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SUBJECT: Power of Nevada Public Service Commission to require LVL&WCo. to augment its water-supply. m l M To: From: Mr. E. E. Bennett W M . R. 111 OCT § 1950 Mr • Edward C . Renwick. m ? M i I am attacking hereto excerpts^ from the Nevada statutes which are pertinent to the question of the power of the Public Service Commission to make an order requiring LVL&WCo. to augment it's water supply. In the proceeding recently instituted by the Commission upon the complaint of the City of Las Vegas, it is apparent that the Commission is proceeding in accordance with the procedure set forth in Section 6125 and 6127 of the Nevada Compiled Laws 1929* These sections and Section 6108 and 6117 authorize the Commission to order a utility to provide adequate service or facilities if after a hearing the Commission determines that its service or facilities are inadequate. The statutes require?, that the order made by the Commission must be a just and reasonable order. These statutory provisions are similar to other state and federal statutes relating to the regulation of public utilities. The power of a regulatory Commission to make just and reasonable orders of the nature referred to has been repeatedly upheld by the Courts. The real problem, of course, is whether a particular order of regulatory commission is reasonable and the tests used by the Courts in determining its reasonableness. The bulk of the cases dealing with this general problem are cases dealing with the obligation of a public utility to extend its service. In the research that I have made to date, I have uncovered only a few cases dealing with the exact question of the obligation of a utility to enlarge its plant or facilities to serve its existing customers. However, the problems in the two sittiatishs are essentially the seme and the principles applied by the Courts - in testing the reasonableness of the Commission’s order are the same. The general rule relating to the obligation of a public utility to render adequate service is stated in 43 Am. Jur. page 601 as follows: "In general, where a public utility accepts a franchise to serve the public or a portion thereof and undertakes to serve a community or territory and its inhabitants, it assumes a public duty to render service commensurate with its offer of providing a service system which will be reasonably adequate to meet the wants of the community or territory, -1