Virginia Electric and Power Company v. The United States

SKELTON, Judge

(concurring in part and dissenting in part):

I respectfully dissent from that portion of the opinion that holds that as of 1959 the useful life for the transmission easements and initial clearing costs of Virginia Electric and Power Company, hereinafter called Vepco, is 71 years and the useful life of its distribution easements and initial clearing costs is 41 years. I believe that this holding is a discrimination against Pennsylvania Power and Light Company, hereinafter called the P. P. & L. Co., plaintiff in Ct. Cl., 411 F.2d 1300 decided today.

Both cases involve basically the same facts. Both companies manufacture and distribute electric power in a similar manner over territory similar in nature in the east coast area of the United States (Virginia and Pennsylvania, respectively) over electric power lines erected on poles over and along easements acquired by them from property owners. There is no practical difference between the manner of operation of the two companies. Both companies seek the same relief at the same time from this court, and, in my opinion, should be treated alike by the court. But this is not the case, because Vepco has received more favorable treatment at the hands of the court than has P. P. & L. Co.

It is true that the two cases were tried by two different commissioners of our court at different times.1 However, both cases are before us at the same time. It is understandable that the commissioners may have reached different results on the problem at issue, because each of them tried his own case on the evidence before him in that ease and based his decision thereon. This is not meant to be any criticism of the commissioners. With us, the situation is different. We are considering both cas*1320es together and we can make whatever findings of fact we think are appropriate that are supported by the records in both cases. The findings of the commissioners are presumptively correct under the rules of our court, but we are not bound by them.

When this is done, we find that the only difference in the evidence in the two cases is the testimony of certain experts in the Vepco case that because of advances in technology and practice in the industry, in a few years all overhead electric lines and modern electric generating plants would be out of date and would be replaced by underground lines and nuclear generating plants. On this testimony the commissioner concluded, and the majority of the court agree, that the useful life of the transmission easements and initial clearing costs of Vepco is 71 years, and that of its distribution easements and initial clearing costs is 41 years. This evidence was not before the commissioner in the P. P. & L. Co. case. The evidence in that case was to the effect that such useful lives are 100 years and 45 years, respectively, and the commissioner so found, and the majority agree.

It should be pointed out that an expert witness named John J. Reilly testified in both cases. His testimony was essentially the same in the two eases. He said in the P. P. & L. Co. case that the useful life of a transmission easement is 100 years and that of the clearing costs is 60 years, and the life of the distribution easement is 45 years and that of the clearing costs is 35 years. On this evidence, the commissioner and the majority hold that the useful life of the transmission easement is 100 years and that of the distribution easement is 45 years. The clearing costs were given the same useful lives as the easements (in both cases).

In the Vepco case, Mr. Reilly testified that the useful life of a transmission easement is 100 years (same as in the P. P. & L. Co. case) and that of the distribution easement is 50 years (5 years more than in the P. P. & L. Co. case). His testimony was based on present conditions and without indulging in speculation as to future underground cable and nuclear plant developments. His evidence was the same in both cases as to the useful life of the transmission easements (100 years) and practically the same on the life of the distribution easements (5 years more in Vepco than in P. P. &L. Co.).

In my opinion, this evidence, based on present conditions, compels us to enter the same judgment in both cases as to the useful lives of these easements. But the majority has adjudged that the easements have the following useful lives:

1. In the P. P. & L. Co. case: Transmission easements .. 100 years Distribution easements .. 45 years

2, In the Vepco case: Transmission easements .. 71 years Distribution easements .. 41 years

The shorter lives for the easements in the Vepco case, as stated above, was arrived at on the testimony of certain experts (its Vice-president and a Dr. A. Kusko) as to the future developments in underground cables and nuclear generating plants. As a practical matter, these witnesses did not testify that these developments would occur only in Vepco’s system, but testified with reference to Vepco and the industry in general. Consequently, from a theoretical standpoint, their testimony is as applicable to P. P. & L. Co. as to Vepco. In my opinion, this testimony was too speculative on which to base the opinion of this court. While their predictions may come to pass, on the other hand, as the government contends, their observations in this regard may be mere “crystal-ball” gazing. In any event, it occurs to me we need something more tangible on which we can base our judgment. If the developments these witnesses predict should materialize in the future, changes in the tax position of the taxpayers could be made at that time. As the majority say in the P. P. & L. Co. case:

* * * As stated by the Supreme Court, if what now appears to be rea*1321sonable useful lives of such assets proves by further experience to be in error, administrative steps are readily available for a redetermination. * *

I do not believe we are justified in treating these two taxpayers differently on practically the same facts and issues. To do so is to prefer one over the other and to discriminate in favor of one and against the other.

I would hold that the useful lives of the easements in both cases are the same, as the court may determine. However, it would be preferable to fix the useful lives of the transmission easements at 100 years and that of the distribution easements at 45 years, because the testimony of the witness Reilly in both cases was to this effect, whereas, there is no evidence in the P. P. & L. Co. case that would support shorter lives for the easements.

COLLINS, Judge, joins in the foregoing opinion, concurring in part and dissenting in part.

. Trial Commissioner Hogenson tried the P. P. & L. Co. case and Trial Commissioner Fletcher tried the Vepco case.