Lasseter v. Georgia Public Service Com'n

• Decision Date: 05 September 1984
• Docket Number: Nos. 40884,40885,s. 40884
• Citation: 253 Ga. 227,319 S.E.2d 824
• Parties: LASSETER v. GEORGIA PUBLIC SERVICE COMMISSION. AMERICAN CYANIMID v. GEORGIA PUBLIC SERVICE COMMISSION.
• Court: Georgia Supreme Court

Page 824

319 S.E.2d 824

253 Ga. 227

LASSETER v. GEORGIA PUBLIC SERVICE COMMISSION.

AMERICAN CYANIMID v. GEORGIA PUBLIC SERVICE COMMISSION.

Nos. 40884, 40885.

Supreme Court of Georgia.

Sept. 5, 1984.

Robert E. Hicks, Charles E. Campbell, J. Michael Levengood, Hicks, Maloof & Campbell, Atlanta, for American Cyanamid Co. et al. and Ernest F. Lasseter et al.

Joel R. Dichter, Atlanta, George W. Williams, Leamon R. Holliday, III, Bouham, Williams & Levy, Savannah, Michael J. Bowers, Atty. Gen., Jim O. Llewellyn, Sr.Asst. Atty. Gen., for Georgia Public Service Com'n et al.

CLARKE, Justice.

Appellants, industrial customers and one individual customer of Savannah Electric and Power Company (SEPCO), challenge decisions of the Georgia Public Service Commission (the "Commission") in four related cases:

(1) The coal conversion case (Docket No. 3361-U), which involves a statute (OCGA § 46-2-26.3) directing the Commission under certain circumstances to permit an electric utility to recover on an accelerated basis the cost incurred in converting 25% of its electric generating capacity from oil to coal;

(2) The coal conversion financing case (Docket No. 3352-U), which involves the Commission's approval of SEPCO's application for authority to issue unsecured sinking fund notes and first mortgage bonds to provide permanent financing for a portion of the cost of converting its Effingham Plant I generating facility;

(3) The rate case (Docket No. 3360-U), which involves the Commission's approval of SEPCO's application to increase base rates and charges for electricity sold;

(4) The fuel adjustment case (Docket No. 3381-U), which involves SEPCO's filing an application pursuant to OCGA § 46-2-26 proposing an adjustment in its fuel cost recovery schedule.

Appellants insist that the Commission's findings in all four cases are erroneous. Appellants contend that OCGA § 46-2-26.3, the Coal Conversion Statute, is unconstitutional because it violates equal protection and because it is unconstitutional special legislation. They argue that the rates approved in the coal conversion financing case, the rate case, and the fuel adjustment case are unjust and unreasonable and that in the rate case the Commission failed to make the findings of fact and conclusions of law as required by the Georgia Administrative Procedure Act. Appellants insist the Commission acted arbitrarily and capriciously in the coal conversion case and the coal conversion financing case. Finally, the appellants suggest that the court should overrule Hall v. Ault, 240 Ga. 585, 242 S.E.2d 101 (1978).

1. SEPCO converted an electric generating plant from petroleum fuel to coal fuel. The usual life of such a converted facility is thirty-two years, but the Coal Conversion Statute allows the Commission to use an accelerated cost recovery of not more than seven years in calculating electrical rates. Appellants complain that the statute violates equal protection because such a calculation benefits future customers to the detriment of present customers. Appellees respond, and we agree, that present customers and future customers do not form discrete classes for purposes of equal protection analysis because customers are a constantly fluctuating group.

If present and future customers did form discrete classes, equal protection analysis would begin with the question of whether there is a rational basis for disparate treatment. Allied Chemical Corp. v. Georgia Power Co., 236 Ga. 548, 224 S.E.2d 396 (1976). In Allied Chemical, the court found, "We cannot say that the Commission acted irrationally in electing to give residential users [of electricity] a price 'break' of some dimension in the new 'energy crisis' era, and for this to be done some other class must take up the slack." Id. at p. 555, 244 S.E.2d 396. The court concluded that "the evidence before the court was adequate to show that the higher price assessed against the industrial class rested upon a rational basis which was reasonably related to the legitimate ends of utility rate making." Id.

Here the evidence before the Commission was that there would be fuel savings of more than $800 million over the life of the plant. There was testimony from the company's chief executive officer that although the company would have converted the plant even in the absence of the benefit provided by the accelerated depreciation, the cost to the customers would have been higher. The Commission's expert testified that the conversion treatment benefited both SEPCO and its customers.

Thus a rational basis exists for the accelerated depreciation and for the consequent financial burden which it places upon the present customers. Appellants' attack on the Coal Conversion Statute's unconstitutionality on grounds of equal protection must fail.

2. The next attack on the Coal Conversion Statute is an argument that the statute is special legislation. Art. I, Sec. II, Par. VII of the 1976 Georgia Constitution provides that laws of a general nature shall have uniform operation throughout the state and, further, that no special law may be enacted in any case for which provision has been made by general law.

To violate the constitutional provision, the statute in question must either be a general law which lacks uniform operation throughout the state or a special law for which provision has been made by existing general law. Whether the accelerated write-off statute fits either of these descriptions depends first upon the distinction between general and special laws.

A general law has been held to be one which operates uniformly throughout the state upon the subject or class of subjects with which it proposes to deal. Lorentz & Rittler v. Alexander, 87 Ga. 444, 13 S.E. 632 (1891); Union Savings Bank & Trust Co. v. Dottenheim, 107 Ga. 606, 34 S.E. 217 (1899). When a statute purports to do this, but in application lacks uniform operation, it runs afoul of the constitution. A special statute is one which affects a limited area or class.

The statute before us deals with a limited activity in a specific industry during a limited time frame. The parties admit it affects only one plant. To designate this as a general law would amount to the acceptance of a fiction which would strain the credibility of the court. It is a special law and must stand or fall as viewed in that posture. In so viewing the statute, we first note that the constitution does not prohibit special laws per se. The legislature may enact special laws affecting special classes, but it cannot do so if it has previously legislated in that area by general law nor may it do so if the classification of those affected is unreasonable. The preemption is expressly covered by Art. I, Sec. II, Par. VII of the 1976 Georgia Constitution. The requirement of reasonable classification comes from the equal protection guarantee. Art. I, Sec. I, Par. II, 1983 Georgia Constitution (Art. I, Sec. II, Par. III, 1976 Georgia Constitution).

Appellants argue that the legislature has by general law, OCGA § 46-2-23, vested the Public Service Commission with the exclusive power to set rates for public utilities and that any special legislation in this area is therefore preempted. We do not agree. OCGA § 46-2-23 has never been construed. We now construe this section to mean that the Public Service Commission rather than any other agency of the executive branch, has authority to regulate public utilities. This grant of authority of the Public Service Commission, to the exclusion of other executive branch agencies, does not mean that the General Assembly has divested itself of its constitutional power to regulate public utilities. Since there has been no such abrogation of legislative authority, no preemption has occurred.

We turn now to the equal protection issue and find no violation of the constitution. "[I]t is not only within the power of the General Assembly to classify subjects for legislation, but ... in many instances it is not only wise but necessary for the public good that there should be a...