Opinion ID: 2307095
Heading Depth: 1
Heading Rank: 3

Heading: The Effect of the Creation of the Municipal Utilities Authority

Text: Both the Board and the Appellate Division held, as we have earlier stated, that the creation of the Authority had no effect on this controversy because it was not in existence at the time South Lakewood sought the franchise from the Township nor until three weeks after it filed its petition with the Board. South Lakewood does not here strongly urge this view. It is obvious to us that both lower tribunals were wrong in taking this position. The situation is substantially similar to one in which state or local legislation affecting a cause is altered during the litigation. The law is settled that when such a change occurs, the disposition of the case is determined by the latest enactment. S & L Associates, Inc. v. Washington Township, 35 N.J. 224, 227 (1961); Borough of Little Ferry v. Bergen County Sewer Authority, 9 N.J. 536, 547 (1952), cert. denied, 344 U.S. 865, 73 S.Ct. 105, 97 L.Ed. 670 (1952). Here the Township's legislative creation of the Authority and its activation shortly after South Lakewood's petition was filed made a very substantial change in the whole scene, which must be given full consideration and appropriate effect, especially in the light of the positive declaration of the municipal utilities authority law, N.J.S.A. 40:14B-61, that no facilities for the distribution of water within an authority's district shall be constructed unless the authority gives its consent thereto. Assuming this to be so and upon the thesis that the Authority here refused its consent to South Lakewood's extension in the Township, the Board urges that it nonetheless has the power to override the refusal. Viewing this case as an application for that purpose, it asserts that its decision should stand. The argument in support of that claimed result follows the same line as that just discussed with respect to the power to override the refusal of a municipal governing body to grant a franchise, i.e., the 1966 amendment to the street use section, N.J.S.A. 48:19-17, bestows the power. As far as that argument is concerned, we disagree for the reasons previously given. (We do not reach the question whether an authority's refusal can be reviewed judicially by an action in lieu of prerogative writ; see footnote (5), supra. ) This leads to the remaining issue of what effect should have been given by the Board (and the Appellate Division as well) to the creation and interposition of the Authority. The answer seems plain, and derives from the extent of the Board's basic jurisdiction. It is thoroughly settled in this state that the Legislature has not conferred any jurisdiction in the Board to regulate water utilities operated by a municipality under powers granted by N.J.S.A. 40:62-47 et seq., as distinct from those privately owned, except in certain instances where such a municipality furnishes water to the residents of another. Woodside Homes, Inc. v. Town of Morristown, 26 N.J. 529, 537-539 (1958); In re Borough of Glen Rock, 25 N.J. 241 (1957). The same limitation of jurisdiction must apply to municipal utilities authorities created pursuant to N.J.S.A. 40:14B-1 et seq., which permits and encourages ( see N.J.S.A. 40:14B-2, Policy) municipalities to create independent agencies to provide municipal water and sewer services. Such an authority is the alter ego of the municipality with broad delegated powers to supply these essential public needs. Jordan v. Zidel, 40 N.J. 244, 247-248 (1963); Retsky v. Municipal Utilities Authority, 91 N.J. Super. 74, 79 (Law Div. 1966). In effect, the enabling statute confers a legislative franchise upon a municipal authority to furnish water and sewer service, exclusive except with its consent, to the municipal area specified in the creating ordinance. It is significant that, so far as we can see, the municipal utilities authority law gives the Board no power with respect to such an authority except when it proposes to sell water at retail in another municipality (not here involved). N.J.S.A. 40:14B-20(6). In the light of all this, it certainly follows that the Board has no jurisdiction to deal with the refusal of an authority to consent to an extension of service into its territory by a private utility and that, when the Board here learned of the existence of the Authority, it should have terminated the proceeding before it and dismissed South Lakewood's petition. The judgment of the Appellate Division and the order of the Board of Public Utility Commissioners are reversed and the petition of South Lakewood Water Company to the Board is dismissed. For reversal  Chief Justice WEINTRAUB and Justices JACOBS, FRANCIS, HALL and SCHETTINO  5. For affirmance  None.