B-126851, FEB. 21, 1956

B-126851: Feb 21, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. THE QUESTION FOR DECISION IS WHETHER RATE NO. 1 IS APPLICABLE OR WHETHER RATE NO. 11 IS PROPERLY APPLICABLE TO THE SERVICES COVERED BY THE VOUCHER AND TO OTHER SIMILAR SERVICES RENDERED UNDER THE CONTRACT SINCE FEBRUARY 1. IT IS STATED IN YOUR LETTER THAT IF RATE NO. 11 IS APPLICABLE OVERPAYMENTS HAVE BEEN MADE IN THE AMOUNT OF $105. IT IS STATED FURTHER THAT THE COMPANY HAS FURNISHED CERTAIN EQUIPMENT ORDINARILY FURNISHED BY CUSTOMERS TAKING SERVICES UNDER INDUSTRIAL RATE SCHEDULES. WAS SUBSTITUTED FOR RATE SCHEDULE NO. 3. SCHEDULE NO. 1 WAS "APPLICABLE TO USE OF SERVICE FOR:PRIMARY POWER BY LARGE INDUSTRIAL CUSTOMERS OR TO THE ARMED FORCES OF THE UNITED STATES ARMY * * * USING 150 KW AND OVER WHEN ALL ELECTRICAL POWER REQUIREMENTS ARE TAKEN FROM THE COMPANY.'.

B-126851, FEB. 21, 1956

TO LIEUTENANT COLONEL B. CORNETT, F.C., UNITED STATES ARMY:

THERE HAS BEEN RECEIVED FROM THE OFFICE OF THE CHIEF OF FINANCE YOUR LETTER OF DECEMBER 23, 1955, TRANSMITTING BUREAU VOUCHER NO. ENG R AND U 569-B (D) IN THE AMOUNT OF $15,989 STATED IN FAVOR OF SOUTH CAROLINA ELECTRIC AND GAS COMPANY UNDER CONTRACT NO. W-408-QM-391, DATED SEPTEMBER 16, 1941, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED.

THE AMOUNT OF THE VOUCHER REPRESENTS CHARGES MADE BY THE SOUTH CAROLINA ELECTRIC AND GAS COMPANY FOR ELECTRIC SERVICES FURNISHED TO THE ARMY INSTALLATION AT FORT JACKSON, SOUTH CAROLINA, DURING THE PERIOD OCTOBER 31 TO NOVEMBER 30, 1955, AS COMPUTED UNDER RATE NO. 1 OF THE COMPANY'S RATE SCHEDULE. THE QUESTION FOR DECISION IS WHETHER RATE NO. 1 IS APPLICABLE OR WHETHER RATE NO. 11 IS PROPERLY APPLICABLE TO THE SERVICES COVERED BY THE VOUCHER AND TO OTHER SIMILAR SERVICES RENDERED UNDER THE CONTRACT SINCE FEBRUARY 1, 1952 (THE EFFECTIVE DATE OF RATE NO. 11), OR TO BE RENDERED IN THE FUTURE. IT IS STATED IN YOUR LETTER THAT IF RATE NO. 11 IS APPLICABLE OVERPAYMENTS HAVE BEEN MADE IN THE AMOUNT OF $105,821.60 FOR THE PERIOD FEBRUARY 1, 1952, TO OCTOBER 31, 1955. IT IS STATED FURTHER THAT THE COMPANY HAS FURNISHED CERTAIN EQUIPMENT ORDINARILY FURNISHED BY CUSTOMERS TAKING SERVICES UNDER INDUSTRIAL RATE SCHEDULES; THAT SUCH EQUIPMENT HAD A DEPRECIATED VALUE OF $24,695.78 AS OF FEBRUARY 16, 1955, AS COMPUTED BY THE COMPANY; AND THAT ARRANGEMENTS COULD BE MADE TO COMPENSATE THE COMPANY FOR THE REASONABLE RENTAL VALUE OF THE EQUIPMENT DURING THE PERIOD SUBSEQUENT TO FEBRUARY 1, 1952, AND TO PURCHASE OR RENT IT FOR USE IN THE FUTURE.

IT APPEARS THAT THE ORIGINAL CONTRACT NO. W-408-QM-391, DATED SEPTEMBER 16, 1941, SPECIFIED RATES "IN ACCORDANCE WITH RATE SCHEDULE NO. 3 * * *.' BY CHANGE ORDER NO. 1, DATED AUGUST 7, 1942, RETROACTIVE TO JUNE 1, 1942, RATE SCHEDULE NO. 1 ISSUED APRIL 15, 1942, WAS SUBSTITUTED FOR RATE SCHEDULE NO. 3, AND ALL SUBSEQUENT MODIFICATIONS OF THE CONTRACT SPECIFIED RATES IN ACCORDANCE WITH SCHEDULE NO. 1. SCHEDULE NO. 1 WAS "APPLICABLE TO USE OF SERVICE FOR:PRIMARY POWER BY LARGE INDUSTRIAL CUSTOMERS OR TO THE ARMED FORCES OF THE UNITED STATES ARMY * * * USING 150 KW AND OVER WHEN ALL ELECTRICAL POWER REQUIREMENTS ARE TAKEN FROM THE COMPANY.' IT IS STATED IN YOUR LETTER THAT THE REISSUES OF RATE SCHEDULE NO. 1 WERE TITLED "INDUSTRIAL SERVICE," ,INDUSTRIAL AND HIGH LOAD FACTOR POWER SERVICE" AND "INDUSTRIAL POWER SERVICE.'

