rates in the case before us was not a final legislative act such as could operate to confiscate the Water Company's property in any permanent sense. Not only was it limited in time but it was temporary in its effect. This is so because of paragraph (e) of Section 310 which requires the Commission upon final determination of the rates to permit the Water Company to recoup its loss, through a temporary increase, if the final rates prove to be higher than the temporary rates. In this respect the case is clearly distinguishable from Prendergast v. New York Tel. Co., supra, which involved a temporary rate that was not subject to adjustment or recoupment.
In Bronx Gas & Electric Co. v. Maltbie, 271 N.Y. 364, 374, 3 N.E.2d 512, 514, the New York Court of Appeals upheld the constitutionality of a temporary rate provision of the New York law substantially similar to the Pennsylvania statute involved in this case. Chief Judge Crane, speaking of the effect of the Prendergast decision, said:
"After this decision the Legislature of the state of New York was confronted with this quaere: Was it ever possible to compel public service corporations to charge reasonable rates, pending the long drawn-out and interminable proceedings to establish a fair return? The establishment of the proper base rate, or the present capital investment, upon which a company is entitled to a fair return, has become an intricate, involved, tedious proceeding, extending into months and years. Much of the evidence produced is expert testimony, varying in worth and uncertainty, presenting a maze of detail and figures. City of Louisville v. Cumberland Telephone & Telegraph Co., 225 U.S. 430, 32 S. Ct. 741, 56 L. Ed. 1151. Without suggesting in any way that the public service corporations have not acted with utmost good faith, we can see the opportunity, as did the Legislature, for the intentional delay in these proceedings whereby unwarranted profits may be obtained. The fixing of a reasonable rate by these public service corporations, who enjoy from the public such valuable franchises, to be of any value, should be a matter of speedy regulation. The courts should not encourage such finesse in figuring as to make these hearings upon rate questions an obstruction instead of a relief. Of course, caution must be used on both sides, for the desire for improper gain is often-times as eager with the consumer, or his spokesman, as with the corporation."
In discussing the temporary rate provision of the New York law, the court said:
"The commission fixes a temporary rate pending the hearing. It is based upon the elements stated, which are not all of those required to fix a permanent rate. As before stated, this would be impossible, if we must consider in fixing a temporary rate all the elements required for the final rate: no temporary rate could ever be fixed. This also is self-evident. Therefore, to meet these conditions the temporary rate is fixed, within reasonable limits, upon figures which can be with some exactness obtained from the books of the company, showing original cost or investment; and if finally, when the proceeding ends, the temporary rate is proved to have been too low, the utility must be permitted and authorized to charge enough for its service to make up the loss. The consumer must pay what he should have paid, and the only way to do it is to fix a rate high enough to make up this loss.
"True it is that all the consumers paying the final rate, including the take-up, may not be the same as those who paid the temporary rate. A few consumers may be new customers paying what the old consumer should have paid. Such instances are of minor importance; the percentage must be very small. We can never work our institutions of government if we refine matters to such an extent that we have to consider all these little details. The Constitution expresses fundamental principles, and if in the main these have been observed, this is all that can be required. Besides, when we speak of the consumer -- the customer -- we mean the public, not individuals. San Diego Land & Town Co. v. Jasper, 189 U.S. 439, 23 S. Ct. 571, 47 L. Ed. 892.
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"This section, as we have said, forces the Public Service Commission to consider the returns from the temporary rate and to establish the permanent rate, or the final rate, accordingly; that is, if the temporary rate has proved to be too low, the final rate must make it up to the company. Over what time it is necessary to provide a rate sufficient to make up the loss, or to include the take-up, is a matter of adjustment, machinery, and method. These matters are all in the hands of the Public Service Commission, which may increase or modify a rate to meet the circumstances at any time."
We think that the reasoning of the opinion of the New York Court of Appeals in the Bronx Gas & Electric Co. case is sound and that it rules the present question. We accordingly hold that the order fixing temporary rates for the Water Company under the authority of paragraphs (a) and (e) of Section 310 of the Pennsylvania Public Utility Law was not a final legislative act which deprived the Water Company of its property in any final or permanent sense and that the statutory provisions referred to do not violate the due process clause of the Fourteenth Amendment as authorizing a rate the effect of which may be in law confiscatory.
The Water Company further contends that the interim order was made by the Commission in violation of the procedural protection afforded by the due process clause. It alleges that it was prevented from presenting pertinent testimony to the examiner when the Commission cancelled the January 27th hearing and that the interim order was made without giving it an opportunity to present its case upon written briefs and oral argument. It must be remembered that the protection offered by the due process clause is against the deprivation or confiscation of property. As we have shown the temporary rates prescribed by the Commission do not affect finally or permanently the rights of the Water Company in such fashion as to deprive that company of its property. We, of course, do not hold that temporary rates may be fixed by the Commission capriciously or arbitrarily and without regard to the minimum standard laid down in the statute. The record in this case, however, discloses that the Commission fixed the temporary rates upon the basis of original cost, less accrued depreciation, as the statute required, and allowed a return of 1% more than the statutory minimum. It determined this basis upon the final result of a prior rate proceeding of the Water Company and upon evidence offered at the hearings by the Water Company, which, in our opinion, provided ample support for the commission's findings. In fixing a rate which is truly temporary in its effect we think that the Commission need have before it merely sufficient evidence to furnish prima facie support for its findings. An analogy may be found in the right of a court of equity to issue an interlocutory injunction ex parte, such as was issued in this case. The procedural safeguards afforded by the due process clause will be fully available to the Water Company in the proceedings to determine the final rates.
It follows that the interlocutory injunction heretofore issued should be dissolved and the bill of complaint dismissed.