Pennsylvania

Vol. III

HARRISBURG, PA., MARCH, 2, 1917

No. 9

Public Service Commission

BOROUGH OF BELLEVUE, ET AL., vs. OHIO VALLEY WATER CO.

Complaints were filed against respondent company by several boroughs, a township and an individual supplied by said company alleging that the rates were excessive and in violation of the provisions of certain ordinances and contracts, in which it was provided that respondent should supply water at certain specified rates.

The Commission held: First, That the contract between the borough of McKees Rocks and the Water Company as well as all other contracts in which are prescribed rates for free service, furnished by the respondent to any municipality, whether such contracts be for a definite or indefinite period, insofar as they attempt to fix rates, do not prevent the Commission from determining whether or not the said rates are just, reasonable or adequate.

2nd. That the charges for fire service in order to be just and reasonable should be based upon the amount of investment that is required for so much of respondent's plant as is used and useful for fire service together with its cost of maintenance as well as the proper proportional part of the operating expenses and depreciation.

3rd. Under the theory of rate regulation of public utilities, as it now obtains under the provisions of the Public Service Company Law, respondent should not be asked or permitted to supply

any free service. Charging one for his supply, and serving another free, is an unfair and unjust practice, and in violation of the rule against unreasonable preferences and unjust discriminations.

4th. All meters should be owned by the utility. They are as much a part of its facilities as its mains or pumping station, and should be owned by and under the control and supervision of the utility. Likewise a water company should furnish meters to its patrons, and any practice whereby some patrons are furnished meters and others are compelled to purchase same is discriminatory.

5th. Where the water furnished by the respondent is all secured from the same source and is supplied to the several contiguous municipalities embraced in one general district, without any great difference in cost, all rates in all the districts served by respondent should be the same.

6th. That a "ready to serve" charge should be substituted for the present "minimum" charge. "The ready to serve" charge is justified on the ground that the utility, after its plant is once constructed and ready for service, may ask each patron to pay a reasonable amount based upon the size of its service pipe in order to reimburse the utility for the cost of so much of its plant as it is required to enable it to at all times stand ready to serve its patrons.

7th. The fair value of respondent's property as it is used and useful in its public service, upon which to base its rate of return in addition to annual operating expenses and proper allowance for depreciation, as of January 1, 1916, is $924,714.00.

8th. The respondent is entitled to have a rate of return upon the fair valuation of its property used and useful, as herein found, of 7% over and above its necessary annual operating expenses and a proper allowance for depreciation.

9th. The rates and minimum charges contained in the sched ules filed by respondent on December 30, 1916, to take effect December 31, 1916, are unjust, unreasonable, inadequate, unjustly discriminatory and unduly and unreasonably preferential.

Alleging Excessive and unreasonable rates, etc., for water service.

Report of the Commission.

RILLING, Commissioner.

On December 30, 1914, the Boroughs of Emsworth and Ben Avon each filed a complaint against the Ohio Valley Water Company, the respondent in this case, alleging that the rates of respondent were excessive and in violation of the provisions of certain ordinances of said Boroughs, duly accepted by the respondent, in which ordinances it was provided that the respondent should supply water to the said Boroughs and the public therein. at certain specified rates.

A hearing was held at Harrisburg, Pennsylvania, on April 6, 1915, at which time the complaint of Emsworth was withdrawn and the hearing proceeded with the single complaint of Ben Avon. Complainant offered no testimony, contending that the burden of proof rested upon the respondent.

The respondent furnished certain evidence in support of the reasonableness of its rates and its witnesses were duly cross-examined by the attorney for the complainant.

Before any report was made by the Commission, the Boroughs of McKees Rocks, Bellevue, Avalon and Westview, and the Township of Stowe, and one William B. Dawson, a resident of Bel

levue, each filed a complaint alleging that the rates of the respondent were excessive and unreasonable and in the complaints of McKees Rocks and Bellevue it was further alleged that said rates were in violation of certain ordinances or contracts then in force between said Boroughs and said respondent.

To all of these complaints the respondent filed its several answers, denying the allegations of unreasonableness of its rates and alleging that the contracts and ordinances which complainants alleged to have been violated by it were void.

Testimony was taken at hearings held in the City of Pittsburgh in November and December, 1915. At these hearings all of the complainants appeared by their respective counsels, and the said W. B. Dawson appeared in person. It was agreed by all the parties that all of the relevant and material testimony taken at said hearings should be considered by the Commission in all the cases then pending before it. Objections were made to the testimony taken at the hearing on April 6, 1915, when the single complaint of Ben Avon was pending before the Commission and therefore it is considered only in connection with the complaint of Ben Avon.

From the evidence we find the following facts:

Facts.

1. The Ohio Valley Water Company, the respondent, was originally incorporated on April 8, 1903, as the West Park Water Company, under the provisions of the Act of General Assembly approved April 29, 1874, and its supplements. Its name was changed on June 22, 1904, to the Ohio Valley Water Company. The Borough of McKees Rocks was 'named in its charter as the district in which it was to carry on its business. Since its incorporation the respondent has by purchase, merger or consolidation acquired several other water companies doing business in McKees Rocks and adjoining districts so that at the time the several complaints were filed it was the only water company supplying water to the public in Boroughs and Townships hereinafter named.

2. The Ohio Valley Water Company was originally incorporated with a capital stock of $10,000 which was on June 25, 1903,