Dunmar Inv. Co. v. Northern Natural Gas Co., 37359
| Decision Date | 03 April 1970 |
| Docket Number | No. 37359,37359 |
| Citation | 185 Neb. 400,176 N.W.2d 4 |
| Parties | DUNMAR INVESTMENT COMPANY, a Nebraska Corporation and Duncan E. McPherson, Appellants, v. NORTHERN NATURAL GAS COMPANY, a Corporation, Metropolitan Utilities District of Omaha, a Municipal Corporation, and City of Omaha, a Municipal Corporation, Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. The supplying of heat and cold by means of circulated steam and refrigerated water does not constitute a sale of gas or water.
2. The subsurface use of a public thoroughfare, which does not interfere with its public use, which is subject to termination by the city, and which is of such a limited nature as not to be of general public interest, is not a proper subject for a franchise.
3. By legislative authority a city of the metropolitan class operating under a home rule charter may properly provide for such use of its streets for private purposes under a proper permit issued as provided by ordinance.
Foulks, Wall & Wintroub, Omaha, for appellants.
Thomas N. Wright, Boland, Mullin & Walsh, F. Vinson Roach, Willis L. Strong, James E. Fellows, Omaha, for appellees.
Heard before WHITE, C.J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN and NEWTON, JJ.
This action tests the right of defendant Northern Natural Gas Company to use the subsurface of the streets of the city of Omaha for pipes conveying steam and refrigerated water without first securing a franchise. Judgment for defendants was entered in the trial court. We affirm the judgment of the trial court.
For convenience, defendants Northern Natural Gas Company, Metropolitan Utilities District of Omaha, and the City of Omaha will be hereinafter respectively referred to as Northern, M.U.D., and City.
Northern constructed and operates a plant in downtown Omaha which supplies steam and chilled water to several buildings in the area for purposes of heating and air conditioning. The steam and chilled water are distributed by means of pipes or conduits lying under the surface of the streets and are returned to Northern's plant in the same manner. The plant is steam powered and natural gas is used to heat the boilers. All gas and water used in the system are purchased from M.U.D. All watem used in the system, either as water or steam, after circulating through the system and through the buildings supplied, is returned and reused, the only exception being small unavoidable losses of steam and a minor loss due to the use of steam as a humidifier. Customers are charged for steam losses occurring on the customer's premises. Northern does not purport to be a public utility but reserves the privilege of accepting or rejecting customers and contracts with each on an individual basis. Its pipes or conduits were installed and are maintained under a permit issued by the City for which a charge is made annually.
Plaintiffs contend: (1) That Northern is engaged in the sale of steam and water in competition with M.U.D.; (2) that the operation is one requiring a franchise; and (3) that the permit is void as one permitting a purely private use of the streets.
The City is included in the Metropolitan Utilities District. Plaintiffs call attention to section 14--1011, R.R.S.1943, which provides that if any portion of the district is supplied with water by any other entity, the M.U.D. board shall have power to fix water rates, regulate conditions of water service, and the conduct of the Water plant affording such supply. Also cited is section 14--1009, R.R.S.1943, which provides that no franchise or permit for the use of the streets for the laying of pipes in connection with a water plant designed for public or private service shall be granted except by the board of directors of M.U.D., and such franchise or permit shall not be valid until aproved by the electors of the district. The inapplicability of these statutes to the existing situation is apparent. Section 14--1008, R.R.S.1943 gives M.U.D. general supervision and control of all matters pertaining to the water Supply of the district. These statutes are clearly designed to give M.U.D. exclusive control of the water Supply within the district. The term 'water plant' refers to a 'water plant affording such supply,' in other words, to the production and supplying of water for consumption within the district. Northern obtains its water from M.U.D. It does not operate an independent plant producing water. Neither does it supply water for consumption by others. Any loss of water through escaping steam is negligible and not an inherent part of its operation which is aimed solely at the production of heat and cold by means of steam and chilled water. Plaintiffs contention that Northern is engaged in the distribution and sale of gas and water is untenable.
It is urged that Northern's operation is one requiring a franchise which under the terms of section 14--811, R.R.S.1943, cannot be issued without approval of the electors of the City. Such a franchise has not been obtained. As previously mentioned, Northern is operating under a permit issued in conformity with sections 28.20.010 to 28.20.140 of the Omaha municipal code. The pertinent portions of the ordinance provide:
'It shall be unlawful for any person, firm or corporation to use any space underneath, upon or above the surface of any street, alley, public way or other public grounds belonging to the City of Omaha, or to construct any structure thereunder or thereover, * * * without first obtaining a permit so to do from the Permits and Inspection Division of the Public Safety Department of the City of Omaha; * * *.' S. 28.20.010.
Section 28.20.070 requires the payment of annual compensation for the privilege of maintaining such structures.
Section 28.20.120 forbids interference with public works and utilities except on consent of the city and lays down rules governing...
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