Petition of Fryeburg Water Co.

• Citation: 99 N.H. 487,115 A.2d 420
• Parties: , 10 P.U.R.3d 106 PETITION of FRYEBURG WATER COMPANY.
• Decision Date: 30 June 1955
• Court: New Hampshire Supreme Court

Page 420

115 A.2d 420

99 N.H. 487, 10 P.U.R.3d 106

PETITION of FRYEBURG WATER COMPANY.

Supreme Court of New Hampshire.

Argued June 7, 1955.

Decided June 30, 1955.

Hastings & Son, Fryeburg, Maine, (David R. Hastings, II, Fryeburg, Maine, orally), for the company petitioner.

L. Hamlin Greene, North Conway (by brief and orally), for the New Hampshire consumers.

GOODNOW, Justice.

The basis upon which the Commission denied an increase in rates as to New Hampshire consumers was apparently the fact that the new source of supply was needed 'to give adequate service to the Fryeburg consumers'; that 'no rate increase would have been needed if the Ward Hill Spring had not been developed for the benefit of the Fryeburg customers'; and that since the new source was not required in order to adequately supply the New Hampshire consumers, no 'material benefits [accrued] to [them] from this added investment'. It is the company's position that the Commission's failure to consider the expense of adequately supplying the needs of the whole system as a unit was error and that the case should be remanded. With this contention we must agree.

The unit normally considered for rate making purposes, even when a utility does business in two or more states and is subject to regulation in each state, is the entire interconnected operating property of the utility without regard to particular groups of consumers or geographical subdivisions. Leeman v. Public Utilities Commission, D.C., 104 F.Supp. 553, 560; Wabash Valley Electric Co. v. Young, 287 U.S. 488, 497, 53 S.Ct. 234, 77 L.Ed. 447. Although conditions may be such in a particular case as to require or permit the consideration of a smaller unit, American Toll Bridge Co. v. Railroad Commission, 307 U.S. 486, 494, 59 S.Ct. 948, 83 L.Ed 1414, no such conditions appear to exist in this case.

The water system in question is a single interconnected line through which consumers in two separate communities have been supplied from the same sources since 1882. All of the company's New Hampshire customers are geographically located nearest the reservoir from which the supply formerly flowed and were adequately supplied from that source. The customers in Maine, located a mile further from the source, were subject to the first demands of the New Hampshire customers against the gravity-fed flow and in recent years were frequently without an adequate supply particularily during dry seasons. The original source having proved inadequate, a new source was developed to cure this inequity and to supply the same users through the same system with a fully adequate supply under pressure.

Rates imposed upon like consumers within a single system 'are required to be just and reasonable inter se, as well as in toto.' New England Tel. & Tel. Co. v. State, 95 N.H. 353, 364, 64 A.2d 9, 18. No distinction as to rate is permitted between consumers of the same class on the basis of their proximity to or distance from the source of supply which would result in an unreasonable preference or disadvantage. R.L. c. 292, § 11 as amended Laws 1951, c. 203, § 46, subd. 10. Cf. Leeman v. Public Utilities Commission, supra 104...