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GEORGIA POWER COMPANY v. GEORGIA PUBLIC SERVICE COMMISSION et al.
18687.
Petition for injunction. Before Judge Moore. Fulton Superior Court. June 1, 1954.
HAWKINS, Justice.
1. The Georgia Public Service Commission has only such powers as the legislature has expressly, or by fair implication, conferred upon it, and there is no statute conferring upon it the power to require an electric public utility, against its will, to buy or merge with a separate and distinct neighboring electric public utility, or to sell power to such other public utility where it has never undertaken as such public utility to provide such service. "Public regulation must not supplant private management."
2. Injunction is an available remedy to restrain the Georgia Public Service Commission from acts or threatened acts which are beyond the scope of its jurisdiction and authority.
3. The petition stated a cause of action, and the trial court erred in sustaining the general demurrer thereto.
On December 16, 1953, the Georgia Public Service Commission, hereinafter referred to as the Commission, issued a rule nisi directed to both Georgia Power Company (hereinafter referred to as the Power Company), and Georgia Power and Light Company (hereinafter referred to as the Light Company), which, after reciting the previous proceedings before the Commission with respect to rates of the Light Company, and the Commission's opinion that it would be in the public interest if the areas presently served respectively by the two companies were integrated into a single operation, called upon them to show cause at a time stated: (1) why the Commission should not prescribe a rate schedule for the sale of electric energy by the Power Company to the Light Company (the Light Company obtaining its power from its parent corporation, Florida Power Corporation) in sufficient volume to meet the entire power requirements of the Light Company, and why said rate should not be as low as the rate at which the Power Company sells electric energy to municipalities or REA co-ops, or at what level said rate would be reasonable; and (2) why the Light Company should not be required to purchase its entire electric-power requirements or a substantial portion thereof from the Power Company at the rate prescribed by the Commission; and (3) why the Commission should not file a petition with the Securities and Exchange Commission, seeking an order from that agency which would provide for the divestment of the Light Company from the Florida Power Corporation and for the sale of said property at a fair price, either to the Power Company or as a separate and independent operating entity, whichever may finally be shown to be in the best interest of the people of the area served; and (4) why, in the event the Light Company be unwilling to purchase its power requirements from the Power Company at a reasonable rate, and in the event it be unwilling to sell its plant and equipment to the Power Company or others at a fair price, and in the event Florida Power Corporation is unwilling to sell its investment in the Light Company to the Power Company or others at a fair price, the Commission should not prescribe reduced rates for electric service rendered by the Light Company to substantially the level charged by the Power Company for the same classes of service.
Upon the service of this rule nisi upon it, the Power Company filed its petition in Fulton Superior Court, seeking by injunction to restrain the Commission from requiring it to respond to the rule nisi, upon the ground that the Commission was without jurisdiction to require it to do what was contemplated by the rule nisi, and therefore it could not force the Power Company to participate in a hearing to be devoted to such matter. The petition alleges: that the Power Company is an electric public utility, engaged in the generation, transmission, and sale of electric energy at retail and wholesale within large portions of the State of Georgia, as shown on a map attached to the petition as Exhibit "A"; that the Light Company, a subsidiary of Florida Power Corporation is a neighboring public utility company engaged in the transmission and sale of electric energy in an area in South Georgia which is indicated on the map attached as Exhibit "A"; that the two companies are separate and nonassociated electric utilities, each responsible for service within the particular area it has undertaken to serve, and that the Commission has no power, authority, or jurisdiction to force the Power Company to provide the power requirements of the Light Company, or to force or in any way coerce the Power Company to acquire or to negotiate for the acquisition of property or to merge with the Light Company, and that the rule nisi is void and of no effect because: (1) the Power Company has never undertaken the obligation as a public utility to provide the power requirements of the Light Company or other comparable independent electric utilities; (2) the Commission has no authority to force the Power Company to render public-utility service outside of its territory or its commitments as a public utility; (3) the Commission has never before undertaken to regulate and control the purchase and sale of power by neighboring public-utility systems or to establish any rates applicable to such transactions, and the Power Company's action in this respect constitutes an exercise of managerial discretion on the part of the company; (4) the Commission, even if it should be successful in obtaining from the Securities and Exchange Commission an order directing the divestment of the Light Company from the Florida Power Corporation, has no statutory authority to require the Power Company to purchase the property of or to become merged with the Light Company; (5) the Commission is attempting to invade the functions of management, and no such power or control is vested in the Commission; (6) even if it be held that the Georgia statutes vest in the Commission jurisdiction and power which it is seeking to exercise, the statutes would be void and violative of the constitutional rights of petitioner, in that, to require it to render service beyond its commitments to the public service or to force or in any way coerce it to acquire or to negotiate for the acquisition of property, would constitute depriving it of its property without due process of law, contrary to the provisions of the 14th Amendment to the Federal Constitution and of the due-process and equal-protection clauses as set out in paragraphs II and III of section I, article I, of the Georgia Constitution.
