Case Title: Vandehei Developers v. Public Service Com'n of Wyoming

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-04-25T00:00:00Z

Document:
Vandehei Developers v. Public Service Com'n of Wyoming1990 WY 43790 P.2d 128Case Number: 89-199Decided: 04/25/1990Supreme Court of Wyoming
VANDEHEI DEVELOPERS, 
INTERVENOR, FEKANY ENTERPRISES, INC., MARY ANN TENSLEY AND KEVIN TENSLEY, 

PETITIONERS,

v.

PUBLIC SERVICE COMMISSION 
OF WYOMING; AND CHEYENNE LIGHT, FUEL AND POWER COMPANY, 

RESPONDENTS.

Petition for review from 
the Public Service Commission.

Bert I. 
Ahlstrom, Jr., Cheyenne, for petitioner Vandehei Developers.

Edwin H. 
Whitehead of Whitehead, Gage & Davidson, Cheyenne, for petitioners Fekany 
Enterprises, Inc., Mary Ann Tensley, and Kevin Tensley.

Joseph B. Meyer, 
Atty. Gen., Mary B. Guthrie, Sr. Asst. Atty. Gen., and Milo M. Vukelich, Asst. 
Atty. Gen., for respondent Public Service Com'n of Wyoming.

John A. Sundahl 
and George E. Powers, Jr. of Godfrey & Sundahl, Cheyenne, for respondent 
Cheyenne Light, Fuel and Power Co.

Before 
CARDINE, C.J., THOMAS and MACY, JJ., BROWN, Ret. J., and LEHMAN, District 
Judge.

BROWN, Justice, 
Retired.

[¶1]      Cheyenne Light, 
Fuel and Power Company (Cheyenne Light) sought approval from the Public Service 
Commission of Wyoming (PSC) to construct a transmission line in north Cheyenne, 
Wyoming, with a portion of the proposed line to run over and through property 
owned by petitioners. The PSC granted Cheyenne Light the authority to build the 
line and this appeal followed.

[¶2]      On appeal, 
petitioners urge three issues:

Whether the actions, 
findings and conclusions of the Public Service Commission of Wyoming are 
unlawful and should be set aside:

I

For the reason that they 
constitute an abuse of discretion, are arbitrary and capricious, or are 
otherwise not in accordance with law.

II

For the reason that the 
Commission acted in excess of statutory jurisdiction, authority or limitations, 
or was lacking statutory right.

III

For the reason that the 
actions, findings and conclusions of the Commission are unsupported by 
substantial evidence.

[¶3]      We will 
affirm.

[¶4]      On March 15, 
1988, the Laramie County Board of Commissioners (the Board) denied Cheyenne 
Light permission to use county rights-of-way for construction of a planned 
transmission line that was to run from a substation north of Frontier Mall, west 
along Four Mile Road and thence to Francis E. Warren Air Force Base. The Board 
ruled that the line could not be placed above ground because it would disrupt 
county residents. However, the Board stated that if the line were placed 
underground, authority for use of county rights-of-way would be 
granted.

[¶5]      After the Board's 
decision, Cheyenne Light applied to the PSC for a determination that a 
certificate of public convenience and necessity was not required to operate the 
proposed line and related facilities. In the alternative, Cheyenne Light applied 
for a certificate of public convenience and necessity authorizing the line to be 
built.

[¶6]      On December 8, 
1988, the PSC gave public notice setting Cheyenne Light's application for public 
hearing. Several parties, including petitioners, intervened. On January 17, 18 
and 19, 1989, the PSC held a public hearing to consider an application of 
Cheyenne Light to build approximately eleven miles of transmission line in north 
and northwest Cheyenne. The portion of the line at issue here runs from a 
substation north of Frontier Mall at the intersection of Powder House Road and 
Four Mile Road and thence west along Four Mile Road to the east boundary of 
Francis E. Warren Air Force Base. Authority was also sought to install necessary 
equipment.

[¶7]      On February 23, 
1989, the PSC entered its order on Cheyenne Light's application. This order 
found that there was public need for the proposed line and related facilities; 
Cheyenne Light and its customers would receive increased reliability and 
facility-use benefits from approval of the line; and placing the line 
underground would expose Cheyenne Light to an extraordinary amount of expense 
when compared to putting the line overhead. The order further held that, based 
upon extensive health and medical testimony, there were no health risks involved 
by having the line installed above ground. The PSC rejected an underground line 
stating that to do so would lead to service problems, place an unreasonable 
burden on Cheyenne Light's ratepayers, and would cost 7.9 times more than 
installing the line overhead.

