Gralapp v. Mississippi Power Co., 1 Div. 328

• Decision Date: 26 January 1967
• Docket Number: 1 Div. 328
• Citation: 194 So.2d 527,280 Ala. 368
• Parties: Marion D. GRALAPP et al. v. MISSISSIPPI POWER COMPANY.
• Court: Alabama Supreme Court

Page 527

194 So.2d 527

280 Ala. 368

Marion D. GRALAPP et al. v. MISSISSIPPI POWER COMPANY.

1 Div. 328.

Supreme Court of Alabama.

Jan. 26, 1967.

Hamilton, Denniston, Butler & Riddick, Mobile, for appellants.

Inge, Twitty, Duffy & Prince, Mobile, and Martin, Balch, Bingham, Hawthorne & Williams, Birmingham, for appellee.

MERRILL, Justice.

This is a condemnation proceeding brought by Mississippi Power Company, appellee, to acquire rights of way and easements 125 feet in width on several parcels of land owned by appellants. From an order denying condemnation in the probate court, appellee appealed to the Circuit Court of Mobile County. The matter was tried de novo without a jury and the application for order of condemnation was granted. From this order, the landowners have perfected the instant appeal.

The facts of the case are undisputed. Mississippi Power is one of four electrical power operating companies affiliated with and controlled by The Southern Company a public utility holding company. It was organized under the general corporation laws of Maine on November 24, 1924, and qualified to do business in Alabama on December 7, 1962. It operates as a public utility in 23 southeast Mississippi counties, but not in Alabama.

The operating companies other than Mississippi Power affiliated with and controlled by The Southern Company are Alabama Power Company, Georgia Power Company and Gulf Power Company, operating respectively in States of Alabama, Georgia, and Florida. The Southern Company is the owner of all of the common stock of each of the operating companies. Transmission systems of each of the companies are interconnected with contiguous affiliated companies so that The Southern Company System is unified from the standpoint of transmission and generation. The four operating companies work under an agreement which provides for the co-ordinated operation of The Southern Company System as a power pool in order to more effectively use transmission lines, generating plants, and storage reservoirs. The System is devised so that electrical power will flow from an area where there is an excess of generating ability at a particular time as compared with load or demand for electricity toward an area where there is (or there is a tendency to be) a deficiency of generating capacity as compared with the existing load in such deficiency area.

It is inherent in the electric utility business that there are emergency occasions when there is need for an alternative source of electricity. These interconnecting lines and the system as detailed above provide these alternative sources. On other occasions one electric system may have an excess of power which has been produced at a relatively lower cost than the local system could produce it. As a result of these interconnections, Alabama is able to obtain such lower cost power when available, providing it with more economical operations and which have been a factor in reduced customer rates.

Another benefit from such interconnections is that it permits Alabama to reduce the size of its 'reserve capacity.' If an electric system is operated independent of any alternative source of power for use in the event of emergencies such as generation failure, then it must have a reserve capacity for availability in such emergencies equal to the size of its largest generating unit. By such interconnections, Alabama is able to obtain emergency power without the need for reserve capacity of such magnitude. By interconnections of the type provided by the line in question, the members of the unified or pooled operation thus pool their reserves and reduce the cost of their required power reserves. Such interconnections further provide for more efficient operations and an alternative source of power when existing Alabama transmission lines are disabled or interrupted from weather or other disturbances or at times of peak load.

The rights of way which Mississippi Power seeks to condemn in this proceeding are for a transmission line with a capacity of 230,000 volts running almost due west from Alabama Power Company's Barry Stream plant in northeast Mobile County to Wade, Mississippi, located just over the Mississippi line, where it will tie into Mississippi Power's transmission and distribution system. This tranmission line, when completed, will be only one of several interconnections between the transmission systems of Alabama Power Company and Mississippi Power.

While power flows both ways, the evidence shows that Mississippi Power is substantially deficient in power. During the year 1964, over the several lines mentioned above, Alabama Power Company delivered Mississippi Power 547,874,000 KWH while the latter delivered to the former 34,056,500 KWH, a better than 15 to 1 ratio. Based on this evidence, appellants contend that the line in question is being built for the benefit of electric consumers in the area of Mississippi served by Mississippi Power and not for the public benefit of Alabama citizens.

Appellants contend that Mississippi Power's engaging in business as an electric company and exercising the power of eminent domain in Alabama are ultra vires. It is argued that the appellee, due to its self-imposed charter limitations and the statutes of Maine did not have the right of eminent domain in the state of its creation (Maine), and therefore, it cannot have that right elsewhere.

We feel that the case of Hagerla v. Mississippi River Power Company, 202 F. 776 (S.D.Iowa 1913) is a complete answer to appellants' argument. In that case, Mississippi River Power Company was a Maine corporation which was engaged in constructing a dam on the Mississippi River, a part of which was to be located in the State of Iowa. It was alleged therein that the Power Company did not have the power of eminent domain in Iowa. The court held that Mississippi River Power Company could exercise such power in Iowa and it was not material whether it had such power under the laws of Maine. The court said:

'The state of Iowa, through the proper officers, acting under a valid statute, admitted the Power Company, a corporation of Maine, to come into the state to transact the very business now questioned, namely, to construct the dam, power house, lock, and dry dock, and expend millions of dollars therefor. The state extended such invitation, granted the entrance into the state, and accepted the statutory license fee. Coming into the state, paying the fees, and obtaining permit from the Secretary of State is expressly authorized by section 1637 of the Iowa Code. Section 1638 provides:

"No foreign corporation which has not in good faith complied with the provisions of this chapter and taken out a permit shall possess the right to exercise the power of eminent domain * * * until it has so complied herewith and taken out such permit.'

'So that this Power Company, having complied with the statute, had all the rights to remain in Iowa, built its structure, at least from the Iowa shore to the thread of the stream, and was given the power of eminent domain, and to take lands by purchase. Now to drive it from the state and render useless such improvements and such expenditures would be in violation of the clause of the Constitution prohibiting the impairment of contracts. American Smelting & Refining Co. v. People of State of Colorado, 204 U.S. 103, 27 S.Ct. 198, 51 L.Ed. 393, 9 Ann.Cas. 978.

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