Case Title: Town of Blackstone v. Southside Electric Cooperati

Citation: 

Docket Number: 980564

State: virginia

Court: Virginia Supreme Court

Date: 1998-11-06T00:00:00Z

Document:
Present: All the Justices 
 
TOWN OF BLACKSTONE 
 
 
OPINION BY 
v.  Record No. 980564 
JUSTICE LAWRENCE L. KOONTZ, JR. 
 
 
November 6, 1998 
SOUTHSIDE ELECTRIC COOPERATIVE, ET AL. 
 
FROM THE STATE CORPORATION COMMISSION 
 
In this appeal, the primary issue we consider is whether a 
municipality seeking to acquire, by condemnation, electric 
utility distribution facilities within an annexed area under 
Code § 56-265.4:2 must first obtain the approval of the State 
Corporation Commission (Commission) under Code § 25-233. 
BACKGROUND 
The Town of Blackstone (the Town) is a municipality in 
Nottoway County that owns and operates an electric utility 
system for the distribution and retail sale of electricity both 
within and beyond its corporate boundaries.  Southside Electric 
Cooperative (Southside) is a Virginia electric distribution 
cooperative that provides retail electric service within an area 
that encompasses eighteen counties and five municipalities, 
including portions of Nottoway County. 
In 1992, pursuant to an agreement with Nottoway County, the 
Town annexed a 2.5 square mile area of Nottoway County (the 
annexed area).  Although the Town at that time provided electric 
service to customers in a portion of the annexed area, 
Southside, pursuant to a certificate issued by the Commission, 
provided electric service to customers in other portions of the 
annexed area as well as to customers in a subdivision of the 
Town known as Pickett Court.  Virginia Electric and Power 
Company (Virginia Power) also provided electric service in the 
Town, serving three customers outside the annexed area. 
In order to extend its electric service to all customers 
located within the annexed area, the Town engaged in discussions 
with Southside in attempts to acquire Southside’s electric 
distribution facilities and associated rights of way (the 
facilities) within that area.  After these discussions failed to 
achieve that goal, on June 25, 1996, the Town Council passed a 
resolution authorizing a condemnation proceeding, pursuant to 
Code § 56-265.4:2, to acquire the facilities.  On June 28, 1996, 
the Town filed an application with the Commission requesting 
permission to acquire the facilities by a condemnation 
proceeding.1
In its application, consistent with the requirements of 
Code § 25-233, the Town asserted that a “public necessity” or an 
                     
1In its application, the Town recognized that the Commission 
had previously ruled, in a divided opinion, that a municipality 
seeking to condemn facilities under Code § 56-265.4:2 was 
required to obtain Commission permission under Code § 25-233.  
See Petition of City of Franklin, Case No. PUE890069, 1990 
S.C.C. Ann. Rep. 301, 302.  However, the Town did not concede 
the issue, and the Commission, therefore, expressly addressed 
it. 
 
 
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“essential public convenience” required its acquisition of 
Southside’s facilities and that these facilities were not 
essential to the purposes of Southside.  In support of those 
assertions, the Town maintained that condemnation would: (1) end 
the fragmented service that results from having more than one 
electric provider in the area; (2) reduce rates for electric 
service; (3) improve the reliability of electric service in the 
annexed area; (4) allow more prompt service connections to 
customers in the annexed area; (5) give customers in the annexed 
area a greater voice in decisions regarding their electric rates 
and service; and (6) have no effect on Southside’s remaining 
customers.  Southside challenged these claims in its answer 
opposing the Town’s application. 
The Commission appointed a hearing examiner to consider the 
application, and hearings were held in December 1996.  On August 
21, 1997, the hearing examiner issued his report.  In that 
report, the hearing examiner rejected the Town’s assertion that 
Code § 56-265.4:2 does not require the Town to obtain the 
Commission’s permission under Code § 25-233 prior to proceeding 
with condemnation of Southside’s facilities in the annexed area.  
In addition, the hearing examiner rejected the Town’s further 
assertion that under the circumstances of this case the 
Commission must apply a less stringent standard for determining 
whether a public necessity or an essential public convenience 
 
