utility’s fulfillment of its service commitments is sine qua non to constitutional protection under confiscation principles; inefficiency and inferior service deserve less return than would normally be forthcoming
How later courts described this case
- utility’s fulfillment of its service commitments is sine qua non to constitutional protection under confiscation principles; inefficiency and inferior service deserve less return than would normally be forthcoming
- constitution neither guarantees public utility immunity from loss occasioned by mismanagement, nor bars regulatory agency from taking adequate steps to protect public from such mismanagement, even if short-term effect is temporary loss to utility
- the caliber of a utility's service may be a factor in determining a reasonable rate of return and inferior service deserves less return
- “Credibility determinations within the agency’s sphere of expertise are peculiarly within its province, and courts will upset them only if made irrationally.”
Written by the judges who cited it.
The opinion
MacKINNON, Circuit Judge,
concurring specially:
While I concur in the result here, I believe that the Commission, and to a certain extent our opinion, overstates the deficiencies of D.C. Transit. The overall situation has degenerated to the point where many blame Transit completely for the financial ills that have befallen it. Transit, in response, blames the Commission, encouraged by a vocal and irresponsible segment of the public, for refusing to provide the revenue needed for survival. To my view the responsibility for Transit’s condition must be widely shared — there is merit to the contentions of all parties.
It is indeed true that Transit is presently in poor financial condition; and certainly the Commission, acting on behalf of the public interest it is bound to serve, is justified in seeking a capital structure for Transit that will reduce debt service expense and improve the overall financial stability of the company. But ordering Transit, in its ailing condition, to attract such large sums of new money may be analogous to a doctor ordering a patient who has just suffered a severe heart attack to get up and run a marathon. It may be possible to acquire new capital — I hope it is. But if Transit actually is as deficient in its operations as the Commission now contends, it may not be possible — investors are not generally attracted to poorly operated or failing ventures. I can join in the opinion of the majority affirming the Commission’s decision here only because there is no basis on this record for concluding that it would be impossible for Transit to comply with the conditions imposed by the Commission.
It seems to me that the Commission could have been more helpful to Transit in attracting additional capital if it had determined the new fare (the Commission admits a fare increase is justifiable) and simultaneously suspended that fare pending satisfactory compliance with the conditions imposed here. Midwest Tel. Co., 23 P.U.R.3d 26 , 31 (Ind. Pub. Serv. Comm’n 1958); Riverside Grove Water Co., 20 P.U.R.3d 117 , 120 (Calif. Pub. Util. Comm’n 1957). That course of action would have provided potential investors assurance of a fare increase of pre-determined magnitude rather than having the question left to the vagaries of future Commission action. As Vice-Chairman Sullivan noted in his dissent to the Commission’s order, that order leaves the Company— and potential investors — “dangling” in *424 mid-air. This is hardly an attractive situation for attempting to raise ■ substantial amounts of new capital.
Finally, I believe that the Commission’s disposition of this matter is only temporarily valid because of the uncertainties left open by the present, inadequate, record. I do not consider that the Commission has fully faced the entire problem. It must eventually face up to the present need for more operating revenue, and it must eventually confront the issue of whether the conditions imposed by its order are possible of accomplishment or unreasonable by virtue of being impossible to meet. But these issues must be fully litigated before the Commission before they may be considered by us. While I thus believe that certain of the Commission’s requirements appear to be somewhat unreasonable, there must be a fully developed record from the Commission before we could properly so find. Subject to these reservations I-concur in the result reached by the majority opinion here. .