Ohio Mining Co. v. Public Utilities Commission
| Decision Date | 12 December 1922 |
| Docket Number | 17558 |
| Citation | 140 N.E. 143,106 Ohio St. 138 |
| Parties | The Ohio Mining Co. v. The Public Utilities Commission. |
| Court | Ohio Supreme Court |
Public utilities commission-Jurisdiction-Corporations not pub-lic utilities-Reasonableness of contract with public utility -As basis for service rates to consumers-Sale of entire product to public utility-Ownership of different corporations in same stockholders-"Public utilities" construed- Section 614-2, General Code
1. Where a corporation is not a public utility within the definition of the General Code, the public utilities commission is without power to make an order affecting such corporation. But where a contract of such corporation involves the rates and charges which a public utility must receive to earn a fair return on its investment, the public utilities commission may investigate and determine whether such contract is just and reasonable to the public utility by the standard of the cost of production by such public utility, or by the standard of the price at which such public utility may be able to purchase such product from other persons or corporations, or both, and may base upon such finding, plus a reasonable return upon the investment of the public utility and a reasonable sum for depreciation, the price and charge at which such public utility shall sell its service.
2. The mere fact that a corporation sells its entire product upon contract to public utilities, who in turn sell that product to consumers, does not make such corporation a public utility, within the definition of Section 614-2, General Code.
3. But where, by the process of incorporation, the ownership of a property is nominally divided between two or more corporations, but is in fact the same, and the business of such corporations is but a single enterprise, a dedication of the property of a nominal owner thereof to the public service is attributable to the real owner thereof and Is a dedication of the entire property Involved in the common enterprise.
The plaintiffs in error filed a complaint before the public utilities commission against The Hocking Power Company, The Athens Electric Company and The Southern Ohio Power Company, in which plaintiffs in error alleged that they are engaged in the business of mining shipping and marketing coal, and are the owners and operators of coal mines situated in Ohio and in the territory served by the defendant power companies; that the defendant power companies are public utilities engaged in the business of generating and supplying electrical energy for light, heat and power purposes to the public and private consumers in the cities of Nelsonville and Athens and in the territory contiguous thereto; that the defendant power companies own and operate a large electrical power-producing plant at Floodwood Ohio, and own and maintain transmission and distributing lines to numerous coal mines and other industries; that plaintiffs in error are purchasers of electric energy from the defendant power companies, paying therefor in accordance with the rates published and on file with the public utilities commission; and that the rates so published, charged and collected are unjust unreasonable, unjustly discriminatory and unjustly preferential, and in violation of law. They pray that the commission fix and establish just and reasonable rates.
The Athens Electric Company and The Hocking Power Company filed answers denying that the rates are unreasonable and unlawful. The Southern Ohio Power Company filed a motion in which it asked that it be dismissed from the action on the ground that it is not a utility within the meaning of the public utilities act of Ohio.
Evidence was heard upon the motion, which evidence, together with admissions by counsel for The Southern Ohio Power Company, disclosed that The Southern Ohio Power Company owns and operates a large electric generating station at Floodwood, Ohio, together with transmission lines leading from that station to the cities of Athens and Nelsonville, Ohio; that The Rocking Power Company owns an electric distributing system in Nelsonville with transmission lines extending out to coal mines and other industries in the vicinity of Nelsonville, and The Athens Electric Company owns an electric distributing system in Athens with transmission lines leading to coal mines in the surrounding territory that all the power is generated at the Floodwood plant owned and operated by The Southern Ohio Power Company, The Rocking Power Company and The Athens Electric Company taking its entire output of electric energy; and that The Southern Ohio Power Company owns the stock of The Rocking Power Company and The Athens Electric Company.
The Athens Electric Company and The Rocking Power Company have qualified as public utilities and have filed rate schedules covering the service in question. The Southern Ohio Power Company, as such, has never qualified as a public utility and disposes of its entire output of electric energy by private contract to The Athens Electric Company and The Hocking Power Company.
Upon hearing the motion to dismiss The Southern Ohio Power Company from the action, the public utilities commission sustained the motion; application for rehearing was filed and denied; and petition in error is filed here to reverse and vacate the order of the commission.
Mr. H. C. Allread, for plaintiffs in error.
Mr. John G. Price, attorney general, and Mr. E. F. Corn, for the Public Utilities Commission.
Mr. Beecher W. Waltermire, for The Southern Ohio Power Company.
The contention of the plaintiffs in error is that by reason of the fact that the capital stock of the distributing companies is owned by the producing company, the producing company is able to and does fix the price which the distributing companies, concededly public utilities, must charge other consumers, and that unless the producing company be adjudged a public utility, and its rates and charges be subjected to regulation by the public utilities commission, the public utilities commission will be powerless to afford relief to the consumer, since the public utilities commission is bound to allow the distributing companies a fair return upon their investment and is limited in its inquiry in determining the rate and charge which the distributing companies shall charge the consumers to the contract price between the distributing companies and the producing company, plus such additional sums as will enable them to earn a fair return upon their investment.
We do not subscribe to this theory. The public utilities act provides, Section 614-12, General Code:
"Every public utility shall furnish necessary and adequate service and facilities which shall be reason- able and just, and every unjust or unreasonable charge for such service is prohibited and declared to be unlawful."
Under this broad authority the public utilities commission is authorized to make an order affecting a pubLic utility, to remedy every unjust or unreasonable charge, and may investigate and determine whether the contracts of the distributing companies are just and reasonable, and, il it finds they are not just and reasonable, it may find the terms which would be just and reasonable, and, upon such finding, base the price and charge at which such distributing companies must sell their service.
In the instant case, if the facts should warrant the conclusion that the distributing companies could manufacture the electric energy at a cost...
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Ohio Mining Co. v. Pub. Utilities Comm'n
...106 Ohio St. 138140 N.E. 143OHIO MINING CO. et al.v.PUBLIC UTILITIES COMMISSION.No. 17558.Supreme Court of Ohio.Dec. 12, Error to Public Utilities Commission. Complaint by the Ohio Mining Company and others against the Hocking Power Company and others, filed before the Public Utilities Comm......