B-87828, AUGUST 12, 1949, 29 COMP. GEN. 71

B-87828: Aug 12, 1949

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PROPERLY ARE PAYABLE BY THE GOVERNMENT AS RATES "LAWFULLY ESTABLISHED" WITHIN THE MEANING OF THE TELEPHONE SERVICE CONTRACT PROVIDING FOR PAYMENT OF SUCH RATES. 1949: REFERENCE IS MADE TO YOUR LETTER OF JULY 7. GEN. 580 RECOGNITION WAS GIVEN TO THE PRINCIPLE THAT CONTRACTS FOR SERVICES IN THE NATURE OF PUBLIC UTILITIES ARE SUBJECT NOT ONLY TO THE POLICE POWER OF REGULATION. BY SECTION 623 IT IS PROVIDED THAT UPON THE FILING OF SCHEDULES OF INCREASED RATES THE COMMISSION MAY ENTER UPON HEARINGS AS TO THE PROPRIETY OF SUCH RATES AND MAY SUSPEND THE OPERATION THEREOF FOR LIMITED PERIODS PENDING SUCH HEARINGS. APPEALS ARE ALLOWED FROM FINAL ORDERS OF THE COMMISSION TO THE STATE SUPREME COURT (SEC. 627).

B-87828, AUGUST 12, 1949, 29 COMP. GEN. 71

TELEPHONES - RATES - INCREASES BY TEMPORARY INJUNCTION INCREASED TELEPHONE RATES PUT INTO EFFECT BY A TELEPHONE COMPANY PURSUANT TO A TEMPORARY INJUNCTION ISSUED BY AN IDAHO COURT RESTRAINING THE STATE PUBLIC UTILITIES COMMISSION FROM INTERFERING WITH THE INCREASED RATES FILED BY THE COMPANY MAY BE REGARDED PENDENTE LITE AS THE ,ESTABLISHED AND EFFECTIVE" RATES UNDER STATE LAW IN THE ABSENCE OF EFFECTIVE INTERPOSITION BY THE COMMISSION AND, AS SUCH, PROPERLY ARE PAYABLE BY THE GOVERNMENT AS RATES "LAWFULLY ESTABLISHED" WITHIN THE MEANING OF THE TELEPHONE SERVICE CONTRACT PROVIDING FOR PAYMENT OF SUCH RATES.

COMPTROLLER GENERAL WARREN TO E. C. CRARY, DEPARTMENT OF AGRICULTURE, AUGUST 12, 1949:

REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1949, REQUESTING A DECISION AS TO WHETHER YOU PROPERLY MAY CERTIFY THE VOUCHER TRANSMITTED THEREWITH IN FAVOR OF THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH CO., IN THE AMOUNT OF $136.29, COVERING TELEPHONE SERVICE FURNISHED THE BOISE NATIONAL FOREST IN THE STATE OF IDAHO FOR CERTAIN PERIODS BETWEEN APRIL 26 AND MAY 31, 1949. YOU STATE THAT $9.23 OF THE AMOUNT INVOLVED REPRESENTS AN INCREASE IN RATES PLACED IN EFFECT BY THE COMPANY AS OF APRIL 18, 1949, PURSUANT TO A TEMPORARY INJUNCTION AND COURT ORDER AND DECREE ISSUED BY THE THIRD DISTRICT COURT OF IDAHO ON APRIL 16, 1949, RESTRAINING THE STATE PUBLIC UTILITIES COMMISSION FROM INTERFERING WITH THE INCREASED RATES FILED BY THE COMPANY, AND, IN EFFECT, ASK WHETHER THE INCREASED RATES SO PUT INTO EFFECT MAY BE CONSIDERED AS RATES "LAWFULLY ESTABLISHED" WITHIN THE MEANING OF THE CONTRACT IN FORCE BETWEEN THE COMPANY AND THE FOREST SERVICE, PROVIDING FOR THE PAYMENT OF SUCH RATES BY THE GOVERNMENT.

IN 27 COMP. GEN. 580 RECOGNITION WAS GIVEN TO THE PRINCIPLE THAT CONTRACTS FOR SERVICES IN THE NATURE OF PUBLIC UTILITIES ARE SUBJECT NOT ONLY TO THE POLICE POWER OF REGULATION, BUT ALSO TO THE REQUIREMENT OF PUBLIC POLICY THAT RATES SHOULD BE NONDISCRIMINATORY AND UNIFORM FOR ALL PERSONS RECEIVING THE SAME CLASS OF SERVICE.

