Opinion ID: 2595592
Heading Depth: 1
Heading Rank: 4

Heading: Is Basin a Public Utility

Text: [¶ 14] We will discuss the issues in a somewhat different order than as presented by the parties. Whether Basin is a public utility, and, therefore, was required to obtain a certificate of public convenience and necessity is a threshold question that must be addressed first. [¶ 15] This issue arises because Basin contends it is not a public utility as contemplated by the governing statute, and because the PSC agreed with that conclusion, thus declining to require Basin to obtain a certificate of public convenience and necessity. Basin is a wholesale power provider, and is a non-profit corporation based in Bismarck, North Dakota. It is owned and controlled by its members. It serves 124 distribution cooperatives throughout a nine-state area. PRECorp is one of the members, and is the largest single user of electricity from Basin. PRECorp and other member owners then sell the electricity to their members. Thus, Basin contends it does not furnish electricity to or for the public, but only to its member cooperatives who, in turn, furnish that electricity to or for the public. [¶ 16] With respect to condemnation of private land, the Wyoming Constitution provides, at art. 1, § 32: § 32. Eminent domain. Private property shall not be taken for private use unless by consent of the owner, except for private ways of necessity, and for reservoirs, drains, flumes or ditches on or across the lands of others for agricultural, mining, milling, domestic or sanitary purposes, nor in any case without due compensation. [¶ 17] Wyo. Stat. Ann. § 37-2-205 (LexisNexis 2005) provides: § 37-2-205. Certificate of convenience and necessity; hearings. (a) No public utility shall begin construction of a line, plant or system, or of any extension of a line, plant or system without having first obtained from the commission a certificate that the present or future public convenience and necessity require or will require such construction. This act shall not be construed to require any public utility operating outside of a city or town to secure a certificate for an extension into an area within which it has lawfully commenced operation, or for an extension into territory contiguous to its line, plant or system for which no certificate is in force and is not served by a public utility of like character or for any extension within or to territory already served by it, necessary in the ordinary course of its business. If any public utility, in constructing or extending its line, plant or system interferes or is about to interfere with the operation of the line, plant or system of any other public utility already authorized or constructed, the commission on complaint of the public utility claiming to be injuriously affected, may after hearing make such order and prescribe the terms and conditions for the location of the lines, plants or systems affected, as to it are just and reasonable. The power companies may, without the certificate, increase capacity of existing plants. (b) No public utility shall henceforth exercise any right or privilege or obtain a franchise or permit to exercise such right or privilege from a municipality or county, without having first obtained from the commission a certificate that public convenience and necessity require the exercise of such right and privilege; provided, that when the commission shall find, after hearing, that a public utility has heretofore begun actual construction work and is prosecuting such work in good faith, uninterruptedly and with reasonable diligence in proportion to the magnitude of the undertaking, under any franchise or permit heretofore granted but not heretofore actually exercised, such public utility may proceed to the completion of such work, and may, after such completion exercise such right or privilege; and provided, further, that this section shall not be construed to validate any right or privilege now invalid or hereafter becoming invalid under any law of this state, nor impair any vested right in any franchise or permit heretofore granted. (c) Before any certificate may issue, under this section, a certified copy of its articles of incorporation or charter, if the applicant be a corporation, shall be filed in the office of the commission. The commission shall have power, after hearing involving the financial ability and good faith of the applicant and the necessity of additional service in the community, to issue said certificate, as prayed for, or to refuse to issue the same, or to issue to it for the construction of a portion only of the contemplated line, plant, or system, or of a portion only, of the contemplated line, plant, system or extension thereof, or for the partial exercise only of said right or privilege, and may attach to the exercise of the rights granted by said certificate such terms and conditions as in its judgment the public convenience and necessity