Opinion ID: 1198948
Heading Depth: 1
Heading Rank: 6

Heading: The Club's Additional Contentions

Text: The Club cites K.S.A. 66-104 and K.S.A. 66-131 in support of its contention that the accepted rule in Kansas is that utility customers are not normally precluded from obtaining their own supply of heat, light or water for private use. K.S.A. 66-131 refers to K.S.A. 66-104. K.S.A. 66-104 does not support the Club's position because the private use exception applies to the first part of the statute (telephone, telegraph, conveyance of oil and gas), but not the second part (heat, light, water, and power): The term public utility, as used in this act, shall be construed to mean every corporation, company, individual, association of persons, their trustees, lessees or receivers, that now or hereafter may own, control, operate or manage, except for private use, any equipment, plant or generating machinery, or any part thereof, for the transmission of telephone messages or for the transmission of telegraph messages in or through any part of the state, or the conveyance of oil and gas through pipelines in or through any part of the state, except pipelines less than 15 miles in length and not operated in connection with or for the general commercial supply of gas or oil, and all companies for the production, transmission, delivery or furnishing of heat, light, water or power. (Emphasis added). K.S.A. 66-104. The Club relies on State, ex rel., v. City of Coffeyville, 138 Kan. 909, 28 P.2d 1032 (1934), for the proposition that a customer may bypass a natural gas utility. In Coffeyville, however, the customer was the City of Coffeyville. Coffeyville did not involve a challenge from a public utility that claimed exclusive rights to serve the city. Instead, the challenge questioned the city's changing its natural gas supplier by resolution instead of by ordinance. In deciding that a resolution was sufficient, we drew a distinction between a city's granting a privilege to use streets and alleys in connection with some service to the inhabitants of the city and the city's decision to buy gas, just as it might buy coal. 138 Kan. at 912. Coffeyville is not an example of competition between natural gas utility companies in the same geographical area. The Club's use of Coffeyville is not on point. The Club also relies on K.S.A. 12-2001, the successor to the statute involved in Coffeyville. K.S.A. 12-2001(b)(3) provides that if a city grants a franchise to furnish, among other things, water service, that franchise cannot be exclusive. K.S.A. 12-2001(b)(3) does not apply. Here, the District's exclusive franchise was granted by the legislature. The municipality involved here is the District itself, a quasi-municipal body corporate with the power of eminent domain. K.S.A. 19-3502. The Club argues that under K.S.A. 66-1,184, an electric utility customer can compete with the electric utility. Competition results from the customer's generating electricity and selling any surplus to the utility company. K.S.A. 66-1,184 is limited to electric utilities. The Club cites two Oklahoma cases, Westville Utility Authority v. Bennett, 903 P.2d 880 (Okla. App. 1995) and Comanche Cty. R. Water Dist. No. 1 v. City of Lawton, 501 P.2d 490 (Okla. 1972), as further support of its position that exclusive service areas are disfavored in the law. Westville held that a town utility authority did not have the exclusive right to provide water for customers within the city limits. In so holding, the Westville court noted that the Oklahoma constitution prohibits municipalities from granting exclusive franchises. 903 P.2d at 882. The Kansas Constitution differs. See Kan. Const. Bill of Rights, § 2. Comanche County turned on the same Oklahoma constitutional provision, and consequently is off the point for discussion here. See 501 P.2d at 492.