Court Opinion

ID: 5097667
Source: CourtListenerOpinion
Date Created: 2021-10-01 19:25:05.993715+00
Date Added: 2024-06-11T08:20:52.587621
License: Public Domain

WINTERSHEIMER,
Justice, dissenting.
I must respectfully dissent from the majority opinion because the Vaneeburg Electric Plant Board has the exclusive right to serve its existing customers in the contested area as well as the absolute right to serve new customers in the area. I would affirm the Court of Appeals and the circuit court in their decisions.
KRS 96.520 and City of Corbin v. Kentucky Utilities Company, Ky., 447 S.W.2d 356 (1969), support the proper legal conclusion that the Vaneeburg Electric Plant Board has the authority to supply power to the disputed area. The statute provides in pertinent part as follows:
Any city of the ... fourth ... class may purchase, establish, erect, maintain and operate electric light, heat and power plants with extensions and necessary appurtenances thereto, within or without the corporate limits of the city, for the purpose of supplying the city and its inhabitants with electric light, heat and power, and for such purpose, may enter into and fulfill the terms of an interconnection agreement with any utility....
KRS 96.520.
City of Corbin, supra, states that “under exceptional circumstances, the supplying of those outside the city limits may be correlated to” the primary purpose of supplying the city and its inhabitants with electricity. The trial judge correctly found that the facts existing in this case create the necessary circumstances to make it a valid exception so as to permit the Vaneeburg utility entities to operate outside the municipal boundaries pursuant to KRS 96.520-540. I must fully agree with the Court of Appeals that the findings of the trial court were not clearly erroneous and should not be set aside.
The trial judge correctly found that as a matter of fact, the Grayson Rural Electric Corporation had no facilities or means to supply power to the contested area, and consequently, there was no competition. The trial judge further correctly held that the public service commission has no authority to regulate the service area of the Vaneeburg Utilities Commission or the Vaneeburg Electric Plant Board. This is not a case which involves a usurpation of the authority of the PSC. The conduct involved is clearly contemplated by the appropriate statutes.
This is a very fact-specific case, and under the unique circumstances presented here where one utility has served the same area for nearly sixty years with unchal*533lenged, uninterrupted service and given the knowledge, acquiescence and the assistance of the other utility there can be no basis to object at this time. Any decision that permits the existing provider of electric service to continue to provide that service does not promote any disorder or instability. The benefits that accrue to the Vanceburg Electric Plant Board are benefits that are clearly contemplated by the rural electric acts over more than seven decades. There are no far-reaching implications that in any way disturb the existing order of providing necessary electric service at affordable rates to all the consumers of the Commonwealth. Clearly, this decision avoids the wasteful duplication of distribution facilities sought to be promoted by KRS 278.016. Exclusive service areas are no more unstable when a municipality exercises that privilege than when an electric cooperative exercises it.
I must disagree with the majority on its interpretation of City of Florence v. Owen Electric Cooperative, Inc., Ky., 832 S.W.2d 876 (1992). In that case, a utility had been granted a franchise by the city and the utility sought to have the right to serve an area that the city had recently annexed. The newly annexed area was located in the certified territory of another utility which had been providing service. This Court correctly held that the legislature has authority to limit the grant and operation of municipal franchises. The Court further held that because the area had been certified as the territory of the other utility under the territorial act, the other utility had exclusive right to serve.
In the City of Nicholasville v. Blue Grass Rural Electric Cooperative Corp., Ky., 514 S.W.2d 414 (1974), the city was attempting to serve an area where it did not have facilities but where a cooperative did have facilities and was already providing service. This Court affirmed the ruling that under the relevant statute, KRS 96.538, the city could not compete with the cooperative.
In this case Vanceburg does not challenge the statutory prohibition of competition. In that respect, this case is clearly distinguishable from both Florence, supra, and Nicholasville, supra, because Vance-burg relies on the premise of the statutes that prohibit competition when it claims that it has the right to serve the disputed area free from other competition.
It is somewhat curious to note that since 1939 and until 1990, Vanceburg Electric Plant Board or its predecessor served only a small number of city residents and an equally small number of rural residents outside the municipal boundaries. In 1990, Vanceburg made a substantial investment in upgrading its facilities for the purpose of providing power to industrial customers located in Black Oak, an industrial site located three miles outside the city limits. The only customer in the St. Paul vicinity served by Grayson RECC is located outside the disputed area. Vance-burg has continuously relied upon their belief that the disputed area was being served exclusively by Vanceburg and this view was based on the acquiescence of Grayson RECC and East Kentucky Power as found by the trial judge. It was only in late 1993 that a prospective industrial customer expressed an interest in locating and purchasing a 1400-acre site in St. Paul owned by Kentucky Power Company since 1975.
Under all the circumstances of this case, Vanceburg and its allied power suppliers have an exclusive right to provide electric service in the disputed area. Such a result would not undermine the orderly distribution of retail electric service as required by Kentucky law.
I would affirm the decision of the circuit court and the Court of Appeals.