City of Columbus v. Public Utilities Commission

• Decision Date: 20 June 1979
• Docket Number: Nos. 78-1235,78-1287,s. 78-1235
• Citation: 58 Ohio St.2d 427,390 N.E.2d 1201
• Parties: , 12 O.O.3d 361 CITY OF COLUMBUS, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee. OHIO MUNICIPAL ELECTRIC ASSOCIATION et al., Appellants, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee.
• Court: Ohio Supreme Court

Page 427

58 Ohio St.2d 427

390 N.E.2d 1201, 12 O.O.3d 361

CITY OF COLUMBUS, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee.

OHIO MUNICIPAL ELECTRIC ASSOCIATION et al., Appellants, v. PUBLIC UTILITIES COMMISSION of Ohio, Appellee.

Nos. 78-1235, 78-1287.

Supreme Court of Ohio.

June 20, 1979.

Syllabus by the Court

1. R.C. 4905.70, insofar as such section would require municipally owned and operated electric light companies to offer their customers the option of metering their electricity consumption by the use of demand or load meters, and would require the companies to bill the customers at a rate that reflects the cost of providing service during off-peak periods, is violative of Section 4, Article XVIII of the Ohio Constitution.

2. R.C. 4905.70, which requires the Public Utilities Commission to promulgate regulations which would control the price municipally owned and operated electric light companies could charge customers using electricity for heating their homes during off-peak periods, may not, in balancing the interests of the state and of local communities, be supported as an exercise of a valid state police power. (State ex rel. McCann v. Defiance, 167 Ohio St. 313, 148 N.E.2d 221, applied and followed.)

The General Assembly in Section 1 of Am.Sub.H.B. No. 230 enacted R.C. 4905.70, effective October 9, 1977. That section required the Public Utilities Commission (commission) to promulgate a rule compelling each electric light company to offer "demand" or "load" metering to those residential customers whose homes are primarily heated by electricity and to provide rate tariffs reflecting the lower cost of service during off-peak periods.

The commission adopted Rule 4901:1-10-01, Ohio Adm.Code, which complied with the mandate of R.C. 4905.70. Subsequently, by entry of February 8, 1978, the commission ordered "municipally owned and operated electric light companies and not-for-profit electric light companies" to file tariffs in accordance with the rule, or show cause why they should be exempted from its requirements.

On March 6, 1978, appellant city of Columbus filed a response, asserting that the commission's assumption of jurisdiction over municipal electric light companies was proscribed by the Constitution of Ohio. On March 7, 1978, appellants Ohio Municipal Electric Association and members thereof ^* filed a similar response. Appellants' arguments were rejected by the commission on June 29, 1978, and their applications for rehearing were subsequently denied.

The causes are now before this court upon appeals as of right.

Gregory S. Lashutka, City Atty., Patrick M. McGrath and John W. Bentine, Columbus, for appellant city of Columbus.

John C. Young and Michael Allerding, Columbus, for appellants Ohio Municipal Elec. Ass'n et al.

William J. Brown, Atty. Gen., Marvin I. Resnik and Kevin F. Duffy, Asst. Attys. Gen., for appellee.

HOLMES, Justice.

The first issue presented by these appeals is whether municipally owned or operated electric light companies are "electric light companies" within the purview of R.C. 4905.70.

R.C. 4905.70 provides, in pertinent part, that:

" * * * The public utilities commission, by a rule adopted no later than October 1, 1977, and effective and applicable no later than November 1, 1977, shall require each electric light company to offer to such of their residential customers whose residences are primarily heated by electricity the option of their usage being metered by a demand or load meter. * * * The rule shall require each company to bill such of its customers who select such option for those kilowatt hours in excess of a prescribed number of kilowatt hours per kilowatt of billing demand, at a rate per kilowatt hour that reflects the lower cost of providing service during off-peak periods."

R.C. 4905.70 was enacted as a part of Section 1 of Am.Sub.H.B. No. 230. Although the statute itself does not define the term "electric light company," Section 12 of the bill provides that:

"All provisions of this act shall be construed to apply to electric light, natural gas, or gas companies operated not for profit and to their customers. With the exception of the provisions of section 5727.31 of the Revised Code as amended by this act, all provisions of this act shall be construed to apply to electric light, natural gas, or gas companies owned or operated by a municipal corporation and to their customers."

