OCR Text |
Show ELEMENTS OF THE APPROPRIATIVE RIGHT 555 In contrasting the two types of commercial irrigation companies formed solely for operational purposes, it is stated earlier under "A Public Use" that public regulation of rates and services applies only to companies engaged in public service-the supplying of water to the public generally. It does not apply to sales or rentals of water to consumers pursuant to strictly private contracts which they hold with the company. If a commercial company is engaged in both kinds of service-public service to some of the consumers and private contract service to others- only the public utility part of its service is subject to regulation. Likewise, in contrasting profit and nonprofit enterprises in general, it has been shown that a mutual irrigation company that provides water for its own shareholders only, at cost, is not of the nature of a public utility and is not subject to rate regulation by public utilities commissions. Here again is a possible exception in situations in which both private and public service are rendered. A California company originally organized as a purely mutual irrigation company began the practice of delivering, in addition to irrigation water to only its own stockholders, domestic water to both shareholders and nonshareholders. So it became technically in part a public utility. At the suggestion of the then State Railroad Commission a subordinate public utility company was formed to take over the domestic service. This subsidiary acquired shares of stock in the parent company sufficient to cover its domestic water requirements; and the mutual company held all the stock of the domestic company. Under this arrangement, the Commission regulated the rates of the domestic company, but it did not inquire into the cost of water to the domestic company so long as the latter received the same treatment as all other mutual shareholders. Regulatory agencies.-In the earlier discussion of *'A Public Use," there are noted constitutional and statutory provisions subjecting sales and rentals of water to such regulation and control of the State as is provided by law. Rate regulation at first was generally imposed on the water selling or renting enterprises through the medium of ordinances passed by the county governing bodies. Later, as the use of regulatory procedures administered by State commissions increased, the function in most Western States in which it was important was vested in the State commission that had jurisdiction over other public utilities. There are deviations from this generalization. Texas vests regulation of water company rates in the State Water Rights Commission which administers "any person" who sells water under contract or otherwise shall be a public utility. However, it exempts from public regulation the owner of a water supply who uses it pri- marily for his own domestic or irrigation purposes, who either (a) sells the surplus for such purposes, or (b) in an emergency water shortage sells water from his supply for not more than one irrigation season, or who (c) sells part of the water as an accomodation to neighbors who have no other water supply. |