City Of Lima v. Public Utilities Commission

• Decision Date: 29 December 1922
• Docket Number: 17617
• Citation: 140 N.E. 147,106 Ohio St. 379
• Parties: The City Of Lima v. The Public Utilities Commission.
• Court: Ohio Supreme Court

140 N.E. 147

106 Ohio St. 379

The City Of Lima v. The Public Utilities Commission.

No. 17617

Supreme Court of Ohio

December 29, 1922

Public utilities commission-Jurisdiction-Fixing rates-Municipal ordinance not accepted-Company appeals to utilities commission and institutes injunction-Municipal home-rule charter pro visions- Validity of contract with producing company-Reasonableness of order of utilities commission- Rates, estimated gas consumption, availability of supply leakage, valuation of utility and dividends returned-Readiness to serve charge.

Mr Paul T. Landis, city solicitor, for plaintiff in error.

Mr John G. Price, attorney general, and Mr. E. E. Corn, for the Public Utilities Commission.

Mr. J. H. Goeke and Messrs, Wheeler & Bentley, for the Lima Natural Gas Company.

BY THE COURT. This is an error proceeding prosecuted by the city of Lima against the public utilities commission, and grows out of the inability of the city of Lima and The Lima Natural Gas Company to agree upon rates to be charged by the company.

The city of Lima, in 1921, passed ordinance No. 10099, fixing the following rates to be charged by The Lima Natural Gas Company for the period of three years:

For the first 5,000 cubic feet, per month, 55 cents per thousand.

For the next 5,000 cubic feet, per month, 60 cents per thousand.

For the next 5000 cubic feet, per month, 65 cents per thousand.

For all over 15,000 cubic feet, per month, 75 cents per thousand.

The Lima Natural Gas Company did not adept the terms of this ordinance,,but appealed therefrom to the public utilities commission.

The public utilities commission after a full hearing fixed these rates:

For the first 5,000 cubic feet, per month, $1.00 per thousand.

For the next 5,000 cubic feet, per month, $1.05 per thousand.

For the next 5,000 cubic feet per month, per thousand.

For all over 15,000 cubic feet, per month, $1.15 per thousand.

Minimum charge, $1.25 per month.

Counsel for the city has specified under separate headings the various grounds upon which he relies for the reversal of the order of the public utilities commission, his first ground being that "The Public Utilities Commission had no jurisdiction to hear or determine the appeal of The Lima Natural Gas Company herein."

This contention is based upon the fact that The Lima Natural Gas Company, upon the same date that it filed its appeal to the public utilities commission, began an action in the court of common pleas of Allen county against the city of Lima to restrain the city from enforcing the provisions of the ordinance appealed from, and it is the contention of counsel for the city that in the filing of the petition to restrain the city from enforcing the rates provided in the ordinance and in its prayer for general relief, The Lima Natural Gas Company conferred upon the court "equal powers with the Utilities Commission to fix rates."

The courts have no power to fix rates other than as a condition to an interlocutory order, pending final judgment, and no power to enforce the rates so fixed other than to withhold or revoke the interlocutory order upon the failure of the party in whose behalf the order is issued to comply therewith; and upon final order the extent of their power is to restrain the enforcement of a rate so unreasonably low as to amount to confiscation.

Counsel for the city, by reason of the fact that the city of Lima is operating under a charter and the city commission under the charter has approved the rates fixed by the council, further contends that thereby under the home-rule provision of the constitution the utilities commission is without jurisdiction. While this court has never been in entire accord upon this proposition, the majority of the court have repeatedly held that the home-rule provision of the constitution is not effective to deprive the utilities commission of the jurisdiction conferred upon it by statute in cases where the rate enacted by the municipality has not been accepted by the utility company and the contractual relation therefore has not been established.

The second ground for reversal contended for by counsel for the city is that "The Public Utilities Commission erred in permitting and sanctioning the agreement secretly entered into between The Medina Gas & Fuel Company and The Lima Natural Gas Company, for forty-five cents per thousand cubic feet of gas, and in making said alleged contract price the basis of cost to consumers in this city."

There being no evidence in the record of such secret agreement the court will ignore it.

This court in the case of The Ohio Mining Company v. Public Utilities Commission, ante, 138, held: "The public utilities commission may investigate and determine whether such contract is just and reasonable to the public utility by the...