RATE SCHEDULE NO. 11, EFFECTIVE FEBRUARY 1, 1952, PROVIDED UNDER THE HEADING "AVAILABILITY: "

"THIS RATE IS NOT AVAILABLE FOR ANY SERVICE UNDER A NEW CONTRACT, BUT SHALL REMAIN IN FORCE AND EFFECT FOR EACH INDUSTRIAL CUSTOMER UNDER A CONTRACT ENTERED INTO, ON OR BEFORE FEBRUARY 1, 1952 COVERED BY SCHEDULE "1" ISSUED SEPTEMBER 28, 1948 AND TO OTHER INDUSTRIAL CUSTOMERS UNDER CONTRACT RATES AND HAVING DEMANDS OVER 3,000 KVA; SUCH CONTRACT BEING IMMEDIATELY CANCELLED UPON DISCONTINUANCE OF SERVICE FOR ANY REASON WHATSOEVER.'

THE CONTRACT PROVIDES IN PART:

"/1) CHANGE OF RATES.--- (1) THAT IF DURING THE LIFE OF THIS CONTRACT THE STATE COMMISSION HAVING JURISDICTION RECEIVES FOR FILE IN AUTHORIZED MANNER RATES THAT ARE HIGHER OR RATES THAT ARE LOWER THAN THOSE STIPULATED HEREIN FOR LIKE CONDITIONS OF SERVICE, THE CONTRACTOR HEREBY AGREES TO CONTINUE TO FURNISH ELECTRIC CURRENT AS STIPULATED IN THIS CONTRACT, AND THE UNITED STATES HEREBY AGREES TO PAY FOR SUCH ELECTRIC CURRENT AT THE HIGHER OR LOWER RATES FROM AND AFTER THE DATE WHEN SUCH RATES ARE MADE EFFECTIVE.'

IN THE EXCERPTS FURNISHED FROM THE HEARINGS HELD BEFORE THE PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA DURING THE PERIOD NOVEMBER 1951 TO JANUARY 1952, ON THE APPLICATION OF THE SOUTH CAROLINA ELECTRIC AND GAS COMPANY FOR AUTHORITY TO MAKE CERTAIN CHANGES IN ITS ELECTRIC AND GAS TARIFFS--- WHICH RESULTED IN THE ISSUANCE OF RATE SCHEDULE NO. 11- - THERE ARE STATEMENTS WHICH MIGHT BE REGARDED AS INDICATING THAT THE COMPANY INTENDED THE NEW RATE NO. 11 TO APPLY ONLY TO THREE LARGE PRIVATE USERS. HOWEVER, THERE IS NOT FOUND ANY SPECIFIC STATEMENT THAT THE UNITED STATES WAS TO BE EXCLUDED FROM THE BENEFITS OF THE NEW RATE. IN ANY EVENT THERE CAN BE NO QUESTION THAT ANY SUCH LANGUAGE IN THE HEARING OR ANY SUCH INTENTION OF THE COMPANY COULD NOT OPERATE TO NULLIFY THE ACTUAL PROVISIONS AND REQUIREMENTS OF THE CONTRACT AND RATE SCHEDULES INVOLVED.

IT IS STATED IN YOUR LETTER THAT "THE DEMAND AT FORT JACKSON AT ALL TIMES SUBSEQUENT TO THE EFFECTIVE DATE OF RATE 11, 1 FEBRUARY 1952, HAS EXCEEDED THE 3,000 KVA MINIMUM ESTABLISHED IN THAT SCHEDULE.' SUCH BEING THE FACT AND IT APPEARING THAT ALL OTHER REQUIREMENTS OF RATE NO. 11 HAVE BEEN MET BY THE SERVICE REQUIRED AT THE ARMY INSTALLATION AT FORT JACKSON AND FURNISHED BY THE SAID COMPANY UNDER THE CONTRACT, THE CONCLUSION IS REQUIRED THAT RATE NO. 11 HAS BEEN PROPERLY APPLICABLE TO SUCH SERVICE AT ALL TIMES SINCE FEBRUARY 1, 1952, THE EFFECTIVE DATE OF THAT RATE. ACCORDINGLY, THE AMOUNT PROPERLY DUE ON THE SUBJECT VOUCHER AND SUBSEQUENT VOUCHERS, IF ANY, SHOULD BE COMPUTED ON THE BASIS OF RATE NO. 11, IF OTHERWISE CORRECT, AND APPROPRIATE ACTION TAKEN TO EFFECT COLLECTION OF THE OVERPAYMENTS RESULTING FROM THE APPLICATION OF THAT RATE TO ALL SERVICES FURNISHED UNDER THE CONTRACT SINCE FEBRUARY 1, 1952.

THE VOUCHER, WHICH MAY BE CERTIFIED ACCORDINGLY, AND ACCOMPANYING PAPERS, ARE RETURNED HEREWITH, EXCEPTING DUPLICATE COPIES WHICH ARE BEING RETAINED HERE.