State v. Public Service Commission

• Decision Date: 13 April 1925
• Docket Number: No. 21950.,No. 21967.,21950.,21967.
• Citation: 272 S.W. 971
• Parties: STATE ex rel. WASHINGTON UNIVERSITY et al. v. PUBLIC SERVICE COMMISSION OF MISSOURI et al.
• Court: Missouri Supreme Court

272 S.W. 971

STATE ex rel. WASHINGTON UNIVERSITY et al. v. PUBLIC SERVICE COMMISSION OF MISSOURI et al.

No. 21950.

No. 21967.

Supreme Court of Missouri, in Banc.

April 13, 1925.

Motion for Rehearing Overruled May 23, 1925.

Appeal from Circuit Court, Cole County; J. G. Slate, Judge.

Eighteen proceedings in certiorari by the State, on the relation of Washington University and of nine others, to review certain orders of the Public Service Commission granting a raise in rates' to the Union Electric Light & Power Company. From a judgment setting aside its orders, the Public Service Commission and another appeal. Reversed.

R. Perry Spencer, of Jefferson City, for appellant Public Service Commission.

Jourdan, Rassieur & Pierce, of St. Louis, for appellant Union Electric Light & Power Co.

Holland, Rutledge & Lashly, Bryan, Williams & Cave, Eliot, Chaplin, Blayney & Bedal, Lewis & Rice, Marion C. Early, Charles M. Polk, and Taylor, Mayer & Shifrin, all of St. Louis, for respondents.

GRAVES, C. J.

This is not the first opinion in this case, and such fact bespeaks a concise, yet a considerate, statement of the case. Volume adds nothing to a statement. What is said in briefs, and in statements, can be stated shortly, for the purpose of passing upon the vital questions. There are 18 cases before us, all growing out of two cases filed before the Public Service Commission. The two cases, out of which all the present cases grow, were two applications to the Public Service Commission, which applications were made by the Union Electric Light & Power Company, for temporary increased rates both on electricity and power, and upon heating. These applications were filed about November 28, 1917, and the applications were heard, and investigated, and by the Commission determined in February, 1920. Before the Public Service Commission, the case as to heating was No. 1395, and that as to electricity was numbered 1396. The Public Service Commission raised rates as to both services, upon proven facts as to the respective costs of operation. These increases were to be for a limited time, and the Commission by requisite orders placed itself in position to determine from future reports of the utility as to how long the rates should be retained. There were a number of consumers (of both heat and electricity) who opposed any change of rates, as are usual in such cases. This case is out of the ordinary, however, because in many instances these particular consumers had been operating their own plants, within their own buildings, from which they got a part, if not all, of their heat, and electrical current and power. These plants were leased to the Union Electric Light & Power Company, which leases (as is claimed) fixed the price of service to these special consumers. Other customers, who likewise turned over their plants, have not complained. The details of these will be left to the opinion, if they became material. The applications for these increases in rates brought a storm of protests from 18 consumers of heat and electrical current and power furnished them by the Union Electric Light & Power Company, and they intervened in the two cases. Their charges ran the gamut from the alleged fact the Union Electric Light & Power Company was not a public service corporation as to furnishing heat, and clear down the line. One principal contention is that these special consumers have term contracts (as to rates) under these leases, and that such rates can not be increased during these contract terms. The front door question is that the Union Electric Light & Power Company (as to heating) is not a public service corporation at all, and hence an absence of jurisdiction in the Public Service Commission to deal with that question. Beaten before the Public Service Commission, these intervening consumers sued out statutory certiorari to the circuit court of Cole county, where, upon a hearing, the orders of the Public Service Commission were set aside.

From that judgment the Public Service Commission and the Union Electric Light & Power Company have appealed. The individual complaints of the several 18 consumers have been separately preserved, so that if one (in matters of its individual rights) has advantage over the others they are preserved in the 18 cases here. The broad questions are common to all cases.

