Metropolitan Dist. Commission v. Department of Public Utilities

• Decision Date: 08 February 1967
• Citation: 352 Mass. 18,224 N.E.2d 502
• Parties: , 69 P.U.R.3d 294 METROPOLITAN DISTRICT COMMISSION v. DEPARTMENT OF PUBLIC UTILITIES et al. 1 (and three companion cases 2 ).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 502

224 N.E.2d 502

352 Mass. 18, 69 P.U.R.3d 294

METROPOLITAN DISTRICT COMMISSION

v.

DEPARTMENT OF PUBLIC UTILITIES et al. ¹ (and three companion cases ²).

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 6, 1966.

Decided Feb. 8, 1967.

Nathan S. Paven, Special Asst. Atty. Gen., for the Metropolitan District Commission.

Donald R. Grant, Boston, for Boston Edison Company.

Philip H. R. Cahill, Boston, for Massachusetts Electric Company.

Gerald May, Boston, for Cambridge Electric Light Company.

Peter Roth, Sp. Asst. Atty. Gen., for the Department of Public Utilities.

Before WILKINS, C.J., and SPALDING, KIRK, SPIEGEL and REARDON, JJ.

SPIEGEL, Justice.

These are four petitions brought under G.L. c. 25, § 5, to review certain orders and decisions of the Department of Public Utilities (department). The single justice reserved and reported these cases without decision. The cases involve rates charged by the electric companies to the Metropolitan District Commission (commission) for street lighting where the commission has furnished part of the equipment and the installation thereof which the electric companies normally furnish.

THE BOSTON EDISON COMPANY CASE

On November 29, 1962, the commission informed the department by letter of suits it had instituted for declaratory decrees and accountings against the Boston Edison Company (Edison) and the companies named in the companion cases, 'to recover alleged overcharges for certain street lighting service.' Those suits were eventually dismissed because the department was a necessary party under the declaratory judgments act (G.L. c. 231A, § 8) and had not been joined. Commonwealth v. Massachusetts Elec. Co., 347 Mass. 780, 199 N.E.2d 530. Commonwealth v. Cambridge Elec. Light Co., 347 Mass. 781, 199 N.E.2d 531. Commonwealth v. Boston Edison Co., 347 Mass. 781, 199 N.E.2d 532. The letter further stated, 'Inasmuch as the provisions of law do not provide for an appeal or petition by the Commission, or any state agency, to the Department for review of any rates, I am calling this matter to your attention informally and requesting that the Department take jurisdiction for the establishment of prospective rates for such service under Sections 76 and 93 of Ch. 164, of the General Laws.'

After informing Edison of this letter for its 'information and comment' the department voted on January 16, 1963, '(t)o enter into an investigation by the Department upon its own motion and upon complaint into the propriety of the rates and charges by * * * (Edison) to the * * * (commission) for the company's supply of electricity for the lighting of streets, boulevards and reservations, under the care and control of the * * * (commission),' and a public hearing was scheduled. Hearings were held on several occasions, and on September 30, 1964, the department announced its decision, ordering Edison to file a new schedule of rates to provide a 'reduction of $27.20 per year per lighting unit from its Class V rates where the customer has furnished, installed and maintained the lamppost and bracket.'

The petition alleges error in the denial of certain of the commission's requests for rulings, and in the granting of certain requests for rulings by Edison, and further alleges that certain findings of the department are 'based upon an error of law, unsupported by substantial evidence, and unwarranted by the facts contained in the record.' These alleged errors relate to two aspects of the department's decision: first, its ruling that 'on this record there is not sufficient evidence that an allowance should be made on account of the ownership of the * * * (commission) of the underground plant'; second, its ruling that it 'can make no order concerning reparations.'

