Bridle Bit Ranch v. Basin Elec. Power

• Decision Date: 07 September 2005
• Docket Number: No. 04-134.,No. 04-136.,04-134.,04-136.
• Parties: BRIDLE BIT RANCH COMPANY, a Wyoming Corporation; Jerry and Barbara Dilts Family Limited Partnership, a Wyoming Limited Partnership; Floyd C. Reno & Sons, a Wyoming corporation; Leland J. Turner; Karen Turner; Jennifer Louise Turner; Wendy Christine Turner; Karen Turner, Conservator of the Estate of Michael William Turner, (a minor); Patricia L. Isenberger Litton, formerly Patricia Louise Isenberger, and Gene Litton, Wife and Husband, Petitioners, v. BASIN ELECTRIC POWER COOPERATIVE, a North Dakota Corporation, Respondent. Robert R. Roush and Dona M. Roush, Husband and Wife; and Innes Ranch, LLC, a Wyoming Limited Liability Company, Petitioners, v. Basin Electric Power Cooperative, a North Dakota Corporation, Respondent.
• Court: Wyoming Supreme Court

118 P.3d 996

2005 WY 108

BRIDLE BIT RANCH COMPANY, a Wyoming Corporation; Jerry and Barbara Dilts Family Limited Partnership, a Wyoming Limited Partnership; Floyd C. Reno & Sons, a Wyoming corporation; Leland J. Turner; Karen Turner; Jennifer Louise Turner; Wendy Christine

Turner; Karen Turner, Conservator of the Estate of Michael William Turner, (a minor); Patricia L. Isenberger Litton, formerly Patricia Louise Isenberger, and Gene Litton, Wife and Husband, Petitioners, v. BASIN ELECTRIC POWER COOPERATIVE, a North Dakota Corporation, Respondent.

Robert R. Roush and Dona M. Roush, Husband and Wife; and Innes Ranch, LLC, a Wyoming Limited Liability Company, Petitioners, v. Basin Electric Power Cooperative, a North Dakota Corporation, Respondent.

No. 04-134.

No. 04-136.

Supreme Court of Wyoming.

September 7, 2005.

Tad T. Daly and Matthew R. Sorensen of Daly Law Associates, P.C., Gillette, Wyoming, for Petitioners Bridle Bit Ranch Company, et al. Argument by Mr. Daly.

Stephen N. Sherard and Rex E. Johnson of Sherard, Sherard and Johnson, Wheatland, Wyoming, for Respondent Basin Electric Power Cooperative. Argument by Mr. Sherard.

Charles R. Hart and Lynn M. Smith of Hart & Smith, Sheridan, Wyoming; and Nancy D. Freudenthal of Davis & Cannon, Cheyenne, Wyoming, for Petitioners Robert R. Roush and Dona M. Roush, et al. Argument by Ms. Freudenthal.

Before HILL, C.J., and GOLDEN, KITE, VOIGT, and BURKE, JJ.

HILL, Chief Justice.

[¶ 1] Employing its powers of eminent domain, the Respondent, Basin Electric Power Cooperative (Basin), sought to condemn a right-of-way through a portion of Campbell County in order to build a 230-kilovolt (kV) power transmission line. Basin asserted that the transmission line was necessary so as to provide additional electrical power to areas of Campbell County where coal bed methane (CBM) is being developed and to otherwise enhance the availability and reliability of electrical service to that area. Basin is a regional wholesale electric generation and transmission cooperative that supplies wholesale electricity to its distribution cooperatives. Powder River Energy Corporation (PRECorp) is a Wyoming non-profit corporation and is one of Basin's distribution cooperative members. PRECorp provides electricity at retail to its customers in Northeastern Wyoming, including Campbell County.

[¶ 2] Basin was able to reach settlements with approximately 82% of the private landowners affected by the transmission line, as well as with the United States Forest Service.¹ At the time of the hearing on this stage of the condemnation action (the "taking"), Basin had not yet reached agreements with two groups of landowners, nor with The State of Wyoming, Office of State Land and Investments (State Lands), or the Bureau of Land Management (BLM).¹ Case No. 04-134 is a challenge to the district court's order granting Basin immediate possession of the lands owned by a group of landowners to whom we will refer collectively as "the Bridle Bit Group." Case No. 04-136 is a similar challenge to that same order by another group of landowners to whom we will refer as "the Roush Group."

[¶ 3] By order entered on July 13, 2004, this Court granted Petitions for Writ of Review under W.R.A.P. 13, in order to address the concerns of both groups of landowners. It was necessary for the landowners to utilize W.R.A.P. 13 because of a long-standing precedent articulated by this Court that the "taking" portion of a condemnation action is not an appealable order. Arp v. State Highway Commission, 567 P.2d 736, 739 (Wyo. 1977).

