Court Opinion

ID: 9665619
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:53:14.485842+00
Date Added: 2024-06-11T13:01:02.474287
License: Public Domain

TEIGEN, Judge
(dissenting).
It is clear to me that the Legislature, in adopting Chapter 319 of the Session Laws of 1965, established a policy of law that a public utility, as defined therein, shall not be permitted by the Public Service Commission to expand upon its electrical services in the rural areas of the State, unless and until it has obtained an order from the Public Service Commission authorizing such extension and service and, with one exception, a certificate of public convenience and necessity. Section 3, quoted in the majority opinion, governs the Public Service Commission in this decision. It provides that the Public Service Commission shall not issue its order or a certificate of public convenience and necessity to any electric public utility to extend its electric lines beyond the corporate limits of a municipality, or to serve a customer whose place to be served is located outside the corporate limits of a municipality, unless it finds that certain facts exist. These facts are that either the electric co-operative, with lines or facilities nearest the place where the service is required, has consented in writing to such extension by the electric public utility, or that the service required cannot be provided by an electric co-operative corporation. The certificate is not required if an agreement has been entered into between a public utility and the proper electric co-operative, provided such agreement is approved by the Public Service Commission. These conditions are guidelines which govern the Public Service Commission in administering the policy of the law as established by the Legislature in this area.
The majority, without specifically saying so, have construed Section 3 to grant a *426monopoly in the rural areas of the State to the electric co-operatives. I do not agree with this construction of the section. I do not agree that the question whether a public utility may extend its services into a rural area is to be determined only by the electric co-operative nearest the place where such services are to be rendered. I believe the Public Service Commission has the power to grant such extension in the absence of the consent or agreement by the electric co-operative and where the electric co-operative can physically provide the services were it not for the refusal of the customer to be served to apply for it.
The statutes do not require a rural customer to seek membership in the electric co-operative serving his area, or request its service as a nonmember. Therefore, if a potential rural customer, for reasons of his own, refuses to receive central-station service from the electric co-operative serving his area, it appears to me that if the electric co-operative cannot provide it, production of such proof in a hearing before the Public Service Commission authorizes it to issue its order permitting an extension of service by the public utility, if it also finds that public convenience and necessity tests are met.
Thus, the Legislature, in its wisdom, has provided protection for the person who resides in a rural area and who chooses not to receive central-station service from the electric co-operative serving his area because he does not wish to contract with the electric co-operative. He is protected to the extent that he is not required, against his will, to seek service from a non-policed supplier of electricity which he may feel will discriminate against him as did Lille-thun in Lillethun v. Tri-County Electric Cooperative, Inc., N.D., 152 N.W.2d 147 [Civil No. 8390], or for other reasons.
On the other hand, the Legislature, in its wisdom, has not provided such person an absolute right to be served by an electric public utility. The question whether he shall be served by it remains for decision by the Public Service Commission, after ascertaining all the facts and conditions to which the policy of the law applies, including the question of public convenience and necessity.
The State has exercised its police powers to control investor-owned public utilities for many years. While complete jurisdiction was placed in the Public Service Commission over investor-owned public utilities, the Legislature provided the Public Service Commission shall have no jurisdiction over “rates, contracts, services rendered, the safety, adequacy, or sufficiency of facilities, or the rules or regulations of any public utility * * * not operated for profit, * * Section 49-02-01.1, N.D.C.C. Chapters 49-01 through 49-07, N.D.C.C., which are made applicable to public utilities, and Chapter 49-20, N. D.C.C., which is applicable to all electric companies, impose various requirements upon public utilities which do not apply to electric co-operatives. The police power of the State has not been extended over electric co-operatives in the area of rates, contracts, services rendered, safety, adequacy, or sufficiency of facilities, except safety regulations when their lines are located in, under, or across public highways or public places, Section 49-20-02, N. D.C.C., or for the construction or reconstruction of high voltage or amperage lines, Section 49-20-03, N.D.C.C.
