Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CITY PITTSBURGH ET AL. v. PENNSYLVANIA PUBLIC UTILITY COMMISSION ET AL. (07/14/53)

July 14, 1953

CITY OF PITTSBURGH ET AL.
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION ET AL.



COUNSEL

M. H. Goldstein and Joseph R. Rose, Philadelphia, for Pennsylvania CIO Council.

Anne X. Alpern, City Sol., Pittsburgh, James L. Stern, Asst. City Sol., and Abraham L. Freedman, City Sol., Philadelphia, for City of Philadelphia.

William J. Grove, Asst. Counsel, Lloyd S. Benjamin, Counsel, Harrisburg, for Pennsylvania Public Utility Commission.

Clarence W. Miles, William B. Rafferty, Baltimore, Md., and John B. King, Philadelphia, for Bell Tel. Co. of Pennsylvania.

Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross, Gunther, and Wright, JJ.

Author: Gunther

[ 174 Pa. Super. Page 6]

GUNTHER, Judge.

Bell Telephone Company of Pennsylvania (hereinafter called Bell) filed with the Public Utility Commission a proposed tariff for increased rates on January 7, 1952, expected to produce an increase in annual revenue of about $33,000,000. The rates were suspended by the Commission until December 7, 1952. After extended hearings the Commission issued an order December 1, 1952, authorizing rate increases totaling over $21,000,000.

The Cities of Pittsburgh and Philadelphia and the Pennsylvania C.I.O. Council have appealed from the Commission's order, alleging error in the findings relating to accrued depreciation and reproduction cost.

[ 174 Pa. Super. Page 71]

. Accrued Depreciation. The Commission was presented with three measures of accrued depreciation: Bell's book reserve for depreciation, reserve requirement study, and Bell's own estimate of 24.83%. The latter was arrived at by starting with the Commission's finding of accrued depreciation of 28.06% as of December 1, 1948, when the previous hearings were held, and working forward to 1952 by estimating the change in depreciation. The earlier finding was based upon a detailed study of the actual depreciation of that time and such finding was affirmed by this Court in City of Pittsburgh v. Pennsylvania P. U. C., 169 Pa. Super. 400, 82 A.2d 515. After study of these three factors, the Commission concluded that the accrued depreciation was 26% as to original cost, and 29% as to reproduction cost.

The order of the Commission must be affirmed if supported by sufficient competent evidence, and if no errors of law appear. City of Pittsburgh v. Pennsylvania P. U. C., 165 Pa. Super. 519, 69 A.2d 844. Of the three measurements appellants have no quarrel with the first two, but maintain that Bell's estimate of accrued depreciation was based upon incompetent evidence.

We see no error in the admission of Bell's study of relative depreciation between 1948 and 1952. It is true that the Commission in its order states that Bell's estimate of accrued depreciation is not a study of the absolute depreciation as of 1952, but only of relative depreciation. Yet that is exactly why it was introduced into evidence, and there is nothing to indicate that the Commission considered it as more than a reasonable estimate. Since a finding of accrued depreciation was made less than four years earlier, there is no reason to require a completely new total appraisal of all Bell's assets. The prior finding is entitled to full consideration, though not res adjudicata. City of Philadelphia v. Pennsylvania P. U. C., 162 Pa. Super. 425, 57 A.2d 613.

[ 174 Pa. Super. Page 8]

From that prior finding, Bell revised its estimate downward based on evidence that it has enormously expanded new plant in three years, and on the decrease in depreciation reserve requirements. The record is replete with testimony regarding the installation of vast new plant in the last few years. The three General Plant Managers of Bell testified at length and gave conclusions on depreciation based on physical inspections and consideration of such factors as the relative amounts of found troubles, 1948 as compared to 1951-52.

Appellants further complain that there was no evidence of obsolescence or inadequacy as to most of Bell's plant. Bell's engineer testified as to these factors only as to 7% of the plant, on the theory that these factors are undeterminable as to that portion of the plant for which no retirement plans have been made. The Commission therefore had before it an absolute evaluation of depreciation on only 7% of the plant, and a relative evaluation as to the remainder. While we do not say that this is the best method of estimating accrued depreciation, it is not therefore completely without merit. The Commission did not, as appellants state, declare Bell's method of estimate invalid. The weight to be given such estimate is, however, up to the judgment of the Commission.

Appellants admit the competency of the book reserve for depreciation and the reserve requirement study and contend that they are the only competent measures introduced into evidence. In view of what we have said above, we disagree and hold that the Commission also properly gave consideration to Bell's estimate based upon relative depreciation. 'The Commission was not bound to accept any particular method of estimating accrued depreciation.' Pittsburgh v. Pa. P. U. C., 171 Pa. Super. 187, at page 206, 90 A.2d 607, 616. The findings in respect to this factor necessarily represent

[ 174 Pa. Super. Page 9]

    a judgment figure, and the exact weight to be given any particular estimate is for the Commission alone. Blue Mountain Telephone & Telegraph Co. v. Pennsylvania P. U. C., 165 Pa. Super. 320, 67 A.2d 441.

The final complaint on this subject is that the Commission went outside the record in making its conclusions. After concluding that Bell's accrued depreciation was 26% as to original cost, the Commission corrected that figure to 29% with respect to reproduction cost on the basis of its knowledge of the effect of the generally rising price level during the past forty years. The order stated that recent cases had indicated a certain general percentage spread between the two applications of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.