may require. (d) Upon its own motion, or on complaint of any person the commission shall have power to investigate and determine whether the competitive rates, charges and service existing between any public utilities are fair, just and reasonable, after hearing thereon to determine, fix and order such rates, charges, regulations and remedies as will establish reasonable and just rates, between said competing public utilities, and between said public utilities and their customers and patrons. (e) Where a certificate for the construction and operation of a high voltage electric transmission line of 230 KV or greater is required, the public service commission shall publish notice of application in a newspaper of general circulation in each county where the line will be constructed. The public service commission shall give actual notice of hearing on the application by registered mail at the applicant's expense to each landowner who may be affected. The notice of hearing shall be given at least thirty (30) days before the hearing is held and shall contain a summary of the pertinent facts about the application. (f) In the case of a certificate for the construction of a high voltage electric transmission line of 230 KV or greater, the issuance of the certificate shall be conditioned so that no construction of the line is authorized until all right-of-way for the line has been acquired. (g) Any electric utility which provided service to any part of the annexed area prior to annexation and which does not receive a franchise from the annexing municipality to serve the annexed area shall receive just compensation from the public or private utility franchised to serve the annexed area. If the affected utilities cannot agree on just compensation within thirty (30) days after the franchise has been issued and become final after any challenge thereto, the affected utilities shall submit the matter to arbitration before the public service commission pursuant to W.S. [§] 37-2-113. Upon conclusion of the arbitration proceedings and payment of the compensation determined to be just, ownership of the facilities shall be transferred to the acquiring utility. [Emphases added.] [¶ 18] Public utility is defined by Wyo. Stat. Ann § 37-1-101(a)(vi) (LexisNexis 2005): (vi) Public utility means and includes every person that owns, operates, leases, controls or has power to operate, lease or control: (A) Any plant, property or facility for the transportation or conveyance to or for the public of passengers or property for hire, except taxicabs operating solely in cities and towns; (B) Repealed by Laws 1995, ch. 181, § 3. (C) Any plant, property or facility for the generation, transmission, distribution, sale or furnishing to or for the public of electricity for light, heat or power, including any conduits, ducts or other devices, materials, apparatus or property for containing, holding or carrying conductors used or to be used for the transmission of electricity for light, heat or power; (D) Any plant, property or facility for the manufacture, distribution, sale or furnishing to or for the public of natural or manufactured gas for lights, heat or power; (E) Any plant, property or facility for the supply, storage, distribution or furnishing to or for the public of water for manufacturing, municipal, agriculture or domestic uses, except and excluding any such plant, property or facility owned by a municipality; (F) Any plant, property or facility for the production, transmission, conveyance, delivery or furnishing to or for the public of steam or any other substance for heat or power; (G) Any plant, property or equipment for the transportation or conveyance to or for the public of oil or gas by pipeline, or any plant, property, or equipment, used for the purpose of transporting, selling or furnishing natural gas to any consumer or consumers within the state of Wyoming for industrial, commercial or residential use, except any such plant, property or equipment used for any of the following purposes is exempted from this and all other provisions of this chapter to the extent of such use: (I) For the transportation or sale of natural gas within or between oil and gas fields or potential oil and gas fields for residential, commercial, industrial or other use reasonably necessary in the exploration, development or operation of the field; (II) For drilling, producing, repressuring, or other oil or gas field operations; (III) For operation of natural gas processing plants; (IV) For the sale of natural gas by the producer to a consumer for use in industrial or commercial plants or establishments of any kind or nature. (H) None of the provisions of this chapter shall apply to: (I) Interstate commerce except when a regulatory field has not been preempted by the United States government; (II) To public utilities owned and operated by a municipality of the state of Wyoming, except as to that portion of a municipality owned and