Cedar Island Imp. Ass'n v. Clinton Elec. Light & Power Co.

• Decision Date: 03 May 1955
• Citation: 142 Conn. 359,114 A.2d 535
• Court: Connecticut Supreme Court
• Parties: , 9 P.U.R.3d 184 CEDAR ISLAND IMPROVEMENT ASSOCIATION et al. v. CLINTON ELECTRIC LIGHT AND POWER COMPANY et al. Supreme Court of Errors of Connecticut

Page 535

114 A.2d 535

142 Conn. 359, 9 P.U.R.3d 184

CEDAR ISLAND IMPROVEMENT ASSOCIATION et al. v. CLINTON ELECTRIC LIGHT AND POWER COMPANY et al.

Supreme Court of Errors of Connecticut.

May 3, 1955.

Irving H. Rosenthal, Hartford, with whom, on the brief, was Solomon Z. Bromberg, Hartford, for plaintiffs.

Olcott D. Smith, Hartford, with whom were W. Robert Hartigan, Hartford, and, on the brief, C. Duane Blinn, Hartford, for named defendant and others.

William R. Connole, Hartford, with whom, on the brief, was John J. Bracken, Atty. Gen., for defendant Public Utilities Commission.

Before BALDWIN, O'SULLIVAN, WYNNE, and DALY, JJ., and CONWAY, Superior Court Judge.

BALDWIN, Associate Justice.

The plaintiffs petitioned the public utilities commission to order the defendants, The Clinton Electric Light and Power Company and The Connecticut Light and Power Company, to serve Cedar Island with electric current as required, it is claimed, by § 5673 of the General Statutes. The petition was denied, ¹ and the plaintiffs appealed to the Superior Court, where the commission, upon its own motion, was made a party defendant. The court reserved the matter for the advice of this court.

The stipulated facts can be stated briefly as follows: Cedar Island is located in Clinton Harbor east of Hammonasset State Park. Its easterly end is occupied by the plaintiffs as a summer recreational area. The defendant The Clinton Electric Light and Power Company, hereinafter referred to as the Clinton Company, maintains a line, distributing current to Hammonasset State Park, 7500 feet westerly from the recreational area on Cedar Island. The Clinton Company also maintains a line to a point on Grove Street in Clinton about 900 feet north of Cedar Island across the open waters of Clinton Harbor. There are forty-four potential users of current in the recreational area, of whom twenty-five would presently be willing to accept electric service. The area has a density of subscribers for electric service averaging more than two per mile on any line which might be constructed to serve it. The cost of extending a line to the area would be $27,280, not including the cost of a distribution system on the island itself. Maintenance would be difficult and expensive. The cost and the prospective income from the maximum guaranteed return of $13.50 per mile per month, fixed by § 5673 of the General Statutes, would result in a loss to the defendants in the foreseeable future.

The three questions upon which the parties seek the advice of this court ² raise two basis issues: (1) What is the nature and extent of the discretionary power of the commission under § 5673 of the General Statutes? (2) Has the commission acted in abuse of that discretion?

Section 5673 of the General Statutes provides that the public utilities commission shall 'order and direct' the electric utility companies distributing current in this state to extend their lines in their chartered territory to all 'unserved areas' having a density of subscribers for electric service averaging at least two per mile on the proposed new lines. ³ In fixing the rates to be charged for service on such new lines, the commission is directed to exercise its statutory powers and to consider the expense and revenues of each company as a whole in arriving at a fair return on the fair value of its properties, except that any guarantee, when required, shall not exceed $13.50 per mile per month. The commission is further directed 'to advance the objects of [§ 5673] in every lawful manner.' The plaintiffs insist upon a literal interpretation of this statute. They claim that it is a mandate to the commission to order the companies to extend their lines for a prospective guaranteed rate not in excess of $13.50 per mile per month, regardless of the cost of the extension or the difficulties of maintaining the service. In short, they maintain that, the qualification of at least two subscribers to a mile of extension having been found to exist, the commission has no discretion but to order the service at a guaranteed return not to exceed the maximum fixed by the statute. The defendants, on the other hand, claim that the statute is a mandate to the commission to order the companies to extend their service only when it would be reasonable to do so in the light of the cost, the return and the additional burden which might be placed upon other customers of the company if the lines were extended. Briefly stated, they contend that the commission has discretion to order only those extensions under § 5673 which, in the exercise of the sound discretion of the commission it finds to be reasonable.

