California Mut. Water Cos. Ass'n v. Public Util. Com'n of California

• Decision Date: 23 September 1955
• Citation: 45 Cal.2d 152,287 P.2d 748
• Court: California Supreme Court
• Parties: , 10 P.U.R.3d 345 CALIFORNIA MUTUAL WATER COMPANIES ASSOCIATION, et al., Petitioners, v. PUBLIC UTILITIES COMMISSION OF The State of CALIFORNIA, Respondent, Southern California Edison Company, Real Party In Interest. S. F. 19181.

Page 748

287 P.2d 748

45 Cal.2d 152, 10 P.U.R.3d 345

CALIFORNIA MUTUAL WATER COMPANIES ASSOCIATION, et al., Petitioners, v. PUBLIC UTILITIES COMMISSION OF The State of CALIFORNIA, Respondent, Southern California Edison Company, Real Party In Interest.

S. F. 19181.

Supreme Court of California, In Bank.

Sept. 23, 1955.

Rehearing Denied Oct. 19, 1955.

Clayson, Stark & Rothrock and Donald D. Stark, Corona, for petitioners.

Everett C. McKeage and J. Thomason Phelps, San Francisco, for respondent.

Bruce Renwick, Gail C. Larkin and Rollin E. Woodbury, Los Angeles, for real party in interest.

SHENK, Justice.

This is a proceeding pursuant to section 1756 of the Public Utilities Code to review portions of an order of the Public Utilities Commission affecting the rates of the Southern California Edison Company for the sale and distribution of its electrical energy. (Decision No. 50449, 53 Cal.P.U.C. 385.)

The petitioner California Mutual Water Companies Association is an unincorporated association of mutual water companies. The other petitioners are 18 duly incorporated mutual water companies engaged in pumping and delivering irrigation water to their shareholders and members at cost, and one irrigation district. The mutual water companies and the irrigation district are consumers of electrical energy from Edison's system. These petitioners had been receiving and paying for electrical energy under a schedule applicable to irrigation pumping facilities only, and designated by Edison as Schedule PAP-2. Under this schedule each was entitled to a conjunctive billing feature which permitted a single facility to receive electrical energy at several metering points but to pay for the total energy consumed as if received through a single meter. As electrical energy was billed at a rate which diminished as consumption increased, a decreased overall rate resulted to those entitled to conjunctive billing.

Edison applied for a general rate increase and proposed, as applicable to consumers in the position of petitioners, that Schedule PAP-2 be replaced by a schedule designated as PA-3, which differed in some respects from PAP-2, but continued the conjunctive billing feature. Edison further proposed that at the end of five years after its effective date Schedule PA-3 would terminate and be replaced by other schedules applicable generally to agricultural consumers and not containing the conjunctive billing feature. By its application Edison sought an increase of approximately $16,000,000 in its annual income. That sum was claimed to be necessary for a fair return on its investment and to maintain its operations. The rate change from PAP-2 to PA-3 was calculated, according to Edison's computations, to produce a proportionate share of increased income when the new rate was to go into effect.

The decision of the Commission in general reduced the overall increase requested by Edison but adopted for the most part the form of schedules proposed by Edison. It provided for an increased annual revenue in the amount of $9,835,000 which would be realized at the time the new schedules should become effective. Among the changes found justified was that from Schedule PAP-2 to Schedule PA-3. However, Schedule PA-3 differs from that proposed by Edison in that it 'will expire on October 1, 1956,' two years after its effective date instead of continuing for five years after its effective date as contemplated by Edison.

The petitioners assert that the Commission acted beyond its power on the record before it in authorizing the termination of Schedule PA-3 at the end of two years or at any time in the future. They claim that at the termination of Schedule PA-3 Edison will realize an increased revenue from consumers now entitled to conjunctive billing in addition to the increase authorized by the Commission to become effective upon the substitution of Schedule PA-3 for Schedule PAP-2, and that there is no showing before or finding by the Commission that such an increase at that time is justified as required by section 454 of the Public Utilities Code. That section provides as follows: 'No public utility shall raise any rate or so alter any classification, contract, practice, or rule as to result in any increase in any rate except upon a showing before the commission and a finding by the commission that such increase is justified.' It is not disputed that in the absence of a showing and finding referred to in the foregoing section the Public Utilities Commission is without power to authorize an increase in rates. It is argued that Edison has already increased its rates by the whole amount to which it was found justified, and any further increase now or in 1956 lacks the necessary finding of justification.

Without question there is evidence in the record to show that the conjunctive billing feature was inaugurated some twenty years ago to meet the economic needs of the time; that today it is unfair and discriminatory as to consumers not entitled to such billing privileges, and that by its application Edison sought in effect to completely eliminate the feature from its schedules over a five-year period. Section 532 of the Public Utilities Code provides in part: '* * * no public utility shall * * * extend to any corporation or person any form of contract or agreement or any rule or regulation or any facility of privilege except such as are regularly and uniformly extended to all corporations and persons. * * *' (See also § 453, Public Utilities Code.) Thus it appears that the Commission might properly have determined on the record before it that the termination of the conjunctive billing feature would be justified. The question is whether such a determination was in fact made. The Commission and Edison contend that the Commission's findings contemplate and justify the termination and the resulting increase in revenue in 1956, although no finding is made as to the specific amount of increase in annual revenue which might accrue to Edison at that time.

There is support in the record for the Commission's and Edison's contention. It appears in the views expressed in the opinion and decision of the Commission that changes in conditions made it undesirable that the conjunctive billing feature...