Case Title: K N Energy, Inc. v. City of Casper

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-05-11T00:00:00Z

Document:
K N Energy, Inc. v. City of Casper1988 WY 69755 P.2d 207Case Number: 86-69Decided: 05/11/1988Supreme Court of Wyoming
K N 
ENERGY, INC., DOING BUSINESS AS NORTHERN UTILITIES DIVISION OF K N ENERGY, INC., 
A KANSAS CORPORATION, APPELLANT (PLAINTIFF),

v.

CITY 
OF   
   CASPER, A WYOMING 
MUNICIPAL CORPORATION, APPELLEE (DEFENDANT).

Appeal from the District 
Court,     
Natrona    
County, Harry E. Leimback, 
J.

Michael J. 
Sullivan, Tim I. Munson and William H. Brown of Brown, Drew, Apostolos, Massey 
& Sullivan, Casper, Robert C. McHugh and Thomas J. Carroll, III, Lakewood, 
Colo., for appellant.

H.B. Harden, 
Jr., City Atty., and Robert L. Mullen, Deputy City Atty., Casper, for appellee.

A.G. McClintock, 
Atty. Gen., Steven R. Shanahan, Sr. Asst. Atty. Gen., Roger C. Fransen, Asst. 
Atty. Gen., amicus curiae for Public 
Service Com'n of Wyoming.

Nicholas G. 
Kalokathis of Lathrop & Uchner, P.C., Cheyenne, amicus 
curiae for      
Wyoming Ass'n of Natural Gas 
Utilities.

Before BROWN, C.J., and THOMAS, CARDINE and MACY, 
JJ., and GUTHRIE, J., Retired. 

THOMAS, Justice.

[¶1.]     This case presents 
directly the question of the authority of a   
              
              
             
Wyoming municipality to regulate a public 
utility by enactment of a licensing ordinance. K N Energy, Inc., doing business 
as Northern Utilities Division of K N Energy, Inc. (Northern), instituted a 
declaratory judgment action in the district court seeking a declaration that the 
ordinance adopted by the City of   
              
              
             
Casper 
(  
              
              
             
Casper) is 
void. The district court declared specific provisions of the ordinance to be 
invalid and unenforceable because of conflict with the regulatory authority over 
public utilities assigned by statute to the Public Service Commission of Wyoming 
(PSC), but it sustained the balance of the ordinance adopted by   
              
              
             
Casper. We cannot agree 
that   
              
              
             
Casper had 
any authority to adopt the ordinance in issue, and we reverse the decision of 
the district court. It is our conclusion that the ordinance is void in its 
entirety because there exists no authority for a city to adopt such an 
ordinance.

[¶2.]     Northern, in its Brief 
of Appellant, sets forth these issues in the appeal:

"1. Whether the District 
Court erred in not declaring Municipal Ordinance No. 16-85 of the City of 
      
        Casper, State of       
        Wyoming, entirely invalid, since the legislature of the 
State of       
        Wyoming has exclusively preempted and totally 
occupied the field of public utility licensing and regulation?

"2. Whether the District 
Court erred in not declaring Municipal Ordinance No. 16-85 of the City of 
     
            
        
Casper, State of      
            
        
Wyoming, entirely invalid, since the City of      
            
        
Casper did not, and does 
not now, have the constitutional or statutory authority to ordain a municipal 
ordinance regulating and requiring the licensing of public 
utilities?

"3. Whether Municipal 
Ordinance No. 16-85 of the City of   
            
 Casper, State 
of   
            
 Wyoming, is 
unconstitutional since it singles out gas utilities to the exclusion of other 
competing utilities?"

Casper restates the issues in 
this way:

"1. Whether the Seventh 
Judicial District Court was correct in declaring valid certain portions of the 
gas company licensing ordinance of the City of Casper, State of Wyoming.

"2. Whether the city had 
authority to adopt the gas company licensing ordinance.

"3. Whether the gas 
company licensing ordinance of the City of   Casper is unconstitutional."

The PSC and the 
Wyoming Association of Natural Gas Utilities sought and received permission to 
file amicus curiae briefs. In their briefs, they suggest single issues. The PSC 
asks the court to decide:

"What is the extent of 
 
            
            
       Wyoming 
cities' and towns' power to regulate and to grant franchises to public 
utilities, relative to the powers of the Public Service Commission to regulate 
and to grant certificate authority to those utilities?"

The Wyoming 
Association of Natural Gas Utilities wants the court to decide:

"Whether municipalities 
have authority to regulate utilities by the adoption of a licensing 
ordinance?"

[¶3.]     Northern is a public 
utility furnishing natural gas service in several    
          Wyoming cities. Among 
those is    
          Casper. 
As a public utility subject to regulation by the PSC, and, in accordance with 
its rules, Northern obtained a certificate of public convenience and necessity 
to furnish natural gas service to residents of    
          Casper. Northern had obtained permission to use 
the streets and property of the city by entering into a franchise agreement with 
   
          Casper, which also provided that Northern would 
furnish natural gas to    
          Casper in accordance with the terms of that 
agreement. This franchise expired on December 31, 1984, and Northern and 
   
          Casper have not 
been successful in agreeing upon the terms of a renewal franchise.

[¶4.]     During this hiatus, the 
legislature adopted Ch. 172, S.L. of Wyoming 1985, which is compiled as § 
15-1-103(a)(xxxiii)(C) and § 15-1-103(b), W.S. 1977 (1987 Cum.Supp.). This 
statute became effective May 23, 1985, and, because its text is of significance 
in understanding the issues, it is attached as Appendix A to this opinion. 
Responding to the adoption of this statute,         
 Casper, on July 2, 1985, adopted Ordinance No. 
16-85 entitled:

"AN ORDINANCE 
ESTABLISHING PROCEDURE AND REGULATIONS FOR A NON-EXCLUSIVE LICENSE TO ANY GAS 
COMPANY WITHIN THE CITY OF CASPER, WYOMING, OPERATING WITHOUT A FRANCHISE, A 
LICENSE TO CONSTRUCT, MAINTAIN, AND OPERATE IN, ON OR UNDER THE PRESENT AND 
FUTURE STREETS, ALLEYS, AND PUBLIC WAYS OF THE CITY OF CASPER, NATRONA COUNTY, 
WYOMING, A GAS DISTRIBUTION PLANT OR SYSTEM FOR THE PURPOSE OF SUPPLYING GAS AND 
GAS SERVICE TO THE CITY OF CASPER, THE INHABITANTS THEREOF, AND OTHERS: SUBJECT 
TO THE TERMS AND CONDITIONS AND TO THE MAKING OF PAYMENTS SPECIFIED IN THE 
ORDINANCE."

Because of its 
significance in understanding the issues of the case, Ordinance No. 16-85 is 
attached hereto as Appendix B.

[¶5.]     An examination of 
Ordinance No. 16-85 of Casper evidences that a gas company operating without a 
franchise from the city, or one as to which the grant or franchise has expired 
and which has not obtained a license or a franchise from the city council, is 
deemed to be in violation of the ordinances of the city and subject to the 
penalties therefor, which include a fine of $200 per day with each day deemed a 
separate violation.1 The ordinance contains a 
comprehensive set of regulatory conditions pursuant to which such a license 
would be issued. It specifically provides in § 21 that it is intended to 
implement Enrolled Act 70 of the Forty-eighth Legislature (Ch. 172, S.L. of 
Wyoming 1985).

[¶6.]     Northern responded to 
the adoption of this ordinance by filing this case as a declaratory judgment 
action in the District Court of the Seventh Judicial District of the State of 
       
              
             
        
Wyoming in and for        
              
             
        
Natrona       
              
             
        
County on July 16, 1985. Northern alleged 
that the ordinance violated its rights to due process, equal protection, to be 
free from arbitrary laws and to uniform administration of the laws. It also 
alleged that        
              
             
        
Casper did not have authority to adopt the 
ordinance. In addition to its request for declaratory relief, Northern sought a 
preliminary injunction restraining        
              
             
        
Casper from enforcement of any of the 
provisions of the ordinance until such time as the district court could rule on 
its validity. Briefs were filed and argument was heard with respect to the 
requested preliminary injunction, and the preliminary injunction was 
denied.

