Coffelt v. Arkansas Power & Light Co., 5--5192
| Citation | 248 Ark. 313,451 S.W.2d 881 |
| Decision Date | 23 March 1970 |
| Docket Number | No. 5--5192,5--5192 |
| Court | Supreme Court of Arkansas |
| Parties | Kenneth COFFELT, Appellant, v. ARKANSAS POWER & LIGHT COMPANY, Appellee. |
Kenneth Coffelt, Little Rock, for appellant.
House, Holmes & Jewell, Little Rock, for appellee.
This suit for a declaratory judgment was brought as a class action by the appellant, who seeks relief on behalf of all consumers who purchase electricity from the appellee, a public utility. The question presented is whether our constitutional prohibition against usury is violated by the utility company's authorized practice of imposing a 'late charge' against customers who do not pay their monthly bills within ten business days (fourteen calendar days) after the due date. This appeal is from a summary judgment upholding the validity of the late charge and dismissing the complaint for want of equity.
The complaint asserts that the imposition of the late charge amounts to the exaction of usurious interest upon the net amount of the bill. By answer the utility company denied the assertion of usury. We take the controlling facts from the affidavit and exhibits accompanying the defendant's motion for summary judgment.
In 1968 the utility company filed a petition asking the Public Service Commission to approve a tariff entitled 'Gross-Net Billing Rider,' which was apparently the first attempt by this particular company to add a late charge to its bills. Interventions were filed protesting approval of the proposed charge.
At a hearing upon the petition the company offered proof from which the Commission found that the company's extra expense in the collection of overdue accounts had amounted, apparently in 1968, to $610,629. The Commission, to enable the company to recoup such expenses from the consumers who were responsible therefor, authorized the imposition of a late charge amounting to 8% of the first $15.00 of the net bill and 2% of any amount in excess of $15.00. The Commission's announced purpose was to avoid discrimination as between the company's consumers. The Commission's reasoning was stated in its order, as follows:
The genesis of such a penalty (late charge) is the strong policy of rate regulation against discrimination. Rates and other charges must be designed as nearly as possible to assess costs on the class of customers which creates them. In this case the application of this policy to the question before the Commission means that costs created by late paying customers should be borne by those very customers rather than distributed in the rates charged all consumers. The other side of the proposition is that if the penalty is excessive as compared to the costs created, then the late payers are bearing costs of company operation not properly attributable to them. In the latter instance this class becomes the class discriminated against.
The Company has conclusively demonstrated that it is put to considerable expense in collecting past due accounts. * * * It cannot be gainsaid that those consumers who are responsible for these expenses to the Company should pay them. It is noteworthy that those customers who in the past have not paid their bills within two weeks of billing date include persons in all income brackets and are in no way confined to those who are in the lower income groups.
In approving the proposed late charge the Commission pointed out that the company's accounting methods had not been designed to completely isolate its collection costs, because no late charge had been imposed in the past. The Commission directed that the company maintain appropriate records in the future to reflect such costs and to file a...
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Purser v. Corpus Christi State Nat. Bank
...statements in the affidavit should be taken to be undisputed and true for the purposes of the motion. Coffelt v. Arkansas Power & Light Co., 248 Ark. 313, 451 S.W.2d 881; Jones v. Comer, 237 Ark. 500, 374 S.W.2d 465; Sleeper v. Sweetser, 247 Ark. 477, 446 S.W.2d 228; Ashley v. Eisele, 247 A......
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...law is the rule that one class of consumers shall not be burdened with costs created by another class. (Coffelt v. Ark. Power & Light Co., 248 Ark. 313, 451 S.W.2d 881 (1970); Utilities Comm. v. Consumers Council, 18 N.C.App. 717, 198 S.E.2d 98 (1973).) The Commission recognized this rule a......
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