Barron Elec. Co-op. v. Public Service Com'n of Wis.

• Decision Date: 07 August 1997
• Docket Number: No. 97-0420,97-0420
• Citation: 212 Wis.2d 752,569 N.W.2d 726
• Parties: , Util. L. Rep. P 26,622 BARRON ELECTRIC COOPERATIVE, Petitioner- Respondent,d v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent-Co-Appellant, Northern States Power Company of Wisconsin, Respondent-Co-Appellant.
• Court: Wisconsin Court of Appeals

Page 726

569 N.W.2d 726

212 Wis.2d 752, Util. L. Rep. P 26,622

BARRON ELECTRIC COOPERATIVE Petitioner- Respondent,d v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent-Co-Appellant Northern States Power Company of Wisconsin, Respondent-Co-Appellant.

No. 97-0420.

Court of Appeals of Wisconsin.

Submitted on Briefs July 9, 1997.

Opinion Released Aug. 7, 1997.

Opinion Filed Aug. 7, 1997.

On behalf of the respondent-co-appellant Public Service Commission of Wisconsin, the cause was submitted on the briefs of Steven Levine of Public Service Commission of Wisconsin.

On behalf of the respondent-co-appellant Northern States Power Company of Wisconsin, the cause was submitted on the briefs of Lisa S. Keyes of Michael, Best & Friedrich of Madison.

On behalf of the petitioner-respondent, the cause was submitted on the brief of Charles S. Van Sickle of Wheeler, Van Sickle & Anderson, S.C., of Madison.

Before EICH, C.J., and VERGERONT and DEININGER, JJ.

EICH, Chief Judge.

The Public Service Commission and Northern States Power Company of Wisconsin (NSP) appeal from an order reversing the commission's decision that Barron Electric Cooperative does not have the right to provide electric service in a residential development in rural Barron County. The commission ruled that Barron's extension of service to a duplex residence in the development violated § 196.495(1m)(b), STATS., and ordered removal of the offending line. Section 196.495 defines two classes of electric utility service extensions according to length. An extension of 500 feet of line or more is a "primary voltage extension"; an extension of less than 500 feet is a "secondary voltage extension." The statute generally prohibits electric utilities from constructing a primary extension to unserved premises to which service is available from another utility through a secondary extension. Under § 196.495(1)(b), the length of an extension is to be measured by "the air line distance between an existing local service distribution line ... and the nearest point on the principal building or facility to be served by ... [the] extension." ¹

The commission's conclusion that Barron's line to the duplex violated § 196.495, STATS., was based on its determination that the line was a primary extension within the meaning of the statute, while NSP had the ability to serve the duplex through a secondary extension. The circuit court disagreed. Employing a de novo standard of review, the court concluded that neither utility could serve the property via a secondary extension and, as a result, there could be no violation of the statute.

The crucial issue is the scope of judicial review of the commission's decision interpreting and applying the provisions of § 196.495, STATS., to the found facts. In this case, as in many other administrative appeals, the ultimate decision is largely driven by the degree of deference we owe, or do not owe, to the agency's decision.

As indicated, the circuit court concluded that it owed little or no deference to the commission's decision and, arriving at its own differing interpretation of the applicable statute, reversed the order. In our view, the commission's decision is entitled to great weight and should be affirmed if it is reasonable, even if another interpretation--such as Barron's or the trial court's--may be equally reasonable. Because we are satisfied that the commission's decision meets the test of reasonableness, we affirm it and reverse the order of the circuit court.

The facts are not in dispute. Charles and Phyllis Cook have owned a farm near the Village of Cameron since 1963, receiving electric service from Barron. In 1976, the Cooks sold off the farm buildings. Gradually, they split up the remaining property and acquired other parcels. While some land remains in use for farming, other portions of the property have been developed for residential use. The area in question is sometimes called Cooksville and referred to by the Cooks as a subdivision--although it has never been formally platted as one. It is an oblong piece of property containing more than forty-five residential lots stretching in a north-south direction from 15th Avenue on the north to County Highway W on the south. The residential lots are separated from the original farm buildings by U.S. Highway 53 on the west. To the east, a cranberry bog runs along the lots.

Both Barron and NSP had pre-existing electric lines in the area. Barron's runs east-west along 15th Avenue on the northern edge of the subdivision, and NSP's tracks Highway W on the south, also in an east-west direction. In July 1994, the Cooks signed a service agreement with Barron to extend its line southward from 15th Avenue to a parcel known as Lot 15, which was located just into the southern half of the subdivision--some 1600 feet from Barron's 15th Avenue line. The service agreement described Lot 15 as an "unimproved lot." According to the commission's findings of fact, Mr. Cook was storing a camper and some excavating equipment on the property at the time the line was extended to the lot on September 9, 1994. At some unspecified later time, he placed a second camper on the lot. Two weeks after Barron's initial extension to Lot 15, it extended the line farther south to a security light after the Cooks began experiencing problems with trespassers and vandalism in the area.

On September 15, 1994, Dennis Zinsmaster signed an agreement for Barron to extend service to a duplex he planned to construct at the very southern edge of the subdivision--only some 300 feet north of Highway W, where the NSP line was located. Learning of the extension, NSP complained to the commission that Barron had violated § 196.495, STATS., by extending its 15th Avenue line some 5500 feet to the Zinsmaster duplex, which NSP claimed was the "principal building or facility to be served by ... [the] extension" within the meaning of § 196.495(1)(b), and which was only 300 feet from NSP's existing line along Highway W. Barron took the position that the "principal building or facility" being served, at least at the outset, was Lot 15 and, eventually, the security light erected somewhere between Lot 15 and the Zinsmaster parcel. Both points were more than 500 feet from either Barron's or NSP's then-existing lines.

The commission agreed with NSP, holding first that the extension closer to the Zinsmaster parcel, the security light, was not the proper point to begin the 500-foot measurement to the duplex because it was not a "principal building or facility" within the meaning of the statute. ² The commission then considered whether Lot 15 could be considered such a facility and ruled that it could not, reasoning as follows:

The purpose of Cooksville is to offer permanent residences to the public. For this reason, the temporary campers at Lot 15 cannot be considered principal buildings or facilities. [The Zinsmaster] [d]uplex ... must therefore be the principal building or facility served by the B[arron] extension. B[arron]'s line is a primary voltage extension, 5,581 feet long. NSP can serve [the][d]uplex ... with a secondary voltage extension, approximately 300 [feet] long. According to the 500-foot rule set forth in s. 196.495(1) and (1m)(b), Stats., NSP is the proper service provider to [the][d]uplex....

Barron sought judicial review of the commission's decision and its order requiring it to remove the service line. As indicated, the circuit court reversed, concluding first that the commission's decision was entitled to no deference because it was based on the "purpose" of the development rather than on the agency's expertise and past experience. Then, determining that the camper on Lot 15 was a proper starting point for the necessary measurements, the court concluded that because both utilities' existing lines were more than 500 feet from Lot 15, the restrictions in § 196.495, STATS., were inapplicable and the Cooks could contract for service for the Zinsmaster lot from either provider.

I. Standard of Review

Not surprisingly, the parties differ as to the appropriate standard governing our review of the commission's order. ³ The commission and NSP argue for deferential review, while Barron urges us to consider the commission's decision de novo, as the trial court did.

While we begin with the proposition that the interpretation of statutes, and their application to found facts, is a question of law for the courts, not for administrative agencies, an equally important principle of administrative law is that, in recognition of the expertise and experience possessed by agencies, courts will defer to their interpretation of statutes in certain situations. When, and to what degree, deference should be paid to an agency's decision in a given case has been the subject of much discussion in the supreme court and this court over the years. This discussion has culminated in Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 539 N.W.2d 98 (1995), where the supreme court, summarizing several prior cases, outlined three possible levels of deference courts should apply to an administrative agency's legal conclusions and statutory interpretations.

According to Harnischfeger, courts should grant the highest level of deference--"great deference"--to the agency where: (1) it is charged with administration of the statute being interpreted; (2) its interpretation "is one of long-standing"; (3) it employed "its expertise or specialized knowledge" in arriving at its interpretation; and (4) its interpretation "will provide uniformity and consistency in the application of the statute." Id. at 660, 539 N.W.2d at 102. Where great deference is appropriate, the agency's interpretation will be sustained if it is reasonable--even if an alternative reading of the statute is more reasonable. Id. at 661, 663, 539 N.W.2d at 102, 103. ⁴ We also will pay great deference to an agency's interpretation "if it is intertwined with value and policy...