[¶7.]     The same day that 
injunctive relief was denied, Northern filed its motion for summary judgment 
requesting the district court to find the ordinance void in whole or in part. 
Additional briefs were filed; argument was heard; and the court then found that 
the ordinance did not violate any of Northern's constitutional rights, and, 
except for certain regulatory provisions in the ordinance, the district court 
held that  
             
             
           
           
              
            
           
           
      Casper  
had authority to adopt it. The district court declared to be void selected 
provisions of the ordinance which it found to effect regulation of a public 
utility, holding that the municipality had no authority to adopt those 
provisions because of the exclusive regulatory authority granted by statute to 
the PSC. The court sustained the balance of the ordinance as coming within "the 
City's residual police power, its power to grant franchises pursuant to § 
15-1-103(a)(xxxiii), Wyoming Statutes 1977, and the power to license, tax and 
regulate businesses pursuant to § 15-1-103(a), Wyoming Statutes 1977, and the 
savings clause, Section 23 of said Ordinance." 

[¶8.]     After entry of the 
court's order,       
            
               
             
            
              
              
              
                 
               
 Casper adopted Ordinance No. 26-85, which 
simply deleted those provisions of Ordinance No. 16-85 that had been nullified 
by the court. On December 13, 1985, Northern then filed a motion to alter or 
amend the judgment, specifically requesting the court also to declare § 21 of 
Ordinance No. 16-85 (the provision providing that the ordinance is adopted to 
implement Ch. 172, S.L. of Wyoming 1985) to be void. This latter motion was 
denied on January 23, 1986, and this appeal was taken from the summary judgment 
order and the order denying the motion to alter or amend the judgment. Casper 
has not appealed the nullification of §§ 2(6), 8, 9, 11, 15, 16(1), 18 and 19 of 
Ordinance No. 16-85, and that aspect of the court's ruling is not at issue in 
this appeal.

[¶9.]     Section 
15-1-103(a)(xxxiii)(C), W.S. 1977, (1987 Cum.Supp.), grants to municipalities 
the authority to include certain provisions in a franchise initially granted, 
renewed or renewed after condemnation, but the authority granted in subparagraph 
(C) of that statute is not any different from the authority granted in 
subparagraphs (A) and (B). Subsection (b) of § 15-1-103, details those 
provisions that may be included in such a franchise agreement. The legislation, 
however, does not require a municipality to insist upon those provisions in a 
franchise, and, in fact, the operative verb is "may."

[¶10.]  We need not address Northern's argument 
concerning the constitutionality of Ordinance No. 16-85. We have said many times 
that constitutional questions will not be discussed if another appropriate 
ground exists to resolve the issue. E.g., Nehring v. Russell, Wyo., 582 P.2d 67 
(1978); Schoeller v. Board of County Commissioners, Wyo., 568 P.2d 869 (1977); 
Stambaugh v. State, Wyo., 566 P.2d 993 (1977); Bowers v. Getter Trucking 
Company, Wyo., 514 P.2d 837 (1973); Pan American Petroleum Corporation v. 
Wyoming Oil & Gas Conservation Commission, Wyo., 446 P.2d 550 (1968); State 
ex rel. Fire Fighters Local 279, I.A.F.F. v. Kingham, Wyo., 420 P.2d 254 (1966); 
Marion v. City of Lander, Wyo., 394 P.2d 910 (1964), cert. denied 380 U.S. 925, 
85 S. Ct. 929, 13 L. Ed. 2d 810, reh. denied 380 U.S. 989, 85 S. Ct. 1352, 14 L. Ed. 2d 283 (1965); Gorrell v. City of 
Casper, Wyo., 371 P.2d 835 (1962). Except for the specific sections of the ordinance which it found to 
conflict with the regulatory authority of the PSC, the district court held the 
ordinance to be valid. We are unable to sustain this ordinance under the 
theories adopted by the district court, or any other theory. We conclude that 
the constitutional questions need not be considered because    
            Casper was without 
authority to adopt an ordinance like the one in issue in this case.

[¶11.]  Neither will we invoke a concept similar 
to federal preemption principles as Northern urges us to do. We do not perceive 
a concept of preemption to be present in this case, at least as preemption 
generally has been understood. The federal preemption cases address a conflict 
between the powers reserved to each state in its sovereign role and the 
sovereign power granted to the federal government. See, e.g., Gulf Oil 
Corporation v. Wyoming Oil and Gas Conservation Commission, Wyo., 693 P.2d 227 
(1985); Industrial Siting Council of State of Wyoming v. Chicago & North 
Western Transportation Company, Wyo., 660 P.2d 776 (1983). A municipality is not 
possessed of any sovereign power, either inherent or reserved. The question then 
becomes not whether the exercise of a state power has preempted a power reserved 
to a municipality, but instead, whether by some act of the legislature, the 
municipality has been granted the authority claimed.

[¶12.]  Our rule in    
           
       Wyoming is unequivocal. 
Municipalities, being creatures of the state, have no inherent powers but 
possess only the authority conferred by the legislature.

"* * * [M]unicipalities 
can exercise only those powers of government which are expressly or impliedly 
conferred." City of Buffalo v. Joslyn, Wyo., 527 P.2d 1106, 1107 (1974), citing May v. City of Laramie, 
58 Wyo. 240, 
131 P.2d 300, 312 (1942).

A court must 
analyze any pertinent constitutional proviso or appropriate statute for the 
purpose of determining whether express or implied authority has been conferred 
upon a municipality. Haddenham v. City of Laramie, Wyo., 648 P.2d 551 (1982); 
City of Buffalo 
v. Joslyn, supra. In deciding whether authority has been granted to a 
municipality to pursue a claimed governmental purpose, we apply a rule of strict 
construction, resolving any doubt against the existence of the municipal power. 
Whipps v. Town of Greybull, 56 Wyo. 355, 109 P.2d 805, 
146 A.L.R. 596 (1941). If we find that appropriate authority has been conferred 
upon a municipality by the legislature, we then liberally construe the method 
invoked to exercise the conferred power, asking only if it is reasonable. Whipps 
v. Town of        
           
Greybull, supra. See also 2 E. McQuillin, 
Municipal Corporations §§ 10.18(a) through 10.21 at 789-800 (rev. 3rd ed. 
1979).

[¶13.]  The district court relied, in part, upon 
§ 15-1-103(a)(xiii), W.S. 1977 (1987 Cum.Supp.), to justify the adoption of 
those portions of Ordinance No. 16-85 that were not stricken. That statutory 
provision authorizes cities and towns to:

"License, tax and 
regulate any business whatsoever conducted or trafficked in within the limits of 
the city or town for the purpose of raising revenue, and any license taxes 
imposed shall be uniform in respect to the class of business upon which imposed; 
* * *."

Public 
utilities, such as Northern, are included within the phrase "any business 
whatsoever." If this language were not limited in some way as to public 
utilities, however, the broad power granted to the municipality to regulate 
would conflict with the "general and exclusive power to regulate and supervise 
every public utility within the state in accordance with the provisions of this 
act" delegated to the PSC in § 37-2-112, W.S. 1977. Any conflict is avoided by 
the legislative language that limits the authority of the municipality to 
license, tax and regulate for "the purpose of raising revenue." This style of 
limitation is not an unusual one. See 3 C. Sands & M. Libonati, Local 
Government Law § 15.11 at 15-44 (1982).

[¶14.]  Ordinance No. 16-85 cannot be sustained 
under the authority delegated to municipalities in § 15-1-103(a)(xiii), W.S. 
1977, (1987 Cum.Supp). The title of this ordinance does not suggest in any way 
that its purpose is to raise revenue, and the balance of the ordinance discloses 
that       
            
          
             
             
          
     Casper did 
not adopt it for the purpose of raising revenue. Other than the potential fines 
to be collected for violation, the purpose of raising revenue appears only in § 
14 of Ordinance No. 16-85, and that section appears to perpetuate the 
consideration for the expired franchise. Instead, the real purpose of this 
ordinance is set forth in § 21, which states that       
            
          
             
             
          
     Casper "intends to implement Wyoming Statutes 
Enrolled Act 70, Forty-eighth Legislature [Ch. 172, S.L. of Wyoming 1985], by 
way of ordinances, resolutions, and rules and regulations." This specific 
statement of intent by Casper, when coupled with its failure to accommodate to 
the general limitations attaching to the authority to license for the purpose of 
raising revenue, forecloses the justification of this ordinance under the 
authority to license, tax and regulate.

[¶15.]  Our conclusion in this regard is 
reinforced by the apparent disregard on the part of    
            
            
          
              
             
            
           
      Casper of other 
limitations upon the authority of municipalities to license, tax or regulate for 
the purpose of raising revenue. The law imposes a requirement of reasonableness 
with respect to the business classification. 16 E. McQuillin, Municipal 
Corporations § 44.20 at 72 (rev. 3d ed. 1984). There is nothing about Ordinance 
No. 16-85 that justifies the choice to license only gas companies. Instead, it 
appears that the license imposed by the ordinance has not been required 
uniformly with respect to an appropriate class of business. Another general 
policy is recognized to avoid double taxation.