[¶8]      On March 17, 
1989, a group of individuals known as the Read Tract Residents petitioned the 
PSC to rehear the Cheyenne Light application. The Read Tract Residents claimed 
insufficient notice of the original hearing and that the notice did not state 
that alternative routes would be considered. The PSC granted a rehearing which 
was held on May 1, 1989. On June 5, 1989, the PSC entered its order on rehearing 
stating that the line should be routed from where Four Mile Road intersects 
Interstate 25 directly west to Francis E. Warren Air Force Base. The original 
order of the PSC provided that the line go around petitioners' property. The 
order on rehearing provided that a portion of the line run over and through 
petitioners' property. On June 23, 1989, petitioners filed their petition for 
review with the District Court for the First Judicial District. The district 
court certified this matter to the Supreme Court.

[¶9]      In this appeal, 
we are governed by certain rules previously announced by this court. The Supreme 
Court will review the decision of an administrative agency as if it were a 
reviewing court of the first instance. Exxon Corporation v. Wyoming State Board 
of Equalization, 783 P.2d 685 (Wyo. 1989). Petitioners have the burden of 
proving that the PSC's actions are arbitrary, capricious or an abuse of 
discretion. Wyoming Bancorporation v. Bonham, 527 P.2d 432, 439 (Wyo. 1974), op. 
supp., 563 P.2d 1382 (Wyo. 1977), reh'g denied, 566 P.2d 219 (Wyo. 1977). The 
reviewing court must examine whether the decision made by an administrative 
agency has been reached on relevant factors and was rational. Tri-State 
Generation and Transmission Association, Inc. v. Environmental Quality Council, 
590 P.2d 1324, 1331 (Wyo. 1979). Agency decisions are to be reversed only for 
errors of law. Shenefield v. Sheridan County School District No. 1, 544 P.2d 870, 874 (Wyo. 1976). Further, courts will not substitute their judgment for 
that of an administrative agency. Gilmore v. Oil and Gas Conservation 
Commission, 642 P.2d 773 (Wyo. 1982).

I

[¶10]   In the first issue raised on 
appeal, petitioners contend that the PSC acted in an arbitrary and 
capricious manner and abused its discretion in making the order 
appealed from. The terms "abuse of discretion," "arbitrary," and "capricious" 
are frequently used interchangeably. In this opinion we will not attempt to 
explain minute differences in meaning except to say arbitrary or capricious 
actions are ways to abuse discretion.

     Judicial discretion is 
a composite of many things, among which are conclusions drawn from objective 
criteria; it means a sound judgment exercised with regard to what is right under 
the circumstances and without doing so arbitrarily or capriciously.

Martin v. State, 
720 P.2d 894, 897 (Wyo. 1986).

[¶11]   Petitioners contend that the PSC 
made its second order without substantial evidence being presented at the 
rehearing. W.S. 37-2-214 (1977)1 provides for rehearing; however, 
this statute does not require that new evidence be presented. A rehearing may be 
had if, in the judgment of the PSC, "sufficient reason therefor be made to 
appear." A rehearing may be proper whether or not new evidence is 
contemplated.

[¶12]   In Utah Power & Light Company 
v. Public Service Commission of Wyoming, 713 P.2d 240, 244 (Wyo. 1986), we held 
"[a] rehearing is in the discretion of the agency and will be interfered with 
only for a clear abuse of such discretion." In that case, we quoted with 
approval the court's definition of abuse of discretion explained in Martinez v. 
State, 611 P.2d 831, 838 (Wyo. 1980):

     A court does not abuse 
its discretion unless it acts in a manner which exceed the bounds of reason 
under the circumstances. In determining whether there has been an abuse of 
discretion, the ultimate issue is whether or not the court could reasonably 
conclude as it did. An abuse of discretion has been said to mean an error of law 
committed by the court under the circumstances.

[¶13]   Petitioners do not contend that the 
final action of the PSC order appealed from would have been arbitrary, 
capricious and an abuse of discretion in any case. Their contention rather is 
that the PSC changed its mind and in doing so abused its discretion. We cannot 
agree.

[¶14]   The PSC was influenced to grant the 
petition for rehearing because it was not satisfied that sufficient notice had 
been given to several affected property owners. While general notice of a 
hearing had been given, some property owners were not aware that an additional 
route was to be considered. At the rehearing, the property owners who petitioned 
for a rehearing testified concerning the effect the route ordered by the PSC 
would have on them. Considerable additional evidence was produced at the 
rehearing. There was additional and more specific evidence regarding costs of 
the alternative routes for the line. Evidence was also produced regarding the 
problem of obtaining easements for the alternative routes. In addition to the 
new evidence received at the rehearing, the PSC considered and re-evaluated the 
evidence produced at the first hearing.