IN IDAHO THE LEGISLATIVE POWER OF REGULATION OF PUBLIC UTILITIES HAS BEEN VESTED IN A PUBLIC UTILITIES COMMISSION ( IDAHO CODE, BOBBS MERRILL CO., 1948, TITLE 61) AND DETAILED PROVISIONS ENACTED WITH RESPECT TO ITS DUTIES AND PROCEDURES. SECTION 301 OF THE TITLE CITED PROVIDES THAT ALL CHARGES FOR PUBLIC UTILITY SERVICES SHALL BE JUST AND REASONABLE; SECTION 305 REQUIRES SCHEDULES OF RATES, REGULATIONS, ETC., TO BE FILED WITH THE COMMISSION; SECTION 307 REQUIRES 30 DAYS' NOTICE OF PROPOSED CHANGES TO BE GIVEN BY THE FILING OF THE PROPOSED NEW RATES WITH THE COMMISSION; AND SECTION 315 PROHIBITS THE GIVING OF ANY PREFERENCE OR ADVANTAGE TO ANY CORPORATION OR PERSON. BY SECTION 623 IT IS PROVIDED THAT UPON THE FILING OF SCHEDULES OF INCREASED RATES THE COMMISSION MAY ENTER UPON HEARINGS AS TO THE PROPRIETY OF SUCH RATES AND MAY SUSPEND THE OPERATION THEREOF FOR LIMITED PERIODS PENDING SUCH HEARINGS, BUT ALL SUCH SCHEDULED RATES NOT SO SUSPENDED SHALL ON THE EXPIRATION OF 30 DAYS FROM FILING GO INTO EFFECT AS "ESTABLISHED AND EFFECTIVE" RATES, SUBJECT TO THE POWER OF THE COMMISSION, AFTER HEARING, TO ALTER OR MODIFY. APPEALS ARE ALLOWED FROM FINAL ORDERS OF THE COMMISSION TO THE STATE SUPREME COURT (SEC. 627), AND PENDING APPEAL THE ORDER APPEALED FROM MAY BE SUSPENDED BY THE COURT (SEC. 635), PROVIDED A BOND BE GIVEN AND PROVISION MADE FOR THE PAYMENT INTO COURT OF MONEYS RECEIVED UNDER A RATE SCHEDULE IN DISPUTE (SEC. 637). SIMILAR SAFEGUARDS ARE PROVIDED WITH RESPECT TO INJUNCTIONS OR RESTRAINING ORDERS ISSUED BY OTHER STATE COURTS (SEC. 634), WHICH ARE PROHIBITED EXCEPT WHERE SUCH A COURT MAKES A SPECIFIC FINDING AND DETERMINATION THAT GREAT AND IRREPARABLE DAMAGE WOULD RESULT TO THE PETITIONER IF THE ORDER OF THE COMMISSION REMAINED IN EFFECT (SEC. 633).

UNDER THESE PROVISIONS, IT SEEMS CLEAR THAT THE RIGHT OF THE UTILITY IN THE FIRST INSTANCE TO INITIATE NEW RATES IS RECOGNIZED, AND THAT IN THE ABSENCE OF INTERPOSITION BY THE COMMISSION A NEW RATE SCHEDULED BY A UTILITY WOULD BECOME, AFTER 30 DAYS, THE "ESTABLISHED AND EFFECTIVE" RATE. IN THE INSTANT CASE IT APPEARS THAT THE COMMISSION HAS DISAPPROVED THE PROPOSED RATES, BUT HAS BEEN ENJOINED BY JUDICIAL AUTHORITY FROM INTERFERING WITH THEM. WHETHER THE INJUNCTION IS SUBSEQUENTLY MADE PERMANENT OR NOT, THE ACTUAL EFFECT IS THAT, SO LONG AS THE INJUNCTION REMAINS IN FORCE, THERE IS NO EFFECTIVE ORDER OF THE COMMISSION PREVENTING THE EFFECTIVENESS OF THE RATES PROPOSED, AND THEY MAY ACCORDINGLY BE CONSIDERED PENDENTE LITE AS MUCH THE "ESTABLISHED AND EFFECTIVE" RATES AS THEY WOULD HAVE BEEN HAD THE COMMISSION TAKEN NO ACTION.

IN VIEW OF THE AMPLE SAFEGUARDS PROVIDED AGAINST THE EVENT THAT THE INCREASED RATES SHOULD HEREAFTER BE DISALLOWED, IT DOES NOT APPEAR THAT THE INTEREST OF THE UNITED STATES WOULD BE PREJUDICED BY ACCEPTING THE RATES NOW IN EFFECT PURSUANT TO THE INJUNCTION AS THE "LAWFULLY ESTABLISHED" RATES WITHIN THE MEANING OF THE SUBJECT CONTRACT, AND THE TRANSMITTED VOUCHER, WHICH IS HEREWITH RETURNED, MAY BE CERTIFIED FOR PAYMENT IF PROPER IN OTHER RESPECTS.