I. What we have denominated the "front door" question in this case relates to the heating activities of the Union Electric Light & Power Company. The Public Service Commission (much better equipped than is this, or any other court, to find and determine facts) has this to say upon this branch of the case:

"The applicant company has established a large downtown heating plant in the vicinity of Tenth and St. Charles streets, and has installed steam pipes connecting it with a number of large adjacent buildings, and has contracted to furnish steam heat to those building from this plant when needed and to furnish electricity from its large central station. In addition, the company has made contracts for steam heating with a number, of consumers so situated that they could not be reached from the St. Charles heating plant. In accordance with these contracts, the company has taken over the private plants of a number of consumers, agreeing to furnish the consumer steam for heating or other purposes, and with electricity for light and power. Usually the right is reserved in these contracts whereby the applicant may shut down the private plant entirely and supply both heat and electricity from some outside source. The company has managed the detail of supplying such service in each case in whatever manner appeared to it to be the most economical. In the summer when there was little or no heating demanded, the company has followed the policy of shutting down most, if not all, of these isolated plants, and furnishing electricity from its own more efficient central plant. During the heating season it has operated some of the consumers' heating plants, furnishing heat to such consumers and sometimes connecting to adjacent consumers, and supplying them with heat from the same plant or plants. During this period of heating demand, the company has apparently considered it economical to operate the consumers' electrical generating equipment, using the exhaust steam therefrom for heating. Usually the contract provided for steam heat for a definite space and for certain stipulated amount of electricity, all for some fixed annual payment, with additional charges for electricity for any excess used above the amount called for in the contract. These contracts have carried with them temporary possession and use of the machinery, with provisions as to extensions or repairs and conditions pertaining to their return to the consumer when the contract has expired. A number of such proposals have been accepted, and the company has taken over some forty-odd such plants, some of which are entirely closed down, but a number of which are operated during the heating season, as above described."

The foregoing findings of facts is of material moment here. They cover much more than the 18 cases involved. This finding of the facts is well buttressed by the proof. Included in that proof are the contracts pleaded by interveners. These contracts are of no vitality, in so far as they affect rates. The Public Service Commission, in fixing rates, cannot be clogged or obstructed by contract rates. This question was early threshed out by this court in several cases, some of which went to the federal Supreme Court, in each of which this court was sustained. The original case, the ruling in which has never been changed, is State ex rel. City of Sedalia v. Public Service Commission, 275 Mo. 201, 204 S. W. 497. The effect of this and subsequent holdings is that contract prices count for naught in the fixing of rates by the Public Service Commission. The Public Service Commission is not a court, and cannot be influenced in any regard by the contract prices as to rates. As said, such body is not a court, and has neither the power to construe contracts, nor to enforce them. If the contracts have any effect at all (as we think they have not) the only effect would be upon the question of whether or not the Union Electric Light & Power Company was a public utility, in so far as heating is concerned. We doubt their efficacy in that regard. This because such question depends largely upon charter powers, and what has been done under the charter powers. But of this question later. Certain it is that such contracts cannot influence service rates. All of these contracts (and there were many not involved in these 18 suits) indicated a general purpose upon the part of the Union Electric to extend the steam-heating branch of their business.

II. If these contracts have any bearing whatever in these cases, it must be on the theory that they tend to prove that the appellant was not in fact a public utility in this regard. Fortunately for the brevity of this opinion, we have had before us the question of steam heating. State ex rel. Case v Public Service Commission, 298 Mo. 303, 249 S. W. 955. It does not show clearly in that opinion, but it was a fact in the case, that the Public Utility had several different plants from which steam heat was furnished and generated. It appeared there, as it appears here, that there is too much waste in conducting steam heat for any great distance. In fact, the only economical way of engaging in such a public utility is to have different plants, located in districts wherein there would be demand for the commodity, and that seems to be the plan of the claimant in these cases. Another question settled in the case supra is that where there is a combined plant for the production of both electricity and steam heat, there should be a proper allocation of the value of the plant as to the separate uses. In the cases before us, we have instances where more electricity is...