"Although double taxation 
is not protected by the United States Constitution, double taxation is not 
favored, and all doubt concerning a conflict between a municipality and state 
relating to taxation is resolved against dual taxation." 16 E. McQuillin, 
Municipal Corporations, supra, § 44.23 at 82. (Footnotes omitted.)

In this regard, 
the state has provided for a uniform state assessment of public utilities to 
defray the administrative expenses of the PSC for regulating and supervising 
them. Section 37-2-106, W.S. 1977. The state tax is invoked to defray the 
expenses of the state accomplishing, under the authority delegated to the PSC, 
exactly the kind of regulation that Ordinance No. 16-85 purports to impose. On 
the face of the ordinance, no public purpose is suggested for the license 
payments to Casper required under § 14 of that 
ordinance, other than defraying the expenses of the regulatory activities of 
Casper. The 
redundancy of such charges makes them suspect under Art. 13, § 3 of the 
Constitution of the State of Wyoming.2 See Powers v. City of Cheyenne, Wyo., 435 P.2d 448 (1967), reh. denied 436 P.2d 961 (1968).

[¶16.]  There is no better prospect for 
sustaining this ordinance under any residual police power of        
           
              
      Casper. The record does 
not clarify what the district court contemplated by its reference to a residual 
police power. The law is settled that, other than the        
           
              
   United States of America, only the state, as sovereign, is 
possessed of inherent police powers. 6 E. McQuillin, Municipal Corporations § 
24.35 at 107 (rev. 3d ed. 1988). This court has explained the police power 
vested in municipal governments in this way:

"* * * [T]he only powers 
possessed by municipalities are those delegated to them. Stewart et al. v. City 
of Cheyenne, 60 Wyo. 497, 154 P.2d 355. The police power is no 
exception. It is not inherent in municipalities. It is said in 37 Am.Jur. 905: 
`In the absence of direct constitutional authorization, the generally accepted 
view is that any police power which a municipal corporation attempts to exercise 
must come from the source of the state police power, the state legislature.' And 
on it is said: `The prevailing view in this country is that the police power of 
municipalities exists solely by virtue of legislative or constitutional grant.' 
* * *" Blumenthal v. City of    
   Cheyenne, 64 
   
   Wyo. 75, 186 P.2d 556, 563 (1947).

See also Nation 
v. Giant Drug Company, Wyo., 396 P.2d 431 (1964). The parties 
suggest, and we have discovered, only two possible sources of a grant of a 
police power to municipalities in the constitution and statutes.

[¶17.]  By statute, cities and towns have 
authority to:

"Adopt ordinances, 
resolutions and regulations, including regulations not in conflict with this act 
and necessary for the health, safety and welfare of the city or town, necessary 
to give effect to the powers conferred by this act and enforce all ordinances by 
imposing fines not exceeding seven hundred fifty ($750.00), or imprisonment not 
exceeding six (6) months, or both; * * *." § 15-1-103(a)(xli), W.S. 1977 (1987 
Cum.Supp.).

By this 
provision, the legislature did not extend a general police power to the 
municipalities, which would exist independent of the express powers granted in 
§§ 15-1-101 through 15-10-117, W.S. 1977 (1987 Cum. Supp.). Any police power 
that would justify this ordinance must relate to an authority otherwise 
expressed in those statutory provisions, and none appears. There is no residual 
police power that is contemplated by the statutory scheme.

[¶18.]  
The alternative source for some general grant of police power to 
municipalities is Art. 13, § 1(b) of the Wyoming Constitution (referred to 
frequently as the "home rule" amendment), which provides:

"All 
cities and towns are hereby empowered to determine their local affairs and 
government as established by ordinance passed by the governing body, subject to 
referendum when prescribed by the legislature, and further subject only to 
statutes uniformly applicable to all cities and towns, and to statutes 
prescribing limits of indebtedness. The levying of taxes, excises, fees, or any 
other charges shall be prescribed by the legislature."

The 
court considered this constitutional provision in Laramie Citizens for Good 
Government v. City of Laramie, Wyo., 617 P.2d 474, 483 (1980), and said:

"* * 
* Plainly and without ambiguity it makes such legislation [municipal ordinances] 
`subject to' statutes uniformly applicable to all cities and towns and to those 
prescribing limits of indebtedness. "`* * * The term "subject to" means 
"subordinate to" or "subservient to." * * *' Kelly v. Smythe, 61 Wyo. 209, 226, 157 P.2d 289, 296 (1945). 
See Chandler v. Hjelle, N.D., 126 N.W.2d 141, 147 
(1964).

"Legislation by cities and towns must not conflict with 
statutes uniformly applicable to cities and towns, and it must be subordinate 
and subservient to such statutes. Each enactment must be measured in its own 
right to determine if it pertains to a `local affair' and if it is `subject to' 
statutes uniformly applicable."

Even 
though the language of this constitutional provision is quite broad, the power 
of the legislature to control even the local activities of the municipality 
cannot be debated.

"* * 
* It is, accordingly, noted that it has been recognized from the very beginning 
of Wyoming that the legislature has the right to prescribe the powers and duties 
of municipalities and these include not only governmental affairs but strictly 
local affairs as well." Stewart v. City of Cheyenne, 60 Wyo. 497, 514, 154 P.2d 355, 360 
(1944).

To 
the extent that a statute of the state in some way conflicts with a claimed 
power of the municipality, the municipal provision must yield, even with respect 
to any police power. The application of that principle results in a conclusion 
that the power to adopt the licensing ordinance in this instance could not be 
sustained under the general power granted by Art. 13, § 3 of the Wyoming Constitution.

[¶19.]  
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. Normally, the power to license in accordance with 
police power implies authority to regulate. See 9 E. McQuillin, Municipal 
Corporations § 26.27 at 70 (rev. 3d ed. 1986). While some courts have held that 
allocation of regulatory power to a state agency does not foreclose the power to 
license, we have discovered no case suggesting that a municipality can license 
in accordance with 
its police power some activity which it cannot regulate. Furthermore, it 
generally is understood that the power to license, pursuant to police power, 
encompasses the power to prohibit the activity. See Blumenthal v. City of 
Cheyenne, supra; 9 E. McQuillin, 
Municipal Corporations, supra, § 26.31 at 79-80. The authority to grant a 
certificate of public convenience and necessity to a public utility to furnish 
services in a city or town and to terminate such services is in the PSC. It must 
approve the commencement or termination of public utility operations in a 
municipality whether or not a franchise has been granted or terminated between 
the municipality and the utility. See § 37-2-205, W.S. 1977; Rules of the Public 
Service Commission of the State of Wyoming, Ch. 2, § 208 (1984). 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.

[¶20.]  
Neither can any implied police power be invoked to sustain this 
ordinance. A municipality does not have the authority to do indirectly anything 
that it has not been afforded authority to do directly. See Robert W. Anderson 
Housewrecking and Excavating, Inc. v. Board of Trustees, School District No. 25, 
Fremont County, Wyo., 681 P.2d 1326 (1984). In 
accordance with our rule of strict construction, we hold that Art. 13, § 1(b), 
Constitution of the State of Wyoming, neither expressly nor by implication 
affords authority to Casper, in the management 
of its local affairs, to license a public utility.

[¶21.]  
The major emphasis by Casper is on its argument that the authority to 
license public utilities is to be found, at least by implication, in the power 
to grant franchises pursuant to § 15-1-103(a)(xxxiii), W.S. 1977 (1987 
Cum.Supp.). That statutory provision provides, in pertinent part:

"(a) 
The governing bodies of all cities and towns may:

* * 
* * * *

"(xxxiii) Grant franchises for such terms as the governing 
body deems proper to any utility company, provided no franchise may be entered 
into with any person in which that person is given an exclusive right for any 
purpose whatsoever and:

"(A) 
Grant to any franchisee utility company the privilege to install and maintain 
necessary installations under or over any streets, alleys or 
avenues;

"(B) 
Contract for a specified time period with any franchisee electric light or gas 
company for the necessary energy and service for the lighting of streets, public 
buildings or other requirements of the city or town;

"(C) 
Upon renewal or initial grant or renewal after condemnation of a franchise, may 
provide in the franchise that the franchisee shall furnish a gas distribution 
system through which any supplier, including the franchisee, may sell and 
distribute natural gas as provided by subsection (b) of this section, to any 
person served by the distribution system, provided that before any city or town 
implements this subparagraph, the question of whether or not to do so shall be 
submitted to and approved by a majority of the electors of the city or town 
voting on the question at a one-time election called for that purpose."3

[¶22.]  
Casper candidly recognizes that this 
section only encompasses authority to grant franchises, but it argues that, in 
other jurisdictions, courts use the terms "license" and "franchise" 
interchangeably, thus demonstrating any difference in these terms to be more 
semantical than substantive. This argument does not assist us in a determination 
in this case. If we were to accept this contention, we necessarily would 
conclude that the Wyoming legislature has used the 
terms "license" and "franchise" interchangeably or, in any event, intended them 
to be synonymous. We would have to do this because of our duty to discern 
municipal authority from legislative grants. An examination of the statutory 
scheme discloses the contrary.

