Clay-Union Elec. Corp., Matter of

• Decision Date: 30 December 1980
• Docket Number: No. 12919,CLAY-UNION,12919
• Citation: 300 N.W.2d 58
• Parties: In the Matter of the Petition for Declaratory Ruling Filed forELECTRIC CORPORATION.
• Court: South Dakota Supreme Court

Page 58

300 N.W.2d 58

In the Matter of the Petition for Declaratory Ruling Filed for CLAY-UNION ELECTRIC CORPORATION.

No. 12919.

Supreme Court of South Dakota.

Argued April 22, 1980.

Decided Dec. 30, 1980.

Theodore J. Dolney, Vermillion, and Vincent J. Protsch, Howard, for appellant Clay-Union Electric Corp.

Merle D. Lewis, Huron, for appellee Northwestern Public Service Co.; Alan D. Dietrich, Huron, on brief.

Leo P. Flynn, Milbank, for amicus curiae S.D. Rural Electric Association.

YOUNG, Circuit Judge.

This appeal arises from an order of the circuit court that reversed a declaratory ruling of the Public Utilities Commission (PUC) awarding Clay Union Electric Corporation (CUEC) the right to provide retail electric service to Alumax Extrusions Inc. (Alumax) near Yankton, South Dakota. CUEC appeals from that order. We affirm.

Appellant CUEC is a rural electric cooperative. Appellee Northwestern Public Service Company (NWPS) is an investor-owned electric utility. Both utilities provide electric service at retail in Yankton County, South Dakota. Prior to 1973, the parties were involved in several legal disputes concerning service rights to an area immediately east of the city of Yankton, South Dakota. Pursuant to a resolution of the South Dakota Electric Mediation Board, the utilities entered into an agreement establishing designated exclusive service areas within the disputed territory. Boundary delineation between these designated exclusive areas was established by maps and by legal description. Each utility was granted the right to continue to service "existing structures and outlets" but "no new connections or hookups" could be made within the designated service areas of the other utility.

In 1975, the South Dakota Legislature enacted SDCL ch. 49-34A, granting the PUC the authority to establish exclusive service areas for every utility throughout the state. SDCL 49-34A-4. These territorial boundaries could be established by the PUC in several ways. Under 49-34A-42 each electric utility had the exclusive right to provide electric service at retail "at each and every location where it is serving a customer as of March 21, 1975, and to each and every present and future customer in its assigned service area ...." The determination of the assigned service areas was set out in SDCL 49-34A-43 and SDCL 49-34A-44. Under SDCL 49-34A-43, two methods for determination of the boundaries were possible. First, boundaries of assigned areas outside of incorporated municipalities, "shall be a line equidistant between the electric lines of adjacent electric utilities as they existed on March 21, 1975" subject to specific modifications due to either natural or physical barriers, to "contracts provided for in this section," or to orders entered before July 1, 1975, by the electric mediation board. The second method provided in SDCL 49-34A-43 is as follows:

Contracts between electric utilities, which are executed on or before July 1, 1976, designating service areas and customers to be served by the electric utilities approved by the commission shall be valid and enforceable and shall be incorporated into the appropriate assigned service areas. The commission shall approve a contract if it finds that the contract will eliminate or avoid unnecessary duplication of facilities, will provide adequate electric service to all areas and customers affected and will promote the efficient and economical use and development of the electric systems of the contracting electric utilities.

Finally, under SDCL 49-34A-44, guidelines are set out which enable the PUC to assign specific service areas in those territories in which service is intertwined. CUEC and NWPS chose the second method and renegotiated their 1973 agreement in which they had established exclusive service areas. The PUC, following the guidelines set out in SDCL 49-34A-43, approved the 1975 contract.

The 1973 agreement and the 1975 contract allow CUEC to continue to service the existing structures and outlets of the Foss farmhouse in Block 1 of Foss' 2nd Addition, Yankton County, South Dakota, which is located within NWPS' designated exclusive area. CUEC continued to serve the farmhouse and later a trailer house located on this property. In October 1978, Alumax purchased Block 1 and Block 2 of Foss' 2nd Addition, the latter of which is also located within NWPS' designated service area. The trailer and farmhouse were removed and an aluminum plant was constructed on this property. NWPS claimed that because this location was within its designated exclusive service area and because the aluminum plant constituted a new structure, a new outlet, and a new connection or hookup, it was entitled to service the plant. CUEC claimed that SDCL 49-34A-42 gave it the authority to serve the entire location and not merely a customer. CUEC further claimed that it was continuing to serve an existing structure and outlet and that the Alumax plant was not a new connection or hookup.

The PUC found in favor of CUEC, primarily on the basis that the language in SDCL 49-34A-42 states, "Each electric utility shall have the exclusive right to provide electric service at retail at each and every location where it is serving a customer as of March 21, 1975, and to each and every present and future customer in its assigned service area ...." The PUC concluded that from the evidence presented a finding could be made that the Alumax plant site constituted the same location as the farmhouse and the trailer, and that CUEC's right to service the Alumax Extrusions facility at this location did not abrogate or violate the 1973 or 1975 agreements.

In reviewing the actions of any agency it is our duty to decide whether the law has been correctly applied and whether the agency's findings are clearly erroneous. South Dakota Public Utilities Commission v. Otter Tail, 291 N.W.2d 291 (S.D.1980); Matter of Certain Territorial Elec. Boundaries, Etc., (Mitchell Area), 281 N.W.2d 65 (S.D.1979). ^* In reviewing the sufficiency of the evidence we do not sit as a trial de novo of the agency but limit our review to whether the findings and decision of that agency are clearly erroneous. SDCL 1-26-36(5); Huffman v. Bd. of Ed. of Mobridge Ind. Sch. Dist., Etc., 265 N.W.2d 262 (S.D.1978). The review by this Court is the same as that conducted by the circuit court without a presumption of correctness as to the lower court's findings. South Dakota Public Utilities Commission v. Otter Tail, supra; Application of Mont.-Dak. Util. Co., Etc., 278 N.W.2d 189 (S.D.1979); Piper v. Neighborhood Youth Corps, 90 S.D. 443, 241 N.W.2d 868 (1976).

The PUC was presented with substantial evidence that the terms "structure," "outlet," "connection" and "hookup" had narrow and specific meanings within the field of utility services. The uncontradicted testimony of the expert witnesses overwhelmingly showed that the term "structure" related to a building or facility containing electrical utilization equipment; that "outlet" related to a point in the wiring systems; and that "connection" or "hookup" referred to the physical attachment of the wire service. The evidence also points to the fact that the electric service provided by CUEC to...