Case Name: Village of Grafton, Appellee, v. Ohio Edison Company et al., Appellants
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1996-11-13
Citations: 77 Ohio St. 3d 102
Docket Number: No. 95-572
Parties: Village of Grafton, Appellee, v. Ohio Edison Company et al., Appellants.
Judges: Moyer, C.J., F.E. Sweeney, Pfeifer, Bryant and Stratton, JJ., concur.
Reporter: Ohio State Reports, Third Service
Volume: 77
Pages: 102–115

Head Matter:
Village of Grafton, Appellee, v. Ohio Edison Company et al., Appellants.
[Cite as Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102.]
(No. 95-572
Submitted May 1, 1996
Decided November 13, 1996.)
Rickard G. Lillie & Assoc, and Richard G. Lillie, for appellee.
Jones, Day, Reavis & Pogue and David A. Kutik; Cook & Batista Co., L.P.A, and Daniel P. Batista, for appellants.
Chester, Willcox, & Saxbe, John W. Bentine and Jeffrey L. Small, urging affirmance for amicus curiae American Municipal Power — Ohio.
Robert S. Tongren, Consumers’ Counsel, and Barry Cohen, Assistant Consumers’ Counsel, urging reversal for amicus curiae Office of Consumers’ Counsel.
Porter, Wright, Morris & Arthur, Samuel H. Porter, Alan D. Wright, Kathleen M. Trafford, Daniel R. Conway and Maine Y. Miller, urging reversal for amicus curiae Ohio Electric Utility Institute.
Betty D. Montgomery, Attorney General, Duane W. Luckey and Ann E. Henkener, Assistant Attorneys General, urging reversal for amicus curiae Public Utilities Commission of Ohio.

Opinion:
Per Curiam.
Appellants pose three propositions of law, arguing that the Miller Act prevents Grafton from terminating Ohio Edison's service to Design and Rite Aid without commission approval For the reasons that follow, we hold that the Miller Act does not prevent Grafton from forcing Ohio Edison to abandon the Design and Rite Aid electric lines.
In order to obtain summary judgment, the movant must show that (1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion when viewing evidence in favor of the nonmoving party, and that conclusion is adverse to the nonmoving party. State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn. (1994), 69 Ohio St.3d 217, 219, 631 N.E.2d 150, 152. This court has complete and independent power of review as to all questions of law. MCI Telecommunications Corp. v. Pub. Util. Comm. (1988), 38 Ohio St.3d 266, 268, 527 N.E.2d 777, 780; Indus. Energy Consumers of Ohio Power Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d 559, 563, 629 N.E.2d 423, 426. There are no questions of fact in the case now before us, as Ohio Edison acknowledges that it erected the service lines to Design and Rite Aid several years after its nonexclusive franchise with Grafton had expired. Thus, the determination of whether the trial court properly granted summary judgment below involves only questions of law and is considered on a de novo basis. Id.
This case involves the interrelationship between the Miller Act, R.C. 4905.20 and 4905.21; the Certified Territory Act, R.C. 4933.81 through 4933.90; and a municipality's power to control utilities within its municipal limits, Section 4, Article XVIII of the Ohio Constitution.
Under Section 4, Article XVIII of the Ohio Constitution, Grafton had constitutional authority to build and operate a municipal utility to serve its inhabitants. Wooster v. Graines (1990), 52 Ohio St.3d 180, 181, 556 N.E.2d 1163, 1164. This right is not generally subject to statutory restriction. Lucas v. Lucas Local School Dist. (1982), 2 Ohio St.3d 13, 2 OBR 501, 442 N.E.2d 449; Columbus v. Pub. Util. Comm. (1979), 58 Ohio St.2d 427, 12 O.O.3d 361, 390 N.E.2d 1201; Columbus v. Ohio Power Siting Comm. (1979), 58 Ohio St.2d 435, 12 O.O.3d 365, 390 N.E.2d 1208.
However, municipal utility operations are subject to statewide police power limitations for health and safety reasons. See Canton v. Whitman (1975), 44 Ohio St.2d 62, 73 O.O.2d 285, 337 N.E.2d 766; Delaware Cty. Bd. of Commrs. v. Columbus (1986), 26 Ohio St.3d 179, 184, 26 OBR 154, 158-159, 497 N.E.2d 1112, 1117; Columbus v. Teater (1978), 53 Ohio St.2d 253, 260-261, 7 O.O.3d 410, 414, 374 N.E.2d 154, 159. Moreover, the Miller Act requires municipalities to obtain commission approval before forcing the abandonment of nonmunicipal utility facilities or the withdrawal of nonmunicipal utility services located inside the municipality. State ex rel. Klapp v. Dayton Power & Light Co. (1967), 10 Ohio St.2d 14, 39 O.O.2d 9, 225 N.E.2d 230; State ex rel. Wear v. Cincinnati & Lake Erie RR. Co. (1934), 128 Ohio St. 95, 190 N.E. 224. Thus, under the Miller Act, a municipality generally must seek commission approval before forcing a utility to stop serving customers or to abandon its electric lines inside the municipal limits. Id.