The relationship between the patron and the electric co-operative is based on contract which is not subject to control by the Public Service Commission. There is no buyer-seller relationship as the member-owner is both buyer and seller. An electric co-operative operates as a nonprofit corporation and surplus earnings are credited back to its patrons who furnished them. It is, undoubtedly, for these reasons that the Legislature has not extended its police powers over rates, contracts, services rendered, etc., over the electric cooperative corporations.
*427Thus, when a business relationship comes into existence between a rural customer and an electric co-operative, it is on a voluntary basis on the part of the customer who becomes a> patron. An electric co-operative is required by Section 10-13-04, N.D.C.C., to serve the customer and accept his application for membership, if he resides in a rural area served by the electric co-operative and agrees to abide by the provisions of its bylaws. But a potential rural customer is not required by law to contract with the co-operative.
The majority appear to construe Chapter 319 of the Session Laws of 1965 to require a potential rural customer to contract for electrical service with the co-operative serving his area if it refuses to consent or enter into an agreement that he be served by a public utility, unless the Public Service Commission finds as a fact that the electric co-operative cannot serve the customer for physical or geographic reasons only. I do not agree with this construction. I think an electric co-operative cannot provide the service within the definition of the Act if the customer refuses to become a patron of the electric cooperative. To hold otherwise forces a potential rural customer to contract against his will. A citizen’s right to contract or not to contract is one of the liberties that is inherent and inalienable. It belongs to every citizen by the law of the land and every man is at liberty to freely deal or refuse to deal with his fellowman. 16 Am. Jur.2d, Constitutional Law, Sec. 373. There are certain limitations but these are applicable only where the police powers of the State are invoked based on some reasonable basis. 16 Am.Jur.2d, Constitutional Law, Secs. 374 and 375.
Our Legislature has not seen fit to invoke the police powers in this area and it »is improper for us to assume that a potential rural customer for electricity is now compelled to contract with the electric co-operative serving his area, unless the electric co-operative consents or agrees otherwise. To give such a construction to this statute, in my opinion, makes it vulnerable to attack on a constitutional basis by a resistant potential customer. It is true that under the police powers the State can interfere with private rights when necessary to protect the public in many areas but we are not concerned here with the question of whether or not the State may exercise it. The simple fact is that the State has not done so.
In my opinion, Chapter 319 of the Session Laws of 1965 does not broaden the rights of the electric co-operative, nor does it exclude public utilities from serving rural areas. It merely tightens the guidelines by which the Public Service Commission is governed in permitting expansion of public utility service in rural areas and requires the issuance of a certificate of public convenience and necessity where the utility and the co-operative have not entered into an agreement acceptable to the Public Service Commission. It does not eliminate customer preference but subjects the customer’s preference for public utility service to an inquiry and decision by the Public Service Commission on the question of .public convenience and necessity.
It appears to me that if we construe this statute otherwise, it will be violative of Section 1 of the State Constitution and the due process clause of Section 13. Section 1 provides:
All men are by nature equally free and independent and have certain inalienable rights, among which are those enjoying and defending life and liberty; acquiring, possessing and protecting property and reputation; and pursuing and obtaining safety and happiness.
The word “liberty” as stated in State v. Cromwell, 72 N.D. 565, 9 N.W.2d 914, “includes the right of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or vocation, and for that purpose to enter into all contracts which may be proper, necessary, and essential to *428his carrying out these purposes to a successful conclusion. Within the meaning of the term ‘liberty’ is also included the right to buy and sell, to select freely such tradesmen as the citizen himself may desire to patronize, to manufacture, to acquire property, to live in a community, to have a free and open market, the right of free speech, of self-defense against unlawful violence, and, in general, the opportunity to do those things which are ordinarily done by free men.”
If the statute violates Section 1 of the Constitution, it also violates the last clause of Section 13 thereof as it provides:
* * * No person shall * * * be deprived of life, liberty or property without due process of law.
Thus the due process clause protects and insures the enjoyment of the rights declared by Section 1.
It is my view that the service required cannot be provided by an electric cooperative corporation if the potential rural customer for central-station service refuses to contract with the electric co-operative for such service.
For the reasons aforesaid, I am of the opinion that Chapter 319 of the Session Laws of 1965 is not an unlawful delegation of legislative power. I agree that the remaining portions of Chapter 319 are valid.