Court Opinion

ID: 9645839
Source: CourtListenerOpinion
Date Created: 2023-08-22 21:36:47.797305+00
Date Added: 2024-06-11T18:11:32.193805
License: Public Domain

Judge MOREMEN
with whom Chief Justice MONTGOMERY joins,
dissenting.
KRS 278.040 states: “The jurisdiction of the commission (Public Service Commission) shall extend to all utilities in this state.”
KRS 278.010(3) reads: “'Utility’ means any person, except a water district organized under Chapter 74 or a city, who owns, controls, operates or manages any facility used * *
The above statutes suggest strongly that neither cities nor water districts were under the jurisdiction of the commission, the rationale being that the citizens and voters of a city, or a water district, would have sufficient control over the management of either one.
In City of Olive Hill v. Public Service Commission, 305 Ky. 249, 203 S.W.2d 68, 70, the city of Olive Hill was furnishing electricity to approximately 800 customers, about half of whom resided outside the city limits. Upon complaint, and after a hearing, the commission entered an order holding that a city was without authority to distribute electricity outside its corporate limits, and ordered the city to discontinue so doing as soon as another utility constructed lines to serve those patrons. The question on appeal was whether the commission possessed authority to enter such an order.
The court said:
“We agree with the City that the Commission’s powers are purely statutory and are limited to the regulation of rates and service of utilities. KRS 278.040(2); Public Service Commission v. Blue Grass Natural Gas Co., 303 Ky. 310, 197 S.W.2d 765, and authorities therein cited. It follows that the Commission was without jurisdiction to determine that the City has no legal right or authority to supply patrons beyond the corporate limits and to order it to cease so doing. This is a question for a court of original jurisdiction and not the Commission; therefore, the Franklin Circuit Court erred in holding that the Commission possessed this authority.”
The word “service” is defined by KRS 278.010, and does not include territorial disputes.
Strangely enough this opinion indicated that even though the commission had no jurisdiction over a city by the terms of the definition in the act, still when it went beyond its borders it was subject to the commission’s supervision as to rates and services. The court said:
“As the Commission was without jurisdiction to order the City to cease this service, which was a question that could only be decided by a court of competent original jurisdiction, and as the Commission (so long as the City is not prevented by a court from operating beyond its boundaries) should have regulated the rates and compelled the *275City to give adequate service to patrons residing without its limits rather than to have issued certificates of convenience and necessity to appellees, the judgment of the Franklin Circuit Court upholding the order of the Commission is hereby reversed, and the case is sent back to the commission for action in conformity with this opinion.”
It will be noticed that although the court surrendered its judicial power to the commission so far as rates and services were concerned, it carefully retained the court’s jurisdiction in territorial disputes and we believe this case, as did the Olive Hill case, involves a territorial dispute.
The majority opinion states: “While both cities and water districts are by KRS 278.010(2) expressly exempted from the definition of ‘utilities’, this statute uses the word ‘person’, and such public corporations are subject to its provisions.” In other words, since subsection (2) of KRS 278.010 reads: “ ‘Person’ includes natural persons, partnerships, corporations, and two or more persons having a joint or common interest,” and cities and water districts are public corporations, they are subject to the provisions of the act. We have quoted at the beginning of this discussion the subsection which immediately follows wherein water districts and cities are expressly excluded and we cannot follow the logic that although they are excluded they are persons and persons are covered by the act, therefore the commission has jurisdiction of cities and water districts.
The next thing that is somewhat disturbing to us about the opinion is the fact that it ignores completely the territorial integrity which we believe the legislature intended a water district to have. KRS Chapter 74 seems to be deeply concerned with territorial and boundary limitations. Some of the pertinent statutes are: KRS 74.010 which sets out procedure for the creation of a water district and requires that the petition to the county court describé the territory intended to be included in it. It gives the county court power to strike off any part of the territory which will not be benefited. KRS 74.090 gives the power of condemnation. KRS 74.100 provides that whenever a water supply line or system is in operation in any water district, it may acquire the existing system. KRS 74.110 provides means by which the boundaries of the district may be enlarged or diminished. But the power to annex or strike off territory is lodged in the county court, not the public service commission.
The opinion in Board of Com’rs of Louisville Extension Water District v. Yunker, Ky., 239 S.W.2d 984, gives us the distinct impression that the court at that time was of opinion that the incorporation of a water district gave the district higher rights in that territory than anyone else. Under the majority opinion, it seems that a water district has no franchise or monopoly of value, that its creation is no more than a bare charter to do business, very much the same as a newly incorporated private business; that it has no preemptive rights in any territory. Under this decision two abutting cities could serve water within the territorial limits of the other city if the commisssion permitted it.
In conclusion, we are unable to reconcile the opinion just handed down in Warren Rural Electric Cooperative Corporation v. Electric Plant Board of the City of Bowling Green, Ky., 331 S.W.2d 117, with the majority opinion in the case at bar. It is true that KRS 96.880 excluded municipalities from supervision of the public service commission, in connection with their electric plants. We believe that KRS 278.-010(3) does the same thing for water districts and cities.
The City of Olive Hill case has been cited and relied upon many times and we believe that if we are not going to follow it, that case should be overruled, and a new rule clearly stated.
For the foregoing reasons we respectfully dissent.