Riverside Cement Co. v. Public Utilities Commission

This is a proceeding to review an order of the Public Utilities Commission which dismissed three complaints for reparations filed by Riverside Cement Company and Southwestern Portland Cement Company. Only two of the eases are involved, and the pertinent facts as to them will be noted.

*329 In the fall of 1942, at the request of the United States War Production Board, Riverside Cement Company (referred to as Riverside), reopened its plant near Oro Grande. Power was furnished by California Electric Power Company (referred to as the utility) and Riverside commenced negotiations to obtain a rate lower than the filed tariff schedules and on a par with rates afforded under existing special contracts. A contract approved and authorized by the commission was executed by which the utility was to supply electric energy for a five-year term commencing October 14, 1942, at a minimum charge of $1.00 per month per horsepower of maximum demand but not less than $4,000 per month, or a total minimum of $240,000 for the five-year period. Paragraph 10(e), designated as the escalator clause, provided that whenever during the contract the market price of fuel oil should exceed $1.30 per barrel, the…

The annulment of the commission’s order is based on the premise that the utility placed in effect lower rates to another consumer having a load similar to that of petitioners within the meaning of paragraph 14 of the contract. The rates allegedly placed in effect are the tariff rates that were in effect when the contract was signed. In 1942, when Riverside asked the commission’s approval of a special contract deviating from PW-1 and PW-2, the existing tariffs, Riverside stated in a letter to the commission on October 7, 1942: “With reference to the Power Company’s published schedules PW-1 and PW-2, our belief is that neither of these schedules is reasonably adapted to the conditions of cement plant operation. So far as we are advised, no cement company has ever operated under either of these schedules.” Yet we are now asked to interpret the contract as having incorporated a schedule not “reasonably adapted to the conditions of cement plant operation.”

It is contended that the original tariff of rates in effect in 1942 when the special contract was signed by the parties and approved by the commission was “placed in effect” on July 1,1947, when the utility raised the contract price…