It is alleged: that, as the Commission has no right to regulate or control the Power Company in the respects contemplated by the rule nisi, it has no right to require the Power Company to come before it to show cause why it should not issue an order along the lines indicated; that a compliance with the rule by the Power Company would require considerable time on the part of its employees and considerable expense to the Power Company, and it would have no remedy to recoup its loss of time and money caused by the proposed illegal, void, and unconstitutional attempt to invade the rights of the Power company and to deprive it of its property without due process of law; that, under Code 93-416 and 93-9901, it would be subjected to severe penalties of as much as $5,000 for each offense, and its officers, agents, and employees subjected to criminal prosecution for failure to comply with any such invalid order that might be issued by the Commission, and that unless enjoined, the Power Company would be subjected to irreparable injury and damage and a multiplicity of criminal actions against its agents.
To this petition the defendants demurred upon the grounds: (a) that the petition sets forth no cause of action; and (b) the petition shows on its face that the plaintiff had failed to exhaust its remedy before the Commission, having failed to make an appearance in response to the rule nisi. To the judgment sustaining this demurrer and dismissing the petition the plaintiff excepts.
(After stating the foregoing facts.) 1. The first question presented for our determination is, whether the Commission has jurisdiction and legal authority to force Georgia Power Company, against its will, to buy or merge with a separate and distinct neighboring electric public utility, or to sell power to such other utility company, although the Power Company has never undertaken as a public utility to provide such service. The Georgia Public Service Commission has only such powers as the legislature has expressly, or by fair implication, conferred upon it. Zuber v. Southern Railway Co., 9 Ga. App. 539 (2) (71 S. E. 937); Georgia Public Service Commission v. City of Albany, 180 Ga. 355 (179 S. E. 369). And its powers with respect to gas companies, which are equally applicable to electric public utilities, are fairly and concisely stated in Georgia Public Service Commission v. Atlanta Gas Light Co., 205 Ga. 863, 880 (55 S. E. 2d 618). It is distinctly and positively averred in the petition, which must be taken as true on demurrer, that the Power Company has never, at any time, assumed any responsibility or committed itself as a public utility to furnish electric power to Georgia Power and Light Company, or to any other neighboring public utility, and that no schedules of rates have been established by the Commission under which such neighboring utilities located outside of the area or territory which it has undertaken to serve as an electric public utility may purchase power from it; that, although it has from time to time, when it had or expected to have available power, made contracts with the Light Company for a limited time to meet its emergency power needs in limited amounts, such sales have always been under terms and conditions mutually agreed upon between the parties, and under such terms and conditions as did not prejudice the Power Company in the fulfilment of its responsibilities to its own customers; and that such contracts have never been the subject matter of regulation or control by the Commission, although the Commission had been duly advised of the execution thereof.