operated public utility, if any, as may extend services outside the corporate limits of a municipality and except that if any municipal utility owns an undivided interest in a facility for the production of electricity which is also partly owned by an agency subject to the jurisdiction of the public service commission, the sale of electricity in excess of the participating municipalities' need is subject to this act; (III) To farmers' mutual telephone associations having no capital stock and furnishing service to members of associations only and without tolls, except as provided in W.S. [§]37-2-205; (IV) To mutual water companies or associations having no capital stock and furnishing water service to members of companies or associations only, and without charges other than assessments of members to reimburse companies or associations for expenses incurred in their establishment or operation; (V) To any person who is not otherwise affiliated with a utility, that owns, leases, controls or has power to lease or control any plant, property or facility which, in a transaction approved or authorized by the commission, is leased to one (1) or more public utilities, and is to be operated by the lessee or lessees for the generation, transmission, distribution, sale or furnishing to or for the public of electricity for light, heat, power or other utility purposes; (VI) To the generation, transmission or distribution of electricity, or to the manufacture or distribution of gas, or to the furnishing or distribution of water, nor to the production, delivery or furnishing of steam or any other substance, by a producer or other person, for the sole use of a producer or other person, or for the use of tenants of a producer or other person and not for sale to others. Such exemptions shall not apply to metered or other direct sales of a utility commodity by a producer or other person to his tenants. (J) The term public utility shall mean and include two (2) or more public utilities rendering joint service; (K) Any person furnishing coal, water or other raw materials to an electric power company shall not by this fact alone be designated as a public utility; (M) The provisions of [§§] W.S. 37-6-101 through 37-6-106, relating to the issuance and sale of securities shall not apply to: (I) Any gas pipeline corporation making direct sales to Wyoming consumers in interstate commerce and not for resale; (II) Any cooperative electrical generation and transmission association operating in interstate commerce whose rates are not regulated by the Wyoming public service commission. [Emphases added.] [¶ 19] Wyo. Stat. Ann. § 1-26-815 (LexisNexis 2005) provides: § 1-26-815. Right of eminent domain granted; ways of necessity for authorized businesses; purposes; extent. (a) Any person, association, company or corporation authorized to do business in this state may appropriate by condemnation a way of necessity over, across or on so much of the lands or real property of others as necessary for the location, construction, maintenance and use of reservoirs, drains, flumes, ditches including return flow and wastewater ditches, underground water pipelines, pumping stations and other necessary appurtenances, canals, electric power transmission lines and distribution systems, railroad trackage, sidings, spur tracks, tramways, roads or mine truck haul roads required in the course of their business for agricultural, mining, exploration drilling and production of oil and gas, milling, electric power transmission and distribution, domestic, municipal or sanitary purposes, or for the transportation of coal from any coal mine or railroad line or for the transportation of oil and gas from any well. (b) The right of condemnation may be exercised for the purpose of: (i) Acquiring, enlarging or relocating ways of necessity; and (ii) Acquiring easements or rights-of-way over adjacent lands sufficient to enable the owner of the way of necessity to construct, repair, maintain and use the structures, roads or facilities for which the way of necessity is acquired. (c) A way of necessity acquired hereunder shall not exceed one hundred (100) feet in width on each side of the outer sides or marginal lines of the reservoir, drain, ditch, underground water pipeline, canal, flume, power transmission line or distribution system, railroad trackage, siding or tramway unless a greater width is necessary for excavation, embankment or deposit of waste from excavation. In no case may the area appropriated exceed that actually necessary for the purpose of use for which a way of necessity is authorized. [¶ 20] Wyo. Stat. Ann. § 1-26-816 (LexisNexis 2005) provides: § 1-26-816. Condemnation and certificate of public necessity and convenience. No person shall institute a condemnation proceeding relating to any facility for which a certificate of public necessity and convenience is required until the certificate has been issued. [¶ 21] Our analysis of this issue is