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Storey v. Mayo, 77 P.U.R.3d 411 (1968)
<br />217 So.2d 304
<br />overlapping distribution systems in the affected areas. This
<br />duplication of lines, poles, transformers and other equipment
<br />not only marred the appearance of the community but it also
<br />increased the hazards of servicing the area. Such overlapping
<br />distribution systems substantially increase the cost of service
<br />per customer because they simply mean that two separate
<br />systems are being supplied and maintained to serve an area
<br />when one should be sufficient. Obviously, neither system
<br />receives maximum benefit from its capital invested in the
<br />area. The ultimate effect of this is that the rates charged in
<br />the affected area are necessarily higher, or, alternatively, the
<br />customers in some other pact of the system must help bear
<br />the added cost. It is the latter which most often happens in an
<br />extensive system -wide operation, such as that conducted by
<br />the Company here.
<br />In order to end the unsatisfactory effects of this type of
<br />expensive, competitive activity, the City and the Company,
<br />on August 7,1967, executed the territorial service agreement
<br />which is the subject of this litigation. In effect it established
<br />areas of service around the City in the suburban territory.
<br />It provided that twelve (12) commercial and sixty-six
<br />(66) residential customers would be transferred from the
<br />City to the Company. Thirty-five (35) commercial and
<br />three hundred sixty-three (363) residential electric customers
<br />were transferred to the City by the Company. There
<br />were provisions for reciprocal transfers of facilities and a
<br />reservation by the City of authority to continue to serve
<br />certain municipally -owned property located in the Company
<br />service area On November 1, 1967, the City Council of
<br />Homestead adopted a resolution providing that electric utility
<br />rates to be charged residential customers in the proposed
<br />service area would 'be established as those now existing in
<br />the proposed service area' and served by the Company. This
<br />resolution is a part of' the record which also reveals that
<br />over a period of forty-three (43) years electric rates charged
<br />customers of the city have never been raised.
<br />The . Company applied to the Florida Public Service
<br />Commission for approval of the agreement. A hearing,
<br />pursuant to notice, was held at the Homestead City Hall on •
<br />November 8, 1967. Witnesses for the Qty and Company
<br />were presented. None of the customers being transferred from
<br />City to Company appeared. Seven, including petitioners,
<br />appeared in opposition to the transfers by the Company
<br />to the City. Petitioners now here claim to represent a
<br />class numbering more than one *307 hundred in this
<br />category. At the hearing, the City expressly stated that it was
<br />not conceding Commission jurisdiction over the municipal
<br />operation. By a 2-1 vote the Commission approved the
<br />agreement. Petitioners, who were among the protestants,
<br />seek review pursuant to Fla.Stat. s 350.641 (1967), F.S.A.;
<br />Fla.Stat. s 366.10 (1967), F.S.A.
<br />The petitioners contend that the notice of the hearing was
<br />insufficient; that the proposed agreement is contrary to the
<br />public interest and is in restraint of trade; and that it denies
<br />to them both equal protection and due process of law. They
<br />claim that the impact of the agreement is to force them to
<br />take service from an unregulated instead of a regulated utility.
<br />They insist that the rates and service of the latter are superior
<br />to the former, and that the agreement eliminates competition.
<br />[1] The established state policy in Florida is to supervise
<br />privately -owned electric utilities through regulation by
<br />a state agency. By the same policy municipally -owned
<br />electric utilities are expressly exempted from state agency
<br />supervision. Fla.Stat. s 366.11 (1967), F.S.A. It was for
<br />this reason that in the instant matter, the City pointedly
<br />saved itself against submission to Commission jurisdiction.
<br />Under Florida law, municipally -owned electric utilities
<br />enjoy the privileges of legally protected monopolies within
<br />municipal limits. The monopoly is totally effective because
<br />the government of the City, which owns the utility, has the
<br />power to preclude even the slightest threat of competition
<br />within the city limits. On the other hand, the rates and services
<br />of the privately -owned electric companies are regulated by
<br />the respondent Commission. Fla.Stat. Ch. 366 (1967), F.S.A.
<br />Service areas are not specifically controlled by requirement
<br />of certificates of public necessity and convenience. However,
<br />in some measure the Commission does control the areas
<br />served by the companies by virtue of its prescribed powers,
<br />including the specific power '* * * to require repairs,
<br />improvements, additions and extensions to the plant and
<br />equipment of any public utility reasonably necessary to
<br />promote the convenience and welfare of the public and
<br />secure adequate service or facilities for those reasonably
<br />entitled thereto * * *.' Fla.Stat. s 366.05 (1967), F.SA. The
<br />regulatory powers of the Commission, as announced in the
<br />cited section, are exclusive and, therefore, necessarily broad
<br />and comprehensive. Fla.Stat. s 366.03 (1967), F.SA.; Florida
<br />Power & Light Co. v. City ofMrami, 72 So.2d 270 (Fla.1954).
<br />[2] [3] The powers of the Commission over these
<br />privately -owned utilities is ominpotent within the confines
<br />of the statute and the limits of organic law. Because of
<br />this, the power to mandate an efficient and effective utility
<br />in the public interest necessitates a correlative power to
<br />protect the utility against unnecessary, expensive competitive
<br />practices. While in particular locales suck practices might
<br />appear to benefit a few, the ultimate impact of repetition
<br />'v'{^slfc.,v+Next © 2014 Thomson Reuters. No claim to original U.S. Govemment Works. 3
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