Court Opinion

ID: 9602663
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:58:26.751108+00
Date Added: 2024-06-11T11:05:56.155215
License: Public Domain

HOWE, Associate Chief Justice,
concurring;
I concur. I agree that a city-owned electric utility may impose charges which produce a profit. The charges are unlike fees that are required for purposes such as those involved in Call v. City of West Jordan, 614 P.2d 1257 (Utah 1980) (park improvement fees); Weber Basin Home Builders’ Ass’n v. Roy City, 26 Utah 2d 215, 487 P.2d 866 (1971) (building permit), and Consolidated Coal Co. v. Emery County, 702 P.2d 121 (Utah 1985) (business license). Fees for these purposes must be reasonably related to the cost of providing the service or regulating the licensee or permittee.
However, section 55-3-10 limits the profit of an electric utility to “a reasonable rate for the service rendered.” The majority opinion has interpreted this limitation to require us to compare Brigham City’s charges with those charged by other cities in Utah which own and operate an electric utility and by Utah Power and Light, an investor-owned utility. Another plausible interpretation would be that urged by Walker: that the return be reasonable in comparison with the cost of producing the power. He points out that Brigham City charges approximately double the cost of producing the power, reaping the City a handsome profit of between $1 million and *352$1.5 million per year. Walker attacks these charges as being unreasonable. Inasmuch as cities have for years without legal challenge used their electric utility to produce excess revenue which is placed into the general fund, I am concurring with the majority’s method of determining whether the rates are reasonable. However, I commend this issue to the legislature to examine and clarify its intent in this sensitive area of financing city operations.