Opinion ID: 2638285
Heading Depth: 2
Heading Rank: 2

Heading: Public Use and Necessity

Text: ¶ 30 Once a government entity passes a resolution or ordinance, as appropriate to that entity, authorizing a condemnation action, it must file a petition in superior court requesting a decree of public use and necessity. RCW 8.12.050. The petition must include a copy of the resolution or ordinance and contain a reasonably accurate description of the property to be condemned. RCW 8.12.060. ¶ 31 A decree of public use and necessity may be entered for a proposed acquisition only when the use in question is really a public use, public interests require it, and the property to be acquired is necessary to facilitate the public use. Hemenway, 73 Wash.2d at 138, 437 P.2d 171.
¶ 32 The question of whether the use is really a public use is a judicial determination. Seattle Popular Monorail, 155 Wash.2d at 629, 121 P.3d 1166; WASH. CONST. art. I, § 16. [19] Washington courts have repeatedly held that condemnation of private property by public utilities to generate electric power is a public use. Dickgieser v. State, 153 Wash.2d 530, 537, 105 P.3d 26 (2005); State ex rel. Wash. State Convention & Trade Ctr. v. Evans, 136 Wash.2d 811, 821, 966 P.2d 1252 (1998); Pub. Util. Dist. No. 1 of Chelan County v. Wash. Water Power Co., 43 Wash.2d 639, 643, 262 P.2d 976 (1953); State ex rel. Chelan Elec. Co. v. Superior Court, 142 Wash. 270, 272, 253 P. 115 (1927). In addition, we have expressly held that a finding of public use is not defeated where alleged private use is incidental to the public use. Evans, 136 Wash.2d at 822, 966 P.2d 1252; City of Tacoma v. Nisqually Power Co., 57 Wash. 420, 428, 107 P. 199 (1910). ¶ 33 NAFTZI's primary contention is that the use is private because PUD only condemned the property to avoid the economic burden of removing the generators and to increase revenues by capitalizing on price fluctuations in the energy market. PUD has consistently argued that its primary purpose in installing the generators and condemning the property was to provide energy to its customers. At the public use and necessity hearing, PUD presented extensive evidence that the generators were installed to act as a hedge against future market increases and that the generators would enable PUD to satisfy the energy needs of its customers. [20] The mere fact that PUD would be able to increase revenues by installing the generators did not convert the use into a private one. [21] ¶ 34 In addition, PUD's plans to sell excess electric power generated did not render the income from those sales private, even if it was sold on an energy market to noncustomers. Wash. Water Power, 43 Wash.2d at 642, 262 P.2d 976 (affirming that Chelan County Public Utility District's sale of electric power to ` public and private corporations, within or without its limits ' was a public use even though the condemnation allowed the district to acquire excess capacity) (quoting Chelan County Superior Court Decree of Public Use and Necessity); see also State ex rel. Chelan Elec. Co. v. Superior Court, 142 Wash. 270, 272, 253 P. 115 (1927) (concluding that all uses of electric power are public uses, irrespective of the user). It is immaterial whether PUD earns revenue by selling electric power directly to its customers or indirectly on an energy market. Because PUD is a public utility, any increase in PUD's revenue is still public revenue. If a public utility uses private property it obtained through condemnation to generate revenue, places the revenue into an account within its control, and uses the revenue for public purposes, the purpose of the property remains public, not private. Dickgieser, 153 Wash.2d at 537-38, 105 P.3d 26. ¶ 35 We conclude that the condemnation was for a public use.
¶ 36 A determination of necessity is a legislative question. Seattle Popular Monorail, 155 Wash.2d at 629, 121 P.3d 1166; Miller, 156 Wash.2d at 411, 128 P.3d 588. A declaration of necessity by a legislative body is conclusive in the absence of proof of actual fraud or arbitrary and capricious conduct, as would constitute constructive fraud. [22] Seattle Popular Monorail, 155 Wash.2d at 629, 121 P.3d 1166. A condemnation of private property is necessary if it is `reasonabl[y] necessary' under the circumstances. Id. at 636 n. 19, 121 P.3d 1166. Challenges to necessity are generally raised when excess land is condemned or when the condemnation is actually for a private use. Evans, 136 Wash.2d 811, 966 P.2d 1252 (holding condemnation of property needed for convention center lawful even though an incidental private use would ensue). ¶ 37 Courts do not disturb a determination of necessity if it was reached honestly, fairly, and upon due consideration of the facts and circumstances. City of Tacoma v. Welcker, 65 Wash.2d 677, 684, 399 P.2d 330 (1965). Even where the decision was motivated in part by improper considerations, a reviewing court will not vacate if `the proposed condemnation demonstrates a genuine need and . . . the condemnor in fact intends to use the property for the avowed purpose.' Miller, 156 Wash.2d at 418, 128 P.3d 588 (alteration in original) (quoting In re Petition of Port of Grays Harbor, 30 Wash.App. 855, 864, 638 P.2d 633 (1982)). ¶ 38 Because the trial judge already weighed the evidence supporting PUD's determination of necessity, we review the record only to determine whether the court's factual findings are supported by substantial evidence. We view substantial evidence in the light most favorable to the respondent. State v. Hill, 123 Wash.2d 641, 644, 870 P.2d 313 (1994). ¶ 39 NAFTZI argues that PUD failed to demonstrate necessity because it did not prove a shortage of energy in the area. NAFTZI also contends that the evidence presented at the condemnation hearing demonstrated that PUD's sole purpose in acquiring the generators was to sell the generated power at inflated prices. PUD disputes NAFTZI's characterization of its purpose. PUD first cites Governor Locke's proclamations and energy supply alert orders as evidence of an emergency. PUD also points to Resolution 7643, which stated that the purpose of the condemnation was operation of a facility to generate electrical current and furnish it to PUD's customers. In addition, PUD produced evidence at the condemnation hearing of fluctuations in the demand for electric power, the tentative nature of its forecasts regarding hydroelectric power, and the backup role the diesel facility serves in cases of power interruption from other sources. ¶ 40 As NAFTZI asserts, the record suggests that PUD's decision to install the generators was motivated, at least in part, to maximize profits from energy sales. [23] However, the record also contains ample evidence that the generators were purchased in response to a real energy crisis and that PUD was acting primarily to protect its ability to provide energy to its customers. Moreover, NAFTZI failed to present any evidence of actual fraud or arbitrary and capricious conduct amounting to constructive fraud by PUD. Absent proof of fraud or arbitrary and capricious conduct, we view PUD's declaration of necessity as conclusive. Accordingly, we affirm the Court of Appeals.