Springfield Gas & Electric Co. v. Barker

• Decision Date: 06 July 1915
• Docket Number: 9.
• Citation: 231 F. 331
• Court: U.S. District Court — Western District of Missouri
• Parties: SPRINGFIELD GAS & ELECTRIC CO. v. BARKER, Atty. Gen., et al.

231 F. 331

SPRINGFIELD GAS & ELECTRIC CO. v. BARKER, Atty. Gen., et al.

No. 9.

United States District Court, W.D. Missouri, Southern Division.

July 6, 1915

W. D Tatlow, of Springfield, Mo., John M. Olin, of Madison, Wis and Tatlow & Mitchell, of Springfield, Mo. (Olin, Butler Stebbins. Curkeet & Stroud, of Madison, Wis., of counsel) for complainant.

William G. Busby, of Carrollton, Mo., and E. C. McAfee and T. Neville, both of Springfield, Mo., for defendants.

Before SANBORN, Circuit Judge, and POLLOCK and VAN VALKENBURGH, District Judges.

PER CURIAM.

The defendants seek to restrain the enforcement of an order made June 23, 1914, by the Public Service Commission of the state of Missouri, fixing the value of complainant's property conceived to be used and useful in the public service in supplying electric energy at Springfield, Mo., and the rates to be charged for electricity by complainant, on the stated ground that said rates are unreasonably low, and are based upon an unreasonable and illegal valuation of complainant's property, and on the further ground that the enforcement of said rates would deprive complainant of its property without due process of law, and would deny to it the equal protection of the laws, in contravention of the Constitution of the United States and of the Constitution of the state of Missouri; also on the still further ground that said commission, in fixing said rates, exceeded its powers under the Constitution and laws of the state of Missouri. The present hearing is upon motion for a temporary injunction; therefore we shall consider only so much of the issues presented as concern the propriety of the immediate relief prayed, reserving a determination of the merits for the final hearing of the cause. The power of the commission to establish just and reasonable rates, based upon a fair valuation of complainant's property after a full and fair hearing, such as the law guarantees, will be assumed.

The valuation fixed by the commission as a basis for determining reasonable and just rates was $300,000. The rate of return allowed was 7 per cent. Complainant insists that this rate of return is unreasonably low, and that the valuation fixed is less than one-half the actual value of the property used and useful in the business, and of the price paid therefor by complainant. Since the order of June 23, 1914, became effective, an actual test, covering a period of approximately eight months, has been made of the effect of these rates upon the business of complainant, monthly reports thereof have been filed with the commission, as required, and the results have been placed before the court.

The opinion and order of the commission discloses that it took the lowest of the computations, made by three several engineers, of the cost of reproduction new of the property involved, less depreciation, made substantial reductions thereon, and therefrom deduced an actual cost of reproduction, less depreciation, of $200,126. The fixed valuation of $300,000 was arrived at by the addition thereto of $100,000, because of 'considering said plant as a going concern and taking into account the fact that said plant is in successful operation, and including engineering, supervision, and interest during construction, organization and general expenses, legal expenses, contingencies, insurance, general contractor's profit, promotion and other development expenses, working capital, and including all other elements of value, tangible and intangible, as used in the public service in supplying electric energy at Springfield. ' It is contended by complainant that this allowance for the various items thus recited is unreasonably low to the point of confiscation. The commission has made an omnibus allowance, without itemization in findings, opinion, or order. Hence it is impossible to test the reasonableness of its findings without such a comprehensive examination of the entire case as is impracticable upon a preliminary hearing of this nature. We turn, therefore, to such elements of disagreement as are presented in tangible and defined form upon the face of the proceedings.

Especial emphasis is laid by complainant upon the following items disallowed by the commission: Steam power plant, $106,000 going value, $60,000 to $140,000; cash working capital, $20,000 to $25,000; managerial and legal expenses, $9,000 per year; new business expenses, $2,500 per year; expenses of the rate-making proceeding, approximately $50,000. It is practically conceded, and sufficiently appears, that if ...