Summary
In Ohio Bell Telephone Co. v. Pub. Util. Comm. (1969), 17 Ohio St.2d 45, we suggested the use of an R.C. 4905.26 hearing as a method whereby the commission could review the reasonableness of a rate schedule it was required to initially accept.
Summary of this case from Ohio Utilities Co. v. Pub. Util. CommOpinion
Nos. 68-336 and 68-337
Decided March 5, 1969.
Public utilities — Regulation by Public Utilities Commission — Application to commission proposing new service and rate therefor — Duty of commission — Power to review reasonableness of rate charged — Section 4905.26, Revised Code.
1. Where a public utility, regulated by the Public Utilities Commission, makes application to the commission proposing to offer a new service to its customers and proposing to establish a rate for such new service, such application is not for an increase in any rate and the commission, pursuant to the provisions of Sections 4909.17, 4909.18 and 4909.19, Revised Code, is required to permit the filing of the schedule of rates proposed for such new service and fix the time when such schedule shall take effect.
2. Under the provisions of Section 4905.26, Revised Code, the Public Utilities Commission has the power to review the justness and reasonableness of any rate charged or proposed to be charged upon a complaint in writing by any person or upon the initiative or complaint of the Public Utilities Commission, that any rate charged or proposed to be charged is in any respect unjust or unreasonable.
APPEALS from the Public Utilities Commission.
These causes are before this court upon appeal from orders of the Public Utilities Commission denying appellants' respective applications to the commission proposing to establish rates for a new service.
The appellants filed applications with the Public Utilities Commission proposing to offer to their respective telephone subscribers, who desired it, a new service not previously offered, consisting of a device known as an acoustic coupler, which is affixed to the microphone end of a headset to minimize noise pickup in noisy locations, and proposing to establish a rate of six dollars, as a one-time charge, for such new service.
The Public Utilities Commission denied the applications.
Mr. Charles B. Ballou, Mr. Michael L. Shatten, Mr. Clay Mock and Messrs. Arter, Hadden, Wykoff Van Duzer, for appellant in case No. 68-336.
Mr. Charles G. Puchta, Mr. Earl R. Huffman and Messrs. Frost Jacobs, for appellant in case No. 68-337.
Mr. Paul W. Brown, attorney general, and Mr. J. Phillip Redick, for appellee.
It is apparently conceded that the appellants' applications are for the establishment of rates for a new service and not for an increase in rates.
The appellants contend that where an application is not for an increase in rates a duty is imposed upon the commission to permit the filing of a schedule of the rates proposed in such application and to fix the time when such schedule is to take effect.
The appellee contends that it may refuse to permit the filing of such a schedule and, upon hearing, make a determination as to whether such proposed rates are just and reasonable before fixing a time when the schedules shall take effect.
The commission takes the position that it has the power to deny a proposed new service to customers and refuse to allow a proposed decrease in rates for consumers to become effective immediately.
This question may be determined from an examination of the statute.
The commission is a creature of statute and has only those powers given to it by statute. Section 4909.17, Revised Code, which empowers the commission to find rates just and reasonable as a condition precedent to their effectiveness, provides as follows:
"No rate * * * of a public utility shall become effective until the Public Utilities Commission, by order, determines it to be just and reasonable, except as provided in this section and Sections 4909.18 and 4909.19 of the Revised Code. * * *" (Emphasis added.)
Section 4909.18, Revised Code, provides in part:
"Any public utility desiring to establish any rate * * * modify, amend, change, increase, or reduce any existing rate * * * shall file a written application with the Public Utilities Commission. Such application shall be verified by the president * * * of the applicant. Such application shall contain a schedule * * *. If such application is not for an increase in any rate * * * the commission shall permit the filing of the schedule proposed in the application and fix the time when such schedule shall take effect.
"If said application is for an increase in any rate * * * there shall also, unless otherwise ordered by the commission, be filed with the application in duplicate the following exhibits * * *." (Emphasis added.)
Section 4909.19, Revised Code is confined by its language to applications for increases in rates and details the procedure to be followed in such cases.
The commission contends that under its broad powers it has authority to require the same procedures to be followed with regard to applications for the filing of a rate for a new service as Section 4909.19 provides shall be followed with regard to applications for increases in rates.
The commission's position is not supported by the language of the statute. Where the application is not for an increase in any rate, but is for a new service, as in the instant causes, or for a reduction in rate, the commission is required to permit the filing of the schedule proposed in the application and fix the time when such schedule shall take effect. Cookson Pottery v. Pub. Util. Comm. (1954), 161 Ohio St. 498, and State, ex rel. Cleveland Electric Illuminating Co., v. Pub. Util. Comm. (1962), 173 Ohio St. 450.
Under the provisions of Section 4905.26, Revised Code, the commission has the power to review the justness and reasonableness of any rate charged or proposed to be charged. The language of that statute provides:
"Upon complaint in writing * * * by any person * * * or upon the initiative or complaint of the Public Utilities Commission that any rate * * * charged * * * or proposed to be * * * charged * * * is in any respect unjust, unreasonable * * * if it appears that reasonable grounds for complaint are stated, the commission shall fix a time for hearing and shall notify * * * and shall publish notice * * *. Such notice * * * shall state the matters complained of * * *." (Emphasis added.)
If a proposed schedule of rates, either reducing rates or establishing a rate for a new service, can not be made effective until a lengthy and often long-delayed review by the Public Utilities Commission is completed, the users of the service will be denied the proposed reduced rates or the opportunity for the proposed new service until such time as the commission completes its review and makes its order.
Under the procedures established by the General Assembly, the advantage to the consumer of a proposed reduced rate or the use of a needed new service is required by law to be given to the user immediately. The consumer is protected from an unjust or unreasonable rate for such new service by Section 4905.26, Revised Code, which provides that such proposed rate may be reviewed by the commission upon a complaint by any person, or upon the initiative or complaint of the commission itself.
The order of the Public Utilities Commission denying appellant's applications is contrary to law, and is, therefore, reversed.
Order reversed.
TAFT, C.J., ZIMMERMAN, MATTHIAS, SCHNEIDER, HERBERT and DUNCAN, JJ., concur.