Levin, J.
The plaintiffs, residents and voters of the City of Lansing, commenced this action against the Board of Water and Light of the City of Lansing and the Michigan Public Power Agency, claiming that contracts entered into by the BWL and the MPPA are invalid because they have not been submitted to and approved by a vote of the Lansing electorate.
The circuit judge entered a summary judgment in favor of defendants on the ground that the plaintiffs had failed to state a claim upon which relief can be granted. We granted leave to appeal prior to decision by the Court of Appeals.
The BWL is an agency of the City of Lansing. MPPA is a public corporation, created pursuant to the Michigan Energy Employment Act of 1976,
composed of fifteen cities and three villages, including Lansing, which operate municipal electric systems.
MPPA has entered into a contract with the
Detroit Edison Company to acquire an undivided 37.22% interest in a 650-plus megawatt coal-fired electric generating plant, Belle River 1, now under construction by Edison. MPPA has also entered into contracts with Edison and Consumers Power Company to acquire undivided ownership interests in certain transmission facilities which will enable the MPPA to transfer to the BWL and other project participants power generated at Belle River 1.
The BWL and the other project participants have entered into contracts with the MPPA to purchase from MPPA electric energy and to pay therefor from electric system revenues amounts based on their percentages of interest of the operating, maintenance, and bond principal and interest expense. The BWL’s share is 64.29% of MPPA’s 37.22% portion of Belle River 1, and the other members of MPPA share the remaining 3.5.71%.
MPPA will finance the purchase of the undivided 37.22% interest in Belle River 1 by selling $630,000,000 of revenue bonds.
As a result of these arrangements, BWL may purchase 156 megawatts; of electric energy— 64.29% of 37.22% of the 650 megawatt generating capacity of the Belle River 1 plant. The BWL currently operates three coal-fired and two hydro generating facilities with a net capacity for all five facilities of 580 megawatts.
Plaintiffs allege that the BWL intends to shut down, retire, or mothball some of its generating facilities when power is generated and commences on line from Belle River 1 sometime in 1990.
Plaintiffs claim that by participating through the MPPA in the Belle River 1 project, the BWL has "acquired” a "public utility” and that, pursuant to Const 1963, art 7, § 25, the acquisition must
first be approved by three-fifths of Lansing voters.
Plaintiffs further assert that by so participating in the project, the BWL has disposed of property "needed to continue the operation” of the BWL, and that the charter of the City of Lansing requires an affirmative vote of three-fifths of the electors before such disposition.
Plaintiffs’ claim that the BWL has acquired a public utility is predicated on the argument that the meaning and effect of the contract entered into between the BWL and the MPPA obligating the BWL to purchase electric energy is to vest in the BWL an undivided interest in the generating facilities of Belle River 1. The claim that the BWL has
disposed of property needed to continue the operation of the BWL is based on the same argument
and on a prediction that by 1992, nine years from now, the BWL will no longer use some of its present electric generating facilities.
I
While the MPPA has acquired an undivided ownership interest in the generating facilities of Belle River 1, the members of the MPPA, including the City of Lansing and its agency, the BWL, have not acquired an ownership interest in Belle River 1, but a right to purchase electric energy in accordance with contracts entered into by the participating cities and the MPPA.
The BWL has no immediate prospect of obtaining an undivided interest in the assets of the MPPA. The BWL cannot acquire an undivided interest in the assets of the MPPA before it is determined that the purposes for which the MPPA was formed have been substantially fulfilled and bonds issued and other obligations incurred have been fully paid or satisfied.
The decisions of this Court indicate that even if
the BWL had acquired an undivided interest in the Belle River 1 generating facilities, the acquisition of such an interest would not be subject to voter approval because the purchase of power generating facilities which merely extend the capacity of existing utility facilities is not, for purposes of Const 1963, art 7, § 25, the acquisition of a public utility.