[¶23.]  
Because the question of the claimed authority must be resolved only with 
respect to authority granted by statute, we invoke the pertinent rule of 
statutory construction. The primary objective in construing a statute is to 
discern the intent of the legislature. McArtor v. State, Wyo., 699 P.2d 288 (1985); 
Hurst v. State, Wyo., 698 P.2d 1130 (1985); Sanches 
v. Sanches, Wyo., 626 P.2d 61 (1981). That 
legislative intent is to be found, if possible, first in the express language of 
the statute, Board of County Commissioners of CampbellCounty v. Ridenour, Wyo., 623 P.2d 1174, reh. denied 
627 P.2d 163 (1981); 
Johnson v. Safeway Stores, Inc., Wyo., 568 P.2d 908 (1977); 
Wyoming State Treasurer v. City of Casper, Wyo., 551 P.2d 687 (1976). The 
express wording in § 15-1-103(a)(xxxiii), W.S. 1977 (1987 Cum.Supp.), is that 
the municipalities are afforded the authority to grant franchises. The word 
"license" does not appear in the section. 

[¶24.]  
Further analysis of this statutory provision makes it evident that the 
legislature did not intend the power to franchise to include the power to 
license or that those terms be treated synonymously. Section 15-1-101 states, in 
part:

"(a) 
As used in W.S. 15-1-101 through 15-10-117:

* * 
* * * *

"(v) 
`Franchise' means the grant of authority to any person or firm by the governing 
body of any city or town to carry on the operation of a public utility; * * 
*"

The 
definition found there ostensibly is in accord with the generally accepted 
understanding of the term "franchise."

"* * 
* Speaking generally, a franchise is a special privilege of a public nature 
conferred by governmental authority upon individuals as such, or artificial 
personalities usually called corporations, and that privilege did not belong to 
the individuals generally as a matter of common right. It is a generic term 
embracing all rights granted to corporations by the legislature of the state, or 
such rights as can only be granted by the state in the first instance, that, by 
delegated authority, are conferred by the municipal corporation, or other 
designated public body, acting in such relation as an agency of the state. The 
right to conduct a business of public utility and use of the streets and public 
ways for this purpose, for example, to supply the public with water, light, 
transportation and other comforts and conveniences in crowded urban centers, is 
required to be conferred by public authority, and this constitutes the giving of 
a franchise. * * *" 12 E. McQuillin, Municipal Corporations § 34.04 at 19 (rev. 
3d ed. 1986).

See 
also 36 Am.Jur.2d Franchises § 1 at 722-723 (1968).

[¶25.]  
A municipal license, as distinguished from a franchise, generally is 
understood to have the effect of granting a privilege or permission to do an act 
that would be prohibited in the absence of the license. See 51 Am.Jur.2d 
Licenses and Permits § 1 at 7 (1970). The critical distinction between a 
municipal license and a municipal franchise is that the franchise extends a 
privilege that would not otherwise exist, while the license restricts, by 
governmental authority, a private right that has an independent existence, but 
has been limited in some way by a municipality through its appropriate police or 
revenue-raising power. The granting of a license then restores the right to 
pursue that activity subject to compliance with the licensed conditions. 9 E. 
McQuillin, Municipal Corporations, supra, § 26.01a at 8-9; 51 Am.Jur.2d Licenses 
and Permits, supra, §§ 1 through 4 at 7-13. It is in accord with this general 
proposition that the Wyoming legislature has 
granted municipalities the authority to license, tax and regulate businesses for 
the purpose of raising revenue. In the light of these provisions, we conclude 
that the legislature knew and applied a distinction between the terms "license" 
and "franchise" and did not use those terms synonymously in the 
statute.

[¶26.]  
We also find an expression of legislative intent that the power to 
franchise should not include the power to license in the restriction relating to 
when the municipality may exercise the authority granted to it in § 
15-1-103(a)(xxxiii)(C). It may only do that "upon renewal or initial grant or 
renewal after condemnation of the franchise." In each such instance, the 
franchisee can accept, reject or propose modifications to the franchise terms 
offered by the municipal government. In contrast, no limitations are invoked as 
to when a municipality may exercise its authority to license under § 
15-1-103(a)(xiii), W.S. 1977 (1987 Cum.Supp.).

[¶27.]  
Further, as distinguished from the unilateral prerogative of a 
municipality to impose conditions on a license, this court has recognized that 
the negotiation of conditions in the process of granting a franchise creates a 
valid contract when accepted by a franchisee, and its conditions may be enforced 
in accordance with general rules applicable to contracts. Northern Gas Company 
v. Town of Sinclair, Wyo., 592 P.2d 1138 (1979). A 
license does not structure a contract but imposes reasonable restrictions or 
conditions on all members of a given class similarly situated. See 9 E. McQuillin, Municipal Corporations, 
supra, § 26.14 at 32-33. This is the reason that the legislature required that 
all license taxes imposed by a municipality be uniform in respect to the class 
of business upon which the tax is imposed. Section 15-1-103(a)(xiii), W.S. 1977 
(1987 Cum.Supp.). In contrast, there is no such requirement that all franchisees 
be afforded equivalent terms. Rather, the municipality may grant franchises "for 
such terms as the governing body deems proper." Section 15-1-103(a)(xxxiii), 
W.S. 1977 (1987 Cum.Supp.).

[¶28.]  
Finally, the legislature's broad grant of regulatory power to the PSC 
supports our conclusion that it intended a restricted meaning to be applied to 
the authority to franchise under § 15-1-103(a)(xxxiii). The broad definition of 
"franchise" set forth at 12 E. McQuillin, Municipal Corporations, supra, § 34.04 
at 19, is very like that which this court adopted in Tri-County Electric 
Association, Inc. v. City of Gillette, 584 P.2d 995, 1001 n. 6 
(1978), to describe the privileges granted to public utilities by the PSC. It is 
apparent, in examining Ordinance No. 16-85, that it encompasses a substantial 
degree of the regulatory authority assigned by statute to the PSC. Indeed, that 
is why the trial court struck specific provisions of the ordinance. If the 
regulatory authority delegated to the PSC is appropriately described by the word 
"franchise," we are compelled to construe the language in § 15-1-103(a)(xxxiii), 
W.S. 1977 (1987 Cum.Supp.), very narrowly. Otherwise, the legislature might have 
structured a conflict between the municipal authority and the authority of the 
PSC, which, of course, would be the result if the words "franchise" and 
"license" are interchangeable. Avoidance of this potential for conflict is an 
additional reason to conclude that Casper had no authority to adopt its 
licensing ordinance pursuant to the franchising provision.

[¶29.]  
We hold that no grant of municipal authority to license public utilities 
exists under the authority conferred by statute to grant franchises. In 
accordance with the rule of strict construction, we furthermore conclude that 
the license is not essential or necessary to carry out the purpose expressed by 
the authority to franchise. See Coulter v. City of 
Rawlins, Wyo., 662 P.2d 888 (1983); 
Blumenthal v. City Cheyenne, supra; 2 E. McQuillin, Municipal Corporations, 
supra, § 10.12 at 768-776. Because the negotiated terms in a franchise agreement 
result in a valid contract when accepted by the franchisee, there is an adequate 
remedy available in the event of breach of the agreement. We also note that any 
attempt by a municipality to impose additional conditions on a valid franchise 
by invoking its police or revenue-raising power would lead to constitutional 
concerns relating to impairment of contracts. In the absence of any suggestion 
that the legislature so intended, this court will not extend through judicial 
fiat what the legislature has not chosen to express in statute.

[¶30.]  
There is a severability clause in Ordinance No. 16-85. We see no purpose 
in parsing the several provisions, however, because the stated intent of this 
ordinance was beyond the authority granted to a municipality by the legislature. 
We declare the ordinance to be void as being adopted without statutory 
authority.

[¶31.]  
The dilemma that confronts Casper with respect to a public 
utility operating without a franchise is not an issue in this case. It may be, 
with the slate now clean, that Casper can address the situation in 
some manner within its authority. Furthermore, the presence of a public utility 
operating in a municipality without franchise is not unique. The contractual 
relationship represented by the prior franchise between Casper and Northern no longer 
exists. The general rule seems to be that the utilization of a city's property, 
such as its streets and alleys, without a franchise, is unlawful. Recognizing 
the regulatory authority of the PSC, which must be invoked to terminate 
Northern's certificate of public convenience and necessity, may demand that the 
city approach the PSC. See Annotation, Right and Duty of City and Public Utility 
upon Expiration by Limitation of Street Franchise, 112 A.L.R. 625 (1938). It may 
be that an action for damages for trespass is appropriate.

