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In re Revision of Rates Filed

Decided: May 7, 1979.

IN THE MATTER OF THE REVISION OF RATES FILED BY LAMBERTVILLE WATER COMPANY INCREASING ITS RATES FOR WATER SERVICE. LAMBERTVILLE WATER COMPANY, RESPONDENT,
v.
NEW JERSEY BOARD OF PUBLIC UTILITY COMMISSIONERS, APPELLANT



On certification to the Superior Court, Appellate Division, whose opinion is reported at 153 N.J. Super. 24 (1977).

For reversal -- Chief Justice Hughes and Justices Mountain, Sullivan, Pashman, Clifford and Handler. For affirmance -- None. The opinion of the court was delivered by Sullivan, J.

Sullivan

This appeal involves a dispute as to the effective date of a rate increase granted, or to be granted, a public utility by the Board of Public Utility Commissioners following prolonged administrative and judicial review proceedings. The Appellate Division held that the rate increase must be made effective as of the date of the expiration of the two four-month periods of suspension which the Board is permitted to order under N.J.S.A. 48:2-21(d) or any further suspension agreed to by the utility pursuant to N.J.S.A. 48:2-21.3.

The Board of Public Utility Commissioners (Board) strongly urges that it has broad discretion, based on circumstances, to set an appropriate date on which its Decision and Order is to become effective, and that the public utility law does not establish a mandatory fixed effective date. Certification was granted by this Court, 76 N.J. 240 (1978), to consider this important question.

The issue is one of statutory construction. The operation of public utilities in this State is controlled by our public

utility law which has established a comprehensive framework of regulatory provisions. The Board of Public Utility Commissioners, the agency charged with enforcement of the law, is vested with broad powers over all aspects of public utility activity including the power to fix the rates which a utility may charge its customers. N.J.S.A. 48:2-21. With reference to a proposed increase in rates, the law in section 21(d) provides:

(d) When any public utility shall increase any existing individual rates, joint rates, tolls, charges or schedules thereof * * * the board, either upon written complaint or upon its own initiative, shall have power after hearing, upon notice by order in writing to determine whether the increase, * * * is just and reasonable. * * * The board, pending such hearing and determination, may order the suspension of the increase, change or alteration until the board shall have approved the same, not exceeding 4 months. If the hearing and determination shall not have been concluded within such 4 months the board may during such hearing and determination order a further suspension for an additional period not exceeding, 4 months. The board shall approve the increase * * * upon being satisfied that the same is just and reasonable.

A companion provision, N.J.S.A. 48:2-21.3, adds that:

Any public utility may file with the board a written stipulation subject to the board's approval at any time extending the suspension periods provided for in this chapter or waiving the effective date of any tariff or rate.

It is the construction of these statutory provisions, particularly section 21(d), which is the subject matter of this appeal.

On June 28, 1974, Lambertville Water Company (Lambertville) filed a petition with the Board seeking to increase its rates for water service effective August 1, 1974. The Board suspended the proposed increase for the two statutory four-month periods to April 1, 1975 while it held hearings on the petition. Unable to issue a decision and order by April 1, the Board obtained a written consent from Lambertville extending the suspension for an additional 30

days. On May 1, 1975, the Board issued its Decision and Order approving some increase in rates but not that which had been requested. The order directed Lambertville to file a tariff designed to produce the additional annual revenues authorized.

Lambertville did not immediately file the tariff authorized. Instead, it moved for reconsideration of the Decision and Order. The Board granted the motion and also authorized Lambertville to file a tariff, effective for service rendered on and after August 1, 1975, which would produce the additional revenues ...


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