In
White v Welsh,
291 Mich 636; 289 NW 279 (1939), this Court considered the language of the 1908 Constitution
corresponding to Const 1963, art 7, § 25, which similarly provided that a city may not acquire a public utility without the affirmative vote of three-fifths of the electors. The Court concluded that the construction of a 30-mile water pipeline between Lake Michigan and Grand Rapids, including pumping and booster stations, was not the acquisition of a public utility. The Court discussed its two earlier decisions construing the language of the constitution. In
Schurtz v Grand Rapids,
208 Mich 510; 175 NW 421 (1919), the Court had held that voter approval was required where the city had acquired the property and franchises of a company which had been furnishing water to a portion of the inhabitants of a city for a number of years. In
Veldman v Grand Rapids,
275 Mich 100; 265 NW 790 (1936), the Court had held that voter approval was not required to purchase a power plant to be used as an auxiliary to the city pumping station and lighting plant. Justice Bushnell, who dissented in part in
Veldman,
wrote for the Court in
White,
and said of
Veldman:
"This court affirmed the dismissal of plaintiffs’ bill of complaint, dividing only upon the method employed.
The court was unanimous on the proposition that the purchase of the power plant was not the acquiring of a public utility but was
only the extension of an existing utility. ”
(Emphasis supplied.)
The opinion of the Court in
White
continued:
"There is no difference in principle between the acquiring of a stand-by pumping station and the building of a pipe line from Grand Rapids to Lake Michigan. The property that was to be purchased in the
Schurtz Case
was an
entirely independent water system.
"The intake crib, pumping stations, pipe line, and increased reservoir capacity
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Levin, J.
The plaintiffs, residents and voters of the City of Lansing, commenced this action against the Board of Water and Light of the City of Lansing and the Michigan Public Power Agency, claiming that contracts entered into by the BWL and the MPPA are invalid because they have not been submitted to and approved by a vote of the Lansing electorate.
The circuit judge entered a summary judgment in favor of defendants on the ground that the plaintiffs had failed to state a claim upon which relief can be granted. We granted leave to appeal prior to decision by the Court of Appeals.
The BWL is an agency of the City of Lansing. MPPA is a public corporation, created pursuant to the Michigan Energy Employment Act of 1976,
composed of fifteen cities and three villages, including Lansing, which operate municipal electric systems.
MPPA has entered into a contract with the
Detroit Edison Company to acquire an undivided 37.22% interest in a 650-plus megawatt coal-fired electric generating plant, Belle River 1, now under construction by Edison. MPPA has also entered into contracts with Edison and Consumers Power Company to acquire undivided ownership interests in certain transmission facilities which will enable the MPPA to transfer to the BWL and other project participants power generated at Belle River 1.
The BWL and the other project participants have entered into contracts with the MPPA to purchase from MPPA electric energy and to pay therefor from electric system revenues amounts based on their percentages of interest of the operating, maintenance, and bond principal and interest expense. The BWL’s share is 64.29% of MPPA’s 37.22% portion of Belle River 1, and the other members of MPPA share the remaining 3.5.71%.
MPPA will finance the purchase of the undivided 37.22% interest in Belle River 1 by selling $630,000,000 of revenue bonds.
As a result of these arrangements, BWL may purchase 156 megawatts; of electric energy— 64.29% of 37.22% of the 650 megawatt generating capacity of the Belle River 1 plant. The BWL currently operates three coal-fired and two hydro generating facilities with a net capacity for all five facilities of 580 megawatts.
Plaintiffs allege that the BWL intends to shut down, retire, or mothball some of its generating facilities when power is generated and commences on line from Belle River 1 sometime in 1990.
Plaintiffs claim that by participating through the MPPA in the Belle River 1 project, the BWL has "acquired” a "public utility” and that, pursuant to Const 1963, art 7, § 25, the acquisition must
first be approved by three-fifths of Lansing voters.
Plaintiffs further assert that by so participating in the project, the BWL has disposed of property "needed to continue the operation” of the BWL, and that the charter of the City of Lansing requires an affirmative vote of three-fifths of the electors before such disposition.
Plaintiffs’ claim that the BWL has acquired a public utility is predicated on the argument that the meaning and effect of the contract entered into between the BWL and the MPPA obligating the BWL to purchase electric energy is to vest in the BWL an undivided interest in the generating facilities of Belle River 1. The claim that the BWL has
disposed of property needed to continue the operation of the BWL is based on the same argument
and on a prediction that by 1992, nine years from now, the BWL will no longer use some of its present electric generating facilities.
I
While the MPPA has acquired an undivided ownership interest in the generating facilities of Belle River 1, the members of the MPPA, including the City of Lansing and its agency, the BWL, have not acquired an ownership interest in Belle River 1, but a right to purchase electric energy in accordance with contracts entered into by the participating cities and the MPPA.
