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N.C.App.1 SPRING SESSION 1972 47 Utilities Comm. v. Telephone Co.
30 June 1970, seven of which had been purchased for new cen-tral
offices or for space for expansion of existing central offices,
and five of which had been purchased for construction of micro-wave
towers. While it may have been entirely prudent for the
utility's management to acquire these tracts prior to the time
they were actually needed, and while savings in purchase price
may have resulted thereby, we find no error in the Commis-sion's
exclusion of this item in its process of finding original
cost. G.S. 62-133(b) (1) clearly specifies that the rate base is
to be "the fair value of the public utility's property used and
useful in providing the service rendered to the public within this
State," and G.S. 62-133 (c) directs that " [t] he public utility's
property and its fair value shall be determined as of the end of
the test period used in the hearing and the probable future reve-nues
and expenses shall be based on the plant and equipment
in operation at that time." (Emphasis added.) The statute
clearly contemplates that only that property of the utility which
is devoted to the public use for which the utility has been
granted a franchise is to be considered, both in arriving at the
fair value rate base and in projecting probable future revenues
and expenses. Utilities Comm. v. Morgan, Attorney General, 278
N.C. 235, 179 S.E. 2d 419.
151 We find no merit in appellant's contention that exclusion
from the rate base of the value of property held by a public
utility for future use amounts to confiscation of its property,
as we know of no constitutional principle which requires a hold-ing
that a public utility be entitled to a return on that portion
of its property not yet devoted to public use, nor do we per-ceive
why present rate payers should be required to pay any
part of the costs of the utility incurred solely for the benefit
of future generations of rate payers. "In fact, the general doc-trine
is that the rate base is made up of values used in furnish-ing
the service." St. Joseph Stockyards Co. v. United States,
11 F. Supp. 322, 329 (W.D. Mo.), affirmed, 298 U.S. 38, 56
S.Ct. 720, 80 L.Ed. 1033. Neither do we perceive any unfairness
in this, since, assuming Southern Bell's contention is correct
that earlier acquisitions of land result in economies in purchase
price, any increment in value of lands so acquired occurring
up to the time the land is placed in actual use by the utility
would properly become includable in the "fair value" rate base
at that time.
Object Description
| Title | North Carolina Court of Appeals Reports [v.015, Spring Session 1972] |
| Creator | North Carolina. Court of Appeals. |
| Date | 1973 |
| Subjects | Law reports, digests, etc.--North Carolina; Court records--North Carolina |
| Place | North Carolina, United States |
| Description | Volume 15, Spring Session 1972. Cited as 15 N.C.App. The North Carolina Court of Appeals Reports are the official report of opinions of the North Carolina Court of Appeals. Includes cases and other information about the courts of North Carolina. |
| Publisher | Court of Appeals of North Carolina |
| Agency-Current | North Carolina Court of Appeals, Judicial Department |
| Rights | State Document see http://digital.ncdcr.gov/u?/p249901coll22,63754 |
| Collection | North Carolina State Documents Collection. State Library of North Carolina |
| Type | Text |
| Language | English |
| Format | Reports; Legal documents |
| Digital Characteristics-A | 36 MB; 842 p. |
| Serial Title | North Carolina Court of Appeals Reports |
| Digital Collection | North Carolina Digital State Documents Collection |
| Digital Format | application/pdf |
| Pres File Name-M | pubs_serial_courtofappealsreports_vol_015.pdf |
| Pres Local File Path-M | \Preservation_content\StatePubs\pubs_law\images_master\ |
| OCLC Number-Original | 1681248 |
Description
| Title | Page 71 |
| Full Text | N.C.App.1 SPRING SESSION 1972 47 Utilities Comm. v. Telephone Co. 30 June 1970, seven of which had been purchased for new cen-tral offices or for space for expansion of existing central offices, and five of which had been purchased for construction of micro-wave towers. While it may have been entirely prudent for the utility's management to acquire these tracts prior to the time they were actually needed, and while savings in purchase price may have resulted thereby, we find no error in the Commis-sion's exclusion of this item in its process of finding original cost. G.S. 62-133(b) (1) clearly specifies that the rate base is to be "the fair value of the public utility's property used and useful in providing the service rendered to the public within this State" and G.S. 62-133 (c) directs that " [t] he public utility's property and its fair value shall be determined as of the end of the test period used in the hearing and the probable future reve-nues and expenses shall be based on the plant and equipment in operation at that time." (Emphasis added.) The statute clearly contemplates that only that property of the utility which is devoted to the public use for which the utility has been granted a franchise is to be considered, both in arriving at the fair value rate base and in projecting probable future revenues and expenses. Utilities Comm. v. Morgan, Attorney General, 278 N.C. 235, 179 S.E. 2d 419. 151 We find no merit in appellant's contention that exclusion from the rate base of the value of property held by a public utility for future use amounts to confiscation of its property, as we know of no constitutional principle which requires a hold-ing that a public utility be entitled to a return on that portion of its property not yet devoted to public use, nor do we per-ceive why present rate payers should be required to pay any part of the costs of the utility incurred solely for the benefit of future generations of rate payers. "In fact, the general doc-trine is that the rate base is made up of values used in furnish-ing the service." St. Joseph Stockyards Co. v. United States, 11 F. Supp. 322, 329 (W.D. Mo.), affirmed, 298 U.S. 38, 56 S.Ct. 720, 80 L.Ed. 1033. Neither do we perceive any unfairness in this, since, assuming Southern Bell's contention is correct that earlier acquisitions of land result in economies in purchase price, any increment in value of lands so acquired occurring up to the time the land is placed in actual use by the utility would properly become includable in the "fair value" rate base at that time. |