However, Grafton asserts that the Miller Act does not apply in this case because the Design and Rite Aid service lines are service lines for individual customers and not a "main" electric line and because Ohio Edison improperly initiated service to Design and Rite Aid after expiration of the nonexclusive franchise. Grafton is correct only on the second ground. We discussed Grafton's first issue in detail in State ex rel. Toledo Edison v. Clyde (1996), 76 Ohio St.3d 508, 668 N.E.2d 498, holding that the Miller Act applies to the forced abandonment of or withdrawal of service over all electric lines, regardless of size. However, for the reasons set forth below, we find that the Miller Act does not apply in this case because Ohio Edison wrongfully initiated service to Design and Rite Aid.
The Miller Act focuses upon protecting existing utility customers from having their service terminated without commission approval. E. Ohio Gas Co. v. Cleveland (1922), 106 Ohio St. 489, 508-509, 140 N.E. 410, 416. This protection extends to situations where the utility franchise has expired (Lake Shore Elec. Ry. Co. v. State ex rel. Martin [1932], 125 Ohio St. 81, 180 N.E. 540) and even where the service was provided without any franchise contract (Wear, supra, 128 Ohio St. 95, 190 N.E. 224). However, the Miller Act does not create any right in a public utility to expand its customer base after its franchise expires to serve unknown, future customers inside a municipality that has created and is operating its own municipal utility. State ex rel. Toledo Edison, supra, 76 Ohio St.3d at 517, 668 N.E.2d at 506-507.
Grafton argues that Ohio Edison's extension of service to Design and Rite Aid was wrongful and violated Grafton's exclusive right to provide utility service to its inhabitants. Grafton is correct.
Ohio Edison was never granted a village-wide franchise to serve Grafton's inhabitants. From their inception, Ohio Edison's franchises were limited to maintaining a transmission and distribution system-within Grafton, to serving only specific customers (or their successors and assigns), and to transporting electricity through Grafton for use solely outside Grafton. Thus, Ohio Edison had no right under its franchises to extend service to additional customers inside Grafton's municipal limits, including service to Design or Rite Aid.
Moreover, Grafton had the right to create a municipal utility monopoly inside Grafton and exclude Ohio Edison from serving Grafton's inhabitants. See State ex rel. Toledo Edison, supra, 76 Ohio St.3d at 517, 668 N.E.2d at 506-507. This position stems from an exclusive grant of power to municipalities in Section 4, Article XVIII of the Ohio Constitution. Id. at 516, 668 N.E.2d at 506, citing Lucas, supra, 2 Ohio St.3d at 16, 2 OBR at 504, 442 N.E.2d at 452. This exclusive power is also recognized in the Certified Territory Act. R.C. 4933.83(A) and 4933.87. Thus, while Ohio Edison has the "exclusive right" to furnish electricity to the current and future customers inside its service territory, this right is expressly limited by Grafton's right to require a franchise contract to serve its inhabitants. R.C. 4933.83(A) and 4933.87. See Legislative Service Analysis of 1977 Am. H.B. No. 577, at 3.
Ohio Edison's franchises expired in 1962 and 1987. Thus, Ohio Edison never had a right to serve any of Grafton's inhabitants other than those specified in these franchises. Ohio Edison never sought to renew or expand the scope of its Grafton franchises, and Grafton took no affirmative steps to prevent Ohio Edison from doing so. However, Grafton was not required to do so. The limited reach of the original franchises made it clear that service to any additional or new customers was beyond the scope of those franchises and wrongful. Additionally, during this entire time frame Grafton was serving its inhabitants with its own utility. That there had been narrowly drawn franchises does not prevent Grafton from stopping Ohio Edison from providing service to customers that Grafton never intended Ohio Edison to serve.
Ohio Edison was an occupant at sufferance inside Grafton's municipal limits once the franchise contract expired. State ex rel. Klapp v. Dayton Power & Light Co. (S.D.Ohio 1957), 170 F.Supp. 722, 725, affirmed in (C.A.6, 1959), 263 F.2d 909, reversed on other grounds (1959), 359 U.S. 552, 79 S.Ct. 1151, 3 L.Ed.2d 1035.
"Mere acquiescence in the continued unauthorized occupancy of the streets, or non-action on the part of public officials to prevent obstruction, or delay in bringing action to procure an order of ouster, could not serve to confer any right upon the defendant company or estop the city from maintaining this proceeding [for ouster]." Ohio Elec. Power Co. v. State ex rel. Martin (1929), 121 Ohio St. 235, 240, 167 N.E. 877, 878.
Thus, although Ohio Edison's right to continue serving customers that it served under its franchises is secure under the Miller Act, Ohio Edison's right to serve new customers inside Grafton's municipal boundaries certainly would not grow merely because Grafton took no affirmative steps to prevent such an expansion. In State ex rel. Toledo Edison, supra, 76 Ohio St.3d 508, 668 N.E.2d 498, we held that expansion of Toledo Edison's customer base after expiration of a franchise was protected under the Miller Act until Clyde took affirmative action, by ordinance, to assert its right to control utility services. But Toledo Edison had had a franchise to serve all of Clyde's inhabitants. By contrast, the expiration of narrowly drawn, specified-customer franchises, like the ones at bar, does not confer more rights on Ohio Edison than it had under the original franchises. Ohio Edison cannot intend to argue that the expiration of these franchises somehow imbued it with rights to expand its service territory and serve new customers inside Grafton's municipal limits that are superior to Grafton's right to serve its citizens.
Ohio Edison argues that it was required to provide service to Design and Rite Aid under the Certified Territory Act and R.C. 4905.22 after they requested service from Ohio Edison. This argument is without merit.
The Certified Territory Act expressly provides that Ohio Edison had no right to serve any customer inside Grafton's municipal limits without Grafton's consent:
"Except as otherwise provided in this section and Article XVIII of the Ohio Constitution, each electric supplier shall have the exclusive right to furnish electric service to all electric load centers located presently or in the future within its certified territory, provided that nothing in [the Certified Territory Act] shall impair the power of municipal corporations to require franchises or contracts for the provision of electric service within their boundaries (Emphasis added.) R.C. 4933.83(A).
Ohio Edison knew that its franchises permitted service only to the individual customers identified in the franchises. Design and Rite Aid are not the customers named in the franchises. Nor did Ohio Edison seek or obtain Grafton's consent to provide service to Design or Rite Aid. Under these circumstances, erection of the two service lines in question was not permitted under the franchises or the Certified Territory Act and was improper.
Ohio Edison asserts that, irrespective of how the Design and Rite Aid service lines came into being, abandonment of the lines or termination of the service over those lines requires commission approval. Thus, Ohio Edison poses the question of whether forcing the abandonment of two electric lines erected in violation of Grafton's constitutional right to control the provision of electric services to its inhabitants requires commission approval. We find that it does not.
The Miller Act applies to the forced abandonment of any electric line or the service over that line. State ex rel. Toledo Edison, supra, 76 Ohio St.3d at 515, 668 N.E.2d at 505-506; R.C. 4905.20 and 4905.21. Yet a public utility should not be permitted knowingly to overreach the express terms of its franchise agreements to expand its service territory. Nor should a public utility be allowed to knowingly violate a municipality's right to exclusive control of utility services within the municipality, and then assert the protections of the Miller Act to prevent forced abandonment of the improperly erected service line or termination of the wrongfully instituted service.
The Miller Act was enacted to protect consumers from having their service terminated because of the whims of a public utility or rogue municipality. The Act was not created to protect overreaching public utilities from abandonment proceedings by aggrieved municipalities. Under circumstances like the ones presently before us, we decline the opportunity to permit the protections of the Miller Act to be distorted into a weapon against municipalities.
This policy is also reflected in R.C. 4933.16, which permits a municipality to use remedies in addition to those set forth in R.C. 4933.99, including injunction, to remedy violations of R.C. 4933.03, 4933.13, 4933.16, which prohibit placement of property of utilities within public rights-of-way without the consent of the municipality. Although not directly applicable to the case at bar, the policy articulated in R.C. 4933.16 reflects that under certain circumstances, the Miller Act may not be the exclusive remedy for the forced abandonment of an electric line.
We, therefore, hold that under the circumstances presently before us, the Miller Act does not apply and, therefore, that Grafton need not seek commission approval in order to force Ohio Edison to abandon the two electric service lines in question. Accordingly, for the reasons set forth above, the decision of the court of appeals is affirmed.
Judgment affirmed.
Moyer, C.J., F.E. Sweeney, Pfeifer, Bryant and Stratton, JJ., concur.
Douglas and Resnick, JJ., dissent.
Peggy Bryant, J., of the Tenth Appellate District, sitting for Cook, J.
. The dissent states that other Grafton customers which were not mentioned in the Grafton franchises are also currently being served by Ohio Edison, and suggests that estoppel may be appropriate in this case. The dissent is mistaken. "Mere acquiescence in the continued unauthorized occupancy of the streets, or non-action on the part of public officials to prevent obstruction, or delay in bringing action to procure an order of ouster, could not serve to confer any right upon the defendant company or estop the city from maintaining this proceeding ¡for ouster]." (Emphasis added.) Ohio Elec. Power Co. v. State ex rel. Martin (1929), 121 Ohio St. 235, 240, 167 N.E. 877, 878.
. The dissent suggests that Ohio Edison should be permitted to expand its utility services inside Grafton not only to Rite Aid and Design, but also to any other customer as long as Ohio Edison does not cross one of Grafton's rights-of-way in providing the service. This position grants Ohio Edison significantly more authority than it had under the franchises and essentially eliminates Grafton's constitutional right to require a utility to enter into a contract with Grafton before providing utility service to Grafton's inhabitants.