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DAVID M. BARASCH v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (04/03/85)

decided: April 3, 1985.

DAVID M. BARASCH, CONSUMER ADVOCATE, APPELLANT,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, PHILADELPHIA ELECTRIC COMPANY, CITY OF PHILADELPHIA, APPELLEES



COUNSEL

Charles F. Hoffman, Marlane R. Chestnut, Harrisburg, for Public Utilities Com'n.

Walter R. Hall, II, David B. MacGregor, Philadelphia, for Philadelphia Elec. Co.

Martha W. Bush, Asst. City Sol., Philadelphia, for City of Philadelphia.

Steven P. Hershey, Philadelphia, for Consumer Educ. & Protection Assoc.

Jack J. Aloff, Philadelphia, pro se.

Jackie Ruttenberg, Philadelphia, Kenneth R. Pepperney and Charles J. Streiff, Pittsburgh, for U.S. Steel Corp.

Edward J. Riehl, Harrisburg, for P.A.I.E.U.G.

Irwin A. Popowsky, Asst. Consumer Advoc., Harrisburg, for appellant.

Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Flaherty, J., filed a dissenting opinion.

Author: Larsen

[ 507 Pa. Page 432]

OPINION OF THE COURT

In this rate case appeal, David M. Barasch, Consumer Advocate, challenges the Commonwealth Court's order affirming the decision of the Pennsylvania Public Utility Commission (Commission) which included in the rate base of appellee, Philadelphia Electric Company (PECO), $39,083,000 invested in nuclear fuel in process of refinement, conversion, enrichment and fabrication, (hereinafter nuclear fuel). For the reasons that follow, we affirm.

On July 29, 1981, PECO filed tariff revisions with the Commission seeking an increase in annual revenue to become effective September 27, 1981.*fn1 The Commission initiated an investigation into the lawfulness, reasonableness and justice of the then existing rates and the proposed rates. After hearings and arguments before an administrative law judge, it was recommended that an increase in annual revenues be permitted. Exceptions to the law

[ 507 Pa. Page 433]

    judge's recommendation were filed with the Commission. Following a review of the testimony, exhibits, briefs and exceptions filed, the Commission found that PECO was entitled to an annual increase in base rates of approximately $221,708,000. Approved for inclusion in the rate base was $39,083,000 invested by PECO in nuclear fuel. The nuclear fuel was included in the rate base even though the Commission found that a major portion*fn2 of the fuel was for Limerick Unit No. 1, a plant 70-75% complete and not scheduled to be operating until 1985.*fn3 Acknowledging that efficient completion of the Limerick No. 1 plant was important to PECO and the public, the Commission stated:

The courts of this Commonwealth and this Commission have recognized that a utility is entitled to a return on investment in property that is essential to the continued operation of the company in rendering service to its ratepayers. E.g., Pa. P.U.C. v. Peoples Natural Gas Company, 51 Pa.P.U.C. 385, 393 (1977); Duquesne Light Co. v. Pa. P.U.C., 176 Pa. Superior Ct. 568, 107 A.2d 745 (1954); City of Pittsburgh v. Pa. P.U.C., 171 Pa. ...


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