Opinion ID: 1790923
Heading Depth: 2
Heading Rank: 1

Heading: whether tvepa exceeded its statutory authority by acquiring an interest in desoto gas company.

Text: ¶ 13. In 1936, Congress created the Rural Electrification Act of 1936 (REAct), codified at 7 U.S.C. § 901 et seq., which empowered the REA, a federal agency, to provide rural America with low cost electricity and telephone service by lending funds and technical assistance to rural electric and telephone systems. In 1936, the Mississippi Legislature passed the Electric Power Association Act in order to enable the its rural citizens to benefit from the federal law. 1936 Miss. Laws ch. 184. ¶ 14. In 1970, after an attempt to terminate the REA loan program by President Nixon, Congress created a federal policy that rural electric and telephone systems should be encouraged and assisted to develop their credit needs from their own financial organizations and other sources... 7 U.S.C. § 930. At the same time, however, other REA regulations prohibited REA borrowers from investing more than 3 percent of their funds in non-Act purposes, which entailed purposes other than providing electricity. In 1987, responding to this limitation Congress amended the REAct adding 7 U.S.C. § 940b which allowed borrowers under the REA loan program to invest its own funds or make loans or guarantees not in excess of 15 percent of its total utility plant for `non-Act' purposes. ¶ 15. TVEPA contends that the Miss. Elec. Act and the Federal REAct must be read in pari materia because both laws present a collaborative effort attempting to address the issue of low-cost electricity to rural areas. In support of this argument, TVEPA cites a litany of cases from different jurisdictions holding that the state laws should be interpreted in pari materia with the federal law. See, e.g., Morton v. Hammond, 604 P.2d 1, 4 (Alaska 1979) (where state and federal statutes deal with same subject matter and state schemes relies on federal scheme, statutes are in pari materia ); Arizona Civil Rights Div. v. Olson, 132 Ariz. 20, 643 P.2d 723, 728 (1982) (Arizona Civil Rights Act interpreted in pari materia with Title VII and federal Equal Pay Act of 1963); Industrial Comm'n of State of Colorado v. Board of County Comm'rs, 690 P.2d 839, 842 (Colo. 1984) (Colorado unemployment tax laws interpreted in pari materia with Federal Unemployment Tax Act). The fact that these laws were enacted at the same time, under the same circumstances, and for the same purpose, TVEPA claims, reinforces the argument that these laws should be construed together. ¶ 16. MPGA agrees that in construing statutes, all statutes in pari materia are taken into consideration, and a legislative intent deduced from a consideration as a whole. Roberts v. Mississippi Republican Party State Executive Comm., 465 So.2d 1050, 1052 (Miss.1985). MPGA asserts, however, that the in pari materia doctrine is invoked only when the language of the statute is ambiguous. Hubbard v. McKey, 193 So.2d 129, 131 (Miss.1966). Here, MPGA contends, the statute is not ambiguous; thus, there is no reason to invoke the doctrine. ¶ 17. Moreover, MPGA urges that the code sections of the Miss. Elec. Act, when read separately or together do not allow for TVEPA to own and operate a propane gas business through its wholly-owned subsidiary. If the in pari materia doctrine is invoked, MPGA stresses, it only follows that each section of the Code dealing with the same or similar subject matter must be read together, not in pari materia with the federal REAct. Mississippi Pub. Serv. Comm'n v. Municipal Energy Agency of Mississippi, 463 So.2d 1056, 1058 (Miss.1985). ¶ 18. TVEPA maintains that its investment in ServicePlus and ServicePlus' investment in DeSoto are actions authorized and contemplated by 7 U.S.C. § 940b. The fact that Congress amended REAct with 7 U.S.C. § 930, TVEPA argues, declaring that rural electric and telephone systems should be encouraged and assisted to develop their resources and ability to achieve the financial strength needed to enable them to satisfy their credit needs from their own financial organizations and other sources ... supports the action undertaken by TVEPA. TVEPA states that since its investment in ServicePlus and/or DeSoto is less than 15 percent of its total utility plant, their action is authorized by federal law and, therefore, within the scope of TVEPA's authority. ¶ 19. TVEPA argues that by examining the corporate purpose of TVEPA under the Miss. Elec. Act and against the backdrop of the language, purposes and policies of both state and federal law it is clear that TVEPA is authorized and empowered to form and own the stock in ServicePlus. TVEPA argues that because Miss.Code Ann. § 77-5-205 requires TVEPA to provide electricity at the lowest cost possible means, it must make prudent business decisions for the benefit of the company. TVEPA further contends