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Matter of Consol. Edison Co. of N.Y. v. Maltbie

Appellate Division of the Supreme Court of New York, Third Department
Mar 16, 1949
275 App. Div. 731 (N.Y. App. Div. 1949)

Opinion

March 16, 1949.

Present — Foster, P.J., Heffernan, Brewster, Deyo and Santry, JJ. [See post, p. 739.]


On December 30, 1948, the Public Service Commission made an order requiring petitioner, Consolidated Edison Company of New York, Inc., to make effective as of January 10, 1949, a temporary reduction in its filed rates for electric service to general consumers. The reduction is an "across the board" 10% reduction estimated to amount on a yearly basis to $21,500,000. On January 7, 1949, petitioner filed with the commission an application for a rehearing, and for postponement of the effective date of the temporary rate, and on January 17, 1949, that application was denied. On January 17, 1949, petitioner instituted a proceeding under article 78 of the Civil Practice Act to review the commission's determination. That petition was returnable at the Albany Special Term of Supreme Court on January 26, 1949. At the same time there was returnable before the Special Term an application by petitioner for a stay of the temporary rate order pending the determination of the proceeding for review. The Special Term denied the motion for a stay and transferred the proceeding to this court for final disposition ( 193 Misc. 1015), and two orders carrying out these decisions were entered in the Albany County Clerk's Office on February 15, 1949. Petitioner appealed from the order denying the stay and that appeal has been argued before this court. It has also applied to this court for a stay. It appears that the order of the Public Service Commission in this proceeding will result in a reduction of the company's revenues from electric service of not less than $21,500,000 annually, and also in a reduction in operating income, for the same period, of not less than $12,427,000. It is worthy of note that the commission's final order was made, not during the hearings as to the rates to be fixed, but at the conclusion thereof at a time when the commission was in a position to have fixed permanent rates. In fixing the temporary rates the commission deducted $95,500,000 from the original cost less depreciation of the used and useful physical property of petitioner as shown on the company's books of account and in its verified reports, and $2,300,000 from the operating expense for depreciation accrual, likewise shown on the books of the company and in the reports. A serious question is presented as to whether or not the commission exceeded its statutory authority under section 114 Pub. Serv. of the Public Service Law in fixing the temporary rates. The Legislature has authorized the commission to fix temporary rates sufficient to provide a return of not less than 5% upon the original cost less accrued depreciation as shown by the books and records of the company. It is only where such records are not available that the commission is permitted to estimate what such figures might be. In the instant case, although the facts needed have been furnished in the form required, they have been ignored by the commission to the extent that it has substituted its own estimate of the amount of depreciation based on a straight line formula for the actual figures as shown by the books of the company. If it be ultimately determined that the commission's act was ultra vires and void, it would seem to follow that any loss in operating income thereby incurred would constitute "great and irreparable damage" (Public Service Law, § 23, subd. 2) as a matter of law. We are informed that this loss will approximate $65,000 a day. The recoupment provisions of section 114 Pub. Serv. of the Public Service Law were designed to furnish a method whereby the permanent rates ultimately adopted might reflect the difference, if any, between such permanent rates and the temporary rates yielding 5% on the company's own figures. This difference must, by necessity, be small if the directives of the statute are adhered to. These provisions were not designed and are not adequate to meet the situation herein presented where the loss, if the order is void, may well reach astronomical figures. The very magnitude of the sums involved is also clearly indicative of the "great and irreparable damage" this petitioner may suffer, both as to reduction of current income in the face of increased operating costs and expanding facilities and as to its adverse effect on necessary company financing as disclosed by the evidence. The application for a stay pendente lite is granted for the reasons set forth above, and otherwise stated in the moving papers, from which it presumptively appears to the court that great and irreparable damage will otherwise result to the petitioner. The order to be entered hereon shall contain appropriate provisions as to the security to be given by the petitioner.


Summaries of

Matter of Consol. Edison Co. of N.Y. v. Maltbie

Appellate Division of the Supreme Court of New York, Third Department
Mar 16, 1949
275 App. Div. 731 (N.Y. App. Div. 1949)
Case details for

Matter of Consol. Edison Co. of N.Y. v. Maltbie

Case Details

Full title:In the Matter of CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Appellant…

Court:Appellate Division of the Supreme Court of New York, Third Department

Date published: Mar 16, 1949

Citations

275 App. Div. 731 (N.Y. App. Div. 1949)

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