It is noted that Section 14 of Am.Sub.H.B. No. 230 prospectively repeals several sections of that act, including Section 12 set forth above. Nevertheless, this court finds the language of Section 12 itself to be a plain and unambiguous expression of the General Assembly's intent to require municipally owned or operated electric light companies to comply with the rule promulgated by the commission, pursuant to R.C. 4905.70. "Where the language itself clearly expresses the legislative intent, the courts need look no further." Katz v. Dept. of Liquor Control (1957), 166 Ohio St. 229, 231, 141 N.E.2d 294, 296. See, also, Carmelite Sisters, St. Rita's Home v. Bd. of Review (1969), 18 Ohio St.2d 41, 46, 247 N.E.2d 477; Provident Bank v. Wood (1973), 36 Ohio St.2d 101, 105, 304 N.E.2d 378.

The term "electric light company," as used within R.C. 4905.70, does, by virtue of Section 12 of Am.Sub.H.B No. 230, enacted effective October 9, 1977, include municipally owned and operated electric light companies for the purpose of requiring such companies to offer their residential customers demand or load meters for measuring electricity used for heating purposes in off-peak periods.

Having determined that R.C. 4905.70 was intended to apply to municipal electric light companies, it becomes necessary for the court to address the constitutional issue raised by these appeals, which issue is whether R.C. 4905.70 conflicts with the provisions of Section 4, Article XVIII of the Constitution of Ohio.

Section 4 of Article XVIII provides that:

"Any municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for any such product or service. The acquisition of any such public utility may be by condemnation or otherwise, and a municipality may acquire thereby the use of, or full title to, the property and franchise of any company or person supplying to the municipality or its inhabitants the service or product of any such utility."

Appellants in their contention that R.C. 4905.70 is unconstitutional rely on prior decisions of this court which held that the state may not attempt to limit the power of a municipality to own or operate a public utility without running afoul of Section 4 of Article XVIII. E. g., State ex rel. McCann v. Defiance (1958), 167 Ohio St. 313, 148 N.E.2d 221. Appellants argue that R.C. 4905.70 imposes such a limitation by granting the commission jurisdiction over municipal electric rates.

The Public Utilities Commission, appellee herein, contends that the statute must be upheld as a reasonable exercise of the state's police power. In support of its position, appellee relies on Canton v. Whitman (1975), 44 Ohio St.2d 62, 337 N.E.2d 766, and Columbus v. Teater (1978), 53 Ohio St.2d 253, 374 N.E.2d 154. In those cases this court upheld statutes enacted under the state's police power, despite their impact upon a municipality's power to own or operate a public utility.

Although we agree with appellee that the municipal public utility power is not absolute, and that the purpose of the statute under consideration promotes a legitimate state interest, we think it clear that the statute must fall insofar as it attempts to impose controls upon the operation of municipal electric light companies.

A municipality's power to own and operate a public utility is " * * * derived directly from the people, pursuant to the provisions of Sections 4 and 6 of Article XVIII of the Ohio Constitution, and not from the General Assembly." McCann, supra, 167 Ohio at page 316, 148 N.E.2d at page 223. Unlike the power granted by Section 3 of Article XVIII to enact local police, sanitary and similar regulations, the municipal public utility power is not necessarily subordinate to conflicting general laws. Pfau v. Cincinnati (1943), 142 Ohio St. 101, 104, 50 N.E.2d 172.

The General Assembly may not attempt to limit or restrict a municipality's power to operate a public utility. Whitman, supra; McCann, supra; Swank v. Shiloh (1957), 166 Ohio St. 415, 143 N.E.2d 586; East Cleveland v. Bd. of Edn. (1925), 112 Ohio St. 607, 616, 148 N.E. 350 (Marshall, C. J., dissenting); Euclid v. Camp Wise Assn. (1921), 102 Ohio St. 207, 131 N.E. 349. Thus, in McCann, supra, this court struck down a statute which required municipalities to furnish water to nonresidents at a rate not to exceed 110 percent of that charged to residents. In a case, such as McCann, where the very purpose of a statute is to restrict the constitutional grant of power to a municipality, the courts will not hesitate in declaring the statute unconstitutional.

However, not every statute which has an impact upon the municipal public utility power is a restriction thereon. If McCann may be said to represent one pole of the spectrum of relations between the state and its...