The department found the following relevant facts. 'The * * * (commission) has been, for many years, served under the Rate E of the Company (Edison) * * *. Under this rate * * * (Edison) supplies street lighting service on public streets to the various municipalities in which it operates * * * and to the Commonwealth through the * * * (department). Rate E contains a table of charges which vary according to the type and size of lamp, and the date of installation. The general conditions of the rate provide in part, as follows:

"Where the Company's standard street lighting units and apparatus * * * are used * * * and where the Company has existing facilities for supplying electricity on such streets, the Company will furnish, own and maintain all the necessary lighting units, poles, wires and such other apparatus and materials as are required. Where the customer has furnished or contributed toward the cost of a standard lamppost or non-line pole for a lighting unit installed prior to March 1, 1950 and continues to maintain it, rate classifications I or IV will apply; but at the request of the customer the Company will take over the ownership and maintenance of such lampposts or non-line poles and the appropriate rate classification for lamps installed on and after March 1, 1950 will apply thereto.

"Where a non-standard lamppost, bracket or luminaire selected by the customer and accepted by the Company is installed at the request of the customer on and after March 1, 1950, the customer shall pay to the Company the excess installed cost of such lamppost * * * (and so forth) over and above the installed cost of standard equipment * * *.

"Where underground service connections to either new or relocated lighting units are required, the customer shall do all the necessary paving for all lateral connections between the lamppost and the Company's mains in the streets, or shall pay to the Company its cost of such work."

The commission installed and continues to own 'substantial portions of the equipment associated with' 721 street lights. 'These lights are supplied by underground cable and were installed at various times in places which did not then have facilities for supplying underground service. In addition, in many instances non-standard equipment was required by the * * * (commission). The practice followed by the Company and the Commission was for the Commission to provide and install posts, the brackets, the underground duct (if required), direct burial cable (where used), and handholds and manholes. The Company supplied the luminaire, the fixture, ballast, photoelectric cell, the underground cable (other than direct burial), and connections thereto.'

The department ruled that the allowance to the commission due to its ownership of the lampposts and brackets should be computed by the following method. 'The average cost of a standard lamppost and bracket between 1949 and 1962 was approximately $200. Under Rate E the * * * (commission) could have * * * required Edison * * * to install the nonstandard poles and avoided the first $200 of investment per pole.' The cost of money to Edison 'based on the return allowed by the (d)epartment in its last rate case * * * plus the savings in personal property taxes which would be assessed against the Company if it owned the poles' was added to the depreciation and maintenance on the poles to arrive at a total annual allowance of $27.20 a pole.

The department's decision states that, 'The * * * (commission) argues that an additional allowance from Rate E should be made with respect to these 721 lights, due to the fact that a substantial portion of the underground plant used to provide power for the lights, was also installed by the * * * (commission).' Depending on what spacing between poles and what cost a linear foot of conduits were assumed an additional annual allowance between $39.91 and $29.39 a pole could be calculated.

The department rejected this argument and refused to award this additional allowance, saying, 'Doubtless, Edison had a duty to serve the * * * (commission), but there is no evidence that it would have been required to serve via an underground installation. If Edison would have been obligated to serve only via overhead, then the * * * (commission) ownership of the underground facilities represents a saving to the Edison only to the extent that the costs incurred by Edison in connection with these underground installations was less than would have been incurred to connect the poles overhead. The * * * (commission's) own evidence indicates that substantial amounts of the cable laid underground and nearly all transformers were at the Company's expense. The record is silent, however, as to whetehr this expense was less (than) what would have been incurred for an entirely overhead plant.'

The department then ruled that, 'On this record there is not sufficient evidence that an allowance should be made on account of the ownership of the * * * (commission) of the underground plant. The amount of the allowance, so calculated, appears on its face to be out of proportion to the basic rate, in fact the * * * (commission's) own witness stated 'that he would be surprised if a rate were based on this calculation.''

The department declined to determine what overcharges had been made by Edison in the past or to order reparations, referring to its decision in the Cambridge Electric Light Company case (one of the companion cases here) in which it said, 'Nothing in Chapter 164 suggests that the Department has the power to order gas or electric companies to make reparations. This is in contrast to the power of the Department in Chapter 159, section 14, to order a railroad corporation which has collected an 'unjust, unreasonable or unjustly discriminatory rate * * * to make due reparation to the person who has paid the same * * *.' We think it clear that the explicit reference to this power in this chapter of the General Laws and its absence in another is an intentional limitation of the Department's power, and we have so held previously.'

A. The commission contends that the department should have made findings of fact on the amount of adjustment in the rates due...