Blue Grass State Tel. Co. v. Public Service Commission

Decision Date15 May 1964
PartiesBLUE GRASS STATE TELEPHONE COMPANY, a Kentucky Corporation, Appellant, v. PUBLIC SERVICE COMMISSION of Kentucky et al., Appellees.
CourtUnited States State Supreme Court — District of Kentucky

Louis Cox, James M. Honaker, Frankfort, for appellant.

John B. Breckinridge, Atty. Gen., J. Gardner Ashcraft, Asst. Atty. Gen., Allen Prewitt, Sr., Frankfort, for appellees.

WADDILL, Commissioner.

The primary issue presented by this appeal is whether the Public Service Commission (hereinafter referred to as Commission) properly refused to grant the Blue Grass State Telephone Company (hereinafter referred to as Blue Grass) a certificate of convenience and necessity to operate a telephone system in the City of Jenkins and its environs.

The previous owner of this system having placed it in receivership, the United States District Court, on December 6, 1961, directed that its assets be sold to Continental Telephone Company upon a bid of $120,000. On January 11, 1962, these assets were transferred to Blue Grass, a Kentucky corporation and a subsidiary of Continental Telephone Company, by a bill of sale reciting that the purchase price was $120,000.

On December 19, 1961, prior to taking possession of the telephone system, Blue Grass filed with the Commission an application for a certificate of convenience and necessity to operate this system under KRS 278.020. By its final order issued September 11, 1962, the Commission refused to grant the requested certificate. This order was upheld by the Franklin Circuit Court.

The question of whether the Commission has jurisdiction to approve or disapprove an involuntary sale was not raised before the Commission. The sole issue for it to decide was whether the operation of this system by Blue Grass was in the public interest.

The Commission determined that the depreciated original cost of this system was $25,366.90, and its order shows that it refused to issue the certificate of convenience and necessity solely because of the disparity between this cost basis and the sale price paid by Blue Grass. It assumed that the price paid would have to be considered as a determining factor in establishing a rate base at some later date.

The Commission apparently misinterpreted our holding in Lexington Telephone Co. v. Public Service Commission, 311 Ky. 584, 224 S.W.2d 423, wherein we held that under the facts presented the capital structure of the utility could not be...

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2 cases
  • Bowie v. Louisiana Public Service Com'n
    • United States
    • Louisiana Supreme Court
    • November 29, 1993
    ...City of Catlettsburg v. Public Service Comm'n of Kentucky, 486 S.W.2d 62 (Ct.App.Ky.1972); Blue Grass State Telephone Co., v. Public Service Comm'n of Kentucky, 382 S.W.2d 81 (Ct.App.Ky.1964); Pacific Power and Light v. Federal Power Comm'n, 111 F.2d 1014, 1016 (9th Cir.1940). Because our P......
  • National-Southwire Aluminum Co. v. Big Rivers Elec. Corp., NATIONAL-SOUTHWIRE
    • United States
    • Kentucky Court of Appeals
    • January 26, 1990
    ...and useful and did not allow them as a factor in establishing a rate base. The appellants also cite Blue Grass State Telephone Co. v. Public Service Comm'n, Ky., 382 S.W.2d 81 (1964), which reaffirmed Fern We believe that neither case is absolutely controlling for various reasons. For one t......

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