Certain Territorial Elec. Boundaries (Aberdeen City Vicinity) (F 3111), Matter of, F-3111

CourtSupreme Court of South Dakota
Writing for the CourtFOSHEIM; WOLLMAN; MORGAN and HENDERSON, JJ., and YOUNG; YOUNG, Circuit Judge, sitting for DUNN; WOLLMAN
Citation281 N.W.2d 72
PartiesIn the Matter of Establishing CERTAIN TERRITORIAL ELECTRIC BOUNDARIES Within the State of South Dakota (ABERDEEN CITY VICINITY) (). NORTHERN ELECTRIC COOPERATIVE, INC., & Brown County, South Dakota, Appellants, v. NORTHWESTERN PUBLIC SERVICE COMPANY, Respondent.
Docket NumberNos. 12327,12328,F-3111
Decision Date21 June 1979

Page 72

281 N.W.2d 72
In the Matter of Establishing CERTAIN TERRITORIAL ELECTRIC
BOUNDARIES Within
the State of South Dakota (ABERDEEN CITY VICINITY) (F-3111).
NORTHERN ELECTRIC COOPERATIVE, INC., & Brown
County, South Dakota, Appellants,
v.
NORTHWESTERN PUBLIC SERVICE COMPANY, Respondent.
Nos. 12327, 12328.
Supreme Court of South Dakota.
Argued Jan. 18, 1979.
Decided June 21, 1979.

Page 73

C. W. Hyde, Aberdeen, for appellant Northern Elec. Cooperative, Inc. (# 12327).

Michael T. Hogan, of Maloney, Kolker, Fritz, Hogan & Johnson, Aberdeen, for appellant Brown County (# 12328); Dennis Maloney, of Maloney, Kolker, Fritz, Hogan & Johnson, Aberdeen, on the brief.

M. D. Lewis, Huron, Ray M. Schutz, of Siegel, Barnett, Schutz, O'Keefe, Jewett & King, Aberdeen, for respondent Northwestern Public Service Co.; Alan D. Dietrich, Huron, on the brief.

Page 74

Judith K. Meierhenry, of Meierhenry, DeVany, Kruger & Meierhenry, Vermillion, for respondent Public Utilities Commission; Ben Stead, Asst. Atty. Gen., Pierre, on the brief.

FOSHEIM, Justice.

This case involves the assignment of approximately a fifty-square-mile territory in the Aberdeen vicinity for electric service pursuant to the provisions of SDCL 49-34A.

The Public Utilities Commission (PUC) assigned most of the area to Northern Electric Cooperative, Inc. (NEC). Northwestern Public Service Company (NWPS) appealed that determination to the circuit court. The trial court reversed and directed the PUC to assign the disputed area in accordance with its opinion. NEC appeals from that decision. The circuit court also assigned a shredder facility, which belongs to Brown County, to the NWPS area. Brown County appeals from that decision.

Appellant NEC is a rural electric cooperative and respondent NWPS is an investor-owned electric utility. NWPS began serving customers in the Aberdeen vicinity in the early 1920s. NEC began operations in 1945 and extended its lines into Brown County and surrounding counties. In 1975, the PUC ordered a hearing to determine which areas the two utilities should serve pursuant to SDCL 49-34A-42 through 44. At this hearing the PUC received evidence from both parties, from its own staff, and from an engineering consulting firm hired by the PUC. NWPS claimed that under these statutes it had the right to serve all customers it was serving on March 21, 1975. It also claimed that use of the equidistant concept, SDCL 49-34A-43, would give it certain areas within the disputed territory. NEC claimed that the lines of the two utilities were so intertwined within the entire disputed territory that the equidistant concept could not reasonably be applied, and that the five conditions listed in SDCL 49-34A-44 should be used to determine the service areas. NWPS argued that the disputed territory should be divided into smaller areas each of which should be evaluated as to how the lines were intertwined.

The PUC accepted the NEC contention. The parties presented evidence concerning the five criteria set out in SDCL 49-34A-44:

(1) The proximity of existing distribution lines to such assigned territory, including the length of time such lines have been in existence;

(2) The adequacy and dependability of existing distribution lines to provide dependable, high quality retail electric service;

(3) The elimination and prevention of duplication of distribution lines and facilities supplying such territory;

(4) The willingness and good faith intent of the electric utility to provide adequate and dependable electric service in the areas to be assigned;

(5) That a reasonable opportunity for future growth within the contested area is afforded each electric utility.

NWPS's evidence tended to show that it had electric lines in existence for a longer period of time than NEC in much of the disputed territory and that its lines were closer to portions of the territory. NWPS's evidence also indicated it could adequately and dependably serve these areas, that construction of lines by NEC would duplicate NWPS's lines already in place, and that in order to have a reasonable chance for growth in the area NWPS would have to receive more of the disputed territory than the PUC gave it. NEC's evidence on these criteria indicated that its lines were newer than those of NWPS and thus more reliable. NEC disputes the priority of time interpretation of the circuit court as to the first criterion of SDCL 49-34A-44 and contends that the length of time lines have been in existence should give preference to newer rather than older lines, since new lines are more dependable.

On the duplication question, NEC presented evidence that NWPS's lines might need upgrading, which NEC lines would not require. NEC considers such upgrading to be unnecessary duplication. On the fifth criterion, that reasonable opportunity

Page 75

for future growth be afforded each utility, NEC claims that because of its heavy loads in the summer it will be unable to adequately balance its load without a significant amount of the disputed territory.

