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November 11, 1959


Appeal, No. 315, Oct. T., 1959, from order of Pennsylvania Public Utility Commission, Complaint Docket No. 16871, in case of New York Central Railroad Company v. Pennsylvania Public Utility Commission et al. Order reversed.


John A. Daily, of the New York Bar, with him W. M. Ruddock, John S. Simpson, and Fisher, Ruddock & Simpson, for appellant.

Miles Warner, Assistant Counsel, with him Thomas M. Kerrigan, Counsel, for Pennsylvania Public Utility Commission, appellee.

David Dunlap, for complainant, intervening appellee.

Before Gunther, Wright, Woodside, Ervin, and Watkins, JJ. (rhodes, P.j., and Hirt, J., absent).

Author: Ervin

[ 191 Pa. Super. Page 126]


This is a rate case. By certain tariffs published to become effective December 21, 1957 and December 27, 1957, the appellant, New York Central Railroad Company (hereinafter called "Central"), provided for increases in rates on bituminous coal, said rates applying generally for the transportation of coal to the electric utility plant of the Pennsylvania Electric Company (hereinafter called "Penelec") at Shawville, Pennsylvania, from mines within a radius of approximately 20 miles. After the tariffs had been published but before the increased rates had become effective, Penelec filed its complaint, alleging that the proposed increased rates were excessive, unjust, unreasonable and unjustly discriminatory. On February 9, 1959, after hearings held before the commission, an order was entered canceling the rate increase and stating that an order awarding reparations, with interest, would issue upon proof of the amount of the rate increase actually paid by Penelec. On or about February 28, 1959 Central petitioned the commission for a reopening of the record, further hearing, reargument and supersedeas. On April 20, 1959 the commission denied the petition and this appeal followed. On June 4, 1959 we permitted Penelect to intervene and on June 8, 1959, upon the

[ 191 Pa. Super. Page 127]

    stipulation of all the parties, we granted a supersedeas.

Penelec's plant is located at Gray station, approximately 6.7 miles east of Clearfield on Central's river line. The coal is loaded into railroad hoppers at mines located within a radius of 20 miles from the plant. The district involved is a bituminous coal mining area located mostly in Clearfield and Centre Counties but reaching westward into parts of Cambria and Indiana Counties as well. Five mine-run local trains are operated in handling this traffic. The movement takes place in either 55-ton or 70-ton hopper cars. Approximately 75% of the cars used in this operation were from foreign roads for which Central paid a per diem charge of $2.75 per car per day. The empties are brought into the district from Central's main line at Avis, where they are classified for distribution to the mines in the area. Ninety per cent of the loaded cars go back through Avis for main line carriage to eastern seaboard markets. Avis may be likened to the neck of a bottle and the district may be thought of as the rest of the bottle. Ten per cent of the cars are temporarily diverted to Penelec's service within the bottle before being loaded for the seaboard. To illustrate this temporary diversion: an empty car picked up by a local at Avis moves westward 75 miles to the mine of one of Penelec's coal suppliers at Mowry; after loading it moves 18 miles farther west to the Penelec plant, where it is unloaded. After its release by Penelec the empty car continues westward to a non-Penelec mine for loading and the loaded car moves eastward to Avis and on to the seaboard. It also happens that a car may make more than one loaded trip from a mine to Penelec before it leaves the area. The number of cars delivered to Penelec from day to day, five days per week, is fairly uniform. The coal requirement per

[ 191 Pa. Super. Page 128]

    day is about 50 cars or 3,000 tons, and this quantity permits an accumulation in Penelec's bunkers to carry through Saturday and Sunday.

Penelec's Shawville plant commenced operation early in 1954. Prior to the commencement of operations, rate negotiations were carried on between Central and Penelec with reference to coal to be hauled from the nearby mines to the new plant. Central was informed that Penelec intended to purchase the Shawville plant's coal supply from mines within 20 miles of the plant and that they were in possession of some very low truck rates. Penelec requested the establishment of specific per-car rates to the plant. On February 18, 1954, in Tariff Pa. P.U.C. No. 263, such rates were established on the basis of different zones with the scale ranging from $12.00 to $21.00 per car. Effective March 7, 1956 these rates were increased by 6% under Ex Parte 196. Effective December 28, 1956, Ex Parte 206, a flat increase of $5.00 per car was added. Effective August 26, 1957, at Ex Parte 206-A, an additional $2.50 per car was added. Immediately prior to the effective dates of the tariff here at issue the range of $12.00 to $21.00, by reason of these ex parte increases, had become $20.22 to $29.76. The tariffs herein complained of increased this range to $32.00 to $48.00 in addition to establishing rates for a number of new origins. While this proceeding was before the commission a further increase, effective February 15, 1958, of $5.00 per car was allowed under Ex Parte 212.

Penelec's complaint is directed against the increases included in tariffs filed to be effective December 21 and 27, 1957. The complaint does not encompass the Ex Parte 212 increases of February 15, 1958 of $5.00 per car. The effect of the rate increase of December 21, 1957 to Penelec is summarized in the following table:

[ 191 Pa. Super. Page 129]

Effect of Rate Increase of Dec. 21, 1957

Applied to Shawville Plant Coal ...

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