guided by our traditional rules of statutory construction: Our standard of review with respect to the construction of statutes is well known. In interpreting statutes, our primary consideration is to determine the legislature's intent. All statutes must be construed in pari materia and, in ascertaining the meaning of a given law, all statutes relating to the same subject or having the same general purpose must be considered and construed in harmony. Statutory construction is a question of law, so our standard of review is de novo. We endeavor to interpret statutes in accordance with the legislature's intent. We begin by making an inquiry respecting the ordinary and obvious meaning of the words employed according to their arrangement and connection. We construe the statute as a whole, giving effect to every word, clause, and sentence, and we construe all parts of the statute in pari materia. When a statute is sufficiently clear and unambiguous, we give effect to the plain and ordinary meaning of the words and do not resort to the rules of statutory construction. Wyoming Board of Outfitters and Professional Guides v. Clark, 2001 WY 78, ¶ 12, 30 P.3d 36, ¶ 12 (Wyo. 2001); Murphy v. State Canvassing Board, 12 P.3d 677, 679 (Wyo. 2000). Moreover, we must not give a statute a meaning that will nullify its operation if it is susceptible of another interpretation. Billis v. State, 800 P.2d 401, 413 (Wyo. 1990) (citing McGuire v. McGuire, 608 P.2d 1278, 1283 (Wyo. 1980)). Moreover, we will not enlarge, stretch, expand, or extend a statute to matters that do not fall within its express provisions. Gray v. Stratton Real Estate, 2001 WY 125, ¶ 5, 36 P.3d 1127, ¶ 5 (Wyo. 2001); Bowen v. State, Wyoming Real Estate Commission, 900 P.2d 1140, 1143 (Wyo. 1995). In Re Loberg, 2004 WY 48, ¶ 5, 88 P.3d 1045, 1048 (Wyo. 2004); Board of County Commissioners of Teton County v. Crow, 2003 WY 40, ¶¶ 40-41, 65 P.3d 720, 733-34 (Wyo. 2003). [¶ 22] In addition, when a particular interpretation has been placed on a statute by the courts, it is presumed that the legislature has acquiesced in that interpretation where it has left the statute materially unchanged at its subsequent meetings. 82 C.J.S. Statutes § 310, at 397 (1999); and see Terex Corp. v. Hough, 2002 WY 112, ¶ 13, 50 P.3d 317, 322 (dissenting opinion) (Wyo. 2002). [¶ 23] As a private corporation, Basin may condemn private property to obtain a right-of-way (way of necessity) across the lands of other private persons and entities. Wyo. Stat. Ann. § 1-26-815. The landowners argue here that Basin cannot be pursuing a private interest and, at the same time, argue that its business is vested with a public interest. However, the statute does not appear to preclude such a circumstance. The Wyoming Constitution does not prohibit such a taking, and the landowners involved in this litigation do not make such an argument. Such a condemnation may not proceed if a certificate of public necessity is required. Wyo. Stat. Ann. § 1-26-816. A certificate of public convenience and necessity is required only if Basin is a public utility. Wyo. Stat. Ann. § 37-2-205. The thorny part of this issue can be summed up as this (although there is a bit more to it, this summation captures the essence of the question): In order to be classified as a public utility, it must be concluded that Basin operates a facility for the transmission, to or for the public, of electricity. Basin's argument is based upon its identification of itself as an electricity wholesaler, that does not directly sell or transmit electricity to or for the public. Rather, Basin sells electricity wholesale and it is only PRECorp that makes sales or transmits the electricity to or for the public. [¶ 24] In the case, Phillips Petroleum Company v. Public Service Commission, 545 P.2d 1167, 1171-72 (Wyo. 1976) we held as follows: This leaves for our disposal the question of whether Phillips' sale to Panhandle, and the delivery of a portion thereof to K-N, constitutes transportation to or for the public. The PSC relies upon the position that this phrase is applicable if the gas is ultimately sold to Wyoming consumers, which is a part of the regulatory scheme of some statutes. It does not, however, require much imagination to suggest that if jurisdiction may be based upon this broad theory, it is possible to follow any producer's line to the Christmas tree. This court is confined to the statute and must stay within its bounds. We would engage in a judicial process of legislative amendment if we were to insert the word ultimate or ultimately into this statute, and this is without our province, Lo Sasso v. Braun, Wyo., 386 P.2d 630, 631; so we are confined to determining the proper definition of to or for the public. We find one contention of the appellee-McCulloch of particular interest and applicability herein when it suggests that the FPC's regulatory authority attaches to sales made at the tailgate. This position is not