City of Cohasset v. Minnesota Power

798 N.W.2d 50, 2011 Minn. LEXIS 277, 2011 WL 2135599
CourtSupreme Court of Minnesota
DecidedJune 1, 2011
DocketNo. A09-572
StatusPublished
Cited by2 cases

This text of 798 N.W.2d 50 (City of Cohasset v. Minnesota Power) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Cohasset v. Minnesota Power, 798 N.W.2d 50, 2011 Minn. LEXIS 277, 2011 WL 2135599 (Mich. 2011).

Opinions

OPINION

PAGE, Justice.

This action arises out of respondent Minnesota Power’s construction of a natural gas pipeline within the Cohasset city limits. Appellant City of Cohasset commenced an action for declaratory and in-junctive relief against Minnesota Power seeking to require Minnesota Power to obtain a franchise from Cohasset to operate the pipeline. The district court concluded that Cohasset did not have franchise authority over Minnesota Power’s pipeline and dismissed the matter. The court of appeals affirmed the district court, which we now reverse.

Cohasset is a statutory city with a population of approximately 2,500 people located in Itasca County. Minnesota Power, an operating division of Alíete, Inc., provides electric service to 141,000 retail customers in northeastern Minnesota, including to residents of Cohasset. Minnesota Power’s largest electric generating facility, the Boswell Energy Center, is located in Co-hasset.

The Boswell Energy Center is a coal-fired electric plant that historically relied on fuel oil as an ignition source. In 2008, Minnesota Power applied to, and obtained from, the Minnesota Public Utilities Commission (MPUC) a permit for routing and construction of a pipeline to deliver natural gas to the Boswell Energy Center for use as an ignition source. Cohasset filed comments with the MPUC on Minnesota Power’s permit request, reserving all rights to object to the operation of the pipeline under Cohasset’s franchise power but making no objection to the route proposed by Minnesota Power for the pipeline. MPUC staff recommended that the issue of Co-hasset’s authority to require a franchise for operation of the pipeline was indepen[52]*52dent of and separate from the MPUC’s routing decision. In granting Minnesota Power a permit for construction of the pipeline, the MPUC adopted the staff report. The now-completed pipeline connects the Boswell Energy Center to a Great Lakes Gas Transmission Company natural gas pipeline located at the Cohas-set city limits. The Minnesota Power pipeline runs for approximately 1.3 miles within the City of Cohasset, crossing under three public roads (County Road 88, County Road 87, and U.S. Highway 2) and several parcels of private property.

About the time the MPUC granted Minnesota Power’s routing permit, Cohas-set commenced an action for declaratory and injunctive relief in Itasca County District Court seeking to require Minnesota Power to obtain a franchise from Cohasset to operate the pipeline. Cohasset also promulgated an ordinance requiring operators of certain gas pipelines to be subject to a franchise and to pay a franchise fee. Minnesota Power’s pipeline nominally falls within the pipelines subject to the Cohas-set ordinance.1 Cohasset then moved for a temporary injunction to bar operation of [53]*53the pipeline except in compliance with the franchise ordinance.

The district court dismissed Cohasset’s claims and denied Cohasset’s motion for injunctive relief.2 The court determined that Cohasset did not have franchise authority over Minnesota Power’s natural gas pipeline because Minnesota Power is not a “natural gas utility.”

A divided court of appeals affirmed. City of Cohasset v. Minn. Power, 776 N.W.2d 776 (Minn.App.2010). The court’s majority opinion characterized Minnesota Power as an “electric public utility” and concluded that the pipeline is not subject to Cohasset’s franchise power because the pipeline itself “is not ‘furnishing’ electricity to the public.” Id. at 780. The court also concluded that Cohasset’s franchise ordinance was expressly preempted by Minn.Stat. § 216G.02, subd. 4 (2010), which provides that a pipeline routing permit “supercedes and preempts all zoning, building, or land use rules, regulations, or ordinances.” 776 N.W.2d at 781. The dissent argued that Minnesota Power is subject to Cohasset’s franchise authority because Minnesota Power itself “is plainly furnishing utility services.” Id. at 785 (Stoneburner, J., dissenting). The dissent also disagreed with the majority’s conclusion that Minn.Stat. § 216G.02, subd. 4, preempted Cohasset’s authority to franchise the pipeline because, in the dissent’s view, the statute pertains only “to site approval and route designation,” not to a municipality’s franchise authority. 776 N.W.2d at 785. Cohasset petitioned for further review, which we granted.

Cohasset argues that it has franchise authority over Minnesota Power’s pipeline pursuant to two Minnesota statutes— [54]*54Minn. Stat. § 216B.36 (2010) and Minn. Stat. § 301B.01 (2010) — both of which grant municipalities franchise authority over public utilities operating within their municipal limits. Cohasset also argues that, even if those statutes do not grant franchise authority, the pipeline is subject to its franchise authority under its general municipal licensing powers. Minnesota, Power counters that its gas pipeline is not subject to Cohasset’s franchise authority because neither the pipeline nor Minnesota Power itself furnishes natural gas to the public. Minnesota Power further contends that even if Cohasset has statutory authority to require a franchise for the operation of the pipeline, that statutory authority is preempted by Minn.Stat. § 216G.02, subd. 4. We review questions of statutory construction de novo. Houston v. Int’l Data Transfer Corp., 645 N.W.2d 144, 149 (Minn.2002).

I.

Cohasset argues that it has the authority to require Minnesota Power to obtain a franchise under two provisions of Minnesota law — Minn. Stat. § 301B.01 and Minn. Stat. § 216B.36 — both of which grant authority to municipalities to franchise certain activities within their borders. We consider each of these statutes in turn.

A.

Cohasset relies in part on its historical franchise authority3 over public service corporations such as public utilities. In particular, Minn.Stat. § 301B.01 bars the construction, maintenance, or operation of a pipeline on public property within a city, by a corporation organized to furnish power for public use, without first obtaining a franchise from the city “conferring this right and compensating the city for it.” Specifically, it provides:

A corporation may be organized to construct, acquire, maintain, or operate internal improvements, including railways, street railways, telegraph and telephone lines, canals, slackwater, or other navigation, dams to create or improve a water supply or to furnish power for public use, and any work for supplying the public, by whatever means, with water, light, heat, or power, including all requisite subways, pipes, and other conduits, and tunnels for transportation of pedestrians. No corporation formed for these purposes may construct, maintain, or operate a railway of any kind, or a subway, pipe line, or other conduit, or a tunnel for transportation of pedestrians in or upon a street, alley, or other public ground of a city, without first obtaining from the city a franchise conferring this right and compensating the city for it.

Minn.Stat. § 301B.01.

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Bluebook (online)
798 N.W.2d 50, 2011 Minn. LEXIS 277, 2011 WL 2135599, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-cohasset-v-minnesota-power-minn-2011.