The opinion of the court was delivered by: SMITH, JR.
JOHN LEWIS SMITH, Jr., District Judge.
The Company filed a formal application to increase its intrastate telephone rates on September 27, 1963, stating that its rate of return had declined steadily since 1960 due to wage and operating cost increases and the cost of obtaining capital financing. The application sought Commission approval of rate changes estimated to produce over $10,500,000 in additional revenues which would yield a projected 8% on intrastate investment. The Commission held extensive hearings from December, 1963 to August, 1965 in compliance with statutory requirements. The first phase established the amount of revenue necessary for the Company to earn a fair return on that part of its investment used to provide intrastate telephone services to the District of Columbia. The second phase resulted in approval of specific telephone rate increases necessary to accomplish that end.
On December 22, 1964, the Commission issued Order No. 4887 establishing the Company's test year intrastate revenues, expenses, and rate base. Both the $2,196,000 increase in annual revenues and the return on intrastate investment of 6.25% authorized fell considerably short of the amount sought by the Company. Following petitioners' motion for reconsideration of that order,
the Commission issued Order No. 4899 which in substance denied petitioners' motion while authorizing an increase in additional revenues of $150,000. Petitioners then appealed those orders in Civil Action No. 909-65.
On August 2, 1965, the Commission issued Order No. 4976 fixing telephone rates pursuant to its previous orders. On November 22, 1965, petitioners appealed this order in Civil Action No. 2916-65 after the Commission denied its petition for reconsideration by failing to act on said petition within thirty days of its filing.
Both actions were consolidated for trial pursuant to Fed.R.Civ.P. 42(a).
Petitioners' allegations of error in the Commission's proceedings address five major areas: 1) the rate base and operating expenses established by the Commission for the Company, 2) the choice of the year 1964 as the test period for ascertaining the rate base and expenses, 3) the Company's rate of return, 4) retention by the Company of past earnings in excess of 6.25%, and 5) procedural errors in the conduct of the hearings. Petitioners have argued their case at great length and memoranda have been filed by both parties. A careful reading of the extensive record compiled before the Commission reveals the attention given to each of these areas. On the basis of that reading and the arguments of counsel, the Court finds that the Commission did not err as a matter of law in any of the areas alleged and that its findings are not unreasonable, arbitrary, or capricious.
Accordingly, Orders Nos. 4887, 4899, and 4976 of the Public Service Commission of the District of Columbia are affirmed and the complaint is dismissed.
This cause having come on to be heard January 30, and 31, 1967, and February 1 and 2, 1967, on petitioners' appeal from Orders Nos. 4887, 4899 and 4976 issued in Formal Case No. 494 by the Public Service Commission of the District of Columbia, and upon consideration of the oral argument in open court by counsel for petitioners, for the Commission, and for the respondent-intervenor The Chesapeake and Potomac Telephone Company, together with the pleadings and papers filed herein by all the parties, and after a review of the entire record certified to this Court,
This Court finds and concludes, all as is more fully set forth in the Statement of Reasons accompanying this order as required by 43 D.C.Code § 705, that the findings of fact of the Public Service Commission in the orders presently at issue were not unreasonable, arbitrary or capricious, and that petitioners were not prejudiced by any errors of law contained therein. Wherefore, for the reasons stated, it is this 5th day of June, 1967,
1. That the petitions of appeal in Civil Action Nos. 909-65 and 2916-65 be, and the same are, hereby dismissed; and
2. That Orders Nos. 4887, 4899 and 4976 issued in Formal Case No. 494 before the Public Service Commission of the District of Columbia ...