase fares to the commission.
On this point I respectfully dissent.
SIMPSON, J., concurs.
                          On Second Rehearing.