The BWL has no immediate prospect of obtaining an undivided interest in the assets of the MPPA. The BWL cannot acquire an undivided interest in the assets of the MPPA before it is determined that the purposes for which the MPPA was formed have been substantially fulfilled and bonds issued and other obligations incurred have been fully paid or satisfied.
The decisions of this Court indicate that even if
the BWL had acquired an undivided interest in the Belle River 1 generating facilities, the acquisition of such an interest would not be subject to voter approval because the purchase of power generating facilities which merely extend the capacity of existing utility facilities is not, for purposes of Const 1963, art 7, § 25, the acquisition of a public utility.
In
White v Welsh,
291 Mich 636; 289 NW 279 (1939), this Court considered the language of the 1908 Constitution
corresponding to Const 1963, art 7, § 25, which similarly provided that a city may not acquire a public utility without the affirmative vote of three-fifths of the electors. The Court concluded that the construction of a 30-mile water pipeline between Lake Michigan and Grand Rapids, including pumping and booster stations, was not the acquisition of a public utility. The Court discussed its two earlier decisions construing the language of the constitution. In
Schurtz v Grand Rapids,
208 Mich 510; 175 NW 421 (1919), the Court had held that voter approval was required where the city had acquired the property and franchises of a company which had been furnishing water to a portion of the inhabitants of a city for a number of years. In
Veldman v Grand Rapids,
275 Mich 100; 265 NW 790 (1936), the Court had held that voter approval was not required to purchase a power plant to be used as an auxiliary to the city pumping station and lighting plant. Justice Bushnell, who dissented in part in
Veldman,
wrote for the Court in
White,
and said of
Veldman:
"This court affirmed the dismissal of plaintiffs’ bill of complaint, dividing only upon the method employed.
The court was unanimous on the proposition that the purchase of the power plant was not the acquiring of a public utility but was
only the extension of an existing utility. ”
(Emphasis supplied.)
The opinion of the Court in
White
continued:
"There is no difference in principle between the acquiring of a stand-by pumping station and the building of a pipe line from Grand Rapids to Lake Michigan. The property that was to be purchased in the
Schurtz Case
was an
entirely independent water system.
"The intake crib, pumping stations, pipe line, and increased reservoir capacity
can be used only in connection with, and is but an extension of, the existing water system. ”
(Emphasis supplied.)
In the instant case, the power generated by the Belle River 1 facilities will be transmitted over the lines of Edison and Consumers Power Company to the lines of the BWL, and over the lines of the BWL to persons living within the BWL service area. As in
Veldman
and
White,
the increased capacity "can be used only in connection with, and is but an extension of, the existing [electric] system”.
We conclude that the BWL has not acquired a public utility within the meaning of Const 1963, art 7, § 25.
II
The plaintiffs claim that by entering into the contracts with the MPPA, the BWL has disposed of or will dispose of assets of the BWL in violation of Lansing’s charter.
The charter restrictions, by their terms, apply only to assets "needed to continue the operation of the” BWL and do not apply to the sale of machin
ery or equipment "no longer useful or which are replaced by new machinery for the operation of the” BWL.
The allegation in plaintiffs’ complaint that the "BWL has purchased its interest in Belle River 1 to replace certain of its own electric generating facilities in the future” fails to state a claim upon which relief can be granted because it is not alleged that the BWL has either disposed of or is about to dispose of any asset,
or that any asset that might "in the future” be disposed of is "needed to continue the operation” of the BWL, or that any disposition of an asset will not constitute "the sale or exchange of articles of machinery or equipment of the board of water and light which are no longer useful or which are replaced by new machinery for the operation of the board of water and light.”
Our disposition makes it unnecessary to consider defendants’ argument that the Michigan Energy Employment Act of 1976 was enacted pursuant to Const 1963, art 7, § 28, empowering the Legislature to enact laws authorizing cities to enter into joint contractual undertakings or agreements, and that the act prescribes the only conditions for such joint efforts and that such joint efforts, when authorized by the Legislature, are not subject to referendum unless the Legislature so provides.
As in
Bigger v Pontiac,
390 Mich 1; 210 NW2d 1 (1973), we direct that no motion for rehearing or
stay will be entertained by this Court and that final process shall issue forthwith.
Affirmed.
Williams, C.J., and Kavanagh, Ryan, Brickley, Cavanagh, and Boyle, JJ., concurred with Levin, J. _