[¶32.]  
It is clear, however, that a city, no more than the state, has no 
authority to seize the property of a public utility, either directly or 
indirectly through a licensing process such as attempted by Casper in this case, or to dictate 
its business decisions in derogation of the constitutional rights of the 
corporation without providing compensation. Cf. Nollan v. California Coastal 
Commission, ___ U.S. ___, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987); First English 
Evangelical Lutheran Church of Glendale v. County of Los Angeles, California, 
___ U.S. ___, 107 S. Ct. 2378, 96 L. Ed. 2d 250 (1987). Should Casper choose to exercise its 
statutory power of eminent domain, it then could become a municipal public 
utility, operating through its proprietary rather than governmental capacity, 
and subject to the jurisdiction of the PSC. See Tri-County Electric Association, 
Inc. v. City of Gillette, supra. An alternative 
approach would be to utilize the power of eminent domain and then sell the plant 
to some other corporation with which a new franchise could be made accomplishing 
that which Casper sought to coerce by virtue of 
Ordinance No. 16-85. Short of ouster, condemnation or an action for damages, 
Casper may choose to involve the PSC 
in its effort to reach agreement with Northern for a franchise by petitioning 
the PSC to take these issues into account in its rate-making process. Mountain 
States Telephone & Telegraph Company and U S West Direct Company v. Public 
Service Commission of Wyoming, Wyo., 745 P.2d 563 (1987).

[¶33.]  
The case is reversed with direction to enter judgment declaring Ordinance 
No. 16-85 to be void because it was adopted without authority.

CARDINE, 
J., filed a specially concurring opinion, in which MACY, J., joined. 

APPENDIX A

SESSION LAWS OF WYOMING, 1985

CHAPTER 172

Original Senate File No. 85

NATURAL GAS FRANCHISES

AN 
ACT to amend W.S. 15-1-103(a)(xxxiii) by creating a new subparagraph (C) and by 
creating new subsections (b) and (c) relating to natural gas franchises; 
providing such franchises may be for providing a natural gas distribution system 
only thereby allowing any person to deliver natural gas through the system; 
providing for a vote of the electors; requiring annual reports to the public 
service commission; prohibiting certain increases in cost and price in purchase 
contracts for the resale of gas to franchise holders; specifying franchise 
conditions including liability; providing for repeal of the act unless continued 
by the legislature; and providing for an effective date.

Be 
It Enacted by the Legislature of the State of Wyoming:

Section 1. W.S. 15-1-103(a)(xxxiii) by creating a new 
subparagraph (C) and by creating new subsections (b) and (c) is amended to 
read:

15-1-103. General powers of governing 
bodies.

(a) 
The governing bodies of all cities and towns may:

(xxxiii) Grant franchises for such terms as the governing 
body deems proper to any utility company, provided no franchise may be entered 
into with any person in which that person is given an exclusive right for any 
purpose whatsoever and:

(C) 
Upon renewal or initial grant or renewal after condemnation of a franchise, may 
provide in the franchise that the franchisee shall furnish a gas distribution 
system through which any supplier, including the franchisee, may sell and 
distribute natural gas as provided by subsection (b) of this section, to any 
person served by the distribution system, provided that before any city or town 
implements this subparagraph, the question of whether or not to do so shall be 
submitted to and approved by a majority of the electors of the city or town 
voting on the question at a one-time election called for that 
purpose.

(b) 
Any franchise granted pursuant to subparagraph (a)(xxxiii)(C) of this section is 
subject to the following:

(i) 
The franchise agreement shall specify who is responsible for 
deliverability;

(ii) 
The distribution system shall continue to be a public utility whose charges are 
regulated by the public service commission. The charges shall reflect the 
reasonable nongas costs subject to management audit as the public service 
commission deems necessary plus a reasonable return on investment;

(iii) Any city or town or its authorized representative 
shall act as an agent for any person served by the system in negotiating terms 
and conditions for the supply of natural gas to that person, and the franchisee 
distribution system shall accept for delivery to any person served by the 
system, natural gas from any supplier; 

(iv) 
The public service commission shall designate a place or places in the vicinity 
of the distribution system for the acceptance of natural gas not supplied by 
franchisee;

(v) 
The public service commission shall adopt and enforce minimum quality standards 
for all gas delivered to the distribution system. These standards shall reflect 
the practices of the operators of the distribution system unless good cause is 
shown for different standards. The standards shall be designed to facilitate the 
comingling of gas from different suppliers;

(vi) 
As soon as there are at least two (2) suppliers offering natural gas to all 
customers served by the franchisee and as soon as the additional supplier or 
suppliers are capable of delivering gas in at least one-third (1/3) of the 
volume required by the entire distribution system provided that the public 
service commission finds that the suppliers own or control, and have committed 
to guaranteed delivery, reserves of natural gas sufficient to supply ten (10) 
years of demand at that level, then all persons supplying gas shall have the 
authority to set their own prices. The proposed supplier has the burden of 
proving adequate reserves and deliverability. The Wyoming oil and gas commission 
shall report to the public service commission on the adequacy and deliverability 
when a utility gas supply is proposed to be displaced under this 
act;

(vii) Subject to the availability of pipeline capacity and 
the requirements of federal law and regulations the public service commission 
may, after notice and hearing if necessary, designate any point in the state on 
a gas pipeline operated for the purpose of delivering gas to the distribution 
system or its parent or subsidiary company as a point for receipt of gas to the 
system and regulate the charges for shipping gas from that point to the system. 
If a pipeline has insufficient capacity the public service commission consistent 
with W.S. 30-5-125 may require it to accept gas that has a lower price to the 
consumer in preference to higher price gas. The public service commission may 
impose any conditions or requirements pursuant to this subsection that are 
necessary to protect the public health, safety and welfare, to ensure the 
efficient operation of the natural gas distribution and supply system and to 
ensure the lowest possible price to retail customers, including but not limited 
to proper assignment of costs of connecting suppliers to the system;

(viii) When a city renews or grants a franchise for the 
supply of natural gas under subparagraph (a)(xxxiii)(C) of this section, the 
public service commission may require that the distribution of gas in 
surrounding unincorporated areas also be made subject to the terms of the same 
franchise;

(ix) 
If a distribution system has only one (1) supplier of natural gas all prices 
charged in that franchise are subject to W.S. 37-2-121 and 37-2-122;

(x) 
All suppliers of gas to the distribution system shall annually report to the 
public service commission the annual consumption of natural gas by their 
customers of record at the date of the report and their natural gas reserves. If 
their natural gas reserves are less than a five (5) year supply, the public 
service commission may forbid any supplier from serving new customers until the 
reserves are equal to a five (5) year supply for all customers;

(xi) 
Any supplier entering the system under this subsection is liable for injuries, 
damages or other losses to the extent to which the injuries, damages or other 
losses are proximately caused by the supplier's operations within the system and 
are due to failure of the supplier to exercise that standard of care which a 
reasonable, prudent person would exercise under the same or similar 
circumstances to avoid an undue risk of harm or are due to the supplier's 
failure to deliver contracted amounts of natural gas.

(c) 
Any provision in a gas purchase contract which contains or creates an indefinite 
escalator clause, otherwise known as a "favored nation treaty" provision, is 
contrary to the public policy of the state and is void and unenforceable 
if:

(i) 
The contract is to sell gas to the holders of a municipality franchise which 
supplies retail customers in the state;

(ii) 
The contract provides for the sale in the state of gas produced within the 
state;

(iii) The contract gas price is in excess of the general 
market price which would otherwise exist in the absence of the indefinite 
escalator clause; and

(iv) 
The higher price resulting from the application of the escalator clause is not 
required by any enforceable provision of statutes or regulations enacted or 
adopted pursuant to the National Gas Policy Act of 1978 or other appropriate 
statutes and regulations of the United 
States.

Section 2. If 
any provision of this act or its application to any person or circumstance is 
held invalid, the invalidity does not affect other provisions of application of 
the act which can be given effect without the invalid provision or application 
and to this end, the provisions of this act are severable.

Section 3. 
Effective July 1, 1988, W.S. 15-1-103 (a)(xxxiii)(C) and (b) are repealed unless 
continued by an affirmative act of the legislature. The repeal of these 
provisions does not affect any franchise agreement made pursuant to these 
provisions prior to the effective date of their repeal.

