Appeal from the Order of the Pennsylvania Public Utility Commission in case of Petition of Pennsylvania Power & Light Company, Order of March 28, 1972 at Docket No. C. 19244.
Robert H. Young, with him Allen W. Stewart, Vincent Butler, and, of counsel, Morgan, Lewis & Bockius, for appellant.
Philip P. Kalodner, Counsel, with him Daniel F. Joella, Assistant Counsel, and Dominic J. Ferraro, Assistant Counsel, for appellee.
Dellon E. Coker, with him Curtis L. Wagner, Jr., and S. John Cottone, U.S. Attorney, for intervening appellee.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Kramer.
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This is an appeal filed by the Pennsylvania Power & Light Company (PP&L) from an order, dated March 28, 1972, of the Pennsylvania Public Utility Commission (PUC). On March 14, 1973, this Court filed an Opinion and Order disposing of the parties' cross motions (see 8 Pa. Commonwealth Ct. 322, 301 A.2d 380 (1973)), and the matter is now before this Court on the merits.
The matter was initially commenced on March 15, 1971 by PP&L's filing for increased rates. In its rate filing, PP&L sought to increase the rates for electric service to its customers in the amount of $42,400,341 (approximately a 15.2 percent increase based upon the
[ 10 Pa. Commw. Page 331]
level of operations at December 31, 1970). In its order the Commission, in effect, disallowed $12,850,000 of the proposed rate increase. Out of the many issues presented, argued and decided by the PUC, based upon volumes of testimony and statistical exhibits, the only issue presented to this Court by PP&L is whether the PUC properly determined an item of expense known as "annual depreciation." The PUC determined that a deficiency existed in PP&L's accrued depreciation as shown on its books, as the result of the adoption of a reserve requirement study of the actual depreciation for the test period. PP&L contends it was error for the PUC to disallow an increment (in addition to the annual depreciation expense) alleged to be required to amortize the deficiency so found. It argues that the increment is needed to permit the utility to recover the original cost of its investment in plant over the remaining life of that plant, as indicated by the reserve requirement study.
This Court's scope of review is limited both by statute and prior case law. Section 1107 of the Public Utility Law, Act of May 28, 1937, P.L. 1053, as amended, 66 P.S. § 1437, provides in pertinent part: "The order of the commission shall not be vacated or set aside, either in whole or in part, except for error of law or lack of evidence to support the finding, determination, or order of the commission, or a violation of constitutional rights. . . ."
Under the Appellate Court Jurisdiction Act, Act of July 31, 1970, P.L. 673, § 403, as amended, 17 P.S. § 211.403(1), jurisdiction for appeals from the adjudications of the PUC are now vested in this Court.
In Clemmer v. Pennsylvania Public Utility Commission, 207 Pa. Superior Ct. 388, 393-94, 217 A.2d 800, 804 (1966), the court described its appellate review in this area in the following terms: "The authority of this
[ 10 Pa. Commw. Page 332]
Court to overrule an order of the Commission is limited. We may not disturb such an order except for errors of law, lack of evidence to support a finding, determination or order of the Commission, or violation of constitutional rights, . . . Pennsylvania Railroad Company v. Pennsylvania Public Utility Commission, 202 Pa. Superior Ct. 114, 195 A.2d 162 (1963). . . ." This Court stated in the case of Department of Transportation v. P.U.C., 3 Pa. Commonwealth Ct. 405, 411, 283 A.2d 313, 317 (1971), that:
"This Court as the successor to the jurisdiction previously exercised by the Superior Court in this appellate area has chosen to view similarly its scope of review.
"Whether or not this Court may agree with the philosophy or the results, so long as the PUC had before it sufficient evidence to support its adjudication, this Court should not reverse the order of the PUC. See People's Cab Co. v. Pa. PUC, 216 Pa. Superior Ct. 18, 260 A.2d 490 (1969) and Modern Transfer Co. v. Pa. PUC, 182 Pa. Superior Ct. 110, 125 A.2d 463 (1956)."*fn1
Initially, in an attempt to simplify the inherently complex aspects of such a utility rate case, we will define the term "depreciation." Thereafter, we will delineate ...