that the ability to make these business decisions is sanctioned by Miss.Code Ann. §§ 77-5-229 and 77-5-231, which when read in conjunction with each other and § 77-5-251, mandate that TVEPA has broad power to make business decisions. Thus, the express language embodied in the Miss. Elec. Act, TVEPA submits, allows the formation and ownership of ServicePlus in order to lower the cost of electricity to TVEPA's members, improve TVEPA's financial strength, and thereby help TVEPA make electric energy available to its member owners at the lowest cost possible. ¶ 20. This Court refuses to adopt such a strained interpretation of the relevant statutes when our statutory scheme expressly and unambiguously provides otherwise. While TVEPA is correct in noting that REAct and the Miss. Elec. Act were created for similar purposes, the Miss. Elec. Act specifically governs the formation and operation of rural electric power associations in Mississippi. The United States Supreme Court has held that REAct is enabling legislation which affords substantial deference to state statutory and regulatory authority. See Arkansas Elec. Coop. Corp. v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375, 103 S.Ct. 1905, 76 L.Ed.2d 1 (1983). [3] ¶ 21. The Miss. Elec. Act. provides that the article is to be liberally construed, and declares that the article is complete in itself and shall be controlling. Miss.Code Ann. § 77-5-251. The Act contains a clear expression of legislative intent that member corporations be prohibited from acquiring an interest in business enterprises not associated with the delivery of electric power. Even a liberal interpretation of the applicable statutes results in the conclusion that TVEPA is limited to the acquisition of electric energy assets. ¶ 22. As its name implies, the Mississippi Electric Power Association Law was enacted to encourage the fullest possible use of electric energy. Miss.Code Ann. § 77-5-205 (emphasis added). Both Miss. Code Ann. § 77-5-229, which articulates the general powers granted to electric associations, and Miss.Code Ann. § 77-5-23, which articulates the specific powers, provide that the powers granted therein are limited to acts necessary for the accomplishment of the corporate purpose. Section 77-5-229, which articulates the general powers granted states: Each corporation formed under this article is hereby vested with all power necessary or requisite for the accomplishment of its corporate purpose, and no enumeration of particular powers hereby granted in this article shall be construed to impair any general grant of power herein contained, or to limit any such grant to a power or powers of the same class or classes as those enumerated. (emphasis added). Section 77-5-231, which contains the grant of specific power provides, in pertinent part: A corporation created under the provisions of this article shall have power to do any and all acts or things necessary or convenient for carrying out the purposes for which it was formed, including, but not limited to:    (c) To acquire, hold and dispose of property, real and personal, tangible and intangible, or interests therein and to pay therefor in cash or property or on credit, and to secure and procure payment of all or any part of the purchase price thereof on such terms and conditions as the board shall determine. (emphasis added). ¶ 23. TVEPA's corporate charter, consistent with the language of § 77-5-205, states that it was formed to encourage the fullest possible use of electric energy in the State of Mississippi and, consistent with the language of § 77-5-231, to perform actions necessary and convenient to accomplishing its purpose. TVEPA's corporate purpose is limited to and cannot exceed the powers granted by the statutory scheme pursuant to which it was created. Section § 77-5-205 provides in relevant part: Three or more natural persons may ... form a corporation not organized for pecuniary profit for the purpose of promoting and encouraging the fullest possible use of electric energy by making electric energy available at the lowest cost consistent with sound economy and prudent management of the business of such corporations. (emphasis added). Miss.Code Ann. § 77-5-225 provides that ... the corporate purpose of each corporation formed under this article shall be to render service to its members only. (emphasis added). TVEPA is permitted to render service and to acquire, own, operate, maintain, and improve a system or systems. Miss.Code Ann. § 77-5-231(d) (emphasis added). Service is defined as the sale or other disposition of energy ... at the lowest cost consistent with sound economy, public advantage and the prudent conduct of the business of a corporation. Miss.Code Ann. § 77-5-203(1)(emphasis added). System is defined as plant, works, system, facilities or properties ... useful in connection with the generation, production, transmission or