Court Opinion

ID: 9855330
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:22:49.913819+00
Date Added: 2024-06-11T09:25:39.743819
License: Public Domain

YALE McFATE, Superior Court Judge
(specially concurring) :
I concur in the majority holding that the District may lawfully construct the lines in question. However, I disagree with the reasons stated for such holding and I concur with the opinions expressed by Justice Bernstein that the exchange power to be transmitted over the petitioners’ lands is not “surplus” power within the meaning of § 45-903, subsection A, paragraph 7 A.R.S.
I am unable to concur with either the opinion of the majority or with that of Justice Bernstein as to the status of the District in relation to its power activities outside its boundaries. The former, it seems, bestows on the District practically unlimited authority, whereas the latter leaves the District without any authority whatsoever, neither of which results were intended by the Legislature.
There was evidence in this record from which the trial judge could have found that the power to be brought in over the transmission lines in question is necessary for the purpose of providing electrical energy to the inhabitants of the area in which the District has extended its electric service lines, and in which it is presently serving.
The question presented to this court, in its simplest terms is, does the District have the authority, either express or implied, under Arizona law, to purchase and transmit additional power to take care of the increasing needs of the commercial business in the areas outside its boundaries in which it is now serving electricity.
I am aware of no law, statutory or otherwise, which will permit the District to transmit the large quantity of newly-acquired non-surplus electricity involved in this case and use any part of it for purposes other than that authorized within its boundaries under § 45-903, subsection A, paragraph 6 A.R.S. unless it be under some theory of-public utility law.
If the District has authority as a public utility to acquire non-surplus electric energy for extra-territorial distribution, that *405authority must be expressed in the statute law under which it was created, or reasonably implied from those statutory powers. However, if it has express authority to establish by the use of its surplus power, a public utility business outside its boundaries, then it has implied authority to acquire additional power from any source, if necessary to satisfy the power requirements of the citizens in the area it serves. And the law which authorizes it to sell surplus power cannot be a limitation on this implied authority, for the reason that it is the basis for the initial authorization and establishment of the public service which in turn is justification for the implied authority to maintain that service. Let us now examine the statutory and case law in point to determine whether the foregoing principles are valid and applicable.
In City of Mesa v. Salt River Project Agri. Imp. & P. Dist., 92 Ariz. 91, 373 P.2d 722 (1962), this Court held that the District is a municipal corporation and a political subdivision of the state of unique character, adding:
“But whatever may be the District’s exact status, plainly, the effect of selling electricity to the ultimate consumer at retail is to place the District in the position of engaging in business as a public utility for this is a business traditionally affected with public interest.” 92 Ariz. 97, 373 P.2d at 726.
The court in that case also stated:
“ * * * The District by its investment has committed itself to a public utility undertaking plainly accepting the grant of the state to engage in that business.” (Emphasis added). 92 Ariz. at 99, 373 P.2d at 728.
We are not here concerned with inquiry into the precise legal relationship between the District and its extra-territorial customers, for example, whether the District is legally obligated to provide them continuous, adequate and non-discriminatory service. We are not concerned with possible conflict between the District and any other public utility. We are here concerned with the character and extent of service actually being rendered and whether that service is ultra vires. The facts are not in dispute that the District has voluntarily inaugurated a public electric power service and is in fact engaged in a public utility business both within and outside its boundaries.
We held in Rubenstein Const. Co. v. Salt River Project Agr. Imp. & P. Dist., 76 Ariz. 402, 265 P.2d 455 (1953), that although the District was not a public service corporation subject to jurisdiction of the Corporation Commission, neverthe*406less it was-a municipal corporation and as such had authority to engage in a public utility business.
Under A.R.S. § 45-903, subsection A, paragraph 7 the District may sell its surplus power, without limitation as to the method of sale, and may construct and maintain the works useful for the purpose, either within or outside its boundaries. This provision is designated in the statute as one of the organizational purposes of the District, and constitutes an express power granted to it. In construing the nature and extent of this authority to sell surplus power outside the District and to build electric works useful for the purpose, we should ascertain its plain meaning and give effect to it. The provisions of the Agricultural Improvement District Act are to be liberally construed to the end that their objectives may be accomplished and justice promoted. Local 266, etc. v. Salt River Project Agr. Imp. & P. Dist, 78 Ariz. 30, 275 P.2d 393 (1954). Applying these rules of construction, it becomes evident that the District has express authority to sell surplus power outside its boundaries in any manner consistent with law, including sale by means of establishing a business enterprise devoted to public service.
