Opinion
No. 31302
Decided June 9, 1948.
Public Utilities Commission — Interim rates may be established and enforced — Section 614-32, General Code — Appeal by utility from municipal rate-fixing ordinance, pending before commission — No existing contract between municipality and utility for services or products.
During an appeal to the Public Utilities Commission by a public utility from a rate-fixing ordinance, where there is at the time no contract between the municipality and utility as to the furnishing of utility services or products, the commission has jurisdiction and power under Section 614-32, General Code, if it finds an emergency exists, to establish and enforce interim rates to prevent injury to the public or utility, pending determination of such appeal. ( City of Cleveland v. Public Utilities Commission, 126 Ohio St. 91, overruled.)
APPEAL from the Public Utilities Commission.
The propriety of the present appeal by the city of Cincinnati from an emergency order of the Public Utilities Commission, establishing interim gas rates pending determination of appeals from ordinances fixing gas rates in that city, was upheld by this court in the case of State, ex rel. City of Cincinnati, v. Miller et al., Public Utilities Commission, ante, 45, 77 N.E.2d 465.
Essential facts pertaining to the pending appeal are as follows:
Before June 30, 1944, there were in effect in the city of Cincinnati, hereafter called the "city," certain gas rates established by ordinance passed by the council of such city, accepted by the Cincinnati Gas Electric Company, hereafter called the "company," and placed on file with the Public Utilities Commission, hereafter called the "commission," as prescribed by Section 614-16 et seq., General Code.
On May 31, 1944, the city council, by ordinance, established new and lower gas rates to be effective from June 30, 1944, to July 1, 1946. Similarly, by ordinance adopted May 29, 1946, the city council established gas rates covering the period from June 30, 1946, to July 1, 1948, which were also lower than the rates prevailing prior to June 30, 1944.
The company, being dissatisfied with and unwilling to accept such lower rates as prescribed by the ordinances, filed separate appeals from the rates so fixed, with the commission pursuant to the provisions of Section 614-44 et seq., General Code. In accordance with Section 614-45, General Code, the company posted cash undertakings with the commission and continued to charge the schedule of rates on file with the commission and which were operative prior to June 30, 1944.
By order of the commission the two appeals of the company were consolidated in May 1947. The appeal proceedings moved slowly, and the company, upon the claim that it was experiencing serious difficulties under existing conditions in carrying on its necessary operations and in furnishing gas to the industries and inhabitants of the city at the rates it could lawfully charge, moved the commission for an investigation of its financial condition.
Whereupon, the commission, over objection by the city, conducted a special hearing, as an incident of the pending appeals, to determine whether an emergency existed which required extraordinary action. As a result of such hearing, wherein considerable evidence was offered and the interested parties participated, the commission, on October 20, 1947, purportedly acting under Section 614-32, General Code, found that an emergency did exist and proceeded to establish so-called interim emergency gas rates somewhat higher than those then being charged and collected by the company. Following the commission's action, additional bond was posted by the company.
Mr. Henry M. Bruestle, city solicitor, Mr. Robert J. White and Mr. Robert E. Steman, for appellant.
Mr. Hugh S. Jenkins, attorney general, and Mr. Harry G. Fitzgerald, Jr., for appellee.
Stated in its simplest terms, the sole question now before this court for decision is: Did the commission have the jurisdiction and authority, in the situation confronting it, to promulgate an emergency order establishing interim gas rates pending disposition of the appeals by the company from the rates prescribed by the ordinances referred to above?
Section 614-32, General Code, under which the commission acted, is in the following language:
"The commission shall have power, when deemed by it necessary to prevent injury to the business or interests of the public or any public utility of this state in case of an emergency to be judged by the commission, to temporarily alter, amend, or with the consent of the public utility concerned suspend any existing rates, schedules or order relating to or affecting any public utility or part of any public utility in this state. Such rates so made by the commission shall apply to one or more of the public utilities in this state, or to any portion thereof as may be directed by the commission, and shall take effect at such time and remain in force for such length of time as may be prescribed by the commission."
In challenging the validity of the commission's emergency order, the city makes the basic contention that the commission has no jurisdiction with respect to utility rates established by ordinance, because of Section 614-47, General Code, which reads as follows:
"This act [Public Utilities Act] shall not apply to any rate, fare or regulation now or hereafter prescribed by any municipal corporation granting a right, permission, authority or franchise, to use its streets, alleys, avenues or public places, for street railway or street railroad purposes, or to any prices so fixed under Sections 3644, 3982 and 3983 of the General Code, except as provided in Sections 46, 47 and 48 [G. C. Secs. 614-44; 614-45 and 614-46] of this act."