consistent with a finding that Panhandle is a consumer, which would create jurisdiction in the PSC. This court has not had occasion to directly define or decide what the term to or for the public means in connection with the jurisdiction of the PSC. However, in the case of State Board of Equalization v. Stanolind Oil & Gas Co., 54 Wyo. 521, 94 P.2d 147, which was a tax case, the question was presented whether Stanolind was operating as a public utility for tax purposes. Under the then statute, which included the words to and for the public, this court held that although the company bought natural gas which it conveyed by a pipeline in which it had some ownership and thereafter delivered the gas to a refinery in Casper to which it was sold, and the refinery used and consumed the gas in its operation, this was not for the public, 94 P.2d at 156, and it could not be considered a public utility. That case further indicated that another factor for consideration is whether the company has offered to furnish the public with services or has ever filed or posted any rates or held itself out to serve consumers, generally absent here. The words to the public used in the statute regulating public utilities have been defined as sales to sufficient of the public to clothe the operation with a public interest, Iowa State Commerce Commission v. Northern Natural Gas Company, Iowa, 161 N.W.2d 111, 115; Griffith v. New Mexico Public Service Commission, 86 N.M. 113, 520 P.2d 269, 272. See City of St. Louis v. Mississippi River Fuel Corporation, 8 Cir., 97 F.2d 726, 728-729, for a discussion of the term public use. Inasmuch as the record here reveals not sales to the public but only to Panhandle, Phillips cannot be classified as a public utility under our statutes. The statutes of the various states defining and regulating what is a public utility are phrased in many different and varying ways. It is difficult to find direct authority for interpretation of our statute. The writer can agree that the theory of the PSC could be sustained under some of these decisions, but the theory here asserted, being that if the gas transported is ultimately used by the public this would grant them jurisdiction, is a change in the rationale of the statutory scheme, in the writer's view. Under a statute which defined a utility as one operating a system of supplying the public for domestic, mechanical or public uses, the Colorado Supreme Court held this did not create jurisdiction, and that it did not come under the jurisdiction of the Commission, although it sold gas directly to eleven different consumers on contract, several of whom bought part of this gas for resale, Public Utilities Commission v. Colorado Interstate Gas Company, 142 Colo. 361, 351 P.2d 241. Under the preceding authorities it is our view that this sale of gas was not to and for the public use. Although uttered in a different context, the writer views a statement in the case of Weaver v. Public Service Commission of Wyoming, 40 Wyo. 462, 278 P. 542, 550, as a worthwhile caveat when broad assertions are made to determine the status of a private carrier to be that of a public utility. The court said:    that a private carrier may not, in view of the Fourteenth Amendment of the United States Constitution, be converted into a common carrier against his will,    It is difficult to see the need or necessity for control or how the public will be secured any protection insofar as Wyoming consumers are concerned because this gas is sold to Panhandle, who acts merely as a wholesaler to K-N, and when that company distributes to Wyoming consumers its prices and operations are certainly under the control and regulation of the PSC. [¶ 25] The Phillips case is instructive in these circumstances. However, in its discussion that court acknowledged that the case had not been well briefed by the parties, although the Court did undertake its own considerable research effort. In the instant case, the parties have provided little more than superficial analysis, and very little in the way of the recitation of pertinent authority. The facts of the Phillips case are certainly more attenuated than those of the instant case, but the Court did observe that similar statutes in other states were more limiting than that of Wyoming's, e.g., directly or indirectly to or for the public, rather than just to or for the public. We do note, however, to borrow a phrase from the Phillips case, that it is quite a bit easier in these circumstances to follow [the] producer's line to the Christmas tree, than it was in the Phillips case. [¶ 26] There is another Wyoming case that is instructive wherein we construed the phrase to or for the public, although it dealt with a sales tax statute. In that case, we held that an electricity provider similarly situated to PRECorp, did provide electricity to or for the public. Rural Electric Company v. State Board of Equalization, 57 Wyo. 451, 120 P.2d 741 (1942); rehearing