Cass County Electric Cooperative, Inc. v. Northern States Power Co.

419 N.W.2d 181, 1988 N.D. LEXIS 243, 1988 WL 6352
CourtNorth Dakota Supreme Court
DecidedFebruary 1, 1988
DocketCiv. 870163
StatusPublished
Cited by11 cases

This text of 419 N.W.2d 181 (Cass County Electric Cooperative, Inc. v. Northern States Power Co.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cass County Electric Cooperative, Inc. v. Northern States Power Co., 419 N.W.2d 181, 1988 N.D. LEXIS 243, 1988 WL 6352 (N.D. 1988).

Opinions

ERICKSTAD, Chief Justice.

This case involves a territorial dispute between Cass County Electric Cooperative, Inc. [Cass], a rural electric cooperative, and Northern States Power Company [NSP], an electric public utility, over an area known as the South Pointe 1st Addition [South Pointe] within the city of Fargo. NSP appeals from a district court judgment which reversed a decision of the Public Service Commission [PSC] and remanded for further proceedings concerning Cass’s request for injunctive relief under the provisions of the Territorial Integrity Act, Chapter 49-03, N.D.C.C. We affirm the judgment of the district court.

Cass provides electric service in Cass County, as well as seven other counties in the state. NSP provides electric and natural gas service in North Dakota and elsewhere. NSP has been authorized by the PSC, and has had a franchise, to provide electric service as an electric utility in the city of Fargo for more than 50 years.

For many years prior to 1975, Cass and NSP were parties to a “territorial agreement” which was designed to avoid “wasteful duplication” of electric facilities and covered areas in and around the cities of West Fargo and Fargo. One of the areas covered by the agreement and designated to be served by Cass was Barnes Township, where South Pointe is located. This agreement, however, was abandoned by the parties in 1975, and on October 28, 1975, Cass and the city of Fargo entered into an agreement giving Cass a nonexclusive right-of-way for its facilities in areas served by Cass and subsequently annexed by the city. Under the terms of this agreement, any area served by Cass which was annexed to the city would remain Cass’s service area absent an objection by the city or another electric supplier.

In 1978 the city annexed a large area served by Cass south of 32nd Avenue South and west of U.S. Highway 81. The area now known as South Pointe is part of this annexed territory. No objections were lodged to Cass’s claim to serve existing and new customers within the annexed area, and, prior to October 1986, Cass was the only supplier of electricity in the annexed territory. Cass included the annexed area in its long-range plans and has made large investments in facilities to serve that area. However, Cass has not provided service to an actual customer in the specific area now designated as South Pointe since 1981.

During August 1986, the developer of South Pointe conferred with officials of NSP and Cass concerning electric service for the new subdivision, which consists of one large commercial lot and 90 residential lots. The developer chose to request electric service as well as natural gas service from NSP, and the developer and NSP signed an agreement to that effect on August 28, 1986. At this time, the area platted as South Pointe was vacant. Both Cass and NSP serve electric account customers on property adjoining the new subdivision.

Cass filed a complaint with the PSC alleging that NSP’s extension of its electric lines and system into South Pointe would “unreasonably interfere with Cass Electric’s ..services, facilities and system and will result in a wasteful and unreasonable duplication” of its “investment in plant facilities- and services.” Cass sought an order restraining and enjoining NSP from constructing and extending its electric [184]*184lines, system, and facilities into South Pointe.

In the administrative proceedings, Cass asserted that although it has no customers which it presently serves in South Pointe, NSP’s extension into the subdivision interferes with the economic viability of the electric system Cass has developed to serve the larger annexed area, and that this interference constitutes a violation of §§ 49-03-01 and 49-03-01.4, N.D.C.C. The PSC concluded that its authority to act under these circumstances was limited by § 49-03-01.3, N.D.C.C., which provides in pertinent part:

“49-03-01.3. Exclusions from limitations on electric distribution lines, extension and service and on issuance of certificates of public convenience and necessity. Sections 49-03-01 through 49-03-01.5, shall not be construed to require any such electric public utility to secure such order or certificate for an extension of its electric distribution lines within the corporate limits of any municipality within which it has lawfully commenced operations; provided, however, that such extension or extensions shall not interfere with existing services provided by a rural electric cooperative or another electric public utility within such municipality; and provided duplication of services is not deemed unreasonable by the commission.”

Because Cass was not presently providing any electric service to customers within the subdivision, the PSC determined that under the provisions of § 49-03-01.3, NSP’s extension of its electric distribution facilities did not “interfere with existing electric service of Cass ... nor unreasonably duplicate services within South Pointe.” Consequently, the PSC dismissed Cass’s complaint.

The district court reversed and remanded the case to the PSC for further consideration, concluding that the PSC’s interpretation of § 49-03-01.3 was “too restrictive:”

“The commission in this case read the language which refers to existing services as only meaning those identifiable sites which are already being served at the time that incorporation is completed by a municipality. I am of the opinion that this is too restrictive of a reading. If that were true, the last line in the paragraph would be unnecessary in its reference to duplication of services. It is my belief that the commission must look at the availability of services in the area annexed and determine whether extension of NSP lines would be unnecessarily duplicating the services provided by Cass. If so, the injunction requested by Cass County should be granted since they have the right to serve in the general area involved in this proceeding. If not, and the commission determines that it is in the best interest of the general public, and the public convenience and necessity requires it, then the extension of NSP’s line should be allowed and the injunction denied. However, this does require the commission to exercise its discretion in the interpretation of the statute and this case should not be handled as if it were a matter of law. The statute must be read more liberally than the reading presently given it by the PSC.”

NSP has appealed from the district court’s judgment.

The issue in this case is whether the PSC properly interpreted the provisions of the Territorial Integrity Act, Chapter 49-03, N.D.C.C., in determining in essence that it had no authority to act under the circumstances. This issue presents a question of law and, consequently, the PSC’s determination on the matter is fully reviewable by this court. Minnesota Mining and Manufacturing Co. v. Conrad, 418 N.W.2d 276, 279 (N.D.1987).

The Territorial Integrity Act was enacted by the Legislature in 1965. See 1965 N.D.Sess.Laws Ch. 319. It amended §§ 49-03-01 and 49-03-05, N.D.C.C., which required a public utility, before beginning construction or operation of a public utility plant or system, or an extension thereof, to obtain from the PSC a certificate of public convenience and necessity. See Montana-Dakota Utilities Co. v. Johanneson, 153 N.W.2d 414, 418 (N.D.1967).

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Cass County Electric Cooperative, Inc. v. Northern States Power Co.
419 N.W.2d 181 (North Dakota Supreme Court, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
419 N.W.2d 181, 1988 N.D. LEXIS 243, 1988 WL 6352, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cass-county-electric-cooperative-inc-v-northern-states-power-co-nd-1988.