On appeal NEC contends the legislature granted it a right to compete for new customers within three miles of Aberdeen by its enactment of SDCL 49-41-7 and 8 (repealed by Sess.L.1975, ch. 283, § 59), and that such a right is a franchise or "franchise-like" grant protected by the constitution. NEC argues that because it is a franchise, the privilege cannot be constitutionally taken away. As we recently stated in In re Establishing Territorial Boundaries (Mitchell area), S.D., 281 N.W.2d 65 (1979), the legislature is without power to grant irrevocable franchises because of S.D.Const. art. VI, § 12. It is settled law that when such a constitutional provision exists any special privilege or franchise granted by the legislature is taken subject to the power to revoke. Bienville Water Supply Co. v. Mobile, 186 U.S. 212, 22 S.Ct. 820, 46 L.Ed. 1132 (1920); Hamilton Gaslight & Coke Co. v. City of Hamilton, 146 U.S. 258, 13 S.Ct. 90, 36 L.Ed. 963 (1892). We came to a similar conclusion, under art. VI, § 12, in City of Lead v. Gas & Fuel Co., 44 S.D. 510, 184 N.W. 244 (1921). We now reaffirm that franchise rights conferred upon a utility by the state are subject to control by the legislature. See also Missouri River Telephone Co. v. City of Mitchell, 22 S.D. 191, 116 N.W. 67 (1908). The rights granted NEC under SDCL 49-41-7 and 8 are not irrevocable franchises.

NEC also contends that SDCL 49-34A operates to exercise the power of eminent domain without compensation. We do not agree. The repealed statutes, SDCL 49-41-7 and 8, granted utilities only the right to compete for customers within a three-mile area of a municipality. They did not give NEC or any other utility an exclusive grant. The revised statute, SDCL 49-34A, gave the utilities the additional right to exclusively serve customers within their assigned service areas. SDCL 49-34A-42. Legislative history reveals that all the electric utilities...

To continue reading

Request your trial
12 practice notes
  • Zacher v. Budd Co., No. 14483
    • United States
    • South Dakota Supreme Court
    • 8 Diciembre 1986
    ...that the Page 143 statute violates a provision of the South Dakota Constitution. Matter of Certain Territorial Elec. Boundaries, Etc., 281 N.W.2d 72 (S.D.1979). These basic tenets of constitutional construction were wholly absent from the Daugaard decision, nor do we find them mentioned in ......
  • Sales Tax Liability of Valley Queen Cheese, Matter of, No. 15148
    • United States
    • Supreme Court of South Dakota
    • 18 Marzo 1986
    ...legislative enactments are consistent and harmonious in their several provisions. Matter of Certain Territorial Elec. Boundaries, Etc., 281 N.W.2d 72 (S.D.1979); In re Schneider's Estate, 72 S.D. 174, 31 N.W.2d 261 318 N.W.2d at 7. The court determined that Welcome Wagon is an advertising s......
  • In re West River Elec. Ass'n, Inc., No. 22827
    • United States
    • South Dakota Supreme Court
    • 28 Enero 2004
    ...or the extent or duration of the service provided prior to March 21, 1975." In re Certain Territorial Elec. Boundaries (Aberdeen), 281 N.W.2d 72, 78 (S.D.1979) (Wollman, C.J., concurring in part and dissenting in part) (emphasis [¶ 24.] We also note that shortly after the Territory Act was ......
  • In re Montana-Dakota Utilities Co., No. 24448.
    • United States
    • Supreme Court of South Dakota
    • 17 Octubre 2007
    ...a utility does have an "exclusive right" to provide service to a "future customer in its assigned service area." See Willrodt, 281 N.W.2d at 72 (citation omitted); SDCL 49-34A-42. FEM believes that to allow "a competing electric service provider to petition the [PUC] under SDCL 49-34A-56 fo......
  • Request a trial to view additional results
12 cases
  • Zacher v. Budd Co., No. 14483
    • United States
    • South Dakota Supreme Court
    • 8 Diciembre 1986
    ...that the Page 143 statute violates a provision of the South Dakota Constitution. Matter of Certain Territorial Elec. Boundaries, Etc., 281 N.W.2d 72 (S.D.1979). These basic tenets of constitutional construction were wholly absent from the Daugaard decision, nor do we find them mentioned in ......
  • Sales Tax Liability of Valley Queen Cheese, Matter of, No. 15148
    • United States
    • Supreme Court of South Dakota
    • 18 Marzo 1986
    ...legislative enactments are consistent and harmonious in their several provisions. Matter of Certain Territorial Elec. Boundaries, Etc., 281 N.W.2d 72 (S.D.1979); In re Schneider's Estate, 72 S.D. 174, 31 N.W.2d 261 318 N.W.2d at 7. The court determined that Welcome Wagon is an advertising s......
  • In re West River Elec. Ass'n, Inc., No. 22827
    • United States
    • South Dakota Supreme Court
    • 28 Enero 2004
    ...or the extent or duration of the service provided prior to March 21, 1975." In re Certain Territorial Elec. Boundaries (Aberdeen), 281 N.W.2d 72, 78 (S.D.1979) (Wollman, C.J., concurring in part and dissenting in part) (emphasis [¶ 24.] We also note that shortly after the Territory Act was ......
  • In re Montana-Dakota Utilities Co., No. 24448.
    • United States
    • Supreme Court of South Dakota
    • 17 Octubre 2007
    ...a utility does have an "exclusive right" to provide service to a "future customer in its assigned service area." See Willrodt, 281 N.W.2d at 72 (citation omitted); SDCL 49-34A-42. FEM believes that to allow "a competing electric service provider to petition the [PUC] under SDCL 49-34A-56 fo......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT