People ex rel. Mun. Gas Co. of Albany v. Pub. Serv. Comm'n

• Decision Date: 12 July 1918
• Parties: PEOPLE ex rel. MUNICIPAL GAS CO. OF CITY OF ALBANY v. PUBLIC SERVICE COMMISSION, SECOND DIST., et al.
• Court: New York Court of Appeals Court of Appeals

224 N.Y. 156

120 N.E. 132

PEOPLE ex rel. MUNICIPAL GAS CO. OF CITY OF ALBANY

v.PUBLIC SERVICE COMMISSION, SECOND DIST., et al.

Court of Appeals of New York.

July 12, 1918.

Appeal from Supreme Court, Appellate Division, Third Department.

Certiorari by the People of the State of New York on the relation of the Municipal Gas Company of the City of Albany, against the Public Service Commission for the Second District and others. From an order of the Appellate Division of the Supreme Court in the Third Judicial Department (170 N. Y. Supp. 1106), the relator appeals. Affirmed.

The facts, so far as material, are stated in the opinion.

McLaughlin, J., dissenting.Neile F. Towner, of Albany, for appellant.

Ledyard P. Hale, of Albany, for respondents.

William L. Ransom, of New York City, for intervener Public Service Commission, First District.

Lewis E. Carr, of Albany, for intervener Empire State Gas & Electric ass'n.

William P. Burr, Corp. Counsel, of New York City, for intervener City of New York.

Alfred B. Cruikshank, of New York City, for intervener Bronx Gas & Electric Co.

COLLIN, J.

The relator, Municipal Gas Company of the City of Albany, seeks in this proceeding authorization by the Public Service Commission, Second District, to charge designated prices exceeding $1 per one thousand cubic feet for gas furnished in the city of Albany. The proceeding was instituted May 6, 1918, by the petition of the relator, which alleged among other things: The relator was incorporated in July, 1885, and has been and is lawfully engaged in its corporate purpose of manufacturing and selling gas to consumers in Albany at prices fixed by it, not exceeding $1 per 1,000 cubic feet. Owing to the increased cost of manufacturing and operating, the net earnings from its gas business during the year ending December 31, 1917, were less than 4 per centum on the value of its property used in the business and ‘the constant rise in the cost of production and distribution of gas makes it certain, if war conditions continue, that the total deficit to your petitioner from gas operations during the year 1918, in case present prices for gas are maintained, will be at least $95,000.’ A statute passed April 26, 1907 (Laws of 1907, c. 227), enacts that the relator ‘shall not charge or receive for gas manufactured, furnished or sold in said city a sum in excess of one dollar per one thousand cubic feet.’ Under other statutes of the state the relator may be compelled to continue the manufacture and distribution of gas, and the continuation at the present prices will result in the taking of the property of relator without just compensation. The Public Service Commission, upon the allegations of the petition and arguments of counsel, dismissed the petition upon the ground the commission was without power, by reason of the provisions of section 72 of the Public Service Commissions Law (Consol. Laws, c. 48) and chapter 227 of the Laws of 1907, to afford the only relief asked for by the petitioner, and denied the relator a rehearing. The Appellate Division affirmed the determination by the order from which the appeal here is taken. The appeal presents the single and clear-cut question: Assuming that the price of $1 per 1,000 cubic feet is confiscatory, has the Legislature vested in the Public Service Commission the power to authorize the relator to charge in the city of Albany a greater price?

Article 4, constituted of sections 64 to 77, inclusive, of the Public Service Commissions Law (Consol. Laws, c. 48) relates specifically to gas and electrical corporations. Section 72 contains this provision, which in connection with chapter 227 of Laws of 1907 constrained the commission:

‘After a hearing and after such an investigation as shall have been made by the commission or its officers, agents, examiners or inspectors, the commission within lawful limits may, by order, fix the maximum price of gas or electricity not exceeding that fixed by statute to be charged by such corporation or person, for the service to be furnished. * * *’

It is asserted and argued that section 66 empowers the commission to prescribe, irrespective of section 72, the just and reasonable price to be charged by petitioner. Section 66 relates, as the headnote states, to the general powers of the Public Service Commissions in respect to gas and electricity. It consists of 13 subdivisions, giving the commission power to supervise generally the corporations, to investigate and control the quality of plants and products, to fix standards of purity, pressure, and measurement, to prescribe uniform forms of keeping accounts and records, to require verified reports of a character prescribed, subject to change by the commission, by producing corporations, persons, or municipalities, to inspect plants, records, accounts, or documents, and compel the production of the latter and the attendance of witnesses, and to administer oaths and take testimony, to require the filing of rates, forms of contracts, and rules relating to rates, which, when filed and published pursuant to order, shall not be changed except as prescribed. Each commission shall have within its jurisdiction power to:

‘5. * * * Whenever the commission shall be of opinion, after a hearing had upon its own motion or upon complaint, that the rates or charges or the acts or regulations of any such person, corporation or municipality are unjust, unreasonable, unjustly discriminatory or unduly preferential or in any wise in violation of any provision of law, the commission shall determine and prescribe the just and reasonable rates and charge thereafter to be in force for the service to be furnished notwithstanding that a higher rate or charge has heretofore been authorized by statute, and the just and reasonable acts and regulations to be done and observed. * * *’

Section 71 has the headnote:

‘Complaints as to quality and price of gas and electricity; investigation by commission; forms of complaint.’

A provision of it, in effect, is, upon the complaint of designated parties, representing consumers, or of a supplying corporation, as to the illuminating power, purity, pressure, or price of gas, the proper commission shall investigate through its agents, inspectors, and subordinates as to the cause of such complaint. Section 72 has the headnote:

‘Notice and hearing; order fixing price of gas or electricity, or requiring improvement.’

A provision of it, in effect, is:

An investigation may be instituted by the commission as to any matter of which complaint may be made as provided in section 71. The commission, before proceeding under a complaint or upon its investigation, shall afford a hearing to the designated interested parties. ‘After a hearing and after such an investigation as shall have been made by the commission or its officers, agents, examiners or inspectors, the commission within lawful limits may, by order, fix the maximum price of gas or electricity not exceeding that fixed by statute to be charged by such corporation or person, for the service to be furnished; and may order such improvement in the manufacture, distribution or supply of gas, in the manufacture, transmission or supply of electricity, or in the methods employed by such person or...