City of Calhoun v. North Georgia Elec. Membership Corp.

• Decision Date: 04 February 1975
• Docket Number: Nos. 29071,29106,29072,s. 29071
• Citation: 213 S.E.2d 596,233 Ga. 759
• Parties: CITY OF CALHOUN et al. v. NORTH GEORGIA ELECTRIC MEMBERSHIP CORPORATION et al. NORTH GEORGIA ELECTRIC MEMBERSHIP CORPORATION et al. v. CITY OF CALHOUN et al. GEORGIA POWER COMPANY v. CITY OF CALHOUN et al.
• Court: Georgia Supreme Court

Page 596

213 S.E.2d 596

233 Ga. 759

CITY OF CALHOUN et al. v. NORTH GEORGIA ELECTRIC MEMBERSHIP CORPORATION et al.

NORTH GEORGIA ELECTRIC MEMBERSHIP CORPORATION et al. v. CITY OF CALHOUN et al.

GEORGIA POWER COMPANY v. CITY OF CALHOUN et al.

Nos. 29071, 29072, 29106.

Supreme Court of Georgia.

Feb. 4, 1975.

Rehearing Denied Feb. 25, 1975.

Thomas L. Shanahan, Calhoun, for City of Calhoun.

Al D. Tull, Cartersville, for City of Cartersville.

Heard, Leverett & Adams, L. Clifford Adams, Jr., Elberton, for City of Calhoun.

Chance & Maddox, J. C. Maddox, Calhoun, for Stewart.

Pittman, Kinney, Kemp, Pickell & Avrett, L. Hugh Kemp, Dalton, for N. Ga. Elec. Membership Corp.

Troutman, Sanders, Lockerman & Ashmore, James E. Joiner, Jeffrey R. Nickerson, Atlanta, for Ga. Power Co.

Arthur K. Bolton, Atty. Gen., Timothy J. Sweeney, Asst. Atty. Gen., Robert J. Castellani, Deputy Asst. Atty. Gen., Atlanta, for Public Service Commission.

James C. Brim, Jr., Richard G. Tisinger, Camilla, Carrollton, for intervenors.

Syllabus Opinion by the Court

PER CURIAM.

This appeal challenges the constitutionality of the Georgia Territorial Electric Service Act (Ga.L.1973, p. 200 et seq.), hereinafter referred to as the Act.

The action arose when the City of Calhoun, Milton Stewart and the City of Cartersville sought a declaratory judgment as to the constitutionality of the Act against the North Georgia Electric Membership Corporation, Georgia Power Company and the Public Service Commission in the Superior Court of Fulton County. Thirty-four other electric membership corporations were allowed to intervene.

After an interlocutory hearing at which the trial court found that it had jurisdiction of the parties and that justiciable controversies existed between them, it issued orders granting an interlocutory injunction to preserve the status quo and confining the issues to be tried to the constitutional questions raised by the pleadings. The case proceeded to trial without a jury and on March 20, 1974, the court entered its order holding the Act to be constitutional.

Plaintiffs Stewart and the two cities appeal that judgment. The cross appeals by Georgia Power Company and North Georgia Electric Membership Corporation present the question of whether the two cities were estopped to deny the constitutionality of the Act because of specified past conduct.

The issues raised by the main appeal are essentially those which follow: (1) that the Act provides for regulation and taxation of municipally owned and operated electric systems and utilities in violation of Art. IV, Sec. I, Par. I (Code Ann. § 2-2401) and Art. VII, Sec. VII, Par. V (Code Ann. § 2-6005) of the Georgia Constitution; (2) that it establishes a monopoly throughout the state with respect to certain electric consumers without regard to the rates to be charged, and authorized contracts between electric suppliers for the division of exclusive territories in violation of Art. IV, Sec. IV, Par. I (Code Ann. § 2-2701) of the Georgia Constitution; (3) that it provides for the assignment of exclusive areas and for unassigned areas on an arbitrary basis which precludes the uniform operation of the Act as required by Art. I, Sec. IV, Par. I (Code Ann. § 2-401) of the Georgia Constitution; (4) that it delegates authority to the Public Service Commission to assign or to declare unassigned certain territories for electric service without adequate standards, which authority is legislative in nature and in violation of Art. III, Sec. I, Par. I (Code Ann. § 2-1301) of the Georgia Constitution; and (5) that it classifies electric consumers into two classes, treats such classes in a wholly different manner, and such classification bears no relationship to the objects of the Act and is arbitrary and unreasonable in violation of Art. I, Sec. I, Par. II (Code Ann. § 2-102) and Art. I, Sec. IV, Par. I, (Code Ann. § 2-401) of the Georgia Constitution.

