No. 91-374 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

YELLOWSTONE VALLEY ELECTRIC 

COOPERATIVE, INC . , 

Plaintiff and Respondent, 

MONTANA POWER COMPANY, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Maurice Colberg, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Donald L. Harris; Crowley, Haughey, Hanson, Toole & 

Dietrich, Billings, Montana 

For Respondent: 

Paul G. Olsen; Olsen & Christensen, Billings, 

Montana 

For Amicus Curiae Montana Electric Cooperatives' 

Association: 

Maxon R. Davis; Cure, Borer & Davis, P.C., Great 

Falls, Montana 

Submitted on Briefs: October 31, 1991 

Filed: 

Decided: December 4, 1991 
Justice John Conway Harrison delivered the Opinion of the Court. 

This is an appeal from the Thirteenth Judicial District 

Court ' s order permanently enjoining the Montana Power Company (MPC) 

from providing electricity to ZooMontana of Billings, Montana. 

Involved is the District Court's interpretation of Montana's 

Territorial Integrity Act. The Territorial Integrity Act was 

adopted in 1971 to aid in the resolution of disputes between 

electric utilities and electric cooperatives in the event a 

question arose over which company would provide electrical service 

to new customers. We affirm. 

The appellant, MPC, raises the following issue: 

Did the District Court err in enjoining MPC from providing 

electricity to ZooMontana under Montana's Territorial Integrity 

Act? 

This Court is revisited with a question thought long ago well 

buried by the passage of the 1971 Montana Territorial Integrity 

Act. For some twenty years, commencing with Sheridan County Elec. 

Coop. v. Montana-Dakota Util. Co. (1954), 128 Mont. 84, 270 P.2d 

742, to Montana Power Co. v. Sun River Elec. Coop., Inc. (1971), 

157 Mont. 468, 487 P.2d 307, this Court struggled with numerous 

cases between the privately-owned electric companies and the 

electric cooperatives in Montana. The Territorial Integrity Act, 

now codified as §§ 69-5-101 et seq., MCA, was enacted to settle and 

bring to an end these types of cases in the courts of Montana. 

Like many pieces of legislation, the Territorial Integrity Act was 

a product of compromise, and seemed to serve that purpose for some 
twenty years between the time when the last case was before this 

Court and the present time with the instant case. 

The underlying facts of this case are the following: 

ZooMontana is a non-profit corporation formed to build and 

operate a zoo on property located just west of the city limits of 

Billings, Montana. Following years of fund raising, ZooMontana 

began the actual construction of the zoo by erecting the education 

building on its land. Eventually, ZooMontana intends to build a 

number of buildings and animal exhibits on the property. The 

construction was to proceed in stages as the funding permitted. 

On May 3, 1991, MPC officials met with Yellowstone Valley 

Electric Cooperative, Inc. officials (the Cooperative) to discuss 

a number of issues. During that meeting, MPC informed the 

Cooperative that ZooMontana had requested MPC to provide threephase power for the education building. MPC stated it intended to 

supply the power because it had the right to do so under the 

Territorial Integrity Act of 1971. The Cooperative officials 

disagreed with MPC's interpretation of the Act. 

On May 8, 1991, the Cooperative's general manager sent a 

letter to MPC which stated in part: "Our measurements show that our 

Cooperative's electric facilities are closer to the proposed 

education building than MPCols." There being no response to the 

letter, on May 24, 1991, MPC began extending its three-phase line 

to ZooMontana property. This construction was observed by a 

Cooperative official for nearly a week and when the line extension 

was completed to ZooMontana, the Cooperative, on May 30, 1991, 

obtained from the District Court an ex parte temporary restraining 

3 
order and order to show cause which enjoined MPC from further 

construction of its facilities to ZooMontana. 

The parties agree to the following: (1) that neither MPC nor 

the Cooperative would master meter the entire ZooMontana property 

at the entry point of each party adjacent to its respective threephase service; (2) that ZooMontana property would utilize in excess 

of 400 kilowatts within two years and that the project eventually 

would use over 800 kilowatts; (3) that ZooMontana is a llcommercial 

and industrial premises;" and (4) that the basic issue is the cost 

to each party of the three-phase line extension. 

The District Court heard this matter in two hearings. After 

the first hearing it was agreed by both parties that the 

engineering firm of Schmidt, Smith and Rush (SSR Engineers, Inc.) 

would be appointed to determine the cost of the extension. SSR 

Engineers, Inc. submitted its report to the court dated June 14, 

1991, wherein it set forth the estimated costs. 

The District Court found in its Findings of Fact No. 7 as 

follows: 

7. Pursuant to Section 69-5-106(2) M.C.A. the 

parties agreed to an independent consultant engineer, SSR 

Inc. Engineers, to determine whether [the Cooperative] or 

MPC can extend its lines to the customer, ZooMontana, at 

the least cost. SSR's report (Plaintiff's Exhibit 3) was 

made with several presumptions and concluded that: 

(a) the cost to MPC to extend its three phase line 

prior [sic] from an extension of that line commenced by 

construction on May 24, 1991, and restrained by [the 

District Court] by order dated May 31, 1991, to the 

education building is $24,136.43; 

(b) the cost to MPC to extend its three phase line 

from the ending point after the extension referred to in 

paragraph 7(a) to the education building is $14,622.46; 
(c) the cost to MPC to extend its three phase line 

to the ZooMontana property line is $16,319.49; 

(d) the cost to [the cooperative] to extend its 

three phase line to the education building is $28,348.86; 

(e) the cost to [the Cooperative] to extend its 

three phase line to the ZooMontana property line is 

$6,092.45. 

The District Court in its Conclusions of Law Nos. 3 and 4 

stated: 

3. Since the parties agree that the ZooMontana 

property is a commercial premises with a need of 400 

kilowatts or larger within two years and since either 

party can extend its lines to the user without any cost 

for the extension, the issue is whether MPC as an 

electric utility is entitled to priority because it can 

under the statute ". . .extend its lines to such industrial 

or commercial premises at less cost to the electric 

utility...". 

4. Section 69-5-102 (7) M.C.A. defines llpremisesll as: 

"Premiseso means a building, residence, 

structure, or facility to which electricity is 

being or is to be furnished; provided, that 

two or more buildings, structures, or 

facilities which are located on one tract or 

contiguous tracts of land and are utilized by 

one electric consumer for farming, business, 

commercial, industrial, institutional, 

governmental, or trailer court purposes shall 

together constitute one premises, except that 

any such building, structure, or facility, 

other than a trailer court, shall not, 

together with any other building, structure, 

or facility, constitute one premises if the 

electric service to it is separately metered 

and the charges for such service are 

calculated independently of charges for 

service to any other building, structure, or 

facility. 

The premises of the ZooMontana property within the 

meaning of this statute is the property line of the 

property. For this reason the appropriate comparisons of 

cost for [the Cooperative] and MPC to extend their lines 

to the property line of ZooMontana are the costs referred 

to in paragraphs 7(c) and 7(e) of the Findings of Fact 

herein such costs being $16,319.49 to MPC and $6,092.45 
to [the Cooperative]. Since the cost of extension of the 

lines to the premises is greater to MPC than [the 

Cooperative], [the Cooperative] is entitled to provide 

the electric power to ZooMontana. 

On appeal, MPC contends that the correct comparison to be made 

was MPC's cost of extending the three-phase power extension to the 

education building in the amount of $24,136.43, as compared to the 

Cooperative's cost to extend its power to the same building in the 

amount of $28,348.86. The Cooperative contends that the premises 

involved here is the entire ZooMontana property so that the cost 

comparison to be made is the cost of extending three-phase power to 

the ZooMontana property line. That comparison shows that MPC's 

cost would be $16,319.49 as compared to the Cooperative's cost of 

Section 69-5-102(7), MCA, defines premises as applicable in 

this case: 

"Premisesu means a building . . . to which 

electricity is being or is to be furnished; provided, 

that two or more buildings, structures, or facilities 

which are located on one tract . . . and are utilized by 

one electric consumer for . . . institutional . . . purposes shall together constitute one premises . . . [with an exception for separate metering which is not 

here applicable]. 

On this issue, the District Court's Findings of Fact No. 8 is 

pertinent: 

8. The intent of ZooMontana is to utilize its 

entire parcel of property for development of its zoo for 

various buildings, parking areas, exhibits, displays and 

other uses. Although the education building would be the 

first place or building located within the total property 

for which three phase electric power may be needed such 

power will ultimately be required for the entire zoo. . 

There is no dispute between the parties as to the foregoing planned 
utilization of the entire parcel. Both parties utilize such future 

developments to arrive at the 400 kilowatts of power needed within 

two years, and referred to in the statute. 

We conclude that such facts establish that the District Court 

is correct in its conclusion that the premises for this purpose is 

the property line of the property and not the education building. 

We therefore affirm the holding of the District Court that the 

appropriate cost comparison of the costs of $16,319.49 to MPC and 

$6,092.45 to the Cooperative; and since the cost of extension is 

greater to MPC than the Cooperative, the Cooperative is entitled to 

provide the electric power. We affirm the court's order 

permanently enjoining MPC from providing electric power to 

ZooMontana. 

Affirmed . 

We concur: 

RChief ~usticd 
December 4, 1991 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

Donald L. Harris 

CROWLEY LAW FIRM 

P.O. Box 2529 

Billings, MT 59103-2529 

Paul G. Olsen 

Olsen & Christensen 

P.O. Box 1596 

Billings, MT 59103-1596 

Maxon R. Davis 

Cure, Borer & Davis 

P.O. Box 2103 

Great Falls, MT 59403-2103 

ED SMITH 

CLERK OF THE SUPREME COURT 

STA~MONTANA 

BY: [< $f , 

Deputy