City of Columbus v. Public Utilities Commission

• Decision Date: 09 May 1979
• Docket Number: No. 78-679,78-679
• Citation: 58 Ohio St.2d 103,388 N.E.2d 1237
• Parties: , 12 O.O.3d 112 CITY OF COLUMBUS, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.
• Court: Ohio Supreme Court

Page 103

58 Ohio St.2d 103

388 N.E.2d 1237, 12 O.O.3d 112

CITY OF COLUMBUS, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.

No. 78-679.

Supreme Court of Ohio.

May 9, 1979.

The cause is now before this court pursuant to an appeal as of right.

Gregory S. Lashutka, City Atty., Patrick M. McGrath and John W. Bentine, Columbus, for appellant.

William J. Brown, Atty. Gen., Marvin I. Resnik and John W. Rudduck, Columbus, for appellees.

Porter, Wright, Morris & Arthur, Samuel H. Porter, Curtis A. Loveland and William J. Kelly, Jr., Columbus, for intervening appellee Columbus & Southern Ohio Elec. Co.

PER CURIAM.

The issue raised by the instant cause is whether the rate increase levied against the utility's Columbus customers is reasonable and lawful. More specifically, the question is whether there is sufficient probative evidence in the record to support the commission's choice of an allocation formula and its valuation of the utility's "used and useful" property.

This court's standard of review for a determination by the Public Utilities Commission is set forth in R.C. 4903.13.

R.C. 4903.13 provides:

"A final order made by the Public Utilities Commission shall be reversed, vacated, or modified by the supreme court on appeal, if, upon consideration of the record, such court is of the opinion that such order was unlawful or unreasonable."

Under the "unlawful or unreasonable" standard specified in R.C. 4903.13, this court will not reverse or modify an opinion and order of the Public Utilities Commission where the record contains sufficient probative evidence to show that the commission's determination is not manifestly against the weight of the evidence and is not so clearly unsupported by the record as to show misapprehension, mistake or willful disregard of duty. Delphos v. Pub. Util. Comm. (1940), 137 Ohio St. 422, 424, 30 N.E.2d 688; Cleveland Elec. Illuminating Co. v. Pub. Util. Comm. (1975), 42 Ohio St.2d 403, 330 N.E.2d 1, paragraph eight of the syllabus; and General Motors Corp. v. Pub. Util. Comm. (1976), 47 Ohio St.2d 58, 351 N.E.2d 183, paragraph two of the syllabus.

The two commission practices challenged by the city in the instant cause are its adoption of an allocation formula based on a non-verifiable assumption and its equation of "used and useful" property with property listed on the utility's books as "in service" property. There is sufficient probative evidence in the record to show that neither practice was manifestly against the weight of the evidence and to support, as reasonable and lawful, the commission's final order.

The commission adopted an allocation formula based, in part, on the non-verifiable assumption that the relationship between the average and peak demands of city and non-city residents is the same. ² The expert who employed that formula in the utility's application testified, in effect, that the formula's reliance on the assumption did not make the formula unfair to Columbus residents. A staff expert concurred in that conclusion, and the staff report, which was admitted in evidence, concluded that the allocation factors were "generally reasonable and appropriate." Given the above evidence in support of the commission's choice of an allocation formula, we find that choice to be reasonable and lawful.

There is also sufficient probative evidence to support as reasonable and lawful the commission's reliance on utility records of property "in service" to determine the value of utility property "used and useful." At the hearing, the utility's controller testified that the utility believed that the property listed on its books as "in service" was "used and useful." In addition, the staff report concluded that there were "no significant discrepancies" between the company's property records and "the actual physical property." ³ The commission's reliance on utility records in the instant cause was reasonable and lawful.

The practices underpinning the commission's final order being reasonable and lawful, the order is affirmed.

Order affirmed.

HERBERT, WILLIAM B. BROWN, SWEENEY and HOLMES, JJ., concur.

CELEBREZZE, C. J., and PAUL W. BROWN and LOCHER, JJ., dissent.

LOCHER, Justice, dissenting.

I dissent from the majority opinion in the instant cause because the utility company has failed to meet the requisite burden of proof pursuant to R.C. 4909.39 and 4909.15. It is axiomatic that a utility has the burden of proof that the property which is sought to be included in its statutory rate base is used and useful. Mt. Vernon Telephone Corp. v. Pub. Util. Comm. (1955), 163 Ohio St. 381, 127 N.E.2d 14.

In the cause Sub judice, the majority opinion admits that the crux of the commission's adoption of the...