Section 4. 
This act is effective May 23, 1985.

Approved February 23, 1985. 

APPENDIX B

ORDINANCE NO. 16-85

AN 
ORDINANCE ESTABLISHING PROCEDURE AND REGULATIONS FOR A NON-EXCLUSIVE LICENSE TO 
ANY GAS COMPANY WITHIN THE CITY OF CASPER, WYOMING, OPERATING WITHOUT A 
FRANCHISE, A LICENSE TO CONSTRUCT, MAINTAIN, AND OPERATE IN, ON OR UNDER THE 
PRESENT AND FUTURE STREETS, ALLEYS, AND PUBLIC WAYS OF THE CITY OF CASPER, 
NATRONA COUNTY, WYOMING, A GAS DISTRIBUTION PLANT OR SYSTEM FOR THE PURPOSE OF 
SUPPLYING GAS AND GAS SERVICE TO THE CITY OF CASPER, THE INHABITANTS THEREOF, 
AND OTHERS: SUBJECT TO THE TERMS AND CONDITIONS AND TO THE MAKING OF PAYMENTS 
SPECIFIED IN THE ORDINANCE.

BE 
IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF CASPER, WYOMING:

Section 1. 
Short Title. This Ordinance shall be known and may be cited as the "Gas Company 
Licensing Ordinance."

Section 2. 
For the purposes of this Ordinance, the following terms, phrases, words, and 
their derivations shall have the meaning given herein. When not inconsistent 
with the context, words in the plural number include the singular number, and 
words in the singular number included the plural number. The word "shall" is 
always mandatory and not merely directory.

(1) 
"City" is the City of Casper, Wyoming.

(2) 
"Company" is the grantee of a license under this Ordinance.

(3) 
"Council" is the City Council of the City of Casper, Wyoming.

(4) 
"Person" is any person, firm, partnership, association, corporation, company, or 
organization of any kind.

(5) 
"Gross Revenue" is all revenue derived from the sale of gas directly or 
indirectly by the Company in connection with the operation of its facilities 
within the City pursuant to this Ordinance; provided, however, that this shall 
not include any taxes upon the sale or distribution of gas furnished by the 
Company, imposed directly upon any customer or user by the State of Wyoming, the 
City, or other governmental entity, and collected by the Company on behalf of 
said State of Wyoming, City, or governmental entity.

(6) 
"Standard cubic foot" is a cubic foot of natural gas containing 1,000 British 
Thermal Units (BTU) per cubic foot when saturated with water vapor at 60° F, 
under pressure equal to 30 inches of mercury at 32° F. This standard shall apply 
in the case of natural, manufactured, or mixed gas. This standard shall be used 
as the basis for all pricing and measurements under this ordinance unless other 
standards are established by the Wyoming Public Service Commission or State 
Statute. Such other quality standards presently existing or as may be 
established by State Statute, the Wyoming Public Service Commission, or other 
regulatory body of competent jurisdiction shall also apply.

(7) 
"Sidewalk" is that portion of a street, other than the roadway set apart by 
curbs, barriers, markings, or other delineation for pedestrian travel, including 
parkways not on private property. 

(8) 
"Street" is the entire width between the boundary lines of every way dedicated 
to the public use, and publicly maintained for the purposes of vehicular and 
pedestrian travel, including alleys.

(9) 
"City Manager" is that person designated by the Council to act in such capacity 
as defined by Wyoming Statutes.

(10) 
"License" is a written instrument executed by the Mayor or City Manager and 
attested to by the City Clerk authorized by resolution of Council granting to a 
gas company the privilege of operating within the City pursuant to the term of 
this Ordinance.

(11) 
"City Gate" shall be the point of transfer of gas from a supplier to Company 
within the proximity of the corporate limits of City.

Section 3. 
Any gas company who is operating without a franchise from the City, or whose 
grant or franchise has expired, and which Company has not by resolution obtained 
a license or franchise from the Council is deemed to be in violation under the 
ordinances of the City or the Statutes of the State of Wyoming and subject to 
the penalties therefore.

Section 4. 
Request for License. Company may request through the City Manager that a license 
be issued for a grant of authority to operate within City. Such request shall be 
for a license which shall conform to this Ordinance. Council at its discretion 
and as hereinafter provided may grant a license to Company.

Section 5. 
Grant of Authority. After Council approval by resolution a license shall be 
granted by the City to the Company for the right and privilege to erect, 
construct, operate, and maintain a gas plant, gas system, or both, and to 
import, transport, sell and distribute gas, whether natural, manufactured, or 
mixed, within the City, and for these purposes to establish the necessary 
facilities and equipment and to lay and maintain gas mains, service pipes, 
meters and regulators, and other appurtenances necessary to the sale and 
distribution of gas in and along the streets and alleys.

(1) 
Non-Exclusive Grant. The right to use and occupy said streets, alleys, public 
ways, and places for the purposes herein set forth shall not be exclusive, and 
the City reserves the right to grant a similar use of said streets, alleys, 
public ways, and places, to any person or corporation at any time during the 
period of this license.

Section 6. 
Compliance with Applicable Laws and Ordinances. The Company shall, at all times 
during the life of the license, be subject to all lawful exercise of the police 
power by the City, and to such reasonable regulation as the City shall hereafter 
by resolution or ordinance provide.

Section 7. 
Indemnification. Company shall fully indemnify, defend, and hold harmless the 
City, its officers, boards, commissions, and employees against any and all 
claims, suits, actions, liability, and judgments for damages, including, but not 
limited to, expenses for reasonable legal fees and disbursements and 
liabilities.

(1) 
To persons or property in any way arising out of or through the acts or 
omissions of the Company, its servants, agents, or employees, to which the 
Company's negligence or fault shall in any way contribute;

(2) 
Arising out of company's failure to comply with the provisions of any federal, 
state, or local statute, ordinance, or regulation applicable to the Company in 
its business hereunder.

Section 8. 
Service Standards. The Company shall maintain and operate its plant and system, 
and render efficient service in accordance with the rules and regulations as 
are, or may be, set forth by the Council as provided for in Section 13 of this 
Ordinance, or by the Public Service Commission of the State of Wyoming. 

(1) 
Odorizing of Gas. Gas furnished to consumers within Casper, Wyoming, shall be of 
marketable quality as required by Public Service Commission except that it shall 
contain some element or compound with an easily detectable odor in an amount 
sufficient to be noticeable when the gas is released, but not sufficient to be 
harmful to human and animal life, or to interfere with combustion.

(2) 
Heating Value. Gas sold, supplied, and delivered under the license shall be 
determined according to standard conditions set forth in Section 2(6) hereof 
adjusted to conditions at Casper, Wyoming; and,

(a) 
Deviation. The adjusted heating value of the gas shall be maintained with as 
little deviation as practicable and such heating value shall never vary more 
than plus or minus five percent (±5%). If the monthly average value varies more 
than plus or minus five percent (±5%), the Council shall have the right to 
penalize the Company by requiring a refund to all customers on their appropriate 
monthly bills sufficient to compensate for the inefficiencies resulting from the 
excessive variation.

(b) 
Calorimeter Tests Required. The Company shall equip itself with a complete, 
standard calorimeter and shall determine the heat value of the gas at least 
daily. The tests may be made at any point within the limits of the distribution 
system. Test results shall be delivered to the office of the City Manager within 
12 hours of said test. City may test said gas at such times as it deems 
necessary or advisable and shall make the results of its tests available to 
Company.

(c) 
Ascertaining Monthly Average. The monthly average adjusted heating value of the 
gas shall be obtained by averaging the heat value found as a result of all 
periodic calorimeter tests as provided hereunder. The Council shall have the 
authority to permit the Company to submit other proof of the quality of the gas, 
in lieu of individual tests made on the City mains, where such proof of quality 
is prepared for and accepted by other cities being served by the same Company on 
the same pipeline and from the same source or sources of supply or accepted by 
the Wyoming Public Service Commission.

(3) 
Meter Accuracy. All gas service shall be supplied through meters which shall 
accurately measure the amount of gas supplied to any customer.

(a) 
Compulsory Check. Every meter, whether complained of by a customer or otherwise, 
shall be removed from service at least once each ten (10) years and thoroughly 
tested for its accuracy. Any meter found inaccurate upon any test beyond a 
reasonable tolerance of two percent (2%) shall not be returned to service until 
properly adjusted as close as practical to zero variation.

(4) 
Notice of Interruption for Repair. Whenever it is necessary to shut off or 
interrupt service for the purpose of making repairs or installations, the 
Company shall do so at such time as will cause the least amount of inconvenience 
to its customers, and unless such repairs are unforeseen and immediately 
necessary, it shall give reasonable notice thereof to the consumers.

