Utilities Com'n v. Cp & L Co.

622 S.E.2d 169, 174 N.C. App. 681, 2005 N.C. App. LEXIS 2590
CourtCourt of Appeals of North Carolina
DecidedDecember 6, 2005
DocketNo. COA02-1737-2.
StatusPublished

This text of 622 S.E.2d 169 (Utilities Com'n v. Cp & L Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Utilities Com'n v. Cp & L Co., 622 S.E.2d 169, 174 N.C. App. 681, 2005 N.C. App. LEXIS 2590 (N.C. Ct. App. 2005).

Opinions

WYNN, Judge.

Non-discriminatory state regulations that "effectuate a legitimate local public interest" and incidentally burden interstate commerce "will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174, 178 (1970). Appellants argue that the North Carolina Utilities Commission's regulation at issue violates the Commerce Clause and is burdensome on interstate commerce. As we find that the local benefit outweighs the incidental burden to interstate commerce, we affirm the Utility Commission's orders.

This case is on remand to this Court "for consideration of the remaining issues" as mandated by our Supreme Court's holding in State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 529, 614 S.E.2d 281, 290 (2005) wherein the facts pertaining to the issues in this case are fully set forth. See also State ex rel. Utils. Comm'n v. Carolina *171Power & Light Co., 161 N.C.App. 199, 588 S.E.2d 77 (2003).

The issues we address on remand are: (1) whether state regulation of wholesale interstate power contracts impermissibly burdens interstate commerce; (2) whether the Utility Commission is authorized under chapter 62 of the North Carolina General Statutes to require the submission of contracts with wholesale interstate purchasers for review prior to execution; and (3) whether the Utility Commission erred in failing to provide guidance by which it would assess the reasonableness of the agreements over which it claims jurisdiction.

Appellants first argue that the Utility Commission's regulation of wholesale contracts, Regulatory Condition 21, impermissibly burdens interstate commerce. Regulatory Condition 21 requires that a utility shall not enter into contracts for the wholesale of electric energy and/or capacity at native load capacity without first giving the Utility Commission and Public Staff written notice twenty days prior to execution of the contracts.

In reversing the earlier opinion in this case, our Supreme Court stated that the Utility Commission's purpose, "was to provide a mechanism through which [the Utility Commission] meaningfully could enforce the requirement `that CP & L's retail native load customers receive priority with respect to, and the benefits from, CP & L's existing generation and that CP & L's wholesale activities not disadvantage its retail ratepayers from either a quality of service or rate perspective[,]'" and it could "`take appropriate action . . . to secure and protect reliable service to retail customers in North Carolina.'" Carolina Power & Light Co., 359 N.C. at 519-21, 614 S.E.2d at 284. As our Supreme Court has deemed that the record on appeals shows the purpose of the regulation, that purpose is binding on this Court.

Appellants contend that the Utility Commission's regulation of wholesale contracts impermissibly burdens interstate commerce in violation of the Commerce Clause of the United States Constitution. However, the Utility Commission's regulation ensures that North Carolina retail consumers get a reliable source of electricity, and is merely burdensome on interstate commerce and not discriminatory.1 Accordingly, the regulation should be analyzed under the test set out by the United States Supreme Court in Pike, 397 U.S. at 142, 90 S.Ct. at 847, 25 L.Ed.2d at 178. The Pike test states that "[w]here the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." Id.

Applying the Pike test to the case at hand, the requirement that the companies allow the Commission and Public Staff to review proposed contracts twenty days before they are signed, is not overly burdensome on interstate commerce as the "putative local benefit," to ensure supply of electricity to retail customers, outweighs the burden on interstate commerce. See Ark. Elec. Coop. Corp. v. Ark. Public Serv. Comm'n, 461 U.S. 375, 394, 103 S.Ct. 1905, 76 L.Ed.2d 1, 17 (1983) (state regulation of the wholesale rates charged by utility to its members is well within the scope of "legitimate local public interests" and does not impermissibly burden interstate commerce).

As the Utility Commission's regulation does not violate the Commerce Clause, we affirm the Utility Commission's orders.

Appellant also argues that Chapter 62 of the North Carolina General Statutes does not authorize the Utility Commission to require submission of contracts with wholesale purchasers prior to execution.

Pursuant to section 62-30 of the North Carolina General Statutes:

*172The Commission shall have and exercise such general power and authority to supervise and control the public utilities of the State as may be necessary to carry out the laws providing for their regulation, and all such other powers and duties as may be necessary or incident to the proper discharge of its duties.

N.C. Gen.Stat. § 62-30 (2003).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Foster-Fountain Packing Co. v. Haydel
278 U.S. 1 (Supreme Court, 1928)
Pike v. Bruce Church, Inc.
397 U.S. 137 (Supreme Court, 1970)
City of Philadelphia v. New Jersey
437 U.S. 617 (Supreme Court, 1978)
Hodel v. Indiana
452 U.S. 314 (Supreme Court, 1981)
New England Power Co. v. New Hampshire
455 U.S. 331 (Supreme Court, 1982)
Reynoldsville Casket Co. v. Hyde
514 U.S. 749 (Supreme Court, 1995)
Fulton Corp. v. Faulkner
516 U.S. 325 (Supreme Court, 1996)
State Ex Rel. Utilities Commission v. Carolina Power & Light Co.
588 S.E.2d 77 (Court of Appeals of North Carolina, 2003)
State Ex Rel. Utilities Commission v. Carolina Water Service, Inc.
439 S.E.2d 127 (Supreme Court of North Carolina, 1994)
State ex rel. Utilities Commission v. Carolina Coach Co.
132 S.E.2d 249 (Supreme Court of North Carolina, 1963)
State ex rel. Utilities Commission v. Edmisten
242 S.E.2d 862 (Supreme Court of North Carolina, 1978)
State Ex rel. Utilities Commission v. Carolina Power & Light Co.
614 S.E.2d 281 (Supreme Court of North Carolina, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
622 S.E.2d 169, 174 N.C. App. 681, 2005 N.C. App. LEXIS 2590, Counsel Stack Legal Research, https://law.counselstack.com/opinion/utilities-comn-v-cp-l-co-ncctapp-2005.