Northern Michigan Water Co. v. Public Service Commission , 5 Mich. App. 635 ( 1967 )

5 Mich. App. 635 (1967) 147 N.W.2d 707

NORTHERN MICHIGAN WATER COMPANY
v.
PUBLIC SERVICE COMMISSION.

Docket No. 381.

Michigan Court of Appeals.

Decided January 24, 1967. Leave to appeal granted May 4, 1967.

Joseph Lavey, for plaintiff.

Matheson, Dixon & Bieneman (John M. Veale, of counsel), for intervenor.

Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Hugh B. Anderson, and David P. Van Note, Assistant Attorneys General, for defendant.

Leave to appeal granted by Supreme Court May 4, 1967. See 379 Mich. 761, 381 Mich. 340.

T.G. KAVANAGH, J.

Plaintiff, Northern Michigan Water Company, is a public utility owning and operating water properties and providing water service in Houghton and Keweenaw counties, Michigan. Intervening plaintiff, Michigan Water Suppliers Association, Inc., is an association of privately owned water utility companies which was granted permission to intervene by the trial court.

On April 1, 1961, Northern acquired a water system designated as the Mohawk location. On this date, Northern increased the rates of the 300 metered customers at this location by 24 per cent. On December 29, 1961, Northern filed an application with the defendant, Michigan public service commission, requesting that the commission enter an order authorizing for the future the increased rates previously placed into effect on the Mohawk location. On August 30, 1962, the commission issued an order approving the rate increase from and after the date of the order and further ordering that refunds be made to Northern customers of the moneys collected between April 1, 1961, and August 30, 1962, for the reason that:

"Rates changed without prior commission approval are illegal rates and Northern should refund the difference between the amounts collected from customers at Mohawk location, since its acquisition by Northern, and the amounts properly computed on the rates in effect prior to the acquisition of this system by Northern."

After denial of a petition for rehearing, Northern filed on November 5, 1962, a complaint in the circuit court for the county of Ingham alleging that the commission did not have jurisdiction to order refunds or to establish the rates of a public water utility. The commission answered and the trial was held on July 24, 1963. The only evidence offered was the official file of the commission and the case was then submitted on briefs. On December 2, 1964, the court ruled that the commission had no jurisdiction over water rates and entered judgment December 18, 1964, vacating the commission order. From this judgment, defendant appeals contending that the commission was vested with jurisdiction to regulate the rates of public water utilities by virtue of PA 1960, No 44, which amended CL 1948, § 460.6 (Stat Ann 1965 Cum Supp § 22.13[6]) and specifically conferred this jurisdiction.

This act, as thus amended provides:

"The Michigan public service commission is hereby vested with complete power and jurisdiction to regulate all public utilities in the state except any municipally owned utility and except as otherwise restricted by law. It is hereby vested with power and jurisdiction to regulate all rates, fares, fees, charges, services, rules, conditions of service and all other matters pertaining to the formation, operation or direction of such public utilities. It is further granted the power and jurisdiction to hear and pass upon all matters pertaining to or necessary or incident to such regulation of all public utilities, including electric light and power companies, whether private, corporate or cooperative, gas companies, water, telephone, telegraph, oil, gas and pipeline companies, motor carriers, and all public transportation and communication agencies other than railroads and railroad companies."

The trial court, in a written opinion interpreting this statute stated:

"The act which gives the defendant commission the right over water companies * * * furnishes no grant of specific powers to the commission but is only an outline of the jurisdiction in the commission and does not purport to be more, and there will have to be additional legislation enacted vesting specific powers in the commission over water rates before the commission can act."

The trial court relied upon the case of Huron Portland Cement Company v. Public Service Commission (1958), 351 Mich. 255 (23 PUR3d 117). In that case, Huron petitioned the public service commission for an order directing the Consumers Power Company to furnish electric service to Huron. The Consumers Power Company did not offer the service requested, did not profess to serve the area, had no power lines into the city in which Huron was located, and had not requested a certificate of public convenience and necessity to serve the area. The Supreme Court held that the jurisdiction of the commission to "regulate all rates, fares, fees, charges, services * * * of such public utilities" furnished no grant of specific powers. The court stated: "It is an outline of jurisdiction in the commission and does not purport to be more. If, indeed, the general language quoted had the effect of vesting particular, specific, powers in the commission, not only would a constitutional question be presented arising from an asserted lack of standards, * * * but there would have been no need whatever for the many statutes enacted * * * vesting specific powers in the commission." (Citations omitted) supra at pages 262, 263. The court concluded that "the only means by which Consumers may provide the service is by voluntarily seeking and obtaining a certificate that public convenience and necessity require the rendering of the service. No such request has been made and that disposes of the matter," supra at page 268.

As the defendant points out in its brief, the question in the Huron case, supra, was not whether the commission had jurisdiction to regulate rates or even whether the commission had jurisdiction to regulate service, but specifically whether the commission had the authority to require the introduction of service by a utility into an area which it did not serve nor desire to serve. Unquestionably the commission has the authority to regulate rates of public utilities by virtue of the act before amendment. See City of Dearborn v. Michigan Consolidated Gas Co. (1941), 297 Mich. 388 (39 PUR NS 31); City of Jackson v. Consumers Power Co. (1945), 312 Mich. 437 (62 PUR NS 48); City of Big Rapids v. Michigan Consolidated Gas Company (1949), 324 Mich. 358 (79 PUR NS 301); City of Lansing v. Public Service Commission (1951), 330 Mich. 608 (89 PUR NS 125). While these cases deal with the jurisdiction of the public service commission to regulate the rates charged by gas companies, the statute cited as granting this jurisdiction is the same statute as herein involved which was amended by PA 1960, No 44, so as to include water companies within its regulatory provisions. Since no additional specific grant of authority by the legislature has been necessary to confer jurisdiction to the public service commission to regulate gas rates, nothing more is required to establish the commission's jurisdiction to regulate water rates.

While the public service commission may not retroactively order a utility to refund charges previously approved by the commission, Michigan Bell Telephone Company v. Public Service Commission (1946), 315 Mich. 533 (66 PUR NS 287), the commission may lawfully require a public utility to refund charges collected without its approval. This is consistent with the holding of the Supreme Court in the Michigan Bell case, supra, and is consistent with the commission's authority to regulate rates of water companies in the first instance.

The judgment of the circuit court is reversed and the case remanded to the circuit court for entry of an order affirming the order of the public service commission dated August 30, 1962, being commission number U-861.

No costs since a public question is involved.

LESINSKI, C.J., and McGREGOR, J., concurred.