Opinion ID: 1363749
Heading Depth: 2
Heading Rank: 1

Heading: retrospective-prospective application

Text: Section 15, upon which Cities rely in support of their first contention, reads: No law shall be passed by the General Assembly granting the right to construct and operate in a public street or on public property a[n] ... electric plant ... or to use the streets for any other facility, without first obtaining the consent of the governing body of the municipality in control of the streets or public places proposed to be occupied for any such or like purpose ... [Emphasis supplied]. Cities contend that, upon annexation or incorporation, S.C. Code Ann. § 58-27-640 (1976), which mandates PSC assignment of service areas, becomes inoperative as to such areas. While conceding PSC jurisdiction in rural areas, they argue that, once these areas become annexed, the Cities have a constitutional right to grant or deny continuation of service by the Co-op. In short, Cities interpret § 15 as granting to them the absolute right not only to refuse consent for new construction and operation but, in addition, to oust any entity providing service in an area at the time of its annexation or incorporation. The effect of Cities' position is to construe § 15 as an exclusive franchising provision beyond reach of statutory legislation. Prior to this litigation our Court has not been called upon to resolve the issues presented here. We necessarily look for assistance from decisions of their jurisdictions construing constitutional provisions similar to § 15. The decision most closely on point is Town of Culpeper v. Virginia Elec. & Power Co. , 215 Va. 189, 207 S.E. (2d) 864 (1974). In Culpeper the town filed a declaratory judgment action to determine its right to oust two electric utilities, one a privately owned utility and the other a rural electric cooperative, from an area being served by them at the time of annexation. These two utilities were granted their territorial assignments by the Virginia State Corporation Commission, the counterpart of South Carolina's PSC. In relevant part Va. Const. art. VII, § 8 reads: No ... electric light or power ... company [or] ... association... shall be permitted to use the streets, alleys, or public grounds of a city or town, without the previous consent of the corporate authorities of such city or town. [Emphasis supplied]. The Virginia Supreme Court, in rejecting the town's claim of a right to oust, points to the intent of the constitutional prohibition against use of its streets without the town's permission: We think it clear that the intention of the framers of the constitutional provision in question was to empower towns to prohibit a utility from entering the town without prior consent. The intent was not to require the ouster of a utility and its facilities from an area where such facilities were already franchised and lawfully in existence and the utility was operating therein prior to such area becoming part of a town ... it is impossible... to obtain `previous' consent from the town. If we applied the section of the Constitution retroactively it would deprive [utilities] of their franchise to service the area in controversy, a franchise right which constitutes a valuable property right. [Emphasis by Court]. 207 S.E. (2d) at 868. The foregoing language in Culpeper clearly prohibits retrospective application of the constitutional requirement of consent. A constitutional provision essentially the same as § 15 is art. XII, § 220 of the Alabama Constitution: No person, firm, association, or corporation shall be authorized or permitted to use the streets, avenues, alleys, or public places of any city, town or village for the construction or operation of any public utility or private enterprise, without first obtaining the consent of the proper authorities of such city, town or village. [Emphasis supplied]. In Clarke-Washington Elec. Membership Corp. v. Alabama Power Co. , 272 Ala. 598, 133 So. (2d) 488 (1961), the Alabama Supreme Court, as in Culpeper , construed the provision requiring municipal consent to apply prospectively only. Any expansion or extension of service, however, would be subject to the veto power of the municipality. Inferably, the cooperative serving the annexed area would be permitted to continue operating its facilities as they existed at the time of annexation. The same Court, in the earlier case of Phenix City v. Alabama Power Co. , 239 Ala. 547, 195 So. 894 (1940), held art. VII, § 220 does not operate as a self-executing authority for municipalities to grant franchises: [T]he power of a city to grant a franchise is by virtue of legislative authority. [Citations omitted]. Section 220, Constitution, is not a grant of such power, but the reservation of a restriction on legislative authority. And by it the State is not divested of its power to grant franchises subject to the consent of the city affected. [Emphasis supplied]. 195 So. at 899. The holding in Phenix City counters the contention of the Cities here that the consent provision constitutes a grant of franchise rights. We agree with the holdings in Culpeper and Clarke-Washington that the municipal consent provisions, as framed in the language of their Constitutions and § 15 of our Constitution, do not apply retrospectively to grant a right of ouster. An analysis of the language in § 15 indicates that the consent requirement is prospective, not retrospective, in nature. The law which the General Assembly is proscribed from enacting is one granting rights without first obtaining municipal consent. The public streets or properties in § 15 are those on which it is proposed that facilities will be constructed and operated. First obtaining clearly is a condition precedent to the referenced event, and proposed is equally indicative of a future occurrence. Consent is required only at the time facilities are first erected. When service is initiated in rural areas there are no governing bodies of a municipality with whom to consult. Accordingly, obtaining consent at initial erection of facilities is impossible. With respect to new construction after annexation or incorporation, § 3 of the Act amends S.C. Code Ann. § 58-27-670 (1976) relating to service in areas which become parts of municipalities. Amended § 58-27-670 contains the following provision: No poles, wires, or other facilities of electric suppliers using the streets, alleys or other public ways within the corporate limits of a municipality may be constructed by an electric supplier unless the consent of the municipal governing body is first obtained. This sentence tracks the constitutional language of § 15 and, further, accords with our interpretation that § 15 was intended to be applied prospectively only. Moreover, Co-ops concede in their brief that, once annexation or incorporation is accomplished, they are prohibited from constructing new poles or wires without municipal consent. We agree with the rationale of the Alabama Supreme Court in Phenix City that the power to franchise is an attribute of state sovereignty which can be delegated to municipalities only by statute. See , S.C. Code Ann. § 58-27-410 (1976). We view the language in Phenix City subject to the consent of the city affected as requiring consent prospectively, that is, for new construction after annexation or incorporation. The language in § 15 vests a veto power in the Cities, not a franchising authority. The consent provision of § 15 is not an affirmative grant of franchise power, but is a restriction on legislative authority. Eminent domain is an attribute of sovereignty and the general rule is that the legislature has the plenary power to grant or withhold the right. Atkinson v. Carolina Power and Light Co. , 239 S.C. 150, 121 S.E. (2d) 743 (1961). Even though eminent domain powers may be delegated to municipal corporations, they are not inherent. Tuomey Hospital v. City of Sumter , 243 S.C. 544, 134 S.E. (2d) 744 (1964). Once electric suppliers lawfully enter an area, annexation, in the absence of statutorily delegated powers of eminent domain, does not authorize an ouster. Unity Light & Power Co., v. City of Burley , 92 Idaho 499, 445 P. (2d) 720 (1968). Amended § 58-27-670 contains the following sentence: Annexation may not be construed to increase, decrease, or affect any other right or responsibility a municipality, rural electric cooperative, or electrical utility may have with regard to supplying electric service in areas assigned by the Public Service Commission in accordance with Chapter 27 of Title 58. Cities express concern that this sentence will prevent any entity other than the assigned Co-op from supplying annexed or incorporated areas. However, under S.C. Code Ann. § 58-27-1230 (1976), no PSC permission is required for municipal electric utilities to operate within corporate limits. Other utilities may operate in such areas upon compliance with the PSC certification process. We interpret the above referenced sentence to preserve, not limit, all rights electric providers enjoy under the statutory scheme. We hold that the Act, as incorporated into Title 58, Chapter 27 of the South Carolina Code, does not contravene § 15.