Douglas County Bd. of Com'rs v. Public Utilities Com'n

• Decision Date: 10 January 1994
• Docket Number: No. 92SA460,92SA460
• Parties: Util. L. Rep. P 26,366 DOUGLAS COUNTY BOARD OF COMMISSIONERS, Petitioner-Appellee, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO; Commissioners Arnold H. Cook, Ronald L. Lehr, and Gary L. Nakarado; and the Public Service Company of Colorado, Respondents-Appellants.
• Court: Colorado Supreme Court

Page 919

866 P.2d 919

Util. L. Rep. P 26,366

DOUGLAS COUNTY BOARD OF COMMISSIONERS, Petitioner-Appellee, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO Commissioners Arnold H. Cook, Ronald L. Lehr, and Gary L. Nakarado; and the Public Service Company of Colorado Respondents-Appellants.

No. 92SA460.

Supreme Court of Colorado En Banc.

Jan. 10, 1994.

Rehearing Denied Jan. 31, 1994.

Denman & Associates, P.C., Steven H. Denman, Denver, J. Mark Hannen, Douglas County Atty., Castle Rock, for petitioner-appellee.

Gale Norton, Atty. Gen., Raymond Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Maurice Knaiser, Deputy Atty. Gen., Larry Williams, First Atty. Gen., Mark W. Gerganoff, Asst. Atty. Gen., Denver, for respondents-appellants Public Utilities Com'n and Com'rs.

LeBoeuf, Lamb, Leiby & MacRae, Kenneth V. Reif, Denver, for respondent-appellant Public Service Co.

Chief Justice ROVIRA delivered the Opinion of the Court.

The Public Utilities Commission of the State of Colorado (PUC) and the Public Service Company of Colorado (PSCo) appeal the order of the Douglas County District Court setting aside the PUC's grant of PSCo's application to upgrade an electric transmission line. We reverse.

I

Due to the increasing demand for electrical power in the south Denver metropolitan area, the need to improve power transfer capabilities of the entire metro-area system, potential overloading of transformers, and the need to improve system reliability, PSCo sought to upgrade a portion of the metro-area electrical transmission system known as the Daniels Park transmission line. That line runs through a number of counties, including Douglas County. Currently, the line is capable of conducting 115 kilovolts (kV) of electric current. PSCo sought to upgrade the line to enable it to conduct 230kV of electric current.

In 1987, PSCo filed an application in Douglas County pursuant to Title 30, 12A C.R.S. (1986), for zoning approval to upgrade the existing transmission line. In December 1988, the Douglas County Board of Commissioners (Douglas County) denied the application, concluding that it was inharmonious with Douglas County's master zoning plan. See § 30-28-107, 12A C.R.S. (1986).

PSCo then filed an application with the PUC pursuant to section 30-28-127, 12A C.R.S. (1986), which authorizes the PUC to order improvements to public utility equipment, including electric transmission lines, even though the improvement is disaccordant with the county's adopted land use plan. PSCo alleged that because the requested upgrade is "reasonable," it should be built in spite of the fact that it may conflict with Douglas County's master zoning plan.

An Administrative Law Judge ordered that the hearing before the PUC be conducted in three phases. Phase one would address the need for the upgraded line, phase two the non-need and non-health considerations, and phase three the health impacts, if any, of the upgraded line. ¹ Nineteen witnesses testified in the course of a five-day hearing before the PUC. In December 1989, the PUC entered its decision in Docket No. 89A-028E, granting PSCo's application to upgrade the Daniels Park transmission line to a capacity of 230kV, subject to seven conditions. ² The approval was based on the PUC's finding, inter alia, that the transmission line upgrade was needed to maintain reliable service and was reasonably required for electrical service in the southeast area of Douglas County.

Douglas County sought judicial review pursuant to section 40-6-115(1), 17 C.R.S. (1984). Though Douglas County raised several issues for review, the district court resolved the case by considering only three of those issues. See Douglas County Bd. of Comm'rs v. Public Serv. Co. of Colo., 829 P.2d 1303 (Colo.1992) (Douglas County I ). The district court concluded, inter alia, that the PUC was required to promulgate rules and regulations setting forth the factors the PUC considers relevant in applying the criteria of section 30-28-127 that an upgrade be "reasonable," in order to comport with due process requirements. Because no such rules and regulations existed, the district court concluded that Douglas County had been denied procedural due process and, accordingly, set aside the decision of the PUC.