We find no Georgia statute which confers upon the Georgia Public Service Commission authority to require one public utility to buy or merge with another, or to sell or not to sell power to each other. The general rule, as stated in 43 Am. Jur. 588, 22, is as follows: "To require a public utility to devote its property to a service which it has never professed to render or to the service of a territory which it has never undertaken to serve is tantamount to taking that property for public use without just compensation." In Georgia Public Service Commission v. Georgia Power Co., 182 Ga. 706 (186 S. E. 839), this court quoted with approval the following from Interstate Commerce Commission v. Oregon-Washington R. &c. Co., 288 U. S. 14, 41 (53 Sup. Ct. 266, 77 L. ed. 588): "State courts have uniformly held that to require extension of existing lines beyond the scope of the carrier's commitment to the public service is a taking of property in violation of the Federal Constitution," and at page 714 this court goes on to say: "It is one thing to require an extension of the existing line within the scope of the commitment to the public service, and quite another and different thing to require the extension of existing lines beyond such scope, and beyond the territory preempted, and beyond the region it has professed to serve." To the sane effect, see Hollywood Chamber of Commerce v. Railroad Commission, 192 Cal. 307 (219 Pac. 983, 30 A. L. R. 68, PUR 1924-B 503); Oklahoma Nat. Gas Co. v. Corporation Commission, 88 Okla. 51 (211 Pac. 401, 31 A. L. R. 330, PUR 1923-B 836); Oklahoma Nat. Gas Co. v. Scott, 115 Oklahoma 8 (241 Pac. 164, PUR 1926-B 67); Atchison T. & S. F. Ry. Co. v. Railroad Commission, 173 Cal. 577 (160 Pac. 828, 2 A. L. R. 975, PUR 1917-B 336).
It also seems to be a well-settled rule that public utilities have the right to enter into contracts between themselves, or with others, free from control or supervision of the State, so long as such contracts are not unconscionable or oppressive and do not impair the obligation of the utility to discharge its public duties. In Halifax Paper Co. v. Roanoke Rapids Sanitary District, 232 N. C. 421, 429 (61 S. E. 2d 378), the Supreme Court of North Carolina said: "It is stated in 51 C. J., p. 8, Sec. (19) F, 'The fact that a business or enterprise is, generally speaking, a public utility, does not make every service performed or rendered by it a public service, but it may act in a private capacity as distinguished from its public capacity, and in so doing is subject to the same rules as a private person.' Phoenix v. Kasun, 54 Ariz. 470, 97 P. 2d 210, 127 A. L. R. 84; Western Union Telegraph Co. v. Louisville & N. R. Co., 250 F. 199. And in 51 C. J., p. 6, Sec. (13) B, it is also said: 'Public utilities have the right to enter into contracts between themselves or with others, free from the control or supervision of the State, so long as such contracts are not unconscionable or oppressive and do not impair the obligation of the utility to discharge its public duties.' Oklahoma Gas & Elec. Co. v. Wilson & Co., 146 Okla. 272, 288 Pac. 316; Oklahoma Gas & Electric Co. v. Oklahoma Natural Gas Co., 85 Okla. 25, 205 Pac. 768."