[¶15]   We believe that the PSC's final 
determination was based on relevant factors and was rational. We are not aware 
of any errors in law made by the PSC, and we will not substitute our judgment 
for that of the PSC. Petitioners have not met their burden to demonstrate that 
the action of the PSC was arbitrary, capricious or an abuse of 
discretion.

II

[¶16]   The Board conditioned Cheyenne 
Light's use of county rights-of-way by requiring that Cheyenne Light place its 
lines underground. In petitioners' second issue on appeal, they attempt to 
structure a conflict in the powers of the PSC and the Board.

[¶17]   The PSC's statutory authority is 
set out in W.S. 37-2-112 (1977): "The Commission shall have general and 
exclusive power to regulate and supervise every public utility within the 
state." This statute is plain and unambiguous on its face. Words used within 
statutes are to be given their plain and ordinary meaning. Department of Revenue 
& Taxation of State of Wyoming v. Casper Legion Baseball Club, Inc., 767 P.2d 608, 610 (Wyo. 1989). Section 37-2-112 grants the PSC general and exclusive 
regulatory powers.

[¶18]   The Board's order that the line be 
placed underground was apparently issued pursuant to W.S. 1-26-813 (1977) which 
provides that utilities must obtain permission from a county commission when 
putting their lines on county roads:

     Corporations 
authorized to do business in this state for the purpose of constructing, 
maintaining and operating a public utility may set their fixtures and facilities 
along, across or under any of the public roads, streets and waters of this state 
in such manner as not to inconvenience the public in their use. * * * A 
person or firm must first obtain permission from the state highway commission or 
the board of county commissioners in the county where the construction is 
contemplated before entering upon any state highway or county road for the 
purpose of commencing the construction. (Emphasis added.)

This statute 
does not, however, grant the Board the authority to regulate public 
utilities.

[¶19]   Petitioners contend that the PSC 
was "bound by the decision of the Laramie County Commissioners" and that the PSC 
exceeded its statutory jurisdiction and authority or was lacking statutory right 
to make the decision it did.

[¶20]   Petitioners have not given effect 
to the holding in K N Energy, Inc. v. City of Casper, 755 P.2d 207, 213 (Wyo. 
1988):

     State-wide regulation 
and supervision of public utilities is the subject of Title 37 of Wyoming 
Statutes 1977. "The public service commission of Wyoming," created by § 
37-2-101, W.S. 1977, has "general and exclusive power to regulate and supervise 
every public utility within the state in accordance with the provisions of this 
act." Section 37-2-112, W.S. 1977. * * * The scope of the authority granted to 
the PSC demonstrates a legislative intent that the police power of the state, to 
the extent that it relates to public utilities, shall be exercised by the PSC 
and to preserve none of that power for municipalities.

[¶21]   That said in K N Energy, Inc. 
applies to counties. There is no significant distinction between the authority 
and powers the legislature granted and delegated to municipalities and that 
granted and delegated to counties.

     When referring to 
"municipalities" and "municipal corporations," these terms are often used in a 
manner which is intended to also include counties. For this reason, when * * * 
we contemplate the law of a municipality's delegated authority, our observations 
can be interpreted as also including the powers delegated to a 
county.

Schoeller v. 
Board of County Commissioners of County of Park, 568 P.2d 869, 875 (Wyo. 1977) 
(citations omitted). Schoeller also states that there are more limits on 
counties than those placed on municipalities:

Exhaustive research has 
revealed no case in which a distinction was made between the powers of a county 
and the powers of a municipality in order to prove greater power in the 
county. This is to say, the powers of a county are usually more restricted than 
those of a municipal corporation * * *.

Id. at 
875.

[¶22]   The problem of subjecting public 
utilities to different regulations is addressed in County of Chester v. 
Philadelphia Electric Company, 420 Pa. 422, 218 A.2d 331, 333 (1966), where the 
court stated:

If each county were to 
pronounce its own regulation and control over electric wires, pipe lines and oil 
lines, the conveyors of power and fuel could become so twisted and knotted as to 
affect adversely the welfare of the entire state. It is for that reason that the 
Legislature has vested in the Public Utility Commission exclusive authority over 
the complex and technical service and engineering questions arising in the 
location, construction and maintenance of all public utilities 
facilities.

See also 
Commonwealth v. Delaware & Hudson Railway Co., 19 Pa.Cmwlth. 59, 339 A.2d 155 (1975). In Niagara Mohawk Power Corporation v. City of Fulton, 8 A.D.2d 523, 
188 N.Y.S.2d 717, 721-22 (1959) (quoting Consolidated Edison Company of New York 
v. Village of Briarcliff Manor, 208 Misc. 295, 300, 144 N.Y.S.2d 379, 384 
(1955)), the court stated:

The power of the 
municipality to enact a zoning ordinance must yield to the superior force of the 
state statutes which impose upon the public utility company the duty of 
rendering safe and adequate service. 

