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PITTSBURGH v. PENNSYLVANIA PUBLIC UTILITY COMMISSION. (01/21/58)

January 21, 1958

PITTSBURGH, APPELLANT,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION.



Appeal, No. 79, April T., 1957, from order of Pennsylvania Public Utility Commission, January 7, 1957, Nos. C. 16250 and 16266, in case of City of Pittsburgh v. Pennsylvania Public Utility Commission et al. Order affirmed.

COUNSEL

David Stahl, Assistant City Solicitor, with him J. Frank McKenna, Jr., City Solicitor, for appellant.

Morris Mindlin, Assistant Counsel, with him Thomas M. Kerrigan, Acting Counsel, for Public Utility Commission, appellee.

Ernest R. von Starck, with him Robert H. Young and Joseph A. Beck, for water company, intervening appellee.

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

Author: Gunther

[ 185 Pa. Super. Page 461]

OPINION BY GUNTHER, J.

The City of Pittsburgh (hereinafter referred to as the "City") has taken this appeal from an order of the Pennsylvania Public Utility Commission (hereinafter referred to as the "Commission") dated January 7,

[ 185 Pa. Super. Page 4621957]

prescribing changes in the contractual formula rate for City customers served by South Pittsburgh Water Company (hereinafter referred to as "Company.")

The Company supplies water in the suburban Pittsburgh area of Allegheny County lying south of the Monongahela River in twenty-two boroughs and eight townships in addition to nine wards of the City which have been annexed from time to time. Since 1919, the Company has supplied water within the City under various contracts whereby it sold to the City all water used by residents of the various wards served by the Company. It owns the facilities for providing this service, including all distribution mains, meters, and services in all of the areas. The most recent contract between the Company and the City was entered into on July 16, 1941, in which the City was treated as a single customer and the formula for determining the rate to be charged within the City included (a) the regular meter charge for all water supplied, computed by applying the Company's regular meter quantity rate; (b) a public fire service charge; (c) a guaranteed annual return of six percent on the value of the Company's distribution facilities within the City, the property valuation being fixed as determined in the contract; (d) a special annual depreciation allowance on the property valuation; (e) a charge for unaccounted water; (f) reimbursement to the Company for its annual expenses of operation and maintenance of the distribution facilities within the City; and (g) the annual cost of preparing statements showing the metered consumption of water for each customer within the City.*fn1

[ 185 Pa. Super. Page 463]

Under this agreement, the City billed its residents at its own rates by separate billings and without regard to the charges paid by it to the Company, but the City gained a discount or rate differential of 17.6% over that billed by the Company to its other individual customers. The agreement provided for the right of either party to terminate the agreement, subsequent to March 31, 1951, upon not less than ninety days' notice in writing served upon the other party and fixing the date of such termination. It further provided that "Nothing in this agreement shall be construed to interfere with, waive or in any manner abridge ... any of the rights, powers or privileges now or at any future time held or enjoyed by either of the parties hereto, or to operate thereafter to the prejudice of any claims of either of the parties ...


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