Section 9. 
Company Rules. The Company shall have the authority to promulgate such rules, 
regulations, terms, and conditions governing the conduct of its business as 
shall be reasonable necessary to enable the Company to exercise its rights and 
perform its obligations under the license, and to assure uninterrupted service 
to each and all of its customers. Provided, however, that such rules, 
regulations, terms, and conditions shall not be in conflict with the provision 
hereof or with the laws of the State of Wyoming, and shall be subject to 
approval by the Public Service Commission of the State of Wyoming. 

Section 10. 
Conditions on Street Occupancy.

(1) 
All pipes, mains, and other natural, artificial, or mixed gas equipment and 
apparatus laid or placed by the Company shall be so located in the streets, 
alleys, and other public placed in the City as not to obstruct or interfere with 
any water pipes, sewers, drains, or other structures already installed or 
hereafter to be installed. The Company shall, when practicable, avoid 
interfering with the use of any street, alley, or other highway when the paving 
or surface of the streets would be disturbed.

(2) 
Restoration. In case of any disturbance of pavement, sidewalk, driveway, or 
other surfacing, the Company shall at its own cost and expense, and in a manner 
approved by the City Inspector, replace and restore all paving, sidewalk, 
driveway, or surface of any street or alley disturbed in as good condition as 
before said work was commenced, and shall maintain the restoration in an 
approved condition for a period of one (1) year from completion of construction, 
and shall post such bond or security as may be required by the Council or its 
agents as shall be deemed necessary to effectuate the intent of this 
section.

(3) 
Relocation. In event that at any time during the period of the license the City 
shall lawfully elect to alter, or change the grade of, any utility line, street, 
alley, or other public way, the Company, upon reasonable notice by the City, 
shall remove, relay, and relocate its mains or service pipes, manholes, and gas 
fixtures at its own expense. The Company shall not place fixtures where the same 
will interfere with any other fixtures or the various City-owned facilities 
serving the residents of the City. The Company agrees that the City Engineer may 
in his discretion, set the time period during which Company may construct, 
locate, repair, or maintain its facilities in arterial streets in order to 
prevent traffic hazards and congestion on said arterial streets, provided, 
however, that in the event of an emergency, nothing herein stated shall prevent 
the Company from performing necessary repairs.

The 
Company is required to place on file in the office of the City Engineer a 
complete and true copy of its most recent, revised plat or maps, or set of plats 
or maps, showing the location of mains, valves, curb boxes and other 
appurtenances, as often as revisions of the same are made; provided, however, 
that the Company shall not be required to file such revised plat or set of plats 
more frequently than once in each calendar year. The Company shall be required, 
at its expense, to provide the City with its plans for replacement of existing 
facility, or installation of new facilities within existing or future City 
streets one (1) year in advance of any proposed construction or replacement. In 
addition, construction plans for construction, repair, or replacement of 
facilities being installed in or under existing improved streets shall be 
submitted to the City Engineer a minimum of thirty (30) days prior to 
commencement of actual work, except in the event of an emergency. Where 
practical, facilities being installed under improved streets shall be pushed or 
bored under such streets in such a manner that the existing improved street is 
not disturbed unless open cutting has been previously approved by the City 
Engineer's Office.

Whenever the Company is working in any street, proper and 
adequate warning signs shall be used, as required by and to the satisfaction of 
the City Engineer's Office and any applicable City Ordinance or State Statute. 
In the event a street is left unrepaired at the end of a normal working day, the 
Company shall perform all necessary cleanup work and erect and monitor such 
signs as are adequate to provide notice to the public of the street conditions, 
said cleanup and signage shall be subject to approval by the City Engineer's 
Office.

Any 
street opening made for installation or repair of facilities shall be closed 
within a maximum of five (5) working days of the making of the opening; and said 
opening shall be permanently repaired and resurfaced to City standards, as soon 
as thereafter as possible. In any event, said street opening shall be subject to 
permit approval by the City Engineer's Office in accordance with any Ordinance 
regulating the same during the term of the license. In the event the Company 
shall fail to close any street opening within the maximum period specified 
herein, the City shall be, and is hereby authorized by the Company to repair and 
resurface the street opening; and the Company agrees to pay all costs incurred 
by the City in doing the same upon demand of the city. In the discretion of the 
City, the Company shall deposit and maintain cash or post bond in lieu thereof 
with the City the sum of Five Thousand Dollars ($5,000.00) to be used in the 
event Company fails to close a street to a condition satisfactory to the City 
Engineer's Office within the time specified. Upon the failure of the Company to 
close a street opening in the time specified, for failure to make such cash 
deposit or post bond when notified by the City Engineer's Office to do so, or 
both, the Company shall be refused any permit or permits thereafter required to 
be issued or obtained for the opening of any streets in the City until such 
violation is rectified to the satisfaction of the City Engineer.

Section 11. 
Preferential or Discriminatory Practices Prohibited. The Company shall not, as 
to rate, charges, service facilities, rules, regulations, or in any other 
respect, make or grant any person, nor subject any person to any prejudice or 
disadvantage, provided that nothing in this license shall be deemed to prohibit 
the establishment of a graduated scale of charges and classified rate schedules 
to which any customer coming within such classification would be entitled, 
subject to such rules and regulations as are now in effect or that may hereafter 
be lawfully made by the Public Service Commission of the State of 
Wyoming.

Section 12. 
Approval of Transfer. The Company shall not sell or transfer its plant or system 
to another, nor transfer any rights under this License to another without 
Council approval. Provided, that no sale or transfer shall be effective until 
the vendee, assignee, or lessee has filed in the office of the City Clerk an 
instrument, duly executed, reciting the fact of such sale, assignment or lease, 
accepting the terms of the license, and agreeing to perform all the conditions 
thereof, and such other information as may be submitted to the Public Service 
Commission.

Section 13. 
Rules and Regulations.

(1) 
Municipal Rules. The City may adopt such rules and regulations as it deems 
necessary in the exercise of its powers to further the provisions of this 
ordinance.

(2) 
Inspection. The City shall have the right but not the duty to inspect all 
construction or installation work performed subject to the provisions of this 
Ordinance.

(3) 
Nothing contained herein shall be construed as a limitation on, or prohibition 
of, the right of the City to exercise its right of eminent domain.

Section 14. 
Payment to City. The Company shall pay to the City for the privilege of 
operating a gas system under the license a sum equivalent to:

(a) 
All sums which would have been due and payable to the City from the date of the 
expiration of any former franchise agreement, plus interest thereon at 10% per 
annum if the Company was operating under any former franchise, agreement, or 
ordinance, or otherwise operating a gas company within the City.

(b) 
Said sum shall be paid prior to the issuance of the License to the 
Company.

(c) 
One percent of the monthly gross revenues taken in and received by it on all 
sales of gas within the City, which shall be paid monthly after determination of 
the monthly gross revenue.

Section 15. 
Rates. Rates charged by the Company for service hereunder shall be fair and 
reasonable, and designed to meet all necessary costs of the service, including a 
fair rate of return on the net valuation of its properties devoted thereto, 
under efficient and economical management. The Company shall be subject to all 
authority now or hereafter possessed by the City, or any other regulatory body 
having competent jurisdiction, to fix just, reasonable, and compensatory gas 
rates. 

(1) 
Savings to Customers. If during the term of the License the Company received 
funds, or if the cost to the Company of the natural, manufactured, or mixed gas 
sold under the license is reduced, by order of any regulatory body having 
competent jurisdiction the Company shall pass on to its consumers such refunds 
or any savings resulting therefrom.

Section 16. 
Records and Reports. The City shall have access at all reasonable hours to all 
of the Company's plans, contracts, and engineering, accounting, finance, 
statistical, customer, and service records relating to the property and the 
operations of the Company and to all other records required to be kept 
hereunder. The following records and reports shall be filed with the City Clerk 
and in the local office of the Company:

(1) 
Calorimeter Tests. Copies of all calorimeter tests required 
hereunder.

(2) 
Company Rules and Regulations. Copies of such rules, regulations, terms, and 
conditions adopted by it for the conduct of its business relating to delivery of 
natural gas to customers within the City.

(3) 
Gross Revenue. There shall be delivered to the City Manager a monthly summary 
report showing gross revenues received by the Company from its operations within 
the City during the preceding month and such other information as the City shall 
request with respect to properties and expenses related to the Company's service 
within the City.

(4) 
Complaints. Company shall deliver to City's Manager, copies of all written 
complaints which it receives from customers and/OR the Public Service Commission 
relating to the company's performance of the terms and conditions of this 
ordinance. Such complaints shall be delivered within thirty (30) days of 
receipt.

