County of San Diego v. San Diego Gas & Electric Co.

TRAYNOR, J. On November 28, 1952, the county of San Diego filed an action for declaratory relief and an accounting for monies claimed to be due for the years 1947 to 1951, inclusive, for franchises granted by the county to defendant under the Broughton Act (Pub. Util. Code, §§ 6001-6017). That act fixed the payments at “. . . two percent (2%) of the gross annual receipts of the grantee arising from the use, operation, or possession of the franchise.”

Defendant serves all of San Diego County including several municipalities. It has two franchises from the county, one for electric lines and one for gas lines. It also holds franchises granted by the several municipalities.

Among the municipalities served by defendant are the [27]cities of San Diego, Coronado, and National City. These three cities are contiguous and for the purposes of this opinion are considered as one.

Defendant computed its payments to the county in the following manner: (1) it determined its gross receipts from the county alone, excluding all receipts from city consumers; (2) it apportioned county receipts between distribution property and all other operative property by means of an “investment factor,” a percentage figure derived by dividing the value of investment in distribution property in both the city and county by the value of total investment in all operative property m both the city and county - (3) it apportioned the part of gross receipts thus attributed to distribution property between public and private rights of way according to the number of miles of each in the county.

The trial court found that the method used by defendant in its computation was correct, and therefore entered judgment for defendant. The county appeals.

The county contends that defendant’s facilities are operated as a unit and that receipts of the entire system should therefore be included in the computation and apportioned among the various franchises by the method approved in prior decisions of this court. (County of Tulare v. City of Dinuba, 188 Cal. 664 [206 P. 983] ; City of San Diego v. Southern Calif. Tel. Corp., 42 Cal.2d 110 [266 P.2d 14] ; County of Los Angeles v. Southern Counties Gas Co., 42 Cal.2d 129 [266 P.2d 27] ; see also County of Tulare v. City of Dinuba, 87 Cal.App. 744 [263 P. 249].) The county also urges that even if city receipts are to be segregated from defendant’s total receipts, county receipts should likewise be so segregated, but that defendant does not consistently maintain such segregation, for it allocates part of the county receipts to the city by applying in its apportionment between distribution property and other operative property an “investment factor” that reflects the value of investment in plant in both the city and county.