Both the PUC and PSCo appealed. We reversed, concluding that the regulatory framework for the PUC's determinations of reasonableness of an upgrade as well as the considerations set forth in section 30-28-107, 12A C.R.S. (1986), provided sufficient guidance to the PUC and parties appearing before it, to comport with requirements of procedural due process. Douglas County I, 829 P.2d at 1310-13. We remanded the case to the district court to resolve the issues raised by the parties but not addressed in its initial opinion.

On remand, the district court characterized the remaining issues raised by Douglas County as falling into two general categories: procedural and evidentiary. Procedurally, Douglas County argued that the PUC violated its role as a neutral decision maker and unlawfully shifted the burden of proof. The district court rejected these claims on the grounds that the record did not support the conclusion that either the PUC failed to act in a neutral manner or that it unlawfully shifted the burden of proof.

With respect to the evidentiary claims, the district court concluded that substantial evidence was presented to support the PUC's conclusion that the potential adverse effects on health and property values resulting from the line upgrade did not mandate that the application be denied. The district court additionally rejected Douglas County's argument that the ruling of the PUC was internally inconsistent because it adopted certain "prudent avoidance concepts" as part of its decision while, at the same time, finding that there were no adverse health effects. See supra note 2. The district court reasoned:

In determining whether to order the extension or addition pursuant to the public utilities exceptions section of the statute, one of the requirements is that the extension or addition be reasonable. There is nothing in the statute which requires that the PUC either accept or reject the PSC proposal without change. There is nothing in the statute which would prohibit the PUC from requiring that PSC meet certain conditions or make specific alterations to its plan in order to determine the same reasonable.

The district court also considered whether substantial evidence had been presented to support the PUC's conclusion that the upgrade was "reasonable" because it was needed. The district court concluded that the evidence presented did not support the PUC's conclusion regarding need because no evidence was presented concerning demand-side alternatives. ³ "Without dispute," the court reasoned, "the establishment of need by PSC was essential to a conclusion that the extension or addition was reasonable. Rather than merely being an element of future actions, evidence of demand side alternatives or reductions was a recognized, necessary component of present need. No evidence was introduced by PSC to support this component." Thus, the district court concluded that the PUC's decision to permit the upgrade was not supported by the evidence and set aside the decision.

II

On appeal the PUC and PSCo contend that the district court erred in concluding that consideration of demand-side alternatives is a prerequisite to a showing of reasonableness as required under section 30-28-127, before an application for a utility upgrade which conflicts with a county's land use plan can be granted. ⁴ We agree.

A

Before considering the merits of the arguments on appeal, it is necessary to recognize the context in which they arise.

In Douglas County I, 829 P.2d at 1312, we held that while section 30-28-107, sets forth the guidelines for a county master plan, it also establishes "factors for the PUC to consider in determining whether any improvement or upgrade in accordance with section 30-28-127 is reasonable." Given that "the reasonableness standard is ... interwoven with the adopted land use plan," id., which is subject to the considerations set forth in section 30-28-107, that section is particularly pertinent to resolving the issue presented here.

Section 30-28-107 provides in part:

The county or regional master plan shall be made with the general purpose of guiding and accomplishing a coordinated, adjusted, and harmonious development of the county or region which, in accordance with present and future needs and resources, will best promote the health, safety, morals, order, convenience, prosperity, or general welfare of the inhabitants, as well as efficiency and economy in the process of development, including such distribution of population and of the uses of land for urbanization, trade, industry, habitation, recreation, agriculture, forestry, and other purposes as will tend to create conditions favorable to health, safety, energy conservation, transportation, prosperity, civic activities, and recreational, educational, and cultural opportunities; will tend to reduce the wastes of physical, financial, or human resources which result from either excessive congestion or excessive scattering of population; and will tend toward an efficient and economic utilization, conservation, and production of the supply of food and water and of drainage, sanitary, and other facilities and resources.

In determining that this section sets forth applicable guidelines for the PUC when reviewing an application for a utility upgrade, nowhere did we either state or imply that energy conservation is the sole or determinative factor which must be addressed in order to support a finding of reasonableness. To the contrary, we held simply that the considerations set out in section 30-28-107 are factors the PUC should consider, not that any one was dispositive with respect to a finding of reasonableness. As such, nothing in...