Storey v. Mayo, 37203

CourtUnited States State Supreme Court of Florida
Citation217 So.2d 304
PartiesMrs. John De Raismes STOREY, Mr. and Mrs. Richard Conley, Mr. and Mrs. George Fichter, Dr. P. M. Boyd, Jr., et ux., et al., Petitioners, v. William T. MAYO, Chairman, and Edwin L. Mason, and Jerry W. Carter, Commissioners, as and constituting the Florida Public Service Commission, Respondents.
Docket NumberNo. 37203,37203
Decision Date06 November 1968

Irving Peskoe, pro se, and for Robert L. Lewis, for petitioners and others directly affected.

Robert M. C. Rose, Tallahassee, for Florida Public Service Commission.

Phillip Goldman of Scott, McCarthy, Steel, Hector & Davis, Miami, for Florida Power & Light Co.

Vernon W. Turner of Turner & Hodson, Homestead, for City of Homestead.

THORNAL, Justice.

By petition for a writ of certiorari we have for review an order of the Florida Public Service Commission which approved a territorial service agreement between two electric utilities, one being privately-owned and regulated by the state, the other being municipally owned and unregulated.

We must decide whether the subject agreement is invalid as being in restraint of trade, contrary to the public interest, or violative of equal protection requirements.

The City of Homestead, a municipal corporation, owns its electric utility system. It serves all residents in the City and some in adjacent non-municipal areas. Florida Power and Light Company is a privately-owned electric utility. It serves extensive areas along the east coast, lower west coast and south central sections of Florida. Included in the Company's service territory is the non-municipal area surrounding Homestead. Because of the municipal operation the Company is not permitted to serve customers inside the city limits. However, prior to the subject agreement, the Company and the City actively competed for customers in the suburban areas. This, of course, required duplicating, paralleling and overlapping distribution systems in the affected areas. This duplication of lines, poles, transformers and other equipment not only marred the appearance of the community but it also increased the hazards of servicing the area. Such overlapping distribution systems substantially increase the cost of service per customer because they simply mean that two separate systems are being supplied and maintained to serve an area when one should be sufficient. Obviously, neither system receives maximum benefit from its capital invested in the area. The ultimate effect of this is that the rates charged in the affected area are necessarily higher, or, alternatively, the customers in some other part of the system must help bear the added cost. It is the latter which most often happens in an extensive system-wide operation, such as that conducted by the Company here.

In order to end the unsatisfactory effects of this type of expensive, competitive activity, the City and the Company, on August 7, 1967, executed the territorial service agreement which is the subject of this litigation. In effect it established areas of service around the City in the suburban territory. It provided that twelve (12) commercial and sixty-six (66) residential customers would be transferred from the City to the Company. Thirty-five (35) commercial and three hundred sixty-three (363) residential electric customers were transferred to the City by the Company. There were provisions for reciprocal transfers of facilities and a reservation by the City of authority to continue to serve certain municipally-owned property located in the Company service area. On November 1, 1967, the City Council of Homestead adopted a resolution providing that electric utility rates to be charged residential customers in the proposed service area would 'be established as those now existing in the proposed service area' and served by the Company. This resolution is a part of the record which also reveals that over a period of forty-three (43) years electric rates charged customers of the city have never been raised.

The Company applied to the Florida Public Service Commission for approval of the agreement. A hearing, pursuant to notice, was held at the Homestead City Hall on November 8, 1967. Witnesses for the City and Company were presented. None of the customers being transferred from City to Company appeared. Seven, including petitioners, appeared in opposition to the transfers by the Company to the City. Petitioners now here claim to represent a class numbering more than one hundred in this category. At the hearing, the City expressly stated that it was not conceding Commission jurisdiction over the municipal operation. By a 2--1 vote the Commission approved the agreement. Petitioners, who were among the protestants, seek review pursuant to Fla.Stat. § 350.641 (1967), F.S.A.; Fla.Stat. § 366.10 (1967), F.S.A.

The petitioners contend that the notice of the hearing was insufficient; that the proposed agreement is contrary to the public interest and is in restraint of trade; and that it denies to them both equal protection and due process of law. They claim that the impact of the agreement is to force them to take service from an unregulated instead of a regulated utility. They insist that the rates and service of the latter are superior to the former, and that the agreement eliminates competition.