For the Commission to order the Power Company to sell the Light Company its power requirements, even if it should appear that it had the available capacity, would be for the Commission to usurp the functions and prerogatives of the Power Company, and this it cannot do, for, as was held by this court in Southern Bell Telephone &c. Co. v. Georgia Public Service Commission, 203 Ga. 832, 878 (49 S. E. 2d 38): "The Commissioners are not the managers of this company, but their function is to regulate and disapprove any dishonest or clearly inefficient conduct and practice by the utility. Public regulation must not supplant private management. Georgia Public Service Comm. v. A. & W. P. R. Co., 164 Ga. 822 [139 S. E. 725]; Missouri ex rel. Southwestern Bell Telephone Co. v. Public Service Commission [262 U. S. 276, 43 Sup. Ct. 544, 67 L. ed. 247, 42 A. L. R. 1232]; Chicago M. & St. P. Ry. Co. v. Wisconsin, 238 U. S. 491 (35 Sup. Ct. 869, 59 L. ed. 1423, L. R. A. (1916A) 1133); Banton v. Belt Line Ry., 268 U. S. 413 (45 Sup. Ct. 534, 69 L. ed. 1020)." Neither does the Commission have authority to order a merger of two public utilities, or the purchase of one by the other. In Re Oldtown Telephone System, 87 PUR (NS-1951) 82 (2), it is said: "The Commission is sympathetic with those who by reason of location and community of interest with Winston-Salem have found the toll charges of the company expensive, inconvenient, and unsatisfactory, and it is not unmindful of suggestions that Southern Bell purchase the telephone properties of the Oldtown Telephone System, all of which has been given consideration, but the Commission has only such powers as have been delegated to it by statute. It has not been given the power to require one company to sell and another to purchase. In its attempt to do equity and justice in this case, it must consider the interests of all parties involved and make its decision within the powers delegated to it by statute." See also Trustees of Freeport v. Nassau & Suffolk Lighting Co., PUR 1924-A 96 (6); City of Groton v. Groton-Ferney Mutual Telephone Co., PUR 1919-E 894 (2); Re Androscoggin Electric Co., PUR 1921-A 201(3); City of Mountain View v. Farmers Telephone Exchange Co., PUR 1919-D 208 (3); Re Arizona Corporation Commission, PUR 1919-E 566. We, therefore, conclude that the Commission has no jurisdiction of the subject matter of the rule nisi which it had issued, and that the proposed hearing would be a nullity.
2. The other question for decision is, whether injunction is a remedy available to the plaintiff, and that question is conclusively settled by the decisions of this court. In McIntyre v. Harrison, 172 Ga. 65 (157 S. E. 499), it is held: "Injunction is an available remedy to restrain the Georgia Public Service Commission from undertaking to regulate a business over which the power of regulation has not been conferred upon that body." In Irwin v. Crawford, 210 Ga. 222, 224 (78 S. E. 2d 609), it is said: "There is no doubt but that equity will exercise jurisdiction to restrain acts or threatened acts of public corporations or of public officers, boards, or commissions which are ultra vires and beyond the scope of their authority, outside their jurisdiction, unlawful or without authority." To the same effect, see Georgia Public Service Commission v. Saye & Davis Transfer Co., 170 Ga. 873 (154 S. E. 439); Georgia Public Service Commission v. Taylor, 172 Ga. 100 (157 S. E. 515); Georgia Public Service Commission v. City of Albany, 180 Ga. 355 (179 S. E. 369); Smith v. McMichael, 203 Ga. 74 (45 S. E. 2d 431); Southern Bell Telephone &c. Co. v. Georgia Public Service Commission, 203 Ga. 832 (49 S. E. 2d 38); Georgia Public Service Commission v. Atlanta Gas Light Co., 205 Ga. 863 (55 S. E. 2d 618); Moore v. Robinson, 206 Ga. 27, 28 (55 S. E. 2d 711). The contention that the plaintiff should have first raised the question of jurisdiction before the Commission is without merit. The Commission has asserted its jurisdiction by the issuance of the rule nisi.
3. Under the foregoing rulings, the petition stated a cause of action, and the trial court erred in sustaining the general demurrer thereto.
Judgment reversed. All the Justices concur.
Eugene Cook, Attorney-General, Dudley Cook, contra.
Arnall, Golden & Gregory, C. E. Gregory, Jr., Robert D. Tisinger, for party at interest not party to record.
Troutman, Sams, Schroder & Lockerman, for plaintiff in error.
ARGUED SEPTEMBER 16, 1954 -- DECIDED NOVEMBER 8, 1954 --REHEARING DENIED DECEMBER 2, 1954.
Saturday May 23 03:36 EDT


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