Court Opinion

ID: 6781635
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:56:40.982401+00
Date Added: 2024-06-11T16:02:52.756209
License: Public Domain

Hadley, J.,
dissenting. I respectfully dissent.
I agree with the majority’s statement that “[t]he Ohio Constitution provides that municipalities may acquire or produce utility services or products for the municipality and its inhabitants and sell surplus product or service.” I disagree with the majority when it states that a municipality is limited in this endeavor by any means other than the fifty-percent limitation set forth in Section 6, Article XVIII of the Constitution.
Under the Home Rule Amendment, Article XVIII, adopted after being proposed by the Constitutional Convention of 1912, “the sovereign people of the state expressly delegated to the sovereign people of the municipalities of the state full and complete political power in all matters of ‘local self-government.’ ” Perrysburg v. Ridgway (1923), 108 Ohio St. 245, 255, 140 N.E. 595, 598.
In Travelers Ins. Co. v. Wadsworth (1924), 109 Ohio St. 440, 142 N.E. 900, at paragraph two of the syllabus, this court held that “in the absence of specific prohibition, the city acting in a proprietary capacity may exercise its powers as would an individual or private corporation.”
In State ex rel. Indian Hill Acres, Inc. v. Kellogg (1948), 149 Ohio St. 461, 37 O.O. 137, 79 N.E.2d 319, the court held that a municipality has full power to determine the policy to be followed in regard to the sale and delivery of a surplus product of a municipally owned utility to others and that it may sell and dispose of its surplus product in such quantities and in such manner as its council determines to be in the best interest of the municipality and its inhabitants.
Specifically referring to electrical utilities, in State ex rel. McCann v. Defiance (1958), 167 Ohio St. 313, 4 O.O.2d 369, 148 N.E.2d 221, paragraph one of the syllabus, the court ruled,- “The General Assembly has no power to * * * [limit] the * * * authority of a municipality * * * to sell and deliver to others the portion of the surplus product of such utility that it is authorized by Sections 4 and 6 of Article XVIII of the Constitution to sell and deliver to such others.”
The majority cities as its authority to limit the sale by municipal utilities the case of State ex rel. Wilson v. Hance (1959), 169 Ohio St. 457, 461, 8 O.O.2d 471, 473, 159 N.E.2d 741, 744. A close examination of that case reveals that the court found that the Constitution did in fact authorize municipalities to acquire public utilities and contract with others for their products and services, but pointed out that the disposition of surplus products or services of the utilities was limited by Section 6, Article XVIII, the fifty-percent limitation. The court merely found that under the circumstances of that case, since it had already been determined that the city of Piqua had exceeded its fifty-percent limitation, any further contract to sell surplus electricity outside the city would be invalid due to that fifty-percent limitation only. Thus neither the Constitution nor case law limits *295the action of the municipalities in this action except for the fifty-percent limitation.
In conjunction with the constitutional power regarding utilities, the General Assembly has enacted R.C. 715.02, which provides that two or more municipal corporations may enter into agreements for the joint construction or management of a utility, “or for the joint exercise of any power conferred on municipal corporations by the constitution or laws of this state, in which each of such municipal corporations is interested.”
Thus a municipality has full and complete power to enter into whatever arrangement it deems necessary for the ownership, operation, and control of public utilities by itself or in conjunction with other municipalities, subject to the fifty-percent limitation.
The majority concludes without authority that since municipalities are not regulated by the Public Utility Commission, “[t]o allow municipalities the unfettered authority to purchase and then resell electricity to entities outside their boundaries could create unfair competition for the heavily regulated public utilities.”
Examining the limitation provision, I find that Section 6, Article XVIII does not provide an “unfettered authority”:
“Any municipality, owning or operating a public utility for the purpose of supplying the service or product thereof to the municipality or its inhabitants, may also sell and deliver to others any transportation service of such utility and the surplus product of any other utility in an amount not exceeding in either case fifty per cent of the total service or product supplied by such utility within the municipality, provided that such fifty per cent limitation shall not apply to the sale of water or sewage services.”
The debates and proceedings of the constitutional convention clearly indicate that the framers considered whether municipalities would be competitive with private corporations for utilities and concluded that the fifty-percent provision would be the only necessary limitation and that the implementation of that limitation should be left to the courts. The court of appeals made the correct assessment of this matter and remanded it to the trial court for determination regarding fifty-percent limitation. I believe that the decision of the court of appeals should be affirmed.