The established state policy in Florida is to supervise privately-owned electric utilities through regulation by a state agency. By the same policy municipally-owned electric utilities are expressly exempted from state agency supervision. Fla.Stat. § 366.11 (1967), F.S.A. It was for this reason that in the instant matter, the City pointedly saved itself against submission to Commission jurisdiction. Under Florida law, municipally-owned electric utilities enjoy the privileges of legally protected monopolies within municipal limits. The monopoly is totally effective because the government of the City, which owns the utility, has the power to preclude even the slightest threat of competition within the city limits. On the other hand, the rates and services of the privately-owned electric companies are regulated by the respondent Commission. Fla.Stat. Ch. 366 (1967), F.S.A. Service areas are not specifically controlled by requirement of certificates of public necessity and convenience. However, in some measure the Commission does control the areas served by the companies by virtue of its prescribed powers, including the specific power '* * * to require repairs, improvements, additions and extensions to the plant and equipment of any public utility reasonably necessary to promote the convenience and welfare of the public and secure adequate service or facilities for those reasonably entitled thereto * * *.' Fla.Stat. § 366.05 (1967), F.S.A. The regulatory powers of the Commission, as announced in the cited section, are exclusive and, therefore, necessarily broad and comprehensive. Fla.Stat. § 366.03 (1967), F.S.A.; Florida Power & Light Co. v. City of Miami, 72 So.2d 270 (Fla.1954).

The powers of the Commission over these privately-owned utilities is ominpotent within the confines of the statute and the limits of organic law. Because of this, the power to mandate an efficient and effective utility in the public interest necessitates a correlative power to protect the utility against unnecessary, expensive competitive practices. While in particular locales such practices might appear to benefit a few, the ultimate impact of repetition occurring many times in an extensive system-wide operation could be extremely harmful and expensive to the utility, its stockholders and the great mass of its customers. Tampa Electric Co. v. Withlacoochee River Electric Coop., 122 So.2d 471 (Fla.1...

To continue reading

Request your trial
26 cases
  • Consol. Gas Co. of Fla. v. City Gas Co. of Fla., 83-1010-CIV.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • July 24, 1987
    ...Supreme Court cases which uphold territorial agreements and are cited by Defendant are not controlling. See, e.g., Storey v. Mayo, 217 So.2d 304 (Fla.1968), cert. denied, 395 U.S. 909, 89 S.Ct. 1751, 23 L.Ed.2d 222 (1969); Peoples Gas System v. Mason, 187 So.2d 335 Being mindful that Midcal......
  • Alabama Power Co. v. Citizens of State
    • United States
    • Supreme Court of Alabama
    • July 16, 1999
    ...Citizens, merely as consumers in general, have no cognizable legal rights at stake in this proceeding. See generally Storey v. Mayo, 217 So.2d 304, 307-08 (Fla.1968), cert. denied, 395 U.S. 909, 89 S.Ct. 1751, 23 L.Ed.2d 222 (1969) (stating that a consumer of electricity has "no organic, ec......
  • Public Service Co. of Colorado v. Public Utilities Com'n of State of Colo., 86SA461
    • United States
    • Colorado Supreme Court of Colorado
    • December 5, 1988
    ...self-interest, and those policies must be enforced and safeguarded by the [Public Utilities Commission]." (quoting Storey v. Mayo, 217 So.2d 304, 307-08 (Fla.1968), cert. denied, 395 U.S. 909, 89 S.Ct. 1751, 23 L.Ed.2d 222 (1969)). See also Capital Elec. Power Ass'n v. Mississippi Power & L......
  • TEC Cogeneration Inc. v. Florida Power & Light Co., s. 94-4323
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • March 8, 1996
    ...facilities); PW Ventures, Inc. v. Nichols, 533 So.2d 281 (Fla.1988) (third-party sales by qualifying facilities); Storey v. Mayo, 217 So.2d 304, 307 (Fla.1968), cert. denied, 395 U.S. 909, 89 S.Ct. 1751, 23 L.Ed.2d 222 (1969) ("The powers of the Commission over ... privately-owned utilities......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT