Case Name: The State of Washington, on the Relation of Public Utility District No. 1 of Skagit County, Respondent, v. John Wylie, as Secretary of the Commission of Public Utility District No. 1 of Skagit County, et al., Appellants
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1947-06-16
Citations: 28 Wash. 2d 113
Docket Number: No. 29997
Parties: The State of Washington, on the Relation of Public Utility District No. 1 of Skagit County, Respondent, v. John Wylie, as Secretary of the Commission of Public Utility District No. 1 of Skagit County, et al., Appellants.
Judges: Millard, Steinert, and Simpson, JJ., concur.
Reporter: Washington Reports
Volume: 28
Pages: 113–177

Head Matter:
[No. 29997.
En Banc.
June 16, 1947.]
The State of Washington, on the Relation of Public Utility District No. 1 of Skagit County, Respondent, v. John Wylie, as Secretary of the Commission of Public Utility District No. 1 of Skagit County, et al., Appellants.
Brodie & Brodie, for appellant Wylie.
W. E. Heidinger, Oliver Malm, and Metzger, Blair, Gardner & Boldt, for appellant Weyerhaeuser Timber Company.
Weter, Roberts & Shefelman, Victor D. Lawrence, Norman G. Booth, McCutcheon & Rowland, and Warren J. Gilbert (Wood, Hoffman, King & Dawson, of counsel), for respondent.
The Attorney General, Frederick J. Lordan and Smithmoore P. Myers, Assistants, A. C. Van Soelen, J. Ambler Newton, Clarence J. Coleman, and George F. Yantis, amici curiae.
Reported in 182 P. (2d) 706.

Opinion:
Hill, J.
This cause is before this court on an appeal from the superior court of Skagit county, which, on May 10, 1946, entered an order directing the issuance of a peremptory writ of mandate directed to the appellant, John Wylie, as secretary of the commission of public utility district No. 1 of Skagit county, Washington, commanding him, as such secretary, to attest and affix the seal of said district to electric revenue bonds in the aggregate principal amount of one hundred thirty-five million dollars, and like wise commanding him, as such secretary, to attest and affix the seal of said district to certain contracts with nine other public utility districts.
Public utility district No. 1 of Skagit county, Washington, comprises all of Skagit county and was organized under the public utility district law (Laws of 1931, chapter 1, p. 3), and will hereinafter be referred to as the "Skagit district."
The Skagit district seeks to issue revenue bonds in the sum of one hundred thirty-five million dollars, for the purchase of certain properties of the Puget Sound Power & Light Company, a Massachusetts corporation, which company will hereinafter be referred to as "Puget Sound." These properties include all of Puget Sound's facilities for generating, transmitting, and distributing electric current, together with certain facilities that are used, in part, for the production,, distribution, and sale of steam for heating purposes in a portion of the central business district in the city of Seattle. It is conceded that the amount of one hundred thirty-five million dollars, required for the purchase of the Puget Sound properties, was arrived at by adding the following items, all computed as of October 31, 1945:
"(1) A net liquidating dividend of $18.00 per share for each of the 2,177,879 shares of common stock now outstanding .$39,201,822.00
(2) An amount equal to $110.00 per share for each of the 137,500 shares of preferred stock of the company now outstanding (exclusive of accrued dividends thereof to date of redemption) being the price required to be paid when such stock is called for redemption prior to maturity................ 15,125,000.00
(3) An amount equal to $1,042.50 for each of the 4%% mortgage bonds of the company now outstanding (exclusive of accrued interest to date of redemption at the rate of 4%% per annum), being the price required to be paid when such bonds are called for redemption prior to maturity......... 53,662,688.00
(4) An amount equal to the face amount of serial 3ys% notes of the company now outstanding (exclusive of accrued interest to date of redemption), being the price required to be paid when such notes are called for redemption prior to maturity.. 2,812,500.00
(5) An amount equal to the accrued interest on debt obligations and accrued dividends and premiums on mortgage bonds, preferred stock and notes.... 1,268,812.00
$112,070,872.00
The total determined and unascertained liabilities of the Company including expenses incident to the dissolution of the Company, ad valorem taxes, federal income and excess profit taxes............. $6,857,700
Net current assets including cash on hand, materials and supplies, accounts receivable, prepayments, unbilled revenues and estimated receipts from sale of non-electric properties . 6,759,000 98,700.00
$112,169,572.00
Reserve for possible capital gains tax or for
capital improvements to the properties____$15,723,200
Bond discount . 1,400,000
Working capital . 5,245,228
Payment to Fiscal Agent................. 262,000
Contingent dissolution expense, and contingent liability to stockholders.............. 200,000 22,830,428.00
$135,000,000.00"
(In addition to the two hundred sixty-two thousand dollars of revenue bonds to be issued for payment of the fiscal agent, the Skagit district is to issue up to one million forty-eight thousand dollars in certificates of indebtedness to him, as the remainder of his compensation, making a total maximum compensation for him of one million three hundred ten thousand dollars.)
The properties of Puget Sound are located in eighteen counties of the state, to wit: Whatcom, Skagit, Snohomish, Island, King, Pierce, Kitsap, Jefferson, Mason, Grays Harbor, Thurston, Cowlitz, Lewis, Pacific, Chelan, Kittitas, Grant, and Douglas. Public utility districts have been organized and exist in all of these counties except King, Pierce, and Island.
For the purposes of this purchase, the Puget Sound properties have been classified as "production" and "distribution." The production properties include the following generating plants:
Demonstrated Capability in Kilowatts
White River (hydroelectric)................ 63,000
Snoqualmie Falls (hydroelectric)............ 21,000
Shuffleton (steam) . 85,000
Electron (hydroelectric) . 23,000
Baker River (hydroelectric)................ 41,100
Rock Island (hydroelectric)................. 80,000
Tumwater (hydroelectric) . 5,250
Georgetown (steam) .
318,350
The production properties also include most of the transmission lines and all or part of forty substations and other miscellaneous properties, as set forth in exhibit No. 32. They are all to be operated and managed by the production division as though they comprised a separate and distinct business enterprise. The portion of the one hundred thirty-five million dollar purchase price allocated to these properties is sixty million eight hundred ninety-seven thousand dollars.
The distribution properties include the following hydroelectric generating plants: Nooksack, Leavenworth, Dryden, Entiat, Olympia, and Kalama, and the Chehalis steam electric generating plant. (These are plants of relatively small capacity, the largest having a demonstrated capability of 2,420 kilowatts.) The distribution properties also include some transmission lines, all or part of numerous substations, all of the distribution lines, and other miscellaneous property, as set forth in exhibit No. 33. The distribution properties are to be disposed of as follows:
(a) The Cowlitz, Lewis, Pacific No. 2, Whatcom, Chelan, Kitsap, Mason No. 3, Snohomish, and Thurston county public utility districts are to acquire the distribution properties within their respective districts. (Chelan will also acquire such properties within the Douglas and Grant county districts.) The terms of acquisition are set forth in contracts which were admitted as exhibits. (The four districts first named will not purchase power from the Skagit district, but the other five will secure the major portion of their power requirements through the- Skagit district.) The total of the purchase price to be paid by these districts to the Skagit district is twenty-nine million three thousand dollars.
(b) The distribution properties in Grays Harbor, Jefferson, Kittitas, Island, King, and Pierce counties are to be retained, for the time being, at least, by the Skagit district. (The first three named have public utility districts, and it apparently was contemplated that these districts would acquire the distribution systems within their respective limits, but, at the time of the trial in the superior court, they had not contracted so to do. There are no public utility districts in the three counties last named, and they constitute what is referred to, in the testimony and briefs, as the "unorganized territory." King county is divided into two segments, one inside and one outside the area in which Puget Sound and Seattle City Light are competitors.) In all of these counties, the Skagit district will be engaged in selling electric energy at retail, and the distribution system in this group of counties will be operated and managed as though it were a separate and distinct business enterprise. It will be known as the "outside subdivision" of the distribution division. The amount of the purchase price allocated to the distribution system in these counties is forty-two million three hundred seventy thousand dollars.
(c) The distribution properties within the territorial limits of the Skagit district will also be operated and managed as though they constituted a separate and distinct business enterprise, and will be known as the "Skagit subdivision" of the distribution division. The portion of the purchase price allocated to the distribution properties in Skagit district is two million seven hundred thirty thousand dollars.
Summarizing, we have the following allocation of the one hundred thirty-five million dollar purchase price:
Percentage of Amount Total Price
Production properties . $60,897,000 45.109% Distribution properties:
(a) To be acquired by various districts.. 29,003,000 21.484
(b) Outside of Skagit district but to be retained and operated by it........ 42,370,000 31.385
(c) Within Skagit district.............. 2,730,000 2.022
$135,000,000 100.000%
Skagit district has also, within its territorial limits, the Baker river hydroelectric plant, which is one of six major generating plants included in the "Production properties" above, and represents 12.9% of the demonstrated capability, in kilowatts, of those properties. There is no segregation in the record of the values attached to the production properties, so there is no evidence from which it can be accurately determined what percentage of the purchase price could properly be allocated to the production properties within Skagit district.
It is proposed that one hundred thirty-five million dollars of revenue bonds be sold to make funds available for the purchase of the Puget Sound properties. By order of the superior court of Skagit county, herein appealed from, the appellant John Wylie, as secretary of the Skagit district, is directed to sign these revenue bonds and the various contracts with the other nine public utility districts.
This does not purport to be a detailed statement of the plan whereby Skagit district is to acquire all of the electric properties of Puget Sound and to operate the major portion of them, or of the contractual relations with the other nine districts whose contracts are here involved, but it gives a brief resume of what is proposed, and sufficient background for discussion of the questions here presented.
Many issues are raised by the appellants and the various amici curiae. Basically, it first must be determined whether or not the Skagit district has a right to acquire all the properties of Puget Sound under the circumstances here existing and to engage in the generation, transmission, distribution, and sale of electric energy, on the scale here contemplated. Unless it is determined to have that right, the other questions posed in the various briefs are academic.
It may be conceded that this very ingenious and carefully devised plan gives to the various public utility districts concerned other than Skagit, the opportunity to acquire properties which they desire, at considerable savings over any awards that might be made if they were to endeavor to condemn such properties. It may also be conceded that Puget Sound's repeated objections to piecemeal acquisition are thereby obviated.
Emphasis is placed upon the fact that all of the electric properties of Puget Sound must be acquired, because it is an integrated system. The principal witness, R. W. Beck, an engineer employed by John Nuveen & Company, which concern, with its associates, has a contract to purchase the bonds, testified:
"In other words, this whole vast system extending over the eighteen counties is operated as one unit, and has been built up to that point over a number of years by the company in order to get the most efficient operations, and the lowest cost of delivering energy to the consumers.
"There is only one point in which there is no integration with the main system, and that is the small Point Roberts system which, as you may know, is a small piece of land which extends into Canada and is not connected with the United States at all, and in order to serve the people in the Point Roberts community energy is purchased from the B. C. Electric Railway Company and delivered to the people that way. But in all other respects the Puget Sound system is a completely integrated system operating as one system, just operating together that way."
On cross-examination, he was questioned as to why the Baker river hydroelectric generating plant, located in Skagit county and having a capability of 41,100 kilowatts (or 360,036,000 kilowatt-hours in one year), was not adequate to supply Skagit county's needs (the consumption in that county having been 71,511,955 kilowatt-hours in 1944). In response to the question, "Is Skagit County and the customers within Skagit, are they served from the Baker River plant?" he answered:
"No, they are served from the integrated system of the company. You must appreciate that all of the power plants are tied together by transmission lines in order to enable the company to get the maximum economy out of the use of all of those plants. Those plants are all tied together and operate and. function as a unit. Where the kilowatt hours come from, or the electricity comes from at any time cannot be determined with any finality. It is just all one big pot and there is a spigot in the pot that leaves some kilowatt hours in Skagit County."
He was also asked,, "What would be the necessity of Skagit County taking over the Rock Island plant?" to which he replied:
"Because it is part of the integrated system. The Rock Island plant's maximum production occurs when there is a minimum stream flow, and that usually occurs at the same time of the year when there is minimum output in the Baker plant, so that the Rock Island plant and the Baker River plant tied in together enables them to get the maximum amount of firm power out of both plants. When Baker River's production falls off due to freezing in the winter is exactly the time Rock Island is having its maximum production because it has low stream flow."
At this point, we might well take a look at the extent of this integrated system. We have already indicated its extent from the standpoint of production and have enumerated the generating plants and their capabilities. The figures for the year 1944, which follow, give the number of customers, their consumption of electric energy in kilowatt-hours, and Puget Sound's Revenues from the eighteen counties in which the company operates.
Puget Sound K.W.H. Sold Puget Sound's
Customers by Puget Revenues
1944 Sound in 1944 1944
Areas in which public utility-districts are to acquire distribution properties but will not purchase power from Skagit:
Cowlitz................... 5,138 11,792,211 $248,515
Lewis . 6,743 19,912,540 383,403
Pacific . 181 231,941 5,939
Whatcom . 19,303 99,999,948 1,310,501
Total................. 31,365 131,936,640 $1,948,358
Puget Sound Customers 1944 K.W.H. Sold Puget Sound's by Puget Revenues Sound in 1944 1944
Areas in which public utility districts are to acquire distribution properties and will purchase power from Skagit:
Chelan (Douglas and Grant) 9,760 70,987,870 $964,667
Kitsap.................... 24,078 128,961,863 1,874,873
Mason (to get power from Kitsap) . 741 1,028,004 24,673
Snohomish................ 31,281 187,650,787 2,193,839
Thurston . 12,833 46,512,278 830,220
Total . 78,693 435,140,802 $5,888,272
Areas in which public utility districts are organized hut which have not agreed to acquire the distribution property, and where Skagit will sell power at retail:
7,125,669 Grays Harbor............. 3,076 $141,707
16,190,313' Jefferson . 2,463 194,022
17,862,931 Kittitas................... 1,668 184,934
Total................. 7,207 41,178,913 $520,663
Areas in which no public utility districts exist and where Skagit will sell power at retail:
Island.................... 2,623 18,382,460 $227,913
King: Outside of Seattle
competitive area . 33,108 Within Seattle com-139,737,120 2,188,331
petitive area...... 63,470 525,467,792 7,421,649*
Pierce . 12,288 51,197,639 750,570
Total................. 111,489 734,785,011 $10,588,463
Skagit district . 12,027 71,511,955 $870,820
'•^Includes $769,255 steam heat revenues.
A summary of the foregoing figures as to areas, follows:
Recognizing all the values and advantages of the acquisition of this integrated system, we must now come to grips with the question: Where does the Skagit district get power and authority to purchase "this whole vast system extending over eighteen counties"? Merely because a plan is new or the methods proposed novel and unprecedented, is no reason to condemn it; nor is it to be regarded with disfavor merely because, as respondent's witness Malcolm Prosser testified, "the setup is involved and intricate," or, as the witness Albert O. Foster said, "replete with complex factors." As respondent aptly points out, the advisability or lack of it in any such plan is, likewise, none of our concern. We are, however, as previously indicated* concerned with the question of the power and authority of the Skagit district to proceed with the contemplated purchase.
Respondent contends that the right to purchase the integrated system owned by Puget Sound is found in Rem. Rev. Stat., § 11610 [P.P.C. § 833-11] (d) (Laws of 1931, chapter 1, p. 12, § 6(d)):
" (d) To purchase, within or without its limits, electric current for sale and distribution within or without its limits, and to construct, condemn and purchase, purchase, acquire, add to, maintain, conduct and operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam or other methods, within or without its limits, for the purpose of furnishing said public utility district, and the inhabitants thereof and any other person, including public and private corporations, within or without its limits, with electric current for all uses ." (Italics respondent's.)
Respondent urges that the words "within or without its limits" are clear and unambiguous and afford no basis for judicial construction.
To carry respondent's argument to its logical conclusion, means that the Skagit district not only could acquire the properties of Puget Sound, but it could acquire those of the Washington Water Power Company and the Pacific Power & Light Company serving the great industrial, min ing, and agricultural areas of eastern Washington. By the same token, a public utility district in Pend Oreille county, in the northeastern corner of the state, could acquire the Puget Sound properties. This holding, however, is not based on an hypothesis of any such extreme situation, and for our present purposes we limit ourselves to the factual situation actually presented: i.e., a portion of the distribution and production properties of Puget Sound is within the territorial limits of the Skagit district, which seeks to acquire all the distribution and production properties of the company, both within and without its limits.
Respondent, to buttress its position, directs attention to the purposes and objects of the public utility district law of 1931, chapter 1, p. 3, as stated in the first section:
" . . . to authorize the establishment of public utility districts to conserve the water and power resources of the State of Washington for the benefit of the people thereof, and to supply public utility service, including water and electricity for all uses." (Italics respondent's.)
Respondent's brief states on p. 17 thereof:
"The words, 'people thereof/ obviously refer to the people of the State of Washington and not to the residents of any one. district alone. This is not only apparent from the language above quoted, but becomes obvious from an examination of Section 6 of the act, wherein the powers of the districts are enumerated." (Italics respondent's.)
Respondent then quotes subsections (a) and (d) of Rem. Rev. Stat., § 11610. We have already quoted (d); (a) reads as follows:
"(a) To make a survey of hydro-electric power, irrigation and domestic water supply resources within or without the district, and to compile comprehensive maps and plans showing the territory that can be most economically served by the various resources and utilities, the natural order in which they should be developed, and how they may he joined and co-ordinated to make a complete and systematic whole; . . ." (Italics respondent's.)
The brief then continues:
"This power is granted to all public utility districts, any one of which may exercise them to the fullest extent, and manifests an intent on the part of the voters who initiated the measure that the residents of all counties, whether or not so fortunately situated as to enjoy power resources within their boundaries, should share equally in the benefits conferred by the law." (Italics respondent's.)
With this argument we shall deal at some length, because it is the foundation of the legal structure here presented.
After a careful and detailed analysis of the public utility district law itself, we are convinced that the construction given the words "without the district" and "without its limits" by the respondent, is too broad; and that, when read in connection with the context of the act of which they are a part and when considered in the light of the avowed purpose of its sponsors and its legislative history, these words should not be carried beyond the express holding in Carstens v. Public Utility Dist. No. 1, 8 Wn. (2d) 136, 111 P. (2d) 583; and that subsection (d) should be construed to mean that the primary purpose of the public utility district is to furnish the district, and the inhabitants thereof, with electric current, and that the furnishing of electric current to any other person, including public and private corporations, within or without its limits, is an incidental purpose only.
One alternative plan proposed by respondent for taking over the assets of Puget Sound is that the Skagit district shall acquire at least two thirds of the corporate stock of Puget Sound and then proceed with its dissolution.
We have a provision in our state constitution which reads:
"No . . . municipal corporation shall hereafter . . . become directly or indirectly the owner of any stock in or bonds of any association, company, or corporation." (Art. VIII, § 7.)
This language would seem to be clear and unambiguous, and not subject to construction.
The respondent contends, and cites abundant authority to support its contention, that such a constitutional mandate, however clear and unambiguous, does not prevent a municipality from acquiring the stock ownership of a cor poration as a convenient means of acquiring its assets. The cases relied upon by respondent point out that a constitutional provision is to be construed with reference to the evils it was intended to correct or prevent.
We mention this constitutional provision and the alternative plan, not for the purpose of passing upon the constitutional question which the alternative plan presents, but merely to make it evident that respondent does not regard judicial construction as forbidden even where words are, in fact, clear and unambiguous.
It is a rule of statutory, as well as constitutional, construction that the antecedent mischief may be considered, also the history and circumstances of the legislative enactment. Cherry Point Fish Co. v. Nelson, 25 Wash. 558, 66 Pac. 55; Huntworth v. Tanner, 87 Wash. 670, 152 Pac. 523, Ann. Cas. 1917D, 676; State ex rel. Troy v. Yelle, 27 P. (2d) 99, 176 P. (2d) 459; United States v. Union Pac. R. Co., 91 U. S. 72, 23 L. Ed. 224.
We turn now to the history of the act. It was filed in the office of the secretary of state on October 25, 1928, as initiative to the legislature No. 1. It was submitted to the legislature January 21, 1929, and rejected by it on February 1, 1929. It was passed by vote of the people at the general election of November 4, 1930, and the proclamation making it effective was signed by the governor on December 3, 1930. It appears as chapter 1, p. 3, Laws of 1931.
In determining the purpose and import of initiative measures, we may consider
". . . the common understanding of the purpose of the law, according to arguments supporting that view submitted by authority of law at the time the act was submitted to the people for their support at the general election." Denny v. Wooster, 175 Wash. 272, 27 P. (2d) 328.
We also said, in Bayha v. Public Utility Dist. No. 1, 2 Wn. (2d) 85, 97 P. (2d) 614:
"Rem. Rev. Stat, § 5422 to 5425 [P. C. § 2775 to 2778], provide for arguments for and against a proposed initiative measure, and the distribution of pamphlets containing such arguments to the voters prior to the election. Relators introduced herein exhibit No. 14, which is a pamphlet containing arguments against the public utility act, and in such argument it was contended that the act gave the commission almost unlimited power to purchase, etc., the property of utility companies. We think it must be assumed, then, that the people, in voting on this initiative, did so believing that public utility districts had the broad powers claimed in such argument. We held in Denny v. Wooster, 175 Wash. 272, 27 P. (2d) 328, that arguments made in pamphlets for and against an initiative measure might be considered by the court in determining the purpose and intent of the act."
The public utility act referred to in that quotation is the one with which we are here concerned.
The pamphlet compiled and issued by the secretary of state prior to the general election of November 4, 1930 (which was exhibit No. 14 referred to in the foregoing quotation), contained an argument for the initiative signed "Executive Committee, Washington State Grange," and "James Taylor, President, Washington State Federation of Labor." The first paragraph is as follows:
"This measure, known as the District Power Bill, was initiated by more than 57,900 signatures of registered voters. Its purpose is to conserve the water and power resources of the state for all of the people, by authorizing the establishment of public utility districts comprising a county or less in area. The method of formation of these districts is the same as for port districts, and the powers granted are the same as those now possessed by incorporated cities." (Italics ours.)
Again it says:
"This bill gives the people of rural districts the same right to develop and distribute electricity that city dwellers now enjoy." (Italics ours.)
We quote, also, the concluding paragraph:
"This measure is necessarily rather long, but the purpose is simple and clear. It is based upon existing legislation which has stood the test of the courts and is in practical operation. It will save our water resources for the people. It will give country districts the same access to our water resources that cities now have. It will insure reasonable rates, and gradually lower rates. Help yourselves and your children. Give the people of the rural districts a square deal. Vote for Initiative Measure No. 1." (Italics ours.)
To the same effect is a statement made years later, in June, 1942, by Judge, then Senator, Homer T. Bone, in the course of a joint hearing before the House and Senate subcommittees on the Columbia power administration bill:
"In 1929 I and one or two of my associates wrote a public power bill for the Washington State Grange. It has been a law referred to since as the Grange power law. Legally and technically it is known as the public-utility-district law. It authorized a county or a portion of a county to hold an election and, with the proper majority, go into the power business up to the hilt. . . . That power was as broad as the power given cities under the statutes."
It is obvious that the sponsors of this initiative had no intention of giving the public utility district powers which incorporated cities did not possess. It is likewise conceded that, if the contention of respondent be sustained, public utility districts do have powers vastly greater than those possessed by any incorporated city in the state, then or now.
In 1939, in the Bayha case, supra, resort was made to the arguments in the pamphlet issued by the secretary of state prior to the 1930 election, to aid in the construction of the statute. As we again review these arguments, it is apparent that there was a marked difference of opinion between the opponents and the proponents of the initiative, as to the powers of public utility districts under the initiative then before the people. In one of their arguments, the opponents of the measure stated:
"It would permit a public utility district in one county to acquire all the private electric systems in the other counties and to fix rates for current without any state control to insure fair and non-discriminatory rates and adequate service."
As we have pointed out, the proponents repeatedly stated or inferred that the powers were the same as those then possessed by incorporated cities.
If the proponents say that the powers of a public utility district are the same as those possessed by cities, and the opponents say that the powers are almost unlimited, and the people then approve and adopt the initiative, we cannot logically say that the people did not believe the proponents but adopted the measure because they believed the opponents and wanted it anyway. It was not our intention to take any such position when we said, in the quotation from the Bayha case, supra:
"We think it must be assumed, then, that the people, in voting on this initiative, did so believing that public utility districts had the broad powers claimed in such argument."
We were, in that case, when that language was used, passing on the specific question of whether or not an election is required as a prerequisite to the purchase of a privately owned utility by a public utility district. It had been pointed out in one of the briefs that the opponents of the initiative had argued that such a purchase could be made without a popular vote, and that the proponents had agreed. We, therefore, were discussing a proposition on which both sides had been in agreement at the time the initiative was submitted to the people.
We are here confronted with a problem of basic powers on which the opponents and the proponents were in marked disagreement. The proponents prevailed in the election, and, while no one can say why the people voted in a certain way on a certain measure, the argument is persuasive, if not conclusive, that the majority of the people had adopted the argument of the prevailing side. As Justice Mitchell said, in Denny v. Wooster, supra:
"Manifestly, the purposes and clear import of the act were and are to limit the amount of taxes to be levied in the future on real and personal property; to bring about necessary reductions in the cost of government; and to negative any thought whatever of repudiating present indebtedness represented by outstanding bonds and warrants. Such was the common understanding of the purpose of the law, according to arguments supporting that view submitted by authority of law at the time the act was submitted to the people for their support at the general election." (Italics ours.)
If, as its sponsors and coauthor state, it was their intention to give public utility districts the same rights that cities then had, we may profitably inquire as to what those rights were then understood to be.
The right of cities to acquire sources of water supply without their limits, even without the state itself, had been established. Langdon v. Walla Walla, 112 Wash. 446, 193 Pac. 1 (1920).
The right of a city to acquire an existing plant, even though it used only forty per cent of the supply, had been recognized, as had its right to sell the excess, or surplus supply, to any person within or without the city. However, the right to acquire, even by purchase, the means of distribution had or used by another city, had been denied. Spear v. Bremerton, 90 Wash. 507, 156 Pac. 825 (1916).
The right of a city, in acquiring a public utility plant, to acquire thereby property and facilities in excess of its strict present needs, and to dispose of its surplus beyond its corporate limits, had likewise been upheld. Tacoma v. Nisqually Power Co., 57 Wash. 420, 107 Pac. 199 (1910); Chandler v. Seattle, 80 Wash. 154, 141 Pac. 331 (1914); Jones v. Centralia, 157 Wash. 194, 289 Pac. 3 (1930).
However, the following quotation from Jones v. Centralia, supra, indicated that there was a limit beyond which municipalities might not go, and that the courts would restrain the construction or acquisition of an unreasonably large plant, or one for any reason entirely inappropriate to the service for which it might lawfully be designed.
"Granting that, under the statutes of this state authorizing the construction by a municipality of a power plant and system, the courts would restrain the construction of an unreasonably large plant or one for any reason entirely inappropriate to the service for which it may lawfully be designed, we find no sufficient ground in the record for interfering with the judgment of the city authorities as exercised by them in connection with the proposed power plant, and, assuming, for the purposes of this opinion, that the testimony offered by appellant had been received, we find therein no ground for reversing the judgment of the trial court."
The testimony offered and refused, to which the court referred, was to the effect that the proposed plant would yield power far in excess of the present needs of the city of Centralia.
We do not believe that anyone contends that in 1930 cities of any class had powers beyond those indicated; and, as a matter of fact, it required a decision of this court, in December of 1931, to clarify the question of the power of first- and second-class cities to sell beyond their limits. We refer to Municipal League of Bremerton v. Tacoma, 166 Wash. 82, 6 P. (2d) 587.
A public utility district coextensive with a county in its territorial limits would include' cities of various sizes and classifications within its borders. Necessarily, the problems presented would require different statutory provisions from those pertaining to cities. We so recognized in Carstens v. Public Utility Dist. No. 1, 8 Wn. (2d) 136, 111 P. (2d) 583 (1941). Consequently, what we have said with reference to the powers of cities is important only in those situations where, as here, we are confronted with the question: What was the legislative intent?
The construction we have placed on the words "without its limits" makes the powers of public utility districts entirely consistent with those of cities as they had been established in 1930, and consistent with the good faith and honesty of purpose of the sponsors of the public utility district law.
Almost all of the counties of the state have organized public utility districts. There have been numerous condemnations under the act, and frequently the awards, particularly for severance damage, have been so high that the districts have refused to take the property. The results of piecemeal condemnation have brought criticism from both the public utility districts and the power companies. It seems, however, to have been generally agreed that additional legislation was necessary to permit the public utility districts, if consolidation as provided for in the act was not practicable, to co-operate in taking over the facilities of one of the major power companies in its entirety, where that company operated in several counties. We find, for instance, in a report of the joint hearings of the House and Senate subcommittees on the Columbia power administration bill, June 3 to 19, 1942, that the proponents of that measure were stressing the necessity of the power given the Federal administration to issue revenue bonds, the proceeds of which could be used to buy the privately owned power systems in Washington and Oregon for the purpose of reselling the distribution facilities to the interested public utility districts and cities.
Referendum No. 25, referred to in all briefs, provided for a "joint commission" which would have the power to take over a power company such as Puget Sound Power & Light Company, in its entirety, and then to sell the distribution systems to the various interested public utility districts. We quite agree with the respondent that no inferences are to be drawn from the vote in the various areas on that measure. The Columbia valley administration law and referendum No. 25 have significance here only because they indicate that those who were attempting to solve the problem of severance damages and multiplicity of suits inherent in piecemeal condemnation, seemed to believe that additional legislation, Federal or state, was necessary. This additional legislation was considered necessary in 1942 and in 1944, despite the fact that there had been the suggestion, in the case of Carstens v. Public Utility Dist. No. 1, supra, of the possible existence of the broad powers now contended for. The prevalence of such beliefs would indicate that those powers have not been regarded, heretofore, as clear, certain, and unambiguous.
We now turn our attention to a section-by-section analysis of the act, with comments on each section in which there is anything that casts light upon the object of our search: ie., the authority to carry out the plan proposed, and the evidence of intention with reference thereto.
In the portion of the respondent's brief quoted above, considerable emphasis is placed on § 1, p. 3, of the act, which reads as follows:
"Section 1. The purpose of this act is to authorize the establishment of public utility districts to conserve the water and power resources of the State of Washington for the benefit of the people thereof, and to supply public utility service, including water and electricity for all uses." (Rem. Rev. Stat., § 11605 [P.P.C. § 833-1].)
and particularly on the words "water and power resources of the State of Washington for the benefit of the people thereof."
Section 2 (Rem. Rev. Stat., § 11606) implements the purpose by authorizing the establishment of municipal corporations to be known as public utility districts.
Section 3 (Rem. Rev. Stat., § 11607) provides that these districts may be coextensive with the boundaries of a county or may be an area less than an entire county, and sets forth the method of getting the formation of such a district on the ballot.
Sections 4 and 5 (Rem. Rev. Stat., § 11608, 11609) deal with elections, with the terms of public utility district commissioners, and with the local districts, within the public utility district, from which the commissioners are to be elected. These sections were amended in 1941 (Rem. Supp. 1941, § 11608, 11609) in certain particulars not material here.
Section 1 has to be construed with the sections that follow, and its sponsors say in the argument quoted:
"Its purpose is to conserve the water and power resources of the state for all of the people, by authorizing the establishment of public utility districts comprising a county or less in area."
As this excerpt from the sponsors' argument points out, the broad purpose is to be accomplished "by authorizing the establishment of public utility districts comprising a county or less in area," to be controlled by commissioners selected from districts created within the public utility district itself. There is nothing thus far in the act to indicate that there was any idea that one of these districts, com prising a county or less, was to generate electric energy for, and sell electric energy to, the entire state or a considerable part thereof. Such authority, if it exists, must be found in § 6 which, in fourteen subsections lettered (a) to (n), inclusive, sets forth the powers of the district. This section was amended in 1945, chapter 143, p. 402, § 1 (Rem. Supp. 1945, § 11610); however, subsection (m) is the only portion of the section affected by the amendment. All the pertinent subsections will be set forth.
"Sec. 6. All public utility districts organized under the provisions of this act shall have power:
"(a) To make a survey of hydro-electric power, irrigation and domestic water supply resources within or without the district, and to compile comprehensive maps and plans showing the territory that can be most economically served by the various resources and utilities, the natural order in which they should be developed, and how they may be joined and co-ordinated to make a complete and systematic whole; . . ." (Rem. Rev. Stat., § 11610(a))
It is recognized that hydroelectric power, irrigation, and domestic water supply resources required to serve any district may be without the district, and the provision for making a survey of these resources "within or without the district" is desirable and necessary. Respondent seems to argue, at p. 18 of its brief, that this subsection warrants any district in making a survey of all the hydroelectric power resources of the state in order that they may be joined and co-ordinated to make a complete and systematic whole.
The things that are to be joined and co-ordinated are the hydroelectric power, irrigation, and domestic water supply resources. It will be noted that the phrase "within or without the district," as here used, refers only to the various resources that are to be surveyed, and not to the "territory that can be most economically served." We would be compelled to write in another "within or without the district," thus making the subsection read, "showing the territory within or without the district that can be most economically served by the various resources and utilities," if we were to give this provision the full scope for which respondent contends. It seems too clear for argument that the territory-referred to is the territory within the public utility district.
"(b) To construct, condemn and purchase, purchase, acquire, lease, add to, maintain, operate, develop and regulate all lands, property, property rights, water, water rights, dams, ditches, flumes, aqueducts, pipes and pipe lines, water power, leases, easements, rights of way, franchises, plants, plant facilities and systems for generating electric energy by water power, steam or other methods, plant, plant facilities and systems for developing, conserving and distributing water for domestic use and irrigation, buildings, structures, poles and pole lines, and cables and conduits and any and all other facilities, and to exercise the right of eminent domain to effectuate the foregoing purposes or for the acquisition and damaging of the same or property of any kind appurtenant thereto, and for the purpose of acquiring the right to make physical connection with plants and plant facilities of any and all persons, corporations and municipalities . . ." (Rem. Rev. Stat., § 11610(b))
This subsection further provides that the right of eminent domain shall be exercised by the same procedure as by law for incorporated cities and towns. There is a proviso:
"That no public utility owned by a city or town shall be condemned hereunder, and none shall be purchased without submission of the question to the voters of the utility district.
This is the proviso that was being construed in the Bayha case, supra.
This subsection does not contain the words "within or without the district" or "within or without its limits," and is important only as it ties condemnation procedure to that provided for incorporated cities and towns.
"(c) To construct, purchase, condemn and purchase, acquire, add to, maintain, conduct and operate water works and irrigation plants and systems, within or without its limits, for the purpose of furnishing such public utility district, and the inhabitants thereof, and any other persons, including public and private corporations within or without its limits, with an ample supply of water for all uses and purposes, public and private, including water power, domestic use and irrigation, with full and exclusive authority to sell and regulate and control the use, distribution and price thereof." (Rem. Rev. Stat., § 11610(c)) (Italics ours.)
This subsection apparently is intended to give a district the same rights, with reference to "water works and irrigation plants and systems, within or without its limits " that are given, with reference to electric current, by subsection (d).
Respondent claims no authority under this subsection, and it is material only as it bears upon the purpose and intent of the enactment. If respondent possesses the right claimed under subsection (d), then it has an equal right, under (c), to acquire and operate waterworks and irrigation systems in all parts of the state.
Under this subsection, a public utility district has a right to acquire and operate waterworks and irrigation plants and systems, within or without its limits, for the purpose of furnishing such public utility district and the inhabitants thereof, and any other persons, including private and public corporations, within or without its limits, with an ample supply of water.
The first "within or without its limits" refers to providing the source of supply, and there is no question as to the right of a public utility district to go beyond its limits to acquire or establish a water supply suitable for its needs. A strict construction of the statute, as written, would limit the sale without the district to public and private corporations. A comma after "corporations," which is inserted in subsection (d), is omitted in this subsection, with the result that it reads:
". . . for the purpose of furnishing such public utility district, and the inhabitants thereof, and any other persons, including public and private corporations within or without its limits, with an ample supply of water for all uses and purposes, ."
The act, however, is to be liberally construed to carry out its purpose, and the purpose unquestionably is that a public utility district, after the accomplishment of the purpose first indicated, that is,
". . . furnishing such public utility district, and the inhabitants thereof, . . . with an ample supply of water for all uses and purposes . . . "
may, as an incident thereto, furnish
". . . any other persons, including public and private corporations [,] within or without its limits, with an ample supply of water for all uses and purposes . . . "
Note that the only territory to which it is the purpose to furnish water is "such utility district"; there is no purpose, expressed or implied, to serve any other area. Beyond, or without that area, the purpose is to furnish "persons, including public and private corporations, with water." Unless furnishing water to persons "without its limits" is construed as being incidental and subordinate to the primary purpose of furnishing water to the district and the inhabitants thereof, no mention need have been made of the district or its inhabitants. The measure need only have said, "for the purpose of furnishing anybody, anywhere, with an ample supply of water."
"(d) To purchase, within or without its limits, electric current for sale and distribution within or without its limits, and to construct, condemn and purchase, purchase, acquire, add to, maintain, conduct and' operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam or other methods, within or without its limits, for the purpose of furnishing said public utility district, and the inhabitants thereof and any other person, including public and private corporations, within or without its limits, with electric current for all uses . . . " (Rem. Rev. Stat., § 11610(d))
This subsection, further, removes public utility districts from the jurisdiction and control of the director of public works and the division of public utilities; gives the district the right to deal in all kinds of accessories and equipment; and authorizes contracts to sell its surplus electric energy or water to privately owned public utilities, with the proviso that such contracts
" . . . shall not extend over a longer period than three (3) years: Provided, That it must at all times first make adequate provision for the needs of the district, both actual and prospective." (Rem. Rev. Stat., § 11610(d))
The first power granted by this subsection, namely, "to purchase, within or without its limits, electric current for sale and distribution within or without its limits," comes nearer to being susceptible of the broad interpretation urged by the respondent than any other language in the act. It says nothing about purchase for the purpose of furnishing the district with electric current. We do not believe that even this apparently unlimited right to purchase, and to sell the current so purchased, is consistent with the act itself or the purpose thereof; but, in any event, it is of no service to the respondent, as it deals only with the purchase of power and its resale, and not with the purchase and acquisition of the facilities for generating electric current.
The respondent must rely upon the next power granted in this subsection, that is:
". . . to construct, condemn and purchase, purchase, acquire, add to, maintain, conduct and operate works, plants, transmission and distribution lines and facilities for generating electric current, . . . within or without its limits, for the purpose of furnishing said public utility district, and the inhabitants thereof and any other person, including public and private corporations, within or without its limits, with electric current for all uses, ." (Italics ours.)
No additional powers, except as above indicated with reference to purchase and resale, are granted here with reference to "electric current" than were granted, by subsection (c), with reference to "water works and irrigation plants and systems."
Under this subsection, a public utility district has the right to acquire and operate facilities for generating electric current within or without its limits, for the purpose of furnishing such public utility district and the residents thereof, and any other persons, including private and public corporations, within or without its limits, with electric current for all uses.
The "within or without its limits," which refers to the source of supply, needs no comment, as there is no question as to the right of a public utility district to go beyond its limits to acquire or establish a source of supply suitable' for its needs. The power to purchase, acquire, and operate, is for the purpose of furnishing said public utility district, and the inhabitants thereof, with electric current for all uses. No other area and the inhabitants of no other area are mentioned. Beyond, or without that area, the purpose is to furnish persons, to wit, "any other person, including public and private corporations, within or without its limits," with electric current for all uses.
It is apparent to us that the purpose of furnishing power to persons, including public and private corporations, beyond its limits, was intended to be incidental and subordinate to the primary purpose of furnishing electric current to the district and its inhabitants. Any other interpretation would have made it unnecessary to refer to the district or its inhabitants, and would leave those words without meaning or significance.
The limitation on the duration of any contract which the district might make to supply privately owned utilities, and the proviso that, in the event it makes such contracts, it must first make adequate provision for the needs of the district, both actual and prospective, further supports that interpretation. There is no requirement that adequate provision for the needs of persons without the district shall be made before the district can make such a contract: adequate provision is required only for the "needs of the district."
" (e) . . . to take, condemn and purchase, purchase, and acquire any and all public and private property . . . necessary or convenient, and, in connection with the construction, maintenance or operation, of any such utility or utilities, to acquire by purchase or condemnation and purchase the right to divert, take, retain and impound and use water from or in any lake or watercourse, . to erect and build within or without its limits, dams or other works across any river or watercourse, . . . " (Rem. Rev. Stat., § 11610(e)) (Italics ours.) .
Various other rights with reference to lakes, rivers, and other watercourses are granted; and it is provided that
". . . any such public utility district shall have the right to acquire by purchase or condemnation and purchase, or otherwise, any lands, property or privileges necessary to be had to protect the water supply of such public utility district from pollution . . . " (Rem. Rev. Stat., 111610(e))
It is provided, also, that:
"Such public utility district shall have power to build and maintain inter-tie lines connecting its power plant and distribution system with the power plant and distribution system owned by any other public utility district, or municipal corporation, or to connect with the power plants and distribution systems owned by any municipal corporation in the district, and from any such inter-tie line to sell electric energy to any individual, or public utility district, or any city or town, or other corporations, public or private, and, by means of transmission or pole lines, to conduct electric energy from the place of production to the point of distribution, and to construct and lay said aqueducts, pipe or pole lines, and transmission lines along and upon public highways, roads and streets, and to condemn and purchase, purchase or acquire, lands, franchises and rights of way necessary for the same." (Rem. Rev. Stat., 111610(e))
Attention was directed, in oral argument, to the fact that "within or without" was used nine times in the statute, as indicating an intent consistent with respondent's interpretation. We have previously discussed its usage on seven occasions, and the "within or without" set forth in the first portion of subsection (e), quoted above, is the eighth and last time it is used in the original act, and its use there certainly adds nothing to respondent's argument. It is conceded that public utility districts frequently must go beyond their limits to erect and build dams for the purpose of impounding water to provide an adequate supply of water for the use of the district or for generating hydroelectric power. The ninth use of "within or without" is in the 1945 amendment.
One provision in this subsection warrants special consideration. It is stated that a district may acquire, purchase, or condemn and purchase
". . . any lands, property or privileges necessary to be had to protect the water supply of such public utility district from pollution . . . " (Italics ours.)
The exercise of this power would protect the inhabitants of the district, and any other person, within or without the district, who might be served from the same water supply, from the dangers of pollution. However, if respondent's position is correct and such district has authority to acquire various sources of supply and, then, to serve distant communities, the authority given by this subsection is not broad enough to protect such sources of supply from pollution. This, again, points to the fact that it was intended that any person supplied without the limits must be supplied from the same source as the district and the inhabitants thereof.
The intertie provision contemplates connection with the power plants or distribution systems of other public utility districts or municipal corporations. We do not understand that respondent is basing any claim of authority on this provision.
" (f) To contract indebtedness or borrow money . . . and to issue general obligation or utility bonds therefor, . . . to purchase with surplus funds, local utility district bonds . . . and sell the same . . . and to create a revolving fund to insure the prompt payment of all local utility district bonds." (Rem. Rev. Stat., § 11610 (f))
The local utility districts which would issue the bonds herein provided for, come into existence under the powers contained in subsection (1).
"(g) To . . . levy . an annual tax on all taxable property within such public utility district not exceeding two mills in any one year, exclusive of interest and redemption for general obligation bonds. . . . " (Rem. Rev. Stat., § 11610(g))
It also provides budget procedure, and for warrants to be issued in anticipation of revenue.
" (h) To enter into any contract with the United States Government, or any state, municipality or other utility district, or any department of those governing bodies, for carrying out any of the powers authorized by this act." (Rem. Rev. Stat., § 11610(h))
Respondents rely somewhat upon this grant of power, but it has equal applicability, and there is greater necessity for it, under the interpretation which we have placed on subsections (c) and (d).
"(i) To acquire by gift, devise, bequest, lease or purchase, real and personal property necessary or convenient for the purposes of the district or any local district therein." (Rem. Rev. Stat., § 11610 (i)) (Italics ours.)
The "district," as used here and throughout this act, is thought of as a geographic area, and reference is made to "any local district therein."
"(i) To acquire by gift, devise, bequest, lease or purchase, real and personal property necessary or convenient to . . . appoint a manager [and fix his salary] . . ."
(Rem. Rev. Stat., § 11610 (j))
The duties of the manager take more than a page of the session laws. Among other things, it is provided that he
". . . shall be the chief administrative officer of the public utility district, and shall have control of administrative functions of the district, and shall . . . keep the commission fully advised as to the financial condition and needs of the district. ." (Rem. Rev. Stat., § 11610 (j).) (Italics ours.)
" (k) To sue and be sued in any court of competent jurisdiction; Provided, That all suits against the public utility district shall be brought in the county in which the public utility district is located. No suit for damages shall be maintained against such public utility district except on the basis of a claim therefor filed with the commission of such district complying in all respects with the terms and requirements for claims for damages filed pursuant to general law against cities of the second class." (Rem. Rev. Stat., § 11610(k)) (Italics ours.)
This subsection indicates that no extensive or widespread operation beyond the limits of the district was in the minds of those who drafted this legislation, or of the people who voted for it. Certainly it was not contemplated that a situation would develop where residents of King and Pierce counties, constituting a great majority of a district's customers and employees, would have to file their claims and wage their suits in Skagit county.
"(1) . to establish and define the boundaries of local assessment districts to be known as Local Utility District No............. for the distribution . of water for domestic use and (or) irrigation and (or) electric energy . . (Rem. Rev. Stat., § 11610(1))
This subsection also provides for special assessments on property specially benefited, and for determination of the proportion of the costs of an improvement that "shall be borne by such local improvement district, and what proportion of the cost, if any, shall be borne by the entire public utility district."
" (m) It is, and shall be lawful for any public utility district organized hereunder to sell and convey all the works, plants, systems, utilities and properties authorized by this act and owned by it after proceedings had as required by sections 9512, 9513 and 9514 of Remington's Compiled Statutes of Washington: Provided, That three-fifths (%) of the voters voting for such sale, in lieu of a majority shall be necessary. . . ." (Rem. Rev. Stat., § 11610 (m))
Considerable reliance is placed by respondent on an amendment to this section by the 1945 legislature, which made several changes in the subsection, the principal one of which was the addition of a second proviso, reading:
"Provided further, That any public utility district may sell, convey, lease or otherwise dispose of all or any part of the property owned by it, located outside its boundaries, to any other public utility district, city, town or other municipal corporation without the approval of the voters; or may sell, convey, lease or otherwise dispose of, to any person, firm, corporation or public body, any part either within or without its boundaries, which shall have become unserviceable, inadequate, obsolete, worn out or unfit to be used in the operations of the system and which is no longer necessary, material to and useful in such operations without the approval of the voters. . . . " (Laws of 1945, chapter 143, p. 402, § 1; Rem. Supp. 1945, § 11610 (m)) (Italics ours.) .
This proviso makes possible the resale of the Puget Sound properties acquired by the Skagit district, without submitting the matter to a vote; it does not, in any way, shed any light on the question of the intention of the people, acting as a legislature, in the year 1930. The ninth appearance of "within or without" is of no consequence.
While this amendment gives authority to sell and convey certain kinds of property without the approval of the voters, it still does not give a public utility district authority to acquire or operate a "vast system operating in eighteen counties."
" (n) The commission of each public utility district may adopt general resolutions to carry out the purposes, objects and provisions of this act." (Rem. Rev. Stat., § 11610 (n))
This concludes the enumeration of powers set forth in § 6.
Section 7 (Rem. Rev. Stat., § 11611) provides that acquisition of any public utility shall be in conformity with a system or plan adopted by the commission, which must be approved by the electors if the general obligation indebtedness is to be increased beyond certain limits. It sets forth, in detail, provisions relative to the sale, issuance, and payment of bonds. Certain new provisions, not material to our consideration here, were made in 1941, chapter 182, p. 518 (Rem. Supp. 1941, § 11611-1-11611-13), and in 1945, chapter 143, p. 414, § 2 (Rem. Supp. 1945, § 11611-3).
Section 8 (Rem. Rev. Stat., § 11612) deals with compensation of commissioners, the organization of the commission, recording of proceedings, calling for bids, reviewing bids, awarding contracts, fixing wage scales, and provides that:
"The commission, in fixing such minimum scale of wages shall fix the same as nearly as possible to the current prevailing and going wages within the district for work of like character." (Rem. Rev. Stat., § 11612.)
The applicability of the "current prevailing and going wages within the district" to contracts in remote and more populous areas, was likewise clearly not within the contemplation of the people, acting as a legislature.
Section 9 (Rem. Rev. Stat., § 11613) makes the county treasurer of the county in which is located any public utility district, the treasurer of the district; provides for special funds; provides that all such public utility district funds shall be deposited in the county depositories.
Section 10 (Rem. Rev. Stat., § 11614) provides that two or more public utility districts may be consolidated into one, and provides for the addition of new territory to any public utility district. This appears to be the section of the act that was intended to make possible such acquisitions as the respondent seeks to effectuate under the provisions of § 6 (d). Certain phases of a consolidation under this section involve the inconvenience and uncertainty of a popular vote.
Section 11 (Rem. Rev. Stat., § 11615) states that invalidity of any part of the act shall not affect the balance, and that:
"The rule of strict construction shall have no application to this act, but the same shall be liberally construed, in order to carry out the purposes and objects for which this act is intended.
"When this act comes in conflict with any provision, limitation or restriction in any other law, this act shall govern and control." (Rem. Rev. Stat., § 11615.)
Much emphasis has been placed upon the rule of liberal construction herein provided for. We already have indicated, under the discussion of § 6(c), that we are prepared to give this act a liberal construction, "to carry out the purposes and objects for which this act is intended." Respondent asks, not a liberal, but a revolutionary construction, to carry out purposes and objects for which the act was not intended.
Section 12 (Rem. Rev. Stat., § 11616) provides that the act shall not be deemed as repealing other acts relating to construction and operation of public utilities, irrigation, or water districts, or other municipal corporations, but as supplemental thereto. It provides that the district shall not include any municipal corporation which owns or operates all the utilities therein authorized. It also forbids taxing of any irrigation or water district or other municipal corporation, to pay for any utility if it owns a utility of like character.
Looking now at the act as a whole, we find that it concerns itself with the problems of supplying water for irrigation and domestic use, and electric current, for public utility districts comprising a county or less. It makes detailed provision for the development of smaller "local utility districts" within such public utility district. There is nothing (not even the isolated words relied upon by the respondent, when read with the other purposes of acquisition) which indicates that the act was intended to give public utility districts the power to engage in business beyond their limits on the grandiose scale here contemplated, and there are numerous provisions that are inconsistent with any such idea.
Respondent has reiterated again and again, in its brief and in oral argument, the words "within or without its limits," as if those words must, in themselves, be decisive of the case. There is no magic in words. A phrase from an enactment cannot be separated from its context, divorced from the other sections of the act, and then be utilized to change the very purpose of the act itself. There is, in the words "within or without," no open sesame to a new interpretation of the public utility district law, and no magical abracadabra that enables any district to go into the electric power business on the basis here contemplated. As we have but recently said:
"A thing within the letter of the law, but not within its spirit, may be held inoperative where it would lead to an absurd conclusion." Discargar v. Seattle, 25 Wn. (2d) 306, 171 P. (2d) 205.
We are not unmindful of the cases construing the statutes of other states, and particularly those of Oregon, Nebraska, and Kansas, which are so strongly relied upon by the respondent.