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supports the Town’s application.   With respect to the merits of 
the application, the hearing examiner addressed each of the 
assertions made by the Town in support of its application and 
found that none of these demonstrated a “public necessity” or 
“essential public convenience” warranting condemnation.  For 
purposes of our resolution of the issues presented in this 
appeal, we need not relate the facts supporting these findings, 
which are adequately supported by the record.2  
The Town filed exceptions to the hearing examiner’s report.   
Thereafter, the Commission reviewed the report and adopted the 
findings and recommendations of the hearing examiner in an order 
dated November 24, 1997, denying the Town’s application.  This 
appeal followed. 
DISCUSSION
On appeal, the Town asserts that the Commission erred in 
finding that it was required to obtain the Commission’s 
permission under Code § 25-233 prior to exercising its right 
                     
2The hearing examiner also addressed the issue of whether 
the facilities are essential to Southside, as required by Code 
§ 25-233.  Noting that the Commission has construed “essential” 
to mean “only when the acquisition would adversely affect 
service to [the relinquishing] utility’s remaining customers,” 
the hearing examiner concluded that the facilities are not 
essential to Southside’s purposes.  The Commission subsequently 
determined that it need not reach this issue since the Town had 
failed to establish that condemnation was appropriate.  The Town 
does not assign error to this determination, and accordingly, we 
express no opinion on this issue. 
 
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under Code § 56-265.4:2 to acquire, by condemnation, Southside’s 
facilities in the annexed area.  The Town further asserts that 
even if it was required to obtain the Commission’s permission 
prior to exercising its right under Code § 56-265.4:2, the 
Commission applied an erroneous legal standard in determining 
whether the requirements of Code § 25-233 were met, by requiring 
the Town to establish a “public necessity” or an “essential 
public convenience” under the traditional standard, instead of 
some “less stringent” standard. 
Both issues raised by the Town are essentially matters of 
statutory construction.  Code § 56-265.4:2, in relevant part 
provides: 
 
A. Any city or town in the Commonwealth which 
provides electric utility service for the use of its 
residents may, at any time following annexation of 
additional territory to such city or town, acquire the 
distribution system facilities of the electric utility 
serving the annexed area in the manner provided by 
Title 25. 
 
(Emphasis added.) 
 
At all times relevant to this appeal, Code § 25-233, 
provided in part: 
 
No corporation or authority created under the 
provisions of Chapter 39 (§ 15.1-1603 et seq.) of 
Title 15.1 shall take by condemnation proceedings any 
property belonging to any other corporation possessing 
the power of eminent domain, unless, after hearing all 
parties in interest, the State Corporation Commission 
shall certify that a public necessity or that an 
essential public convenience shall so require, and 
shall give its permission thereto; and in no event 
shall one corporation take by condemnation proceedings 
 
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any property owned by and essential to the purposes of 
another corporation possessing the power of eminent 
domain. 
 
(Emphasis added.) 
 
The Town contends that a proper construction of Code § 56-
265.4:2 would exclude such condemnation actions from the review 
of the Commission under Code § 25-233 by limiting the phrase “in 
the manner provided by Title 25” to mean that a city or town 
need only employ the procedures of the Virginia General 
Condemnation Act, Code § 25-46.1 et seq.  In short, the Town 
contends that Code § 56-265.4:2 was enacted to permit a city or 
town to do the very thing prohibited by Code § 25-233, that is 
to condemn the property of a public utility with the power of 
eminent domain without first seeking permission from the 
Commission.  In making this contention, the Town does not 
expressly state that Code § 56-265.4:2 is ambiguous, but 
supports its argument with extensive reference to external aids 
to construction, raising the obvious implication that the 
statute cannot be construed from its plain language.3  We 
disagree. 
                     
