Public utilities deliver everyday necessities to residents, such as natural gas, sewage, water, and electricity. Many of the utility companies are privately owned. Regardless of whether they are public or private, they must observe the Filed Rate Doctrine.

What Is the Filed Rate Doctrine?

The filed rate doctrine, referred to as a tariff, is a public document outlining the following:

  • Services of a public utility
  • Utility rates
  • Utility charges

The services outlined in the doctrine are governed by specific rules, practices, and regulations.

What Purpose Does the Filed Tariff Doctrine Serve?

The doctrine serves two purposes. It recognizes the utility provider has the freedom to set fair rates. The second purpose is to stop customer discrimination.

Do Public Utility Providers Have to Follow the Doctrine?

Yes. The provider must follow the rates, conditions, and terms of service outlined in the doctrine. For instance, the provider cannot charge more than the rate listed on file with the federal regulatory authority.

What Is a Public Utility?

A public utility provider provides essential services to communities. These services include electricity, heat, trash removal, and road repair. Public utility companies include cable, Internet, telephone providers, natural gas providers, oil delivery services, waste management providers, and electricity providers.

What Are the Public Utilities’ Duties?

Public utilities are either owned by a municipality or are privately owned. Private owners are the companies’ shareholders of privately owned public utilities. Privately owned public utilities have a twin responsibility. They must satisfy shareholder concerns. These public utilities make money through a procedure known as the “rate of return” regulation.

Essentially, in exchange for giving the utilities a monopoly, the government gets to set the price utilities can charge customers. Ultimately, privately owned public utilities (which the government keeps free of competition) are permitted to earn a profit, called return on equity. This profit is given to shareholders. At the same time, these companies provide essential public services. Public utilities are heavily regulated by the state, local, and federal government authorities to ensure these services are provided.

Under their arrangement with the government, privately owned public utilities have several obligations to the customers they serve. These obligations include:

  • Public utilities must serve their communities by providing service to any community member served by that utility who requests it: This means a utility cannot engage in racial or other discrimination in providing services. It must serve all who request and pay for the services.
  • Public utilities must provide a minimum level of service: Under this obligation, the service provided must be safe for customers to use: If a problem with the service develops, the public utility must correct the problem. For instance, if a storm causes downed power lines and blackouts, the utility must remove the tree and power line and restore the service.
  • Public utilities must charge customers only as permitted by the utility’s rate with the regulatory authority: By law, public utilities must file a document that outlines their services, charges, and rates. The public has the right to inspect this document.
  • Public utilities must provide services in good faith and deal with customers fairly: This obligation to act in good faith is something the law implies, or “reads into,” the service contract between the utility and the customer. Acting in good faith and dealing fairly requires public utilities to respond to customer complaints and questions about bills and make terms of service clear.

Who Regulates Public Utilities?

Privately owned public utilities can be regulated at any level of government, including state, local (county, municipality, township), and federal government. Public utilities are regulated at the state and local levels by government agencies. State agencies have names such as “Public Service Commission,” “Board of Public Utilities,” “Public Utility Regulatory Authority,” and similar designations.

Local authorities that regulate public utilities have similar names. These local authorities are regulated by state authorities or operate independently. When services cross state lines, the federal government acts as a regulator.

For instance, radio, television services, and cable transmit work by transmitting signals throughout the country. The federal agency that regulates cable networks and Internet service providers is known as the Federal Communications Commission (FCC). Another example of a federal agency regulator is the Nuclear Regulatory Commission (NRC). This agency regulates nuclear power providers to protect public safety and health.

What Are Regulated Utilities?

A privately owned regulated utility is one that investors or shareholders own. The utility is given a near or total monopoly on providing service in a given area. For example, in Long Island, New York, only one railroad company provides passenger (as opposed to freight only) transportation.

This utility is known as the Long Island Rail Road (LIRR). The LIRR is run by the Metropolitan Transportation Authority (MTA). In turn, the MTA, a corporation, is run by a Board of Directors. The board members are appointed by the governor of the state of New York and by county and borough officials.

The MTA is an example of a transportation monopoly. It runs the Metro-North commuter rail service and New York City transit system in addition to the LIRR. All of these services are monopolies. The MTA monopoly is subject to regulation concerning each of its services.

For instance, the LIRR’s rates, hours of operation, and hiring and firing procedures are regulated at the state and local levels. The Federal Railroad Administration regulates the LIRR’s drug and alcohol testing program. Other public utilities are also regulated at the state and federal levels.

Can I Sue My Public Utility Company?

Typically, no. The doctrine forbids or limits lawsuits brought by customers. However, it is clear that a public utility company can be sued for gross negligence or willful and wanton misconduct in many jurisdictions.

A privately owned public utility may be sued. Nevertheless, the individual filing a suit cannot assert mere negligence. In other words, the individual filing suit cannot allege that the train “is slow” on some days. To recover against a public utility, a customer must show that the utility’s delivery was grossly negligent. In other words, the customer must demonstrate that the service quality was sufficiently poor to be entirely out of line with reasonable customer expectations. Customers may also sue public utilities for deliberate misconduct.

What Is Gross Negligence?

Negligence is the unintentional act of breaching the duty of care to someone and causing injuries. Gross negligence is defined as a failure to exercise the slightest amount of care. In other words, it is a total disregard for a person’s safety.

What Would I Have to Do to Determine If I Have a Case?

First, check with a lawyer regarding your case. The attorney will:

  • Review the filed tariff doctrine to determine if it contains any liability or limitation provisions.
  • Investigate the provider’s standard of care. For example, if the provider’s actions were simple negligence, willful, wanton misconduct, or gross negligence.
  • Determine whether your local jurisdiction has taken a stance on preventing liability claims.

Do I Need a Lawyer?

Public utilities are something that every property owner needs to deal with. If a public utility company is acting in a negligent or discriminatory manner toward a property owner, that owner may need to take legal action against the company. If you find yourself being treated unfairly by a utility company, you should talk to a property lawyer.