At the time subsection A, paragraph 7 of § 45-903 A.R.S. was added to the District’s powers, by amendment in 1936, the District’s predecessor had established extra-territorial public utility service, of which fact the Legislature was fully aware. Almost twenty years later, the Legislature (Laws 1963, 1st sp. ses., ch. 1 § 1) encouraged the operation carried on by the District whereby it used its power revenues to defray costs of operation and for water conservation, being, at the time, fully cognizant of the nature and extent of its public utility operations. At no time has there been any legislative effort to curtail such activity or alter the status quo ante. This fact confirms the notion that the Legislature intended a liberal construction of the words "sale of surplus power” so as to include the public utility method of sale then being employed.
It appearing that (1) this court has held in City of Mesa and in Rubenstein, supra, that the District is empowered to act as a public utility, and, (2) the statute is broad enough to empower such activity outside the boundaries of the District, and (3) the District and its predecessor have for many years engaged in such activity within and without its boundaries, with tacit legislative approval, I conclude that in the conduct of such business it is not acting ultra vires.
The remaining question is, in the course-of its extra-territorial business as a public-utility, does the District have implied au*407thority to acquire power from sources other than its own generating facilities, to satisfy the increased demands of the public within reasonable reach of its service lines ?
I find no statute which expressly denies it such authority. It would seem that absent express statutory limitation, the authority to acquire sufficient power to meet the requirements of the citizens residing within the territory being served by its lines is implicit in the authority of the District to carry on the business of serving power to the public. When a municipal corporation is authorized to exercise a power purely proprietary, the law leans to the theory that it has full power to perform it in the same efficient manner as a private concern would do. Gardner v. Industrial Commission, 72 Ariz. 274, 233 P.2d 833 (1951). Local 266, etc. v. Salt River Project, 78 Ariz. 30, 275 P.2d 393 (1954). The outright denial of such authority in this case would be a great public disservice, which could cause immeasurable harm and hardship to thousands of citizens dependent upon electric service from the District. There should be no such denial except for sound, legal and compelling reasons.
It seems doubtful that the grant of authority to sell to the public one of the present-day necessities of life would intentionally be limited in such manner that continuity of service would be dependent on the ability of the District to develop and maintain a constant and sufficient surplus, over and above its own requirements. Especially is this so in view of the fact that through the years the Salt River Valley has experienced continuous growth and development, and that the yearly and seasonal power requirements of the District are subject to change. Did the Legislature contemplate that the public service to be established by the District with its surplus energy would be turned on and off or curtailed intermittently, depending on District power needs and generating capacity? Did the Legislature intend that the citizens living within the area served by the District’s lines be treated in this manner, when under similar circumstances other municipally operated utilities have ample authority to acquire the necessary electrical energy to satisfy customer demands? I believe not.
This court should determine that the District’s powers in relation to sale of electrical energy, expressed and reasonably implied are as follows:
(1) Under A.R.S. § 45-903, subsection A, paragraph 6, the District may provide an electric public utility service within its boundaries, or otherwise provide power to the occupants of the lands therein.
*408(2) At such times as it generates surplus power it may sell the same in any manner consistent with law, including the extension of its public utility business outside its boundaries.
(3) Once it has established a public utility plant and established service outside its boundaries, it may provide adequate service to its customers in the area served, even though its generating facilities become incapable of producing sufficient surplus power to satisfy their needs.
(4) It may acquire such additional necessary power by purchase, or otherwise, and may construct lines useful for transmitting it to the ultimate consumer.
. In view of the foregoing authorities and conclusions, it is evident that the transmission lines being constructed by the District are for a lawful purpose, and as I concur in the majority opinion dealing with the District’s right of condemnation, I conclude that the order of the lower court should be affirmed.
Note: The Honorable Renz L. Jennings, former Justice, having disqualified himself, and the Honorable Ernest W. McFarland, Justice, not having participated in the hearing, the Honorable Yale McFate, Judge of the Superior Court, was called in to participate in the determination of this matter.