B-178356, OCT 31, 1973
Highlights
THIS OFFICE HAS NO OBJECTION TO PAYMENT AT NEW RATES ORDERED BY COMMISSION BECAUSE RATES FIXED BY CONTRACT BETWEEN THESE PARTIES ARE SUBJECT TO STATE LEGISLATIVE REGULATION AND CAN BE SUPERSEDED BY SCHEDULE OF RATES ESTABLISHED BY LEGISLATURE OR COMMISSION THAT HAS BEEN DELEGATED THIS REGULATORY POWER AS LONG AS RATES ARE JUST. NONDISCRIMINATORY AND FEDERAL PROCUREMENT POLICY IS NOT VIOLATED. (27 COMP. REGULATIONS AND CASES ARE CITED THEREIN.). EARL DUFFEL: THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 29. THE STATE LEGISLATURE CREATED A COMMISSION TO REGULATE PUBLIC UTILITIES AND PURSUANT TO THIS AUTHORITY RATE INCREASES WERE EFFECTED. RATES FIXED BY CONTRACT BETWEEN A PUBLIC UTILITY AND A CONSUMER ARE SUBJECT TO STATE LEGISLATIVE REGULATION AND CAN BE SUPERSEDED BY A SCHEDULE OF RATES ESTABLISHED BY THE LEGISLATURE OR A COMMISSION THAT HAS BEEN DELEGATED THIS REGULATORY POWER.
B-178356, OCT 31, 1973
WHEN DEPARTMENT OF AGRICULTURE CONTRACTED FOR GAS AND ELECTRIC SERVICES FROM PUBLIC UTILITY AT FIXED RATE AND DURING TERM OF CONTRACT STATE LEGISLATIVE CREATED COMMISSION TO REGULATE PUBLIC UTILITIES, THIS OFFICE HAS NO OBJECTION TO PAYMENT AT NEW RATES ORDERED BY COMMISSION BECAUSE RATES FIXED BY CONTRACT BETWEEN THESE PARTIES ARE SUBJECT TO STATE LEGISLATIVE REGULATION AND CAN BE SUPERSEDED BY SCHEDULE OF RATES ESTABLISHED BY LEGISLATURE OR COMMISSION THAT HAS BEEN DELEGATED THIS REGULATORY POWER AS LONG AS RATES ARE JUST, REASONABLE, AND NONDISCRIMINATORY AND FEDERAL PROCUREMENT POLICY IS NOT VIOLATED. (27 COMP. GEN. 580 (1948) AND OTHER STATUTES, REGULATIONS AND CASES ARE CITED THEREIN.)
TO MR. EARL DUFFEL:
THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 29, 1973, AND SUBSEQUENT CORRESPONDENCE, REQUESTING OUR DECISION AS TO WHETHER CERTAIN BILLS FOR SERVICES PROVIDED BY THE IOWA ELECTRIC LIGHT AND POWER COMPANY (HEREINAFTER REFERRED TO AS IOWA ELECTRIC) DURING THE MONTHS OF JANUARY AND FEBRUARY 1973, IN THE AMOUNT OF $80,112.27 MAY BE CERTIFIED FOR PAYMENT.
THE RECORD SHOWS THAT ON NOVEMBER 20, 1958, THE AGRICULTURE RESEARCH SERVICE OF THE UNITED STATES DEPARTMENT OF AGRICULTURE AND IOWA ELECTRIC EXECUTED CONTRACT NO. 12-14-100-2948(45). BY THE TERMS OF THIS CONTRACT IOWA ELECTRIC AGREED TO FURNISH ITS SERVICES TO THE ANIMAL DISEASE RESEARCH LABORATORY AT AMES, IOWA, AT RATES PROVIDED THEREIN. AFTER EXECUTION OF THE CONTRACT, THE STATE LEGISLATURE CREATED A COMMISSION TO REGULATE PUBLIC UTILITIES AND PURSUANT TO THIS AUTHORITY RATE INCREASES WERE EFFECTED. IOWA ELECTRIC CONTENDS THAT THE HIGHER RATES GRANTED BY THE COMMISSION SUPERSEDE THE CONTRACT RATES AND HAS REQUESTED PAYMENT IN ACCORDANCE WITH THE INCREASED RATES.
GENERALLY, RATES FIXED BY CONTRACT BETWEEN A PUBLIC UTILITY AND A CONSUMER ARE SUBJECT TO STATE LEGISLATIVE REGULATION AND CAN BE SUPERSEDED BY A SCHEDULE OF RATES ESTABLISHED BY THE LEGISLATURE OR A COMMISSION THAT HAS BEEN DELEGATED THIS REGULATORY POWER. SEE MIDLAND REALTY CO. V. KANSAS CITY POWER AND LIGHT CO., 300 U.S. 109 (1937); 27 COMP. GEN. 580, 582 (1948) AND CASES CITED THEREIN; AND 29 C.J.S. ELECTRICITY SECS 30 AND 31.
IN THE ABSENCE OF ANY INDICATION IN THE RECORD THAT THE NEW RATES ARE UNJUST, UNREASONABLE OR DISCRIMINATORY, WE DO NOT OBJECT TO PAYMENT FOR THESE SERVICES AT THE NEW RATES PRESCRIBED BY THE REGULATORY AUTHORITY. 27 COMP. GEN. 580, SUPRA. ..END :