The resolution of these issues requires us to ascertain the legislative intent expressed in § 5673. For this purpose we must look to the wording of the statute and to its history and basic policy as disclosed by pre existing legislation and the circumstances that brought about the enactment of the law under consideration. Jennings v. Connecticut Light & Power Co., 140 Conn. 650, 657, 103 A.2d 535, and cases cited. The obligation of an electric utility company to extend its lines to unserved areas is dealt with in two different sections of our statutes. Section 5410 provides that if a company 'shall unreasonably fail or refuse to furnish adequate service at reasonable rates to any person' within its chartered territory, that person may petition the commission, which, if it finds, after a hearing, that adequate service has been refused, may prescribe the terms and conditions under which electric service is to be furnished. ⁴ We have construed this statute as requiring only such extensions as the commission may find reasonable under all the circumstances. Levitt v. Public Utilities Commission, 114 Conn. 628, 633, 159 A. 878. This is the generally accepted rule. Root v. New Britain Gas Light Co., 91 Conn. 134, 143, 99 A. 559; 43 Am.Jur. 602, § 48; note, 58 A.L.R. 537. Factors which enter into the determination of the reasonableness of a demand for an extension of service are the need and cost of the extension, the return to be expected from it, the effect upon the company's revenue, and the advantage to the public to be derived from it. People of State of New York ex rel. Woodhaven Gaslight Co. v. Public Service Commission, 269 U.S. 244, 248, 46 S.Ct. 83, 70 L.Ed. 255; Milwaukee Electric Ry. & Light Co. v. State of Wisconsin ex rel. City of Milwaukee, 252 U.S. 100, 105, 40 S.Ct. 306, 64 L.Ed. 476; Mississippi Railroad Commission v. Mobile & O. R. Co., 244 U.S. 388, 391, 37 S.Ct. 602, 61 L.Ed. 1216.

Section 5673, originally entitled 'An Act concerning Areas Not Served with Electric Current,' was adopted at the regular session of the General Assembly in 1941. Public Acts 1941, c. 257; Sup.1941, § 619f. Since that time it has not been amended or considered in any case in our courts. On the same day it was approved, June 18, 1941, the governor also approved an act entitled 'An Act concerning Electric Co-operative, Non-Profit, Membership Corporations,' enacted at the same session of the General Assembly. Public Acts 1941, c. 287; Sup.1941, §§ 583f-611f. At that time and in the years immediately preceding 1941, extension of electric service appears to have been much in the public mind. In 1936 the Congress, after hearings before its house committee on interstate and foreign commerce, ⁵ had passed 'An Act To provide for rural electrification, and for other purposes' popularly known as the Rural Electrification Act of 1936. 49 Stat. 1363. This act was substantially amended in 1938. ⁶ 52 Stat. 818, 7 U.S.C.A. § 903. It is fair to assume that this federal legislation furnished some of the inspiration for the legislation in our own state and that both of the acts of 1941 were enacted with the purpose of extending electric service more rapidly than had been done theretofore at the instance of the companies or the commission or of some individual acting under § 5410.

On July 1, 1941, the commission held a hearing to which the electric utility companies of the state, including the two defendants, were summoned. ⁷ As a result of this hearing, an order was issued to each of twelve companies 'to promptly extend and build as expeditiously as possible electric lines to all unserved areas within [the company's] chartered territory where there exist subscribers for electric service averaging at least two subscribers per mile of each mile of new line extension and where subscribers agree with [the company] to guarantee it a revenue of $13.50 per mile of extension per month.' The Clinton Company was directed to charge its prevailing rural extension rate as on file with the commission. In the case of the Connecticut Light and Power Company, a schedule of rates was prescribed by the commission in its order. ⁸ In its annual report to the governor for 1941, the commission stated that in the year ending May 1, 1941, 262 miles of rural extension were built and that 1257 miles were required to reach all the unserved areas. ⁹ A survey made on the basis of the service required to accommodate as few as two customers to a mile, as provided in § 5673, revealed that 1093 miles would be necessary to serve 4587 prospective customers. The commission's report for the following year stated that electric service had been extended to 98 per cent of the area of the state and that all roads with a density of population of four persons to a mile had been covered when § 5673 was adopted in 1941. ¹⁰ The report contains this illuminating language bearing upon the legislative intent expressed in § 5673. 'The Commission was given a mandate to carry out the objectives of [§ 5673] * * *.' It related further that a hearing had been held with representatives of the electric companies, that rates had been agreed upon and that '[t]he Commission felt a responsibility to integrate such new rates into existing rates in such manner as to involve no penalty to the new...