distribution of energy. § 77-5-203(f) (emphasis added). Energy is defined as all electric energy no matter how or where generated or produced. § 77-5-203(d) (emphasis added). ¶ 24. The language of the above statutes is clear that TVEPA is empowered to provide electricity. Nothing in the statutory scheme authorizes TVEPA to distribute another form of energy. Though TVEPA is granted powers necessary and convenient for carrying out the purposes of its organization and is authorized to acquire property to carry out those purposes, it can hardly be argued that it is necessary or convenient for TVEPA to sell propane gas to accomplish its purposes. Though the language necessary or convenient arguably broadens the powers granted to TVEPA, it does not enable TVEPA to engage in businesses which exceed its statutory or corporate purpose solely for the aim of increasing its bottom line under the guise of prudent business decisions. As the trial court stated in its opinion, under TVEPA's interpretation of these statutes, it may own, operate, or invest up to 15% of its total utility plant in a department store, restaurant, or any other non-electric business, as long as the investment provides economic development for rural communities and profits which can be used to lower electric rates. The authority for such an interpretation simply cannot be found in either the letter or the purpose of the statutory scheme. ¶ 25. The Georgia Supreme Court decided a case nearly identical to that at hand in Flint Elec. Membership Corp. v. Barrow, 271 Ga. 636, 523 S.E.2d 10 (1999). The issue before the Georgia Court was whether Flint Electric Membership Corporation (Flint) should be allowed to sell propane gas to its customers. Flint was a rural electric association that set up a wholly owned subsidiary, Flint Electric, to own and operate a propane gas business and sell propane to its electric customers. Id. Flint's statutory purpose was to engage in rural electrification. Id. at 11. In 1997, Flint amended its charter to allow it to engage in any lawful act, business, or activity which in the discretion of the Board of the Directors would be beneficial to the members. Id. Flint then formed a subsidiary corporation with the intention of selling propane gas to its members. Id. ¶ 26. Georgia law provides that an electric membership corporation may serve any one or more of the following purposes: (1) To furnish electrical energy and service; (2) To assist its members in the efficient and economical use of energy; (3) To engage in research and to promote and develop energy conservation and sources and methods of conserving, producing, converting, and delivering energy; and (4) To engage in any lawful act or activity necessary or convenient to effect the foregoing purposes. O.C.G.A. § 46-3-200 (2000). Further, O.C.G.A. § 46-3-201(b)(5) (2000) provides that a rural electric association may purchase; take; receive by gift, will, or otherwise; lease; or otherwise acquire, own, hold, improve, use, and otherwise deal in and with real or personal property or any interest therein, wherever situated. The Georgia Supreme Court held that the rural electric association could not operate a propane gas company through a subsidiary, stating: Even if it can be said that subsections (2), (3) and (4) of O.C.G.A. § 46-3-200 authorize an EMC [electric association] to assist its members in the use of another energy source, promote its development, or engage in lawful activities to effect such a purpose, nothing in the GEMCA [Georgia's rural electric association act] authorizes an EMC to furnish or sell another form of energy. In fact, O.C.G.A. § 46-3-201 makes it clear that, while an EMC is empowered to assist its members ... in the efficient and economical use of energy, O.C.G.A. § 46-3-201(b)(8), it can only furnish or sell electricity. O.C.G.A. § 46-3-201(b)(7). And while O.C.G.A. § 46-3-201(b)(26) gives an EMC all powers necessary or convenient to effect any or all of the purposes for which the electric membership corporation is organized, it can hardly be said that it is necessary or convenient for Flint to sell propane gas to accomplish its purposes. 271 Ga. at 637-38, 523 S.E.2d 10 (emphasis added). TVEPA argues that this Court's interpretation of the Miss. Elec. Act should be broader than that espoused by the Georgia Supreme Court in interpreting the Georgia Act. TVEPA apparently relies on the fact that the Georgia statute lacks the liberal construction language. See Miss.Code Ann. § 77-5-231. Even a liberal interpretation of our statutes requires the conclusion that TVEPA is limited to the acquisition of electric energy assets. This Court cannot, in the name of liberal interpretation, expand the clear and express language of these statutes to affect an alteration more appropriately sought through legislative means. The lower court did not err in its interpretation of these statutes.