Penn-Dixie Steel Corp. v. Public Service Co. of Indiana, Inc.
| Decision Date | 30 September 1980 |
| Docket Number | PENN-DIXIE,Nos. 2-1075A309,2-1275A360,s. 2-1075A309 |
| Parties | STEEL CORPORATION, a Delaware Corporation, Appellant (Intervenor Below), City of Rushville, Indiana, a Municipal Corporation in Indiana, Appellant (Intervenor Below), v. PUBLIC SERVICE COMPANY OF INDIANA, INC., an Indiana Corporation, Appellee(Petitioner Below), Public Service Commission of Indiana, Appellee, Frank J. Biddinger, Public Counselor of the State of Indiana, Appellee, General Motors Corporation, Appellee (Intervenor Below), Anaconda Company, Appellee (Intervenor Below). |
| Court | Indiana Appellate Court |
Paul Hirsch and Robert W. Bridwell, Haymaker, Hirsch & Fink, Indianapolis, David A. Malson, Rushville, for appellants.
Charles W. Campbell, Greg K. Kimberlin, Plainfield, Robert D. Morgan and Michael B. Cracraft, Smith, Morgan & Ryan, Indianapolis, for appellees.
This appeal is a consolidation of two separate causes filed by Penn-Dixie Steel Corporation (Penn-Dixie) and the City of Rushville (Rushville) seeking review of a rate increase granted Public Service Company of Indiana, Inc. (PSI) by the Public Service Commission (PSC). During the briefing stage of its appeal, Penn-Dixie entered into a settlement agreement with PSI. Rushville is the sole appellant left in this case. It was granted intervenor status in the rate case and now appeals the PSC's final order. We affirm.
Rushville has raised the following issue:
Whether the PSC complied with the notice and hearing procedures required by law in reaching its final order.
On May 16, 1967, PSI purchased the municipal electric system owned by Rushville for two million dollars. At that time, PSI's rates were higher than the rates charged by the municipal system. PSI, by a provision in the sales contract, agreed to supply electricity to the former municipal customers at the municipal system's then charged rate (old rate). This old rate was available only to the customers of the municipal system as of the date of sale and only so long as the customer continued to receive the electric service at the same premises. The sales contract was approved by the Federal Power Commission and PSI's rates for Rushville were filed with and approved by the PSC.
PSI filed a petition for a rate increase with the PSC on December 6, 1974. On January 3, 1975, Rushville filed a petition to intervene which was granted by the PSC. Notice of the prehearing conference on PSI's petition was published in two Rushville newspapers on January 17. This conference was attended by Rushville's attorney. On May 15, 1975, PSI filed its proposed rate schedule which did not raise the rates of Rushville's old rate customers.
Notice of PSI's proposed rate increase was published in two Rushville newspapers. It is set out below.
PUBLIC HEARING
FOR APPROVAL OF REVISED PROPER AND ADEQUATE RATES OF DEPRECIATION OF THE SEVERAL CLASSES OF ITS UTILITY PROPERTY.
Notice is hereby given that the Public Service Commission of Indiana will conduct a public hearing in this cause in the Rooms of the Commission, 907 State Office Building, Indianapolis Indiana, at 9:00 a. m., EST, on Monday, June 23, 1975.
Public participation is requested.
PUBLIC SERVICE COMMISSION
OF INDIANA
By: LARRY J. WALLACE
Chairman
At the rate hearings, PSI's witness, Donald Gimble, testified on direct examination that PSI was not seeking a rate increase for old rate Rushville customers since it had agreed not to in its purchase contract. But in his opinion, since the old rate customers were receiving the same service as those now paying higher rates, this dual rate for the same service was unfair, unjust, and unreasonable to those who were paying the higher rate. On cross-examination by Penn-Dixie, another intervenor, Gimble testified, in his opinion, the customers whose rates were not frozen were subsidizing those whose rates were frozen in the amount of approximately $250,000.
Although it had been granted intervenor status, Rushville did not attend nor participate in these hearings. The hearings were concluded on August 6, 1975, and the PSC issued its order on October 6.
In its order, the PSC summarized the evidence presented by Gimbel concerning the frozen rates. In its Findings of Facts, the PSC made the following findings:
Rushville petitioned the PSC for a rehearing after the order was issued but the petition was denied. Rushville then filed this appeal.
On appeal Rushville does not challenge the authority of the PSC to disregard a contract between a public utility and its customers. Public Service Commission v. Girton, (1920) 189 Ind. 627, 128 N.E. 690 held it is not possible for a private citizen, by his contract with a public utility, to limit the power of the state to regulate rates charged by the utility.
Rushville does challenge the propriety of paragraph 8 of the Findings of Fact set out above. It argues the PSC made a finding of fact not based on evidence in the record on an issue not properly before it. In its brief, Rushville explains it did not attend nor participate in the rate increase hearings because PSI had not requested a rate increase for Rushville's old rate customers and therefore the issue of a rate increase for the old rate customers was not properly before the PSC. In Rushville's eyes, the PSC made its own investigation, which is authorized by IC 8-1-2-58, 1 but it did not comply with the statutory notice and hearing requirements 2 when it delivered its order based upon its investigation. We disagree that the PSC made its decision based upon its own investigation.
"(T)he PSC's orders must be based upon substantial evidence in the record and be specific enough to enable this court to intelligently review the PSC's decision." United Telephone Company of Indiana, Inc. v. Public Service Commission, (1980) Ind.App., 402 N.E.2d 1013. Rushville argues there was not substantial evidence in the record to find the old rates were to last in perpetuity, and that the old rates were unconscionable and discriminatory. It argues the old rates are automatically terminated when an old rate customer moves or dies and therefore the old rates cannot last in perpetuity. A close reading of paragraph 8 reveals the PSC did not find the old rates will continue in perpetuity. It merely states they cannot be permitted to continue into perpetuity. The PSC found the rates to be unreasonable and unjustly discriminatory based on the difference in the rates charged, not on the length of time the difference was to remain in effect. 3
The testimony of Gimble clearly provided substantial evidence in the record from which the PSC could find the...
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AFL-CIO, Central Labor Council of Vanderburgh, Posey and Warrick Counties v. Southern Indiana Gas and Elec. Co.
...Svc. Comm. v. Boone Cir. Ct. (1956), 236 Ind. 202, 138 N.E.2d 4, reh. den. 236 Ind. 202, 139 N.E.2d 552; Penn-Dixie Steel Corp. v. Public Service Co. (1980), Ind.App., 410 N.E.2d 1354. On the authority of these decisions we must conclude that there was no abuse of discretion in denying the ......