Seneca Hills Service Co. v. Public Utilities Commission

• Decision Date: 07 December 1978
• Docket Number: No. 78-15,78-15
• Citation: 56 Ohio St.2d 410,384 N.E.2d 277
• Parties: , 10 O.O.3d 518 SENECA HILLS SERVICE COMPANY, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee.
• Court: Ohio Supreme Court

Page 410

56 Ohio St.2d 410

384 N.E.2d 277, 10 O.O.3d 518

SENECA HILLS SERVICE COMPANY, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee.

No. 78-15.

Supreme Court of Ohio.

Dec. 7, 1978.

In September 1974, Seneca Hills Service Company, appellant herein, signed an agreement to purchase the water utility operations of the Tanglewood Water Company ("Tanglewood"). The transaction between the two public utilities was closed three months later. Seneca Hills began operations in the Tanglewood area in January 1975.

On July 6, 1976, Tanglewood filed an application for an emergency rate increase with the Public Utilities Commission appellee herein. A month later, Tanglewood applied to the commission for approval of the 1974 transfer of its water utility operations to Seneca Hills. At the subsequent hearing on the rate increase, Tanglewood made a motion for a substitution of parties. The hearing examiner permitted Seneca Hills, as Tanglewood's successor in interest, to proceed with the application for rate relief. The hearing was later rescheduled for October 5, 1976, for a new hearing consolidating the rate and transfer applications. After holding the consolidated hearing, the commission issued an opinion and order on December 8, 1976, approving both the transfer and the emergency rate relief. However, there were conditions attached to that award. Seneca Hills was not allowed to bill at the emergency rate level for services provided from April 1 to October 1, 1977, unless it filed an application for a permanent rate increase prior to October 1, 1977. ¹

By letter dated July 22, 1977, three weeks after the deadline for pre-filing notification of a permanent rate increase application, ² the utility notified the commission that it would not be able to meet the October 1 filing deadline and requested an extension. ³ The commission issued an entry on September 29, 1977, denying that requested extension and directing that service for April 1 to October 1 be billed at the non-emergency rates. On October 11, 1977, Seneca Hills filed an application for rehearing and moved to stay the proceedings. At that time, Seneca Hills acknowledged that, prior to receiving the September 29 entry from the commission, it had billed its customers for the April to October period at the emergency rate level. The commission issued an entry on October 26 directing Seneca Hills to establish a separate account and to account for the difference in charges paid under the emergency rate as opposed to the lower permanent rate. Two weeks later, on November 9, 1977, the commission denied the utility's application for a rehearing and ordered Seneca Hills to refund to customers the amounts collected over the permanent rate in the April to October billing period.

The cause is now before this court on an appeal as of right.

Earl T. Longley, Cleveland and James H. Callard, Columbus, for appellant.

William J. Brown, Atty. Gen., and Marvin I. Resnik, Columbus, for appellee.

PER CURIAM.

The sole issue raised by the instant cause is whether the commission abused its discretion when it refused to extend the deadline in which to apply for a permanent rate increase and to allow emergency rate relief beyond March 31, 1977.

The power of the commission to grant emergency rate increases is set forth in R.C. 4909.16. That statute provides:

"When the public utilities commission Deems it necessary to prevent injury to the business or interests of the public or of any public utility of this state in case of any emergency to be judged by the commission, it may temporarily alter, amend, or, with the consent of the public utility concerned, suspend any existing rates, schedules, or order relating to or affecting any public utility or part of any public utility in this state. Rates so made by the commission shall apply to one or more of the public utilities in this state, or to any portion thereof, as is directed by the commission, And shall take effect at such time and remain in force for such length of time as the commission prescribes." (Emphasis added.)

R.C. 4909.16 grants the commission the power, whenever it "deems it necessary," to determine both the need for an emergency rate increase and the length of time that increase will be in effect. The power to establish those rates and to place time limitations on them is, therefore, within the sound discretion of...