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NATONA MILLS v. PENNSYLVANIA PUBLIC UTILITY COMMISSION. (09/28/55)

September 28, 1955

NATONA MILLS, INC., ET AL., APPELLANTS,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION.



Appeal, No. 227, Oct. T., 1954, from order of Pennsylvania Public Utility Commission, April 12, 1954, Complaint Docket No. C-15950, in case of Natona Mills, Inc. et al. v. Pennsylvania Public Utility Commission and United Gas Improvement Company. Order affirmed.

COUNSEL

Arthur Silverblatt, with him James, McLean, Silverblatt & Miner, for appellants.

Harris J. Latta, Jr., Assistant Counsel, with him John E. Fullerton, Assistant Counsel, Thomas M. Kerrigan, Acting Counsel, Jack F. Aschinger, Assistant Counsel, and Lloyd S. Benjamin, Counsel, for appellee.

Ernest R. von Starck, with him Norman T. Hayes, Jr., and Morgan, Lewis & Bockius, for utility company, intervening appellee.

Before Rhodes, P.j., Hirt, Ross, Gunther, Wright, Woodside, and Ervin, JJ.

Author: Hirt

[ 179 Pa. Super. Page 265]

OPINION BY HIRT, J.

Prior to December 31, 1952 United Gas Improvement Company - U.G.I., as we shall refer to it - was a holding company which owned and operated seven subsidiary corporations. Luzerne County Gas & Electric Corporation was one of them, which along with the other six subsidiaries was merged into the body corporate of United Gas Improvement Company on the above date. Thereupon U.G.I. became the general operating company. The merger was accomplished in accordance with the terms of an agreement entered into by all of the merging corporations which had been approved by the Pennsylvania Public Utility Commission on June 16, 1952.

Since the merger the Luzerne Division of U.G.I., in the sale of electric energy serves more than 45,000 customers in Luzerne County. On May 29, 1953, U.G.I.

[ 179 Pa. Super. Page 266]

    filed with the Commission Supplement No. 10 to the existing tariff providing for increases and changes in certain of the electric rates applicable to large power users in its Luzerne Division, to become effective on July 28, 1953. This supplement to the tariff prompted an investigation by the Commission, of its own motion, to determine the validity of the proposed increased rates. Ten industrial companies affected by the rates had filed complaints. The complaint proceedings were consolidated with the Commission investigation for hearing and, pending final order, the operation of the rates in the proposed supplement were suspended for successive periods of six and three months to April 28,@ 1954. Ten days of hearings were held, the last of them on February 3, 1954. The Commission on April 12, 1954 entered a unanimous order in which the complaints were dismissed and the proposed rates of Supplement No. 10 were declared to be fair and reasonable. The order found the "fair value of respondent's property, used and useful in electric public service, to be $19,000,000 as of July 31, 1953." A return of $991,044 at 5.22% on fair value, as found, was allowed. These findings of fair value, and the amount of allowable earnings at the approved rate of return are not questioned in this appeal.

Of the 45,313 customers of the Luzerne Division as of the cut-off date of July 31, 1953, 37,510 were classified as Residential or Domestic, 3,162 as Rural and 4,365, Commercial. The remaining customers were Industrial or miscellaneous public users of the company's service. Under Supplement No. 10 two rate schedules were increased; one, Rate ERP applicable to service of Wilkes-Barre Transit Copporation, not questioned here, and the other a general rate, designated as ...


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