PUBLIC UTILITIES - POWER OF CITY TO REDUCE RATES ALLOWED BY FRANCHISE

Authors

M. D. Blackwell, University of Michigan Law SchoolFollow

Abstract

The city of Miami gave a franchise to a utility to sell electric power, providing that after a stated period of time it should have the right to charge rates which would enable it to have an annual return of at least ten per cent on the rate base over and above operating expenses. The right to set rates, however, was made "subject to the lawful regulatory authority of the city or state commission having jurisdiction," and it was further provided that "this grant shall at all times be subject to the right of the state of Florida, directly or through a commission or similar body, to regulate rates and service hereunder." The state had no regulatory commission, but had given to Miami such right to regulate rates as is usually given to state commissions. By ordinance Miami reduced rates of the utility to a point at which it could not realize ten per cent on the rate base. Held, that the contract reserved the right to the city to reduce the rates, hence the ordinance did not impair the franchise contract in a manner prohibited by the Federal Constitution. Florida Power & Light Co. v. Miami, (C. C. A. 5th, 1938) 98 F. (2d) 180, cert. den. (U. S. 1938) 59 S. Ct. 147.

Recommended Citation

M. D. Blackwell, PUBLIC UTILITIES - POWER OF CITY TO REDUCE RATES ALLOWED BY FRANCHISE, 37 Mich. L. Rev. 670 (1939).
Available at: https://repository.law.umich.edu/mlr/vol37/iss4/24