3The Town further contends that Code § 56-265.4:2 must be 
read to provide more expansive powers of condemnation than are 
provided elsewhere in the Code, otherwise its enactment would 
merely be redundant of other statutes.  However, as the Town 
itself notes, Code § 56-265.4:2 was enacted following this 
Court’s decision in Town of Culpeper v. VEPCO, 215 Va. 189, 207 
S.E.2d 864 (1974), in order to provide the express right of 
 
 
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When considering a legislative act, a court may look only 
to the words of the statute to determine its meaning, and when 
the meaning is plain, resort to rules of construction, 
legislative history, and extrinsic evidence is impermissible.  
Harrison & Bates, Inc. v. Featherstone Assoc., 253 Va. 364, 368, 
484 S.E.2d 883, 885 (1997).  Accordingly, unless we find that 
any words of the statute are “inherently difficult to 
comprehend, of doubtful import, or lacking in clarity and 
definiteness . . . it is not necessary to look beyond the plain 
language of the statute to ascertain its underlying legislative 
intent.”  Id. at 369, 484 S.E.2d at 886. 
Utilizing this standard, we find no merit to the Town’s 
contention that the phrase “in the manner provided by Title 25” 
can be reasonably read to have a limited construction.  Nothing 
in that phrase suggests that the legislature intended other than 
what the plain language imports, which is that the right 
afforded to cities and towns seeking to acquire by condemnation 
the electric utility distribution facilities within newly 
annexed areas is subject to all the provisions of Title 25 
relevant to such actions.  No resort to external aids to 
construction is necessary to reach that self-evident conclusion. 
                                                                  
 
condemnation in annexed areas which we had found lacking 
elsewhere in the Code.  Accordingly, the purpose of this statute 
 
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Accordingly, we hold that a city or town seeking to 
exercise the right provided by Code § 56-265.4:2 must comply 
with Code § 25-233, which provides that permission must first be 
obtained from the Commission by any public corporation or 
authority seeking to take by condemnation proceedings the 
property of any other entity also possessing that power.  To do 
so, the city or town must demonstrate “that a public necessity 
or that an essential public convenience shall so require.”  Code 
§ 25-233. 
The Town contends, however, that unless a “less stringent” 
standard is applied by the Commission in its determinations 
under Code § 25-233, Code § 56-265.4:2 is rendered meaningless.  
This is so, the Town asserts, because “it is highly unlikely 
that a municipality can ever demonstrate that a regulated public 
utility is failing to provide adequate service at reasonable 
rates” and, thus, no municipality could ever demonstrate that 
the condemnation of electric utility distribution facilities is 
a public necessity or essential to public convenience. 
The Town’s contention on this issue rests on a faulty 
premise.  Nothing in the record before us suggests that the 
Commission limited its consideration of the Town’s application 
solely to the question of adequacy of service and reasonableness 
                                                                  
 
is clearly not redundant of the existing scheme for condemnation 
 
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of rates, or that it would so limit itself in the future.  
Rather, the Commission focused its inquiry on whether the public 
would benefit under the entire circumstances of the proposed 
condemnation, and noted that while there would be certain 
benefits, including a slight reduction of rates, the evidence on 
balance did not support such a finding.  The record adequately 
supports that finding.  Moreover, we reject the Town’s 
contention that no municipality would be able to effectively 
compete with a public utility in the provision of or cost of 
service. 
In sum, we hold that all of the provisions of Code § 25-233 
as traditionally applied by the Commission apply to the 
condemnation of electric utility distribution facilities under 
Code § 56-265.4:2 by a city or town.  The decision of the 
Commission, as an expert tribunal, is presumed to be just, 
reasonable, and correct unless without support in the record or 
manifestly in error.  Central Telephone Co. of Virginia v. State 
Corporation Commission, 219 Va. 863, 874, 252 S.E.2d 575, 581-82 
(1979).  Here, the record supports the decision of the 
Commission and the Commission correctly applied the law.  For 
these reasons, the order of the Commission will be affirmed. 
Affirmed. 
                                                                  
of electric distribution facilities. 
 
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