"The general grant of 
power to a municipality to adopt zoning laws in the interest of public welfare 
does not have the effect of permitting the local legislative body to override 
such state law and policy."

Applying K N 
Energy, Inc. and Schoeller to this case brings us to the conclusion that a 
county does not have the power to regulate public utilities. The statutory 
language of § 37-2-112, as well as the case law, makes it apparent the PSC has 
the exclusive responsibility of regulating public utilities.

III

[¶23]   In the final issue, petitioners 
maintain that the action by the PSC was not supported by substantial evidence. 
An attack on the quantum of evidence is another way of alleging that the PSC's 
action was arbitrary and capricious.

[¶24]   In Parts I and II we delineated 
certain evidence in both the original hearing and the rehearing. In this portion 
of the opinion we will repeat some of that evidence and refer to additional 
evidence.

[¶25]   The Wyoming Administrative 
Procedure Act provides that it is the duty of the court reviewing an agency 
action to determine if the decision was supported by substantial evidence. W.S. 
16-3-114 (1977).

Substantial evidence is 
such relevant evidence as a reasonable mind might accept as adequate to support 
a conclusion; it may be less than the weight of the evidence but cannot be 
contrary to the overwhelming weight of the evidence.

Wyoming 
Insurance Department v. Avemco Insurance Company, 726 P.2d 507, 509 (Wyo. 1986). 
See also Cody Gas Company v. Public Service Commission of Wyoming, 748 P.2d 1144, 1146 (Wyo. 1988). If the whole record establishes that there is 
substantial evidence to support agency action, then the Supreme Court will not 
substitute its judgment for that of the agency.

[¶26]   Substantial evidence is such 
relevant evidence as reasonable minds would accept as adequate to support a 
conclusion. Southwest Wyoming Rehabilitation Center v. Employment Security 
Commission of Wyoming, 781 P.2d 918 (Wyo. 1989); Beddow v. Employment Security 
Commission of Wyoming, 718 P.2d 12, 14 (Wyo. 1986). In determining whether that 
quantum of evidence is present, all of the evidence on the record, both that 
which supports and that which conflicts with the agency's decision must be 
reviewed, and the court must determine whether the agency could reasonably 
conclude what it did. The standard requires more than a mere scintilla of 
evidence, more than a mere suspicion that a certain fact exists. However, once 
that measure of evidence has been found to exist, the possibility of drawing two 
inconsistent conclusions from a body of evidence does not prevent a finding that 
the conclusion drawn by the administrative agency was supported by substantial 
evidence. Burlington Northern Railroad Company v. Public Service Commission of 
Wyoming, 698 P.2d 1135, 1139 (Wyo. 1985). The courts will defer to the 
experience and expertise of the agency in its weighing of the evidence and will 
disturb its decisions only where it is clearly contrary to the overwhelming 
weight of the evidence on the record. Cody Gas Company, 748 P.2d  at 
1146.

[¶27]   The PSC is to determine the weight 
to be given evidence in light of its experience and expertise. In the Matter of 
Rule Radiophone Service, Inc., 621 P.2d 241, 245 (Wyo. 1980). Further, the PSC 
must weigh potential advantages and disadvantages that may come with a proposal. 
Id. at 246.

[¶28]   After taking a considerable amount 
of evidence at the rehearing, the PSC determined that the originally approved 
route was circuitous, would require approximately one-half mile of additional 
and unnecessary overhead power line construction costs, would be unnecessarily 
obstructive along the two additional and unnecessary legs of the power line 
route, would require three additional metal corner structures and four 
additional treated wood pole structures which would be installed along and near 
existing homes and developed properties near Laughlin Road. Use of the direct 
route would result in reduced construction and maintenance costs that will 
support lower rates to all of Cheyenne Light's ratepayers, and would in turn 
avoid the additional expense of clearing a new route through the base which may 
increase the construction costs.

[¶29]   The PSC was presented with evidence 
as to the cost of the different alternatives to the line, as well as the 
population demographics of the area. The cost differential, coupled with a 
desire to minimize impact on existing residences, was substantial evidence to 
support the PSC's conclusion.

[¶30]   In summary, we are satisfied that 
the PSC's action was not arbitrary or capricious. Furthermore, the PSC did not 
abuse its discretion nor exceed its jurisdiction. The decision of the PSC was 
supported by substantial evidence.

[¶31]   Affirmed.

FOOTNOTES

1 W.S. 37-2-214 (1977) 
reads in pertinent part:

At 
any time after an order has been made by the commission any person interested 
therein may apply for a rehearing in respect to any matter determined therein 
and the commission shall grant and hold such rehearing if in its judgment 
sufficient reason therefor be made to appear * * *.