denied 57 Wyo. 451, 122 P.2d 189 (1942). Certainly, the Rural Electric case, contemplated a broader meaning for the phrase to or for the public, than does the more modern case of Phillips. [¶ 27] There is a significant body of case law that is pertinent to this discussion, although we will not attempt to exhaustively catalogue it here. We will note that the results of many of the pertinent cases vary considerably depending upon the exact wording of the applicable statutes, as well as the availability of any statutory purpose/intent clauses and/or legislative history. Many of the cases are quite old. Some of those cases may no longer accurately discuss the status of the existing law within the jurisdiction because of subsequent changes to statutes. Also, it can probably safely be said that in most jurisdictions the construction of a power transmission line of this magnitude could not be undertaken without some oversight from a regulatory body such as Wyoming's PSC. [¶ 28] Before we begin our summary of some of the pertinent case law, it is worthwhile here to provide a general summary of the purposes of an administrative body such as the PSC: Public service or public utilities commissions are created for the accomplishment of public purposes. The function and purpose of a utility commission is in general to supervise, regulate, and control public utilities within its authority. They are also intended to safeguard the interests of the utilities and of the public, though their primary purpose is to serve the interests of the public. 73B C.J.S., Public Utilities § 149 at 400-1 (2004). [¶ 29] In the case, Bethlehem Steel Corporation v. Pennsylvania Public Utility Commission, 713 A.2d 1110, 1114-15 (Pa. 1998), it was held that where gas was supplied to a single end user (corporate entity), there was no public involvement and the sale was not to or for the public. That court went on to comment that it was for the legislature, and not the courts, to determine what business activity comes within the purview of the regulatory body. In the case, Appeal of Zimmerman, 141 N.H. 605, 689 A.2d 678, 683 (1997), the court held that an entity that provided telecommunications services for all building tenants was not a public utility because those services were not offered to all comers without discrimination. In the case, Osage Water Company v. Miller County Water Authority, Inc., 950 S.W.2d 569, 574-75 (Mo.App. S.D.1997) (collecting cases), the court opined that `in determining whether a corporation is or not a public utility, the important thing is, not what its charter says it may do, but what it actually does.' Continuing, that court found a water company to be a public utility because it sold water to the public for compensation, and its actions suggest that it has undertaken the responsibility to provide water service to all members of the public within its capabilities. In the case, Waltman v. Public Utility Commission, 142 Pa.Cmwlth. 44, 596 A.2d 1221, 1223-24 (1991), the court applied this test to whether utility services were being offered for the public: [W]hether or not such person holds himself out, expressly or impliedly, as engaged in the business of supplying his product or service to the public, as a class, or to any limited portion of it, as contradistinguished from holding himself out as serving or ready to serve only particular individuals. [Emphasis in original.] [¶ 30] In the case Arkansas Charcoal Company v. Public Service Commission, 299 Ark. 359, 773 S.W.2d 427, 429-31 (1989), the court held that the phrase to or for the public did not include the sale of natural gas, via a pipeline that had been condemned for that purpose, to a single end user. Applying a broad definition, the court in State ex rel. Utilities Commission v. Mackie, 79 N.C.App. 19, 338 S.E.2d 888, 893-94 (1986) concluded that an individual providing water and sewer service to a very limited number of customers was a public utility providing service to or for the public. [¶ 31] We conclude that the district court did not err as a matter of law in deciding that Basin was not required to seek and obtain a certificate of public convenience and necessity before undertaking the disputed project. To a limited extent, the district court's conclusion is a mixed question of law and fact. To the extent that it is, the facts clearly support a conclusion that Basin does not supply electricity to or for the public as contemplated by the governing statute. Our decision in Phillips supports that conclusion, and we are not inclined to reconsider its wisdom under the circumstances of this case, although the circumstances here are different from those circumstances presented by Phillips. As we have set out above, there is authority that is in accord with Phillips. We also note that our decision in Phillips is now a long-standing one, and any alteration of it, or clarification of that statute, is properly a question for the legislature.