1. At the outset it should be recognized that before an Act of the legislature can be declared unconstitutional, the conflict between it and the fundamental law must be clear and palpable and this court must be 'clearly satisfied of its unconstitutionality.' Sister Felicitas v. Hartridge, 148 Ga. 832, 836, 98 S.E. 538; Franklin v. Harper, 205 Ga. 779, 790, 55 S.E.2d 221 and cits. If the Act is 'equally susceptible of two constructions, one of which will harmonize it with the constitution and the other of which will render it unconstitutional, the former construction is generally to be preferred.' Fordham v. Sikes, 141 Ga. 469(a), 81 S.E. 208, 210; Sumter County v. Allen, 193 Ga. 171, 174, 17 S.E.2d 567. 'It is, of course, fundamental that 'the cardinal rule to guide the construction of laws is, first, to ascertain the legislative intent and purpose in enacting the law and then to give it that construction which will effectuate the legislative intent and purpose.' Ford Motor Co. v. Abercrombie, 207 Ga. 464, 467, 62 S.E.2d 209.' City of Jesup v. Bennett, 226 Ga. 606, 608, 176 S.E.2d 81, 83.

Section 2 of the Act under review (Ga.L.1973, pp. 200, 201) provides the following legislative findings and declaration of intent. 'The public interest requires, and it is hereby declared to be the policy of the State of Georgia, that, in order (1) to assure the most efficient, economical and orderly rendition of retail electric service within the State, (2) to inhibit duplication of the lines of electric suppliers, (3) to foster the extension and location of electric supplier lines in the manner most compatible with the preservation and enhancement of the State's physical environment, and (4) to protect and conserve the lines heretofore and hereafter lawfully constructed by electric suppliers, it is necessary and appropriate that the State establish and implement a plan whereby every geographical area within the State shall be either assigned to an electric supplier or declared unassigned as to any electric supplier; that, to accomplish such a plan, it is necessary that all electric suppliers within the State be subject to this Act as provided; that the Public Service Commission be delegated power, authority and jurisdiction with respect to such plan; and that all electric membership corporations and all municipalities which furnish retail electric service be additionally subject to regulation by the Public Service Commission in the same manner as provided for regulation of electric light and power companies, except as to the fixing of their rates, charges and service rules and regulations, it being determined by the General Assembly that such electric membership corporations and municipalities, which by their corporate nature are wholly or substantially controlled by their consumers, should for regulatory purposes be classified differently in certain respects from the electric light and power companies.'

Therefore, in light of the above stated legal principles, our consideration of each constitutional attack raised by the appellants must be guided by the legislative intent and policy specifically declared within the Act itself.

2. The appellants contend in enumerations of error 1 and 2 that the Act violates Art. IV, Sec. I, Par I and Art. VII, Sec. VII, Par V, supra, because those provisions of the Georgia Constitution prohibit regulation and taxation of municipally owned and operated utilities except as specifically provided.

Art. IV, Sec. I, Par. I, which confers upon the General Assembly certain power and authority in the regulation of railroads and public utilities, is qualified by the following language: 'provided, nevertheless, that such power and authority shall never be exercised in any way to regulate or fix charges of such public utilities as are or may be owned or operated by any county or municipality of this State; except as provided in this Constitution.'

It is argued that the above-quoted proviso is a general restriction on the power of the General Assembly over municipal utilities, and that the only exception to this restriction is contained in the proviso to Art. VII, Sec. VII, Par. V, which subjects municipalities, counties or other political subdivisions to the same taxation and regulation as private utilities if they use revenue bonds to finance utility operations outside of the county in which they are located. Appellants urge in effect that the municipally owned and operated electric systems here involved are totally immune to any regulation of their activities.

In our view this argument is specious.

Section 15-A recites that 'No provision of this Act, or application thereof, shall be construed in any way to regulate or fix charges of county-owned or municipality owned or operated public utilities, as prohibited by Art. IV, Section I, Paragraph I . . .'

The proceedings of the Constitutional Commission of 1943-1944 show that the proviso to Art. IV, Sec. I, Par. I of the Georgia Constitution of 1945 was intended only to prohibit the General Assembly from regulating or fixing the charges of municipally owned or operated electric systems. Therefore that provision does not deal with every aspect of the General Assembly's broad, inherent powers over both public utilities and municipal corporations. See in this regard, Atlanta Terminal Co. v. Georgia Public Service Comm., 163 Ga. 897, 137 S.E. 556; Troup County E.M.C. v. Georgia Power Co., 229 Ga. 348, 352, 191 S.E.2d 33.

As shown by the Atlanta Terminal case, supra, this constitutional provision should not be construed to restrict these powers of the General Assembly unless it is clearly and indisputably shown that the legislation was intended as a restriction of the scope and extent urged. We conclude that this was not done here. Moreover, Section 15-A specifically disavows any intent to violate Art. IV, Sec. I, Par. I.

The subject of Art. VII, Sec. VII, Para. V is revenue anticipation certificates and the proviso simply recites that the use of revenue bonds to...