Town of Harrisville v. Public Service Commission

• Decision Date: 03 May 1927
• Docket Number: 5521.
• Citation: 138 S.E. 99,103 W.Va. 526
• Parties: TOWN OF HARRISVILLE v. PUBLIC SERVICE COMMISSION et al.
• Court: West Virginia Supreme Court

138 S.E. 99

103 W.Va. 526

TOWN OF HARRISVILLE v. PUBLIC SERVICE COMMISSION et al.

No. 5521.

Supreme Court of Appeals of West Virginia.

May 3, 1927

Submitted January 14, 1927.

Syllabus by the Court.

The findings of the Public Service Commission, based upon substantial evidence, will not be reviewed by this court.

Suit by the Town of Harrisville to have canceled an increase in rates granted to the Utility Gas Company by the Public Service Commission. Ruling of the Commission affirmed.

Robert Morris and S. A. Powell, both of Harrisville, for petitioner.

Homer Adams, of Pittsburgh, Pa., for respondent Gas Co.

LITZ J.

The applicant, Utility Gas Company, is a public service corporation engaged in supplying protestant, town of Harrisville, and its inhabitants with natural gas. The municipality seeks to have canceled, by an order of this court, an increase in rates granted by the Public Service Commission to the Utility Company.

The town of Harrisville constructed, and for many years operated a gas plant, supplying itself and its inhabitants with natural gas. On November 16, 1918, it sold and transferred the property to the Imperial Gas Company (a producer of natural gas), and further granted to the purchaser, its successors and assigns, the right and privilege of constructing and maintaining a system of mains, pipes, and other appliances in and upon the streets and alleys of the town for the purpose of distributing and furnishing gas to it and its inhabitants for a term of ten years. The Imperial Company thereafter served the town and its inhabitants until January 31, 1921 when it conveyed and assigned the Harrisville plant and franchise to its subsidiary, the Utility Gas Company, which has since been performing the service.

The Utility Company does not produce any gas, and was organized for the sole purpose of taking over and conducting the public service business of the parent corporation, from whom it has been purchasing gas with which to supply the town of Harrisville and its inhabitants.

The numerous questions raised by the protestant for the most part involve but two issues: (1) Value of the property employed by the applicant in rendering the service; and (2) fair price for gas sold and delivered to it by the Imperial Company.

The commission found the physical value of the property to be $9,500, and allowed 10 per cent. for going concern value, making a total value of $10,450, or $50 less than the assessed valuation. By adding $1,000 for working capital, a rate base of $11,450 was established. There was much other proof sustaining the finding of physical value, including the testimony of counsel for the town, given on its behalf in previous litigation between the parties, that at the time of the purchase by the Imperial Company the property was worth from $15,000 to $20,000. Additions since then amount to $3,961.26.

The Commission also fixed 20 cents per thousand cubic feet as a fair price to be paid by the Utility Company to the Imperial Company for gas as measured to the consumer. The Imperial Company received for one-third of the other gas marketed by it 18 cents per thousand cubic feet, and 12 cents and 13 cents for the remainder, or an average of 14.7 cents delivered at the nearest connecting points on the lines of the purchasers. Reasons which we think justify the difference in price to the Utility Company and to other purchasers, stated by counsel for the applicant, follow: The Imperial Company cannot store its surplus gas, and must therefore sell it for the best prices obtainable, or lose much of it through drainage. It delivers gas to the other purchasers at their nearest gathering or transmission lines, while it delivers to the Utility Company ready for distribution to...