[¶ 4] Both groups of landowners contend that Basin is a public utility as defined by Wyo. Stat. Ann. § 37-1-101 (LexisNexis 2005), and, thus, Basin was required to obtain a certificate of public convenience and necessity from the Public Service Commission (PSC) before beginning the process of locating the transmission line. They also contend that Basin: Failed to show that public interest and necessity required the project; failed to show that the project is planned and located in a manner that will be most compatible with the greatest public good and the least private injury; and failed to negotiate in good faith. It is also contended that the district court erred in granting a taking that is, in essence, perpetual.

[¶ 5] We will affirm the district court's order in all respects.

ISSUES

[¶ 6] The Bridle Bit Group raises these issues:

A. Did the district court commit clear error in finding Basin located the transmission line in the manner most compatible with greatest public good and least private injury?

B. Did the district court err in finding that a perpetual easement for transmission lines is permitted under Wyoming law?

C. Did the district court err in finding that Basin was not a public utility as defined by Wyoming Statute § 37-1-101?

The Roush Group states these issues:

I. Whether the district court erred in finding [that Basin] met all the requirements of Wyoming's eminent domain statutes.

a. Did [Basin] comply with the statutory requirements for a condemnation action?

b. Is [Basin] a "public utility," and therefore, required to obtain a "certificate of public convenience and necessity" from the Public Service Commission prior to condemnation[?]

II. Whether [Basin] should be granted a limited easement or an easement in perpetuity.

We glean this more complete statement of the issues from Basin's brief:

I. Basin has complied with the statutory requirements for its condemnation action.

a) Basin has shown that the public interest and necessity require the transmission line project.

b) Basin has proved that the project is planned or located in the manner that will be the most compatible with the greatest public good and the least private injury[.]

c) Basin has made reasonable and diligent efforts to acquire property by good faith negotiation.

II. Basin is entitled to a permanent easement for its transmission line and access rights-of-way.

III. Basin [is not a public utility] and was not required to obtain a certificate of public convenience and necessity from [PSC] [before proceeding with the] condemnation action.

FACTS AND PROCEEDINGS

[¶ 7] During the winter of 2000, Basin began looking at selecting a route for an additional power transmission line in Campbell County. By letter dated December 21, 2000, Basin submitted the following inquiry to PSC:

Basin Electric Power Cooperative (Basin Electric) is currently reviewing its resources for supplying wholesale power to its member Powder River Energy Corporation (PRECORP). PRECORP has experienced a sudden and rather substantial increase in its membership load because of the development of coal bed methane in the Powder River Basin.

While Basin Electric is considering several options for power supply, the first phase of an overall program needs to move forward expeditiously so that Basin Electric can meet its power supply obligations. Our studies show that Basin Electric needs approximately 40-50 MW [megawatt] of capacity in place in the PRECORP service territory on or before May of 2002.

To meet this need, we anticipate installing up to 15 MW of combustion turbine capacity adjacent to each of the PRECORP substations located in Arvada, Barber Creek and Hartzog for a total of 45 MW. A map of the proposed locations is attached. There will be three or four combustion turbines located at each substation, depending on the size of the units ultimately selected. The estimated cost of these facilities is $36 million.

Basin Electric¹ seeks a ruling from the Commission on whether it must obtain a Certificate of Public Convenience and Necessity under Section 37-2-204² of the Wyoming Statutes Annotated for the installation of these turbines.

¹ Basin Electric is a participant in the Laramie River Station that is jointly owned by Basin Electric, Tri-State Generation and Transmission Association, Western Minnesota Municipal Power Agency, Heartland Consumers Power District, the City of Lincoln, Nebraska Electric System and the Wyoming Municipal Power Agency. The Commission issued Certificates of Public Convenience and Necessity for this facility on June 24, 1976. Docket Numbers: 9548 Sub 4, 9611, 9621, 9622, 9623, 9624.

[¶ 8] On January 13, 2001, the Secretary and Chief Counsel for the PSC replied:

This responds to your letter to the Chairman of the Wyoming Public Service Commission of December 21, 2000, seeking the opinion of the Commission as to whether or not Basin Electric Power Cooperative (Basin) must obtain a certificate of public convenience and necessity from the Commission for the construction of certain electric generation facilities in the Wyoming Service territory of Powder River Energy Corporation (Powder River Energy). Specifically, Basin proposes to install up to 15 MW of combustion turbine capacity adjacent to each of the Powder River Energy substations located at Arvada, Barber Creek and Hartzog. You have stated that this will entail the placement of three or four combustion turbines at each substation depending on the size of the units selected for placement. You estimate the cost of the facilities to be $36 million and state that the construction is needed to assist Powder River Energy in dealing with the substantial increase in demand caused by the development of coal bed methane in the Powder River Basin.

Additionally, you have told us that Basin will own and operate the facilities, selling the power produced by the units at wholesale to Powder River Energy under its all requirements contract with your cooperative. Powder River Energy is a member of Basin, and it will neither own nor operate the facilities.

Basin is not generally regulated by the Commission. Because the power sale is being made to Powder River Energy under your existing all requirements contract, and because the facilities will furnish power to Powder River Energy at wholesale rather than directly to the public, the Commission therefore...