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PHILADELPHIA SUBURBAN TRANSPORTATION COMPANY v. PUBLIC UTILITY COMMISSION AND PHILADELPHIA ELECTRIC COMPANY (09/07/71)

decided: September 7, 1971.

PHILADELPHIA SUBURBAN TRANSPORTATION COMPANY
v.
PUBLIC UTILITY COMMISSION AND PHILADELPHIA ELECTRIC COMPANY



Appeal from the order of the Pennsylvania Public Utility Commission at No. 18088, November 23, 1970, in case of Philadelphia Suburban Transportation Company v. Philadelphia Electric Company.

COUNSEL

David Berger, with him H. Laddie Montague, Jr., for appellant.

Herbert E. Squires, Assistant Counsel, with him Edward Munce, Acting Counsel, for appellee, Pennsylvania Public Utility Commission.

Frederic L. Ballard, with him Tyson W. Coughlin, Kenneth J. Levin and Edward G. Bauer, Jr., for intervenor, Philadelphia Electric Company.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. Opinion by Judge Kramer. Judge Manderino dissents.

Author: Kramer

[ 3 Pa. Commw. Page 185]

This is an appeal from an order of the Pennsylvania Public Utility Commission (PUC) dated November 23, 1970, dismissing a complaint filed by the appellant, the Philadelphia Suburban Transportation Company (PST) against the Philadelphia Electric Company (PE), intervening appellee, alleging discrimination and preferential electric rates among customers to the detriment of PST. The complaint, as later twice amended, requested the PUC to fix, determine

[ 3 Pa. Commw. Page 186]

    and prescribe a special rate schedule for PST, together with refunds for any unlawful collection of rates by PE from PST. The thrust of PST's complaint is that because PE had established a rate schedule designed for the Philadelphia Transportation Company (PTC) arising out of a 1929 contract, and had continued to charge PTC for electric service under what was referred to in the record of this case as "Former Rate T" while "arbitrarily" not making that same rate schedule available to PST (PTC and PST both being street railway mass transit companies serving the Philadelphia area) resulted in the alleged discrimination and preferential treatment.

Because both PTC and PST, in 1968 and 1970 respectively, had all of their assets acquired by the Southeastern Pennsylvania Transportation Association (SEPTA), a mass transit municipal authority, the practical intent of the owners of the stock (or what remains of the assets) of PST is to claim refunds for those electric rate sums of money which PST alleges were overcharged to it by virtue of the alleged discrimination and preferential treatment. To understand what the PUC (which becomes the appellee on appeal) determined in its adjudication dismissing the complaint of PST, it will be necessary to set forth certain pertinent factual background and a description of the various rate schedules involved.

PTC was a mass transit railway public utility. On October 1, 1929, PE and PTC (formerly known as Philadelphia Rapid Transit Company) entered into an agreement whereby PTC agreed to cease generating its own electricity and to purchase its entire electric requirements from PE. Under the contract, PTC's electric generating facilities were leased to PE. In return for PE investing in, and providing facilities to supply the entire requirements of PTC, the railway company

[ 3 Pa. Commw. Page 187]

    agreed to pay for the electric service rendered under certain guarantees provided for in a three-part rate schedule. For purposes of this opinion, this rate schedule, which was designated Rate T, will be referred to herein as Former Rate T, because the three-part design of the rate schedule continued to June 16, 1966, when a new Rate T became effective. This new Rate T which continued after June 16, 1966, will be designated herein as "Current Rate T".

The three parts in the design of Former Rate T were: (1) The capacity charge was intended to recover the fixed costs on PE's investment in facilities to serve any customers taking electric service under Former Rate T. It contained a minimum billing demand provision under a formula which required PTC to pay the capacity charge (expressed in money) based upon 64,880.4 kilowatts regardless of its actual demands during the month. (2) The energy charge was designed to recover PE's operating costs at a designated sum of money per kilowatt hour for serving the electric energy to the customers taking service under Former Rate T. (3) The third part was a transmission and distribution investment charge (T & D charge), which was designed to recover for PE, on an annual basis, an amount equal to 13 1/2 per cent of all of the investments which PE made in facilities required exclusively for service to PTC. Although written in terms of availability to anyone, there can be no question that Former Rate T was intended for only one customer, namely, PTC.

In 1936, PST was organized and became a customer of PE. PST was also a mass transit railway public utility. Its requirements for electric service were only one-tenth that of PTC. Although service to both PTC and PST was to be used for the same kind of customer with similar load factors and peak requirements, PST, because of its requirements, was not able to qualify for

[ 3 Pa. Commw. Page 188]

    service under the Former Rate T. PST did qualify to take its electric service under Rate HT, a high tension rate schedule for customers receiving energy at 13,000 volts and above. (The only exceptions to this statement of fact were three railroad and railway companies which, because of special circumstances were billed under special tariff classifications.) Rate Schedule HT is a two-part rate schedule with capacity and energy charges blocked in such a way ...


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