Section 17. 
Term of License. The License and rights herein granted shall take effect and be 
in force from and after adoption of resolution by Council and issuance by City. 
Company shall file an acceptance of the terms of the license as established by 
this Ordinance with the City Clerk, and the License shall continue in force and 
effect for a term of one (1) month after the effective date of license issuance. 
Provided, that if an acceptance is not filed the Company shall be considered in 
violation of this Ordinance. Upon acceptance by Company, the license shall 
continue in full force and effect from month to month until the Mayor or City 
Manager at the direction of the Council shall provide written notice to the 
Company of the termination of said license. Termination shall become effective 
thirty days from the date of said notice.

Section 18. 
Billing Procedures and Information Contained Thereon. Company's billing 
statements to customers within the City shall include such information as may be 
required by City. After January 1, 1986, billings shall include an itemization 
of the cost of the gas to the Company in a standard MCF; the cost of 
distribution; tax; and the cost per therm to the customer.

Section 19. 
Notice of Rate Filing. Company shall during any term of license authorized 
pursuant to this Ordinance and granted by City notify in writing the City 
Manager or any Federal or State rate making filing, cost adjustments, or other 
action which would have a monetary affect upon the City or it's inhabitants. On 
the date of any such filing Company shall also file with the City Manager's 
Office a duplicate copy of any and all documents or materials filed with said 
agency.

Section 20. 
Waiver. The waiver of any breach of any of the terms or conditions of this 
License shall be limited to the act or acts constituting such breach, and shall 
never be construed as being a continuing or permanent waiver of any such terms 
or conditions, all of which shall be and remain in full force and effect as to 
future acts or happenings notwithstanding any such individual waiver or any 
breach thereof. 

Section 21. 
State Statutes and Regulation. City intends to implement Wyoming Statutes 
Enrolled Act 70, Forty Eighth Legislature, by way of ordinances, resolutions, 
and rules and regulations. Any license issued pursuant to the terms of this 
ordinance is subject to all rights and privileges granted to the City by 
Enrolled Act 70, Forty Eighth Legislature or any other statute of the State of 
Wyoming, including the right of eminent domain. In event of conflict between 
this ordinance and State Statute or Public Service Commission Regulation the 
State Statute or Regulation shall prevail.

Section 22. 
Penalties. Violation of this Ordinance or any provision thereof shall be 
punishable in accordance with Section 1-7 of the Casper City Code. Each day of 
violation shall be deemed a separate violation.

Section 23. 
Severability. If any section, provision, clause, or sentence hereof shall be 
held invalid, it shall not effect the validity of the remaining portions of this 
Ordinance.

Section 24. 
Effective Date, Repealer. The effective date of this Ordinance shall be July 10, 
1985.

Section 25. 
This Ordinance shall be in full force and effect from and after passage on three 
readings.

PASSED on 1st reading the 19th day of March , 
1985.

PASSED on 2nd reading the 21st day of May , 
1985.

PASSED, APPROVED, AND ADOPTED this 2nd day of July , 
1985.

APPROVED AS TO FORM: 
___________________________

ATTEST:                                                                                
CITY OF CASPER, WYOMING A Municipal Corporation

 
 

FOOTNOTES

1 
Section 22 of the ordinance provides:

"Penalties. Violation of this Ordinance or any provision 
thereof shall be punishable in accordance with Section 1.7 of the Casper City 
Code. Each day of violation shall be deemed a separate violation."

By 
Section 1.7 of the Casper City Code, violation of the ordinance is a misdemeanor 
punishable by a fine of not more than $200 or by imprisonment in the city jail 
for a period not to exceed three months together with costs.

2 
Art. 13, § 3 of the Constitution of the State of Wyoming provides:

"The 
legislature shall restrict the powers of such corporations [municipal 
corporations] to levy taxes and assessments, to borrow money and contract debts 
so as to prevent the abuse of such power, and no tax or assessment shall be 
levied or collected or debts contracted by municipal corporations except in 
pursuance of law for public purposes specified by law."

3 
Subparagraph (C) of § 15-1-103(a)(xxxiii) was part of Ch. 172, S.L. of Wyoming 
1985. At the same time, subsection (b) of § 15-1-103 was adopted, which sets 
forth several requirements that must be satisfied under any contract entered 
into pursuant to the power granted the municipality by § 15-1-103(a)(xxxiii)(C). 
A general review of the history leading to the passage of these provisions can 
be found in Dee Pridgen & Edward W. Harris, The Wyoming Natural Gas 
Consumers' Act of 1985: An Experiment in Controlling Natural Gas Prices and a 
Response to Indefinite Price Escalation Clauses, 21 Land & Water L.Rev. 141 
(1986).

CARDINE, 
Justice, specially concurring, with whom MACY, Justice, joins.

[¶34.]  
I concur in the opinion of the court because ordinance number 16-85 was 
not within the power conferred upon the City by the legislature in amending and 
reenacting chapter 172, Session Laws of Wyoming 1985, entitled Natural Gas 
Franchises, § 15-1-103, W.S. 1977, as amended. Appellant K N Energy, Inc. was 
supplying natural gas to residents of the City of Casper through its gas 
distribution system at a cost which appellee claimed far exceeded the price at 
which gas could be purchased in the open market and supplied to K N Energy. It 
was the intent of the legislature in amending and reenacting § 15-1-103 to 
empower the City (and other municipalities) to arrange for a less expensive 
source of gas and provide for delivery of such less expensive gas to its 
franchisee, K N Energy, Inc., for distribution through K N Energy's gas 
distribution system to customers in the municipalities.

[¶35.]  
A public utility must satisfy two requirements precedent to the exercise 
of privileges of a public utility in a municipality in the State of Wyoming. A public utility must 
obtain from the public service commission a certificate of convenience and 
necessity, as provided by § 37-2-205, W.S. 1977, and must obtain a franchise 
from the municipality, as required by Art. 13, § 4, Wyoming Constitution and § 
15-1-103(a)(xxxiii), W.S. 1977, as amended. The franchise under which K N Energy 
operates in the City of Casper expired December 
31, 1984. The City of Casper has not renewed the 
franchise of K N Energy. K N Energy, then, has been operating illegally without 
a franchise in the City of Casper.

[¶36.]  
Section 15-1-103(a)(xxxiii)(C), as amended, provides that:

"The 
governing bodies of all cities * * * may * * * [u]pon renewal * * * provide in 
the franchise that the franchisee shall furnish a gas distribution system 
through which any supplier, including the franchisee, may sell and distribute 
natural gas as provided by subsection (b) * * *."

Section 15-1-103 then provides that the question of whether 
or not another supplier could supply gas to the franchisee's system must be 
submitted to and approved by a majority of the electors of the city; that the 
public utility continue to be regulated by the public service commission and be 
compensated for non-gas costs in the delivery; that the public service 
commission adopt and enforce minimum quality standards for gas delivered; that 
the gas offered for delivery to the public utility be sufficient to supply ten 
years of demand; and other requirements, including reporting to the public 
service commission.

[¶37.]  
I find § 15-1-103, as amended, entirely appropriate as within the scheme 
of franchising the creation, construction and operation of public utilities in 
the State of Wyoming. Section 
15-1-103(a)(xxxiii) provides that

"no 
franchise may be entered into with any person in which that person is given an 
exclusive right 
for any purpose whatsoever * * *." (Emphasis added.)

Because the statute prohibits issuance of an exclusive 
franchise, the City of Casper could (a) issue a franchise to another utility; 
(b) itself construct distribution lines alongside those of appellant and compete 
with appellant for customers purchasing gas; (c) condemn appellant's gas 
distribution system as provided in § 15-1-103(a)(xxxiii)(C), which makes 
reference to "renewal after condemnation of a franchise"; or (d) require that 
its franchisee accept gas from another supplier and distribute it through its 
gas distribution system. The statute, as amended, seems clearly to further a 
state policy promoting competition among gas suppliers and distributors toward 
an end result that gas be furnished to Wyoming residents at the fairest 
and least expensive cost obtainable. K N Energy presently has no competition in 
supplying gas to residents of the municipality of Casper. The possibility of 
competition, however, is always present, and that is a benefit to purchasers of 
gas that is intended by our constitutional and statutory scheme for regulating 
public utilities.

[¶38.]  
Section 15-1-103, as amended, left the licensing power and supervisory 
and regulatory authority in the public service commission as provided in Title 
37, Wyoming Statutes, 1977. The City of Casper attempted, in ordinance number 
16-85, to assume supervisory, regulatory, and licensing functions not granted 
the City by enactment of amended § 15-1-103. Had the City of Casper exercised only those powers 
granted in § 15-1-103 and already discussed, I would have no hesitancy in 
upholding its ordinance.