Southwestern Light & Power Co. v. City of Elk , 188 Okla. 540 ( 1940 )

The order of the Corporation Commission, reversed by the decision of the majority, contained two features which if considered in connection with the record should lead this court to affirm the action of the commission.

The order fixed a legal rate chargeable to Elk City for the electric service rendered by the utility and ordered a refund for overcharge as measured, not by the contract, but by the rate so fixed.

The Corporation Commission has power and authority so to do. Section 3626, O. S. 1931, 17 Okla. Stat. Ann. § 121:

"The Corporation Commission is hereby vested with the power of a court of record to determine: First, the amount of refund due in all cases where any public service corporation, . . . charges an amount . . . in excess of the lawful rate in force at the time such charge was made, or may thereafter be declared to be the legal rate which should have been applied. . . ."

This act was construed in Chicago, R.I. P. Co. v. Brown,105 Okla. 133, 232 P. 43, to give to the Corporation Commission "exclusive original jurisdiction" in such matters of excess charges.

It is my view that the contract existing between the city and the utility provided a rate in the absence of an order of the regulatory agency (American Indian Oil Gas Co. v. Collins Co., 157 Okla. 49, 9 P.2d 438); that the contract rate forms a basis for reparations, not in an action in the district court, but before the Corporation Commission (Jefferson Deposit Co. v. Central Illinois Light Co., 309 Ill. 262, 140 N.E. 817; 51 C. J. 7, § 13); and that the utility bound itself, by its contract, subject to relief by the regulatory body, to furnish the service to Elk City as cheaply as it furnished such service to other cities similarly situated, but that measured by the record presented the utility overcharged, and did not apply its contract rate.

However, should it be considered that the contract existing between the city and the utility is a mere scrap of paper, then undoubtedly it will be conceded that under the act, supra, the Corporation Commission was empowered to determine "the legal rate which should have been applied," and after determining that rate, to order a refund for any overcharge. Such was the action of the commission.

The Corporation Commission is not limited to any particular theory or method in rate making. Standard Telephone Telegraph Co. v. State et al., 177 Okla. 88, 58 P.2d 121; American Indian Oil Gas Co. v. Collins Co., 157 Okla. 49,9 P.2d 438; Western Telephone Corp. v. Corporation Commission of Oklahoma, 176 Okla. 540, 56 P.2d 899.

The Corporation Commission might properly take into consideration, as it did, the utility's written contract, and view rates for similar service furnished presumably at a profitable but lower rate. Then the commission might, as it did, valuate the facilities used and useful in the service at Elk City, and compare that figure ($6,887) both with the annual income for the service locally rendered ($6,852) and with the valuation, income, and rate existing in other cities similarly situated and served by the utility.

The Corporation Commission found that a rate not to exceed 1.4c per kwh in Elk City would be justified. That rate, applied to the consumption for the year 1934, would give a return of 80.9 per cent. per annum upon the investment (excluding attributable management costs), which seems sufficient.

Reparations ordered were not based on the contract rate, as might be inferred from the majority opinion —

Contract rate: Primary charge $62.00

First 5000 kwh .3c Next 10,000 kwh 2.25c Next 1000 kwh 1.75c Excess 1.35c

— but upon the rate fixed and based upon valuation, returns from the investment and comparisons. These rates were:

Sept. 1930 to Feb. 1932 per kwh 1.7c (The same rate charged at Waurika) Feb. 1932 to May 1935 per kwh 1.4c (This was the rate prevailing at Chickasha) For the first period the excess charged was _________________________$1713.94 and for the second period the over charge was _____________ 4459.98 _________ The total being ___________ $6173.92

By section 18, art. 9, Constitution of Oklahoma, the Corporation Commission is charged with the duty of regulating (as to charges, public duties and abuses) transmission companies within the state. Chicago, R.I. P. Co. v. Brown, supra. By section 35, Const., the Legislature was empowered to amend by statute constitutional provisions sections 18 to 34, art. 9, inclusive, so that by our decision, cited, the act first mentioned has the force and effect of a constitutional provision. It should be liberally construed.

In view of such a provision, I cannot bring myself, considering this record, to relegate to the district court a litigant seeking a rebate from an overcharge on a utility rate; or to suspend that litigant's rights by failure to determine whether or not the rate as fixed for purposes of the refund was valid.

After a careful review of the record I am convinced that the finding of fact made by the commission is supported by the evidence, and that under it the future rate, the past rate, and the refund of the overcharge, as ordered, should be sustained.

It was definitely decided in the case of Chicago, R.I. P. Co. v. Brown, supra, that such an overcharge made by a public service company was cognizable by the Corporation Commission but not by the district court. The present opinion is to the contrary.

CORN, V. C. J., and HURST, J., concur.