B-102230, MAY 3, 1951, 30 COMP. GEN. 435

B-102230: May 3, 1951

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TELEPHONES - RATES - INCREASES - GOVERNMENT LIABILITY RATES FIXED BY CONTRACT BETWEEN A PUBLIC UTILITY COMPANY AND A PATRON THEREOF ARE SUBJECT TO LEGISLATIVE REGULATION AND ARE SUPERSEDED BY A SCHEDULE OF RATES PRESCRIBED BY THE LEGISLATURE OR A COMMISSION TO WHICH IT HAS DELEGATED ITS REGULATORY POWER. EVEN THOUGH NEW CONTRACTS WITH THE TELEPHONE COMPANY PROVIDING FOR THE HIGHER RATES WERE ERRONEOUSLY FIXED TO TAKE EFFECT AT A LATER TIME. 1951: REFERENCE IS MADE TO YOUR LETTER OF MARCH 19. REQUESTING DECISION AS TO WHETHER CERTIFICATION THEREOF FOR PAYMENT IS AUTHORIZED AND WHETHER TWO PERTINENT CONTRACTS REFERRED TO IN YOUR LETTER MAY BE OR SHOULD BE AMENDED. IN YOUR LETTER IT IS STATED THAT THE COMPANY ENTERED THE DATE JULY 1.

B-102230, MAY 3, 1951, 30 COMP. GEN. 435

TELEPHONES - RATES - INCREASES - GOVERNMENT LIABILITY RATES FIXED BY CONTRACT BETWEEN A PUBLIC UTILITY COMPANY AND A PATRON THEREOF ARE SUBJECT TO LEGISLATIVE REGULATION AND ARE SUPERSEDED BY A SCHEDULE OF RATES PRESCRIBED BY THE LEGISLATURE OR A COMMISSION TO WHICH IT HAS DELEGATED ITS REGULATORY POWER, AND THEREFORE AN INCREASE IN TELEPHONE SERVICE RATES AUTHORIZED BY THE RAILROAD AND PUBLIC UTILITIES COMMISSION OF THE STATE OF TENNESSEE TO TAKE EFFECT ON JUNE 1, 1950, MAY BE PAID FOR SERVICE FURNISHED THE GOVERNMENT IN THE MONTH OF JUNE, EVEN THOUGH NEW CONTRACTS WITH THE TELEPHONE COMPANY PROVIDING FOR THE HIGHER RATES WERE ERRONEOUSLY FIXED TO TAKE EFFECT AT A LATER TIME.

COMPTROLLER GENERAL WARREN TO W. M. IRBY, JR., DEPARTMENT OF AGRICULTURE, MAY 3, 1951:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 19, 1951, YOUR REFERENCE A -- DISBURSEMENT--- VOUCHERS--- ADVANCE DECISIONS, TRANSMITTING A VOUCHER IN THE AMOUNT OF $4.50 STATED IN FAVOR OF SOUTHERN BELL TELEPHONE AND TELEGRAPH CO., INC., CLEVELAND, TENNESSEE, AND REQUESTING DECISION AS TO WHETHER CERTIFICATION THEREOF FOR PAYMENT IS AUTHORIZED AND WHETHER TWO PERTINENT CONTRACTS REFERRED TO IN YOUR LETTER MAY BE OR SHOULD BE AMENDED.

THE VOUCHER COVERS A PROPOSED PAYMENT FOR CERTAIN TELEPHONE SERVICES FURNISHED TO THE GOVERNMENT DURING THE MONTH OF JUNE 1950, SUCH PROPOSED PAYMENT REPRESENTING THE DIFFERENCE BETWEEN THE RATES AUTHORIZED BY THE RAILROAD AND PUBLIC UTILITIES COMMISSION OF THE STATE OF TENNESSEE AS OF JUNE 1, 1950, AND THE RATES PAID FOR THE SAID SERVICE UNDER THE CONTRACTS THEN IN EFFECT. IT APPEARS THAT CONTRACTS NOS. A8FS-9385 AND A8FS-9386 DATED JULY 10, 1950, SUPERSEDING PRIOR CONTRACTS SPECIFIED THEREIN, PROVIDED FOR PAYMENT OF CERTAIN RATES FOR SERVICE BEGINNING JULY 1, 1950, SUCH RATES BEING THOSE AUTHORIZED BY THE RAILROAD AND PUBLIC UTILITIES COMMISSION OF THE STATE OF TENNESSEE TO BEGIN AS OF JUNE 1, 1950. IN YOUR LETTER IT IS STATED THAT THE COMPANY ENTERED THE DATE JULY 1, 1950, INSTEAD OF JUNE 1, 1950, ON THE SAID CONTRACTS AS THE EFFECTIVE DATE THEREOF BECAUSE OF ITS ERRONEOUS INTERPRETATION OF A PERTINENT RULING MADE BY THE SAID COMMISSION.

IT IS WELL RECOGNIZED THAT RATES FIXED BY CONTRACT BETWEEN A PUBLIC UTILITY COMPANY AND A PATRON THEREOF ARE NEVERTHELESS SUBJECT TO LEGISLATIVE REGULATION AND ARE SUPERSEDED BY A SCHEDULE OF RATES PRESCRIBED BY THE LEGISLATURE OR A COMMISSION TO WHICH IT HAS DELEGATED ITS REGULATORY POWER. SEE 27 COMP. GEN. 580, AND AUTHORITIES CITED THEREIN. FURTHERMORE, IT IS NOTED THAT THE CONTRACTS HERE INVOLVED PROVIDE THAT THEY ARE "SUBJECT TO ALL RATES, CHARGES, RULES, PRACTICES * * * OR REQUIREMENTS WHICH MAY BE LAWFULLY ESTABLISHED.' THEREFORE, IF THE RAILROAD AND PUBLIC UTILITIES COMMISSION OF THE STATE OF TENNESSEE, IN FACT AUTHORIZED THE CLAIMED INCREASE IN RATES EFFECTIVE JUNE 1, 1950, CERTIFICATION OF THE VOUCHER FOR PAYMENT MAY BE ACCOMPLISHED, IF OTHERWISE CORRECT. ACTUAL AMENDMENT OF THE CONTRACTS INVOLVED TO PROVIDE FOR PAYMENT OF THE INCREASED RATE FROM AND AFTER JUNE 1, 1950, WILL NOT BE NECESSARY IF A CITATION TO THIS DECISION IS PLACED UPON THE VOUCHER PAYING THE DIFFERENCE BETWEEN THE OLD AND THE NEW RATES.