Article XI, § 12, of the Oregon constitution, provides that people's utility districts "may sell, distribute and/or otherwise dispose of water, water power and electric energy within or without the territory of such districts." Section 114-245, Oregon Compiled Laws, as amended by chapter 287 of the Laws of 1941, gives such utility districts that power in the exact words of the constitutional provision. Answering the contention that sale and distribution without the district should be only incidental to the major operations within the district, the Oregon supreme court, in Central Lincoln Peoples' Utility Dist. v. Smith, 170 Ore. 356, 133 P. (2d) 702, quoted the constitution and the statute and said:
"We are unable, under the law, to place such a restriction upon the operations of a utility district. The authority of a utility district to operate 'within or without' its boundaries is conferred upon it in plain, simple, unambiguous language. There is no need of construction when the language is reasonably susceptible of only one meaning."
That case and other Oregon cases, such as Ollilo v. Clatskanie Peoples' Utility Dist., 170 Ore. 173, 132 P. (2d) 416, are easily distinguished, because, entirely aside from the fact that we have in those cases no question of legislative history and intent, we do not have a statement in the act itself, as we do in our own statute, that the supply of electric current is being acquired "for the purpose of furnishing such public utility district, and the inhabitants thereof," with electric current for all uses.
The other cases relied upon by the respondent are city cases. Respondent quotes at length from Curtis v. Maywood Light Co., 137 Neb. 119, 288 N. W. 503. The question there presented was the right of the city of Curtis to acquire an electric plant in the village of Maywood, and to operate it. The court held that it had the right, under the express terms of the Nebraska statute, saying:
"The exact words of the statute empower the city of Curtis to extend its electric light and power system 'beyond •its boundaries, and for that purpose (it) is hereby authorized and empowered to construct, purchase, lease, or otherwise acquire, and to maintain, improve, extend, and operate electric light and power plants, distribution systems and transmission lines, outside of the boundaries of such city, . . . for such distance and over such territory within this state as may be deemed expedient.' But, not satisfied with an absolutely unconditional grant of power, which manifestly and necessarily includes the right to operate within the domain of other cities or villages, the legislature has added thereto the words, 'The provisions of this act shall be deemed cumulative and the authority herein granted to cities, villages . . . shall not be limited or made inoperative by any existing statute.' In this connection it may be said that, obviously, statutes are the sole source of municipal rights and powers. In addition, section 2, quoted above, necessarily contemplates that one city may carry on the business of selling electrical current within the corporate boundary of another 'upon such terms and conditions as may be agreed upon between the contracting cities.' "
There is enough of the Nebraska statutory provisions quoted in the opinion to indicate that there is a direct, explicit, and detailed enumeration of what the city could do beyond its boundaries.
The statute did not stop with saying that the city could operate without its boundaries, but it enumerated what it could do, and it said how far— "for such distance or over such territory within this state as may be deemed expedient." The difference in wording and in the purpose of the Nebraska statute there construed and the Washington statute here construed, is so apparent that discussion is unnecessary.
The case of Kansas Gas & Electric Co. v. McPherson, 146 Kan. 614, 72 P. (2d) 985, also relied on by respondent, is not apposite for two reasons: First, the Kansas statutes are direct and explicit and have no resemblance to the Washington statute now under consideration. We quote the following sections from the General Statutes of Kansas, 1935:
"12-806. . . . All cities of the state owning their own electric-light, heat or power plant are hereby authorized and empowered to furnish electric light, heat or power to districts lying outside of the limits of such cities, and charge for such service such rates as may be provided by ordinance." (Italics ours.)
"12-808. . . . Any city operating waterworks, fuel, power, or lighting plant may sell and dispose of water, fuel, power or light to any person within or without said city." (Italics ours.)
"12-817. . . . That the governing body of any city acquiring a waterworks plant, or part thereof, may make a contract with any person, city or corporation, located within or without this state, for the purchase and supplying of water for all purposes to such city for its own use or to supply all other consumers." (Italics ours.)
"12-821. . . . Any city operating any waterworks, fuel, power or lighting plant or sewer system may extend its mains, transmission lines or pipe lines within or without the city by construction or purchase, when applications have been made and agreements entered into by persons along the proposed extension that will produce a revenue in the judgment of the governing body, sufficient to pay interest on the cost of the extension, and the operating cost of the product or service furnished." (Italics ours.)
These statutes, which were referred to by the supreme court of Kansas in its decision, are obviously not comparable to our own.
A second basis of distinction is that the Kansas statutes construed in that decision are concerned with the powers of a city owning or operating its water, electric, or heating system, to extend its services. We are here concerned with the power to acquire and operate. If Skagit district had been authorized to, and had already acquired and was now operating the Puget Sound properties, and it was a question as to whether it could extend its lines to serve certain people "without its limits," we would have a comparable factual situation to that presented by the Kansas case.
This opinion has been unduly extended by reason of the fact that we have felt it desirable to examine the public utility district law in detail, that the legislative intent might be ascertained, not from the literal meaning of the words "within or without," but from the text of the statute as a whole, interpreted in the light of the general object and purpose of the act, and its legislative history. Much that has been said has been by way of explanation and argument, and, therefore, we summarize the points that are here decided.
The primary purpose of the power granted to a public utility district by subsection (d) of § 6, chapter 1, Laws of 1931 (Rem. Rev. St at., § 11610 (d)) is to furnish the district, and the inhabitants thereof, with electric current for all uses, and, as an incident thereto, it may furnish any other persons, including public and private corporations, within dr without its limits, with such current for all uses.
The right given, under subsection (d), to construct, condemn and purchase, purchase, and acquire plants, transmission and distribution lines, and facilities for generating electric current, is subject to the limitation that the facilities acquired must not be unreasonably large or entirely inappropriate for the accomplishment of that primary purpose.
The Skagit district has approximately five per cent of the customers and approximately five per cent of the power consumption of the Puget Sound integrated system. If this plan were approved, Skagit district would furnish power, at wholesale, to districts which have six times as many customers and which use six times as much power. It would be furnishing power, at retail, to an "unorganized" area with more than nine times as many customers and using more than ten times as much power.
We quoted testimony to the effect that it is necessary for Skagit district to acquire the entire system, because it is integrated. The figures show that it is planned to disintegrate it immediately, by cutting off 31,365 customers (there are only 12,027 customers in Skagit district), who used 131,936,640 kilowatt-hours in 1944 (only 71,511,955 kilowatt-hours used in Skagit district during that period), and by disposing of seven small generating plants.
We are somewhat skeptical as to Mr. Beck's testimony that the Baker river plant, which, operated at a maximum demonstrated capacity, would produce 360,036,000 kilowatt-hours per year, would not be able to supply Skagit district's needs (71,511,955 kilowatt-hours sold in 1944), even during periods when streams are frozen. Certainly the district could safeguard against any such contingencies at a comparatively small expense, by taking advantage of the power given it to make interties with other systems.
The most that could be claimed for Mr. Beck's testimony is that the Baker river and Rock island plants are both needed to supply the present and future needs of Skagit district. Skagit district may be warranted in acquiring both of these generating plants to adequately meet present and future ascertainable needs of the district and the inhabitants thereof, but it is impossible to envision any necessity for purchasing the Shuffleton, White river, Electron, Snoqualmie, and Georgetown plants for the purpose of serving that district or its inhabitants. That would not be an acquisition' in advance of future needs; it would be acquiring facilities which are, and would be, totally unnecessary, at least so far as the discernible future is concerned.
The evidence clearly demonstrates that the facilities here sought to be acquired are unreasonably large and entirely inappropriate for the accomplishment of the primary purpose of the Skagit district.
The order of the trial court will be reversed, and the superior court of Skagit county is directed to enter an order denying the application for the writ of mandate applied for by the respondent.
Millard, Steinert, and Simpson, JJ., concur.
(The Georgetown steam plant is regarded as standby equipment and is kept in cold reserve. It has a nominal capacity oí 23,000 kilowatts.)