Garkane Power Co., Inc. v. Public Service Commission

• Decision Date: 23 March 1940
• Docket Number: 6186
• Citation: 100 P.2d 571,98 Utah 466
• Court: Utah Supreme Court
• Parties: GARKANE POWER CO., Inc., v. PUBLIC SERVICE COMMISSION

100 P.2d 571

98 Utah 466

GARKANE POWER CO., Inc., v. PUBLIC SERVICE COMMISSION

No. 6186

Supreme Court of Utah

March 23, 1940

Original certiorari proceedings by Garkane Power Company Incorporated, against the Public Service Commission of Utah to review determination of defendant that it had jurisdiction over plaintiff.

Order in accordance with opinion.

Vincent D. Nicholson, of Washington, D. C., and W. W. Porter, of Panguitch, for plaintiff.

Joseph Chez, Atty. Gen., and John D. Rice, Asst. Atty. Gen., for defendant.

WOLFE Justice. MOFFAT, C. J., and LARSON, McDONOUGH, and PRATT, JJ., concur.

OPINION

WOLFE, Justice.

This case is before us on a Writ of Certiorari. The question to be resolved is whether or not the defendant, Public Service Commission, has jurisdiction over the plaintiff, Garkane Power Company, Inc. This depends on whether Garkane is a "public utility" as that term is used in our statute, Sec. 76-2-1 (28), R. S. U. 1933.

Garkane Power Company, Inc., is a nonprofit membership corporation, organized pursuant to Chap. 6 of Title 18, R. S. U. 1933, for the purpose of generating and transmitting to its members, electric energy. Certain facilities for carrying out this purpose have been erected. Franchises have been granted to Garkane by the towns it proposes to serve and it has obtained right-of-ways for its power lines from the towns and counties in which it will operate, and from various private individuals. On June 1, 1939, Garkane filed with the Public Service Commission an application for exemption from obtaining a Certificate, and, in the alternative, for a Certificate of Convenience and Necessity. Hearings were held on said application and a Report and Order were entered by the Commission on August 10, 1939, in which the Commission assumed jurisdiction over Garkane and granted the Certificate. Garkane applied for a rehearing but it was denied, September 6, 1939; consequently the case was brought before this Court on the question of jurisdiction.

There is little or no dispute as to the facts in this case; the parties disagree as to the significance of those facts and as to the interpretation of certain controlling statutes.

Sec. 3, Chap. 63, Laws of Utah 1935, provides that the Public Service Commission shall succeed to all powers, duties, and functions of the Public Utilities Commission, Title 76, R. S. U. 1933. Sec. 76-4-1, R. S. U. 1933 vests in the Public Utilities Commission "power and jurisdiction to supervise and regulate every public utility in this state." (Italics added.)

"The term 'public utility' includes every common carrier, gas corporation, electric corporation, telephone corporation, telegraph corporation, water corporation, heat corporation, and warehouseman where the service is performed for, or the commodity delivered to, the public generally." (Italics added.) 76-2-1 (28), R. S. U. 1933.

An "electrical corporation" is a person, group of persons, or a corporation which owns, controls, operates, or manages an electric plant or in anywise furnishes electric power "for public service within this state." 76-2-1 (20), R. S. U. 1933.

It is clear and undisputed that Garkane will "own, control, operate, and manage an electric plant." Assuming that the phrases "public service" and "for service to the public generally," have the same meaning the sole question is whether Garkane will furnish electric power "for public service," or "to the public generally."

The record shows that Garkane was incorporated for the purpose of generating or acquiring electric energy to distribute and sell to its members only. The Corporation is non-profit, and any excess money collected is to be returned or credited to the member consumers pro rata on the basis of the amount of electrical energy consumed during the period in which the excess was collected. The Corporation is specifically prohibited from rendering service for or to the public. Membership in Garkane is restricted to persons, firms, corporations, or bodies politic who (1) pay membership fee ($ 5); (2) agree to purchase the minimum amount of electricity monthly which is set by the Corporation; and (3) agree to comply with Articles of Incorporation, By-Laws, and rules and regulations of the Board of Directors, provided he or it be accepted for membership by vote of the board or of the members.

In State v. Nelson, 65 Utah 457, 238 P. 237, 239, 42 A.L.R. 849, the question of the jurisdiction of the Public Utilities Commission over the activities of a person who, under contract, transported guests to and from a summer resort, was presented to this court. In holding that such transportation service did not constitute Nelson a common carrier, this court said:

"* * * public service [is] serving and carrying all persons indifferently who apply for passage or for shipment of goods or freight. * * * Public service, as distinguished from mere private service, is thus a necessary factor to constitute a common carrier. * * * So, if the business or concern is not public service, where the public has not a legal right to the use of it, where the business or operation is not open to an indefinite public, it is not subject to the jurisdiction or regulation of the commission. Humbird Lumber Co. v. Public Utiliites Comm., 39 Idaho 505, 228 P. 271; Story v. Richardson, 186 Cal. 162, 198 P. 1057, 18 A.L.R. 750."

And we pointed out that Nelson hauled only a certain restricted group of people (guests of the resort) and did not hold himself out as willing to haul anyone who applied.

The distinction there made is valid, and is conclusive of this case. Garkane does not propose to hold itself out to serve all who apply and live near its lines; its very charter which gives it existence restricts its service to a certain group (members). It does not propose to serve "the public generally," but only to serve its members.

"The test * * * is * * * whether the public has a legal right to the use which cannot be gainsaid, or denied, or withdrawn, at the pleasure of the owner." Farmers' Market Co. v. R. R. Co., 142 Pa. 580, 21 A. 902, 989, 990.

"The essential feature of a public use is that it is not confined to privileged individuals, but is open to the indefinite public. It is this indefiniteness or unrestricted quality that gives it its public character." Thayer v. California Development Board, 164 Cal. 117, 127, 128 P. 21, 25.

But the Public Service Commission points out that membership in Garkane is easy to obtain and that actually the Corporation solicits membership and has apparently accepted thus far all who paid their fee and agreed to pay the monthly minimum. This does not affect the relationship of the Corporation with its members nor does it change the character of the service to be rendered. The distinction between a public service corporation and a cooperative is a qualitative one. In a cooperative the principle of mutuality of ownership among all users is substituted for the conflicting interests that dominate the owner vendor--non owner vendee relationship. In a cooperative all sell to each. The owner is both seller and buyer. So long as a cooperative serves only its owner-members and so long as it has the right to select those who become members, ordinarily it matters not that 5 or 1000 people are members or that a few or all the people in a given area are accorded...