Such statutes, argues the city, deprive the commission of the jurisdiction and power to fix interim emergency rates by resort to Section 614-32, General Code. The city insists that rates set by ordinance are governed exclusively by the sections of the Code relating specifically to that subject and that general provisions of the Code defining the powers and duties of the commission are without application.
Finally, the city urges that the "rates" which a utility may elect to charge under the authorization of Section 614-45, General Code, may not properly be classed as "rates" within the purview of Section 614-32, General Code, but are in fact only "charges," a part of which may have to be refunded if the utility is unsuccessful in its appeals from the rates proclaimed by ordinance.
Opposing such position, the commission and the company point out that, although Section 614-47, General Code, does affect the commission's jurisdiction when there is a valid ordinance or ordinance contract in operation, that section is without significance where there is no ordinance or ordinance contract in force, as is presently the case between the city and the company; and that while the rates charged by the company under Section 614-45, General Code, are the same as those established by the ordinance which expired in June of 1944, such ordinance had in fact expired and the rates thereafter charged do not represent rates under any existing ordinance, hence Section 614-47, General Code, is not relevant in the circumstances.
The commission and the company further represent that, contrary to the claim of the city, Section 614-32, General Code, is in reality a special statute which enables the commission to intervene when economic conditions are such as to require prompt action either in the interests of the public or of a utility.
After a consideration and analysis of the several statutes involved, we have come to the conclusion that Section 614-47, General Code, prevails and precludes the commission from exercising jurisdiction where there is a valid and operative ordinance under which a utility is furnishing its products or services to users within a municipality, but that where a utility has appealed to the commission from a rate ordinance unacceptable to such utility, the rates prescribed by such ordinance are suspended or abated; and that where, under Section 614-45, General Code, the utility elects to charge the rate which previously existed, it is not charging a rate fixed by any subsisting ordinance, but one which is ordained by statute pending the outcome of an appeal. In such circumstances, therefore, Section 614-47, General Code, does not operate to deny the commission jurisdiction.
Nor do we find any conflict between Sections 614-45 and 614-32, General Code. The former provides for the continuance of a prior rate during appeal proceedings to preserve the status quo under ordinary conditions; the latter is a special statute which may be invoked by the commission where an emergency demands it. Although Section 614-32, General Code, is couched in general terms, the plain import of the language employed is to confer upon the commission extraordinary and special powers in the event it determines that an emergency exists.
Lastly, in our opinion, there exists here a "rate" within the contemplation of Section 614-32, General Code. When the company declined to accept the new rates fixed by the new ordinances, appealed to the commission and elected to charge the former rates as provided by Section 614-45, General Code, the rates so charged became the existing legal rates, for the time being at least, by operation of law. The fact that the company might eventually be required to refund a part of the money thus collected is no more than a condition subsequent and does not alter the fact that, during the period such rates prescribed by statute remained in force, they constituted the existing legal rates.
The position now taken by this court is in accord with expressions appearing in the cases of City of Cincinnati v. Public Utilities Commission, 96 Ohio St. 270,117 N.E. 381, and City of Akron v. Public Utilities Commission, 126 Ohio St. 333, 185 N.E. 415; but is in conflict with the holding in the case of City of Cleveland v. Public Utilities Commission, 126 Ohio St. 91, 183 N.E. 924.
In our view this latter case reads out of the Ohio statutes Section 614-32, General Code, thereby defeating the manifest purpose of the General Assembly to empower the commission to take immediate action to protect the public or a utility as concerns rates for utility products or services when the exigencies of a situation demand it and there is no operative ordinance under which a utility is furnishing its products or services. The case of City of Cleveland v. Public Utilities Commission, supra, is therefore overruled.
We hold, in the circumstances presented by the instant appeal, that the commission had the jurisdiction and power to make an emergency order establishing interim gas rates in the city of Cincinnati by virtue of Section 614-32, General Code, and that the order so made is neither arbitrary nor unreasonable. Certainly, should the gas rates ultimately fixed for the city of Cincinnati be lower than those set by the emergency order, the gas consumers in that city will be adequately protected.
Such order is consequently affirmed.
Order affirmed.
WEYGANDT, C.J., MATTHIAS and HART, JJ., concur.
TURNER, SOHNGEN and STEWART, JJ., not participating.