Court Opinion

ID: 9528952
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:45:41.668865+00
Date Added: 2024-06-11T13:27:32.243331
License: Public Domain

TUCKETT, Justice:
Original proceedings were filed in this court to review a decision of the Public Service Commission of Utah. The plaintiff petitioned the Commission for an order compelling Terra Utilities, Inc., to supply water required for a condominium building project contemplated by the plaintiff.
. Prior to 1969 Terracor commenced a development of a community to be known as “Bloomington” lying some three miles south of the city of St. George, Utah. The development planned by Terracor contemplated the construction of one-family dwellings, as well as erection of condominiums on other parts of the tract. In pursuing its plan Terracor built roads, a water supply system, and a sewage disposal system. In addition thereto Terracor established a golf course, tennis courts, a swimming pool, a club house, and riding facilities. The plan of Terracor was to recoup the expenses involved in the development and to eventually realize a profit from the sale of lots and housing. A contract was entered into between the city of St. George and Terracor whereby the city agreed to sell surplus waters to supply the culinary requirements of the Bloomington development.
In the year 1969 Terra Utilities, Inc., was formed as a wholly owned corporation by Terracor. Terracor owned all of the shares of stock of Terra Utilities, with interlocking directors. Terracor conveyed to Terra Utilities the water and sewer systems it had established in the development. Thereafter Terra Utilities applied to the Public Service Commission for a certificate of convenience and necessity to operate as a public utility. The Commission granted the certificate as prayed for.
The plaintiff purchased a tract of land in the vicinity of Bloomington and commenced preparation to construct condominium residential housing. In the latter part of 1971 the plaintiff applied to Terra Utilities for water to be supplied from its system. The plaintiff requested the utility to supply 19,000 gallons per day but the Utility declined to supply more than 9,600 gallons per day. Terra Utilities does not claim that its supply of water is insufficient to supply the request of the plaintiff but, rather, that its parent corporation Ter-racor in the sale of its lots which had been completed and the offers to sell the remaining lots provided that culinary water would be available to each lot to be supplied by a company regulated by the Public Service Commission. Only a small portion of the total lots have been sold. During the course of the development Terracor made representations to state and federal agencies confirming the fact- that water would be supplied for the lots offered for sale. The ordinances of Washington County require *382an assured supply of water prior to subdivision approval. The county also required that the water supply be approved by the State Department of Health.
It is the contention of the defendants Terra Utilities and Terracor that the representations made by Terracor in its offers to sell and the approvals secured from various governmental agencies has the effect of allocating water to each of the lots in Terracor’s development and that it only has 9,600 gallons per day over and above these prior allocations to supply the plaintiff’s needs.
The Commission did not find that a system of allocation has been established but it elected to treat the matter as though a system of allocations or priorities had in fact been made. The pertinent part of the Commission’s conclusion in respect thereto is set forth as follows:
It seems appropriate to this Commission, in view of the facts and circumstances of this case, and in view of the numerous members of the public who have purchased lots with the hope of one day building thereon and upon representations made that culinary water is available therefor, that it is in the best public interest that this Commission conclude that the water source available to Terra Utilities, Inc., was allocated to the various subdivisions at the time the Division of Health of the State of Utah approved of the water source represented by the developer and the public utility to be available to each proposed subdivision.
The Commission then issued its order which provides in part as follows:
Terra Utilities, Inc., shall make available to complainant, Interwest Corporation, 9,600 gallons of culinary water per day immediately upon Interwest’s request therefor, providing Interwest has complied with all of the requirements contained in Terra Utilities tariffs on file with this Commission.
All additional water sources acquired by Terra Utilities, Inc., shall be allocated on the basis of the priorities established by the date of the preliminary approval by Washington County Planning Board of development plans requiring water in excess of that already allocated to the land on which the proposed development will be located.
The Public Service Commission was created by the legislature and charged with the general duties of regulating public utilities. The Commission can only exercise those powers granted by the legislature. We find no statute, nor has our attention been called to any statute, which authorizes the Commission to set up a system of priorities or allocations for the use of water on a territorial basis as was done in this case. The Commission is authorized to regulate water companies and the services *383of those companies rendered to their customers so that there is no discrimination.1
The record is this case indicates that the supply of water available to Terra Utilities is adequate to supply the users now connected with the system and those who are about to become users, including the use and supply of water requested by the plaintiff. Even though the developments planned by the defendant Terracor and the plaintiff contemplate some density of population, at the present time the area is only sparsely inhabited. We do not have a problem where population has outstripped the water supply.
We are of the opinion that the Commission exercised a power beyond that granted to it by the legislature and that its order is without force or effect.2 The decision of the Commission is reversed. No costs awarded.
CALLISTER, C. J., and HENRIOD, J., concur..

. Allen v. Park Place Water, Light & Power Co., 266 S.W. 219 (Tex.Civ.App.) ; Nueces County Water Imp. Dist. No. 1 v. Spring, 139 Tex. 297, 162 S.W.2d 155.

. Salt Lake City v. Utah Light & Traction Co., 52 Utah 210, 173 P. 556.