Johnson County Rural Elec. Membership Corp. v. Public Service Co. of Indiana, Inc., 2-776A265

• Decision Date: 05 July 1978
• Docket Number: No. 2-776A265,2-776A265
• Citation: 378 N.E.2d 1,177 Ind.App. 53
• Parties: JOHNSON COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Respondent-Appellant, v. PUBLIC SERVICE COMPANY OF INDIANA, INC., Petitioner-Appellee.
• Court: Indiana Appellate Court

Page 1

378 N.E.2d 1

177 Ind.App. 53

JOHNSON COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION Respondent-Appellant, v. PUBLIC SERVICE COMPANY OF INDIANA, INC., Petitioner-Appellee.

No. 2-776A265.

Court of Appeals of Indiana,Third District.

July 5, 1978.

Rogers, Tomkins & Geese, Franklin, Peter L. Obremskey, Parr, Richey, Obremskey & Morton, Lebanon, for respondent-appellant.

Duejean C. Garrett, Gregg K. Kimberlin, Plainfield, for petitioner-appellee.

HOFFMAN, Judge.

This is a judicial review of a final order by the Public Service Commission of Indiana (Commission) granting petitioner-appellee Public Service Company of Indiana, Inc. (PSI), a certificate of public convenience and necessity to provide electrical service to territory formerly included in the service territory of respondent-appellant Johnson County Rural Electric Membership Corporation (Johnson REMC). The order of the Commission was issued pursuant to the provisions of IC 1971, 8-1-13-18(b) (Burns Code Ed.).

On appeal Johnson REMC challenges the constitutionality of 8-1-13-18(b) and contends that the order of the Public Service Commission is not supported by sufficient evidence and deprives it of its property without just compensation.

The record reveals the following:

On October 2, 1973, PSI filed a petition seeking a declaration of public convenience and necessity for the construction, ownership, operation, management and control of electrical facilities to be used to render service in part of a 525-acre residential, commercial and industrial development called Valle Vista and located immediately to the east of Greenwood, Indiana. The Articles of Incorporation of Johnson REMC and Indiana Statewide Rural Electric Cooperative, Inc. included Valle Vista in the description of its service territory.

Johnson REMC filed a motion to dismiss on November 16, 1973, alleging that the petition failed to state a claim upon which relief could be granted. PSI filed an answer in opposition on April 11, 1974.

On May 9, 1974, Johnson REMC filed a cross-petition, alleging that during the 1940's PSI was granted certain customer releases in the territory of Johnson REMC, that PSI discontinued its service to these customers in 1971, and that such termination of service ended PSI's right to provide electrical service in that territory. The cross-petition further alleged that PSI rebuilt and re-energized electric utility lines into Johnson REMC territory in violation of law and requested an order directing PSI to remove such lines. PSI filed a motion to strike the cross-petition on May 10, 1974.

The Commission heard argument on the motion to dismiss and the motion to strike the cross-petition prior to the introduction of evidence at the hearing. Johnson REMC's motion to dismiss was taken under advisement, and PSI's motion to strike the cross-petition was denied.

The Commission issued its order on May 19, 1976, granting PSI a certificate of pubic convenience and necessity to serve a substantial portion of Valle Vista. The order of the Commission contained a statement of fact and then made the following findings and order:

"1. That the Commission has jurisdiction over Petitioner (PSI) and Johnson REMC as well as the general subject matter of the Petition herein.

2. That Yeager Contracting Company, Incorporated is developing a 525 acre Planned Unit Development on the southeast side of Greenwood, Indiana, known as Valle Vista, which will include single family residential lots, apartment and condominium buildings, several commercial complexes, an industrial park, and a golf course and clubhouse. That portions of the development have already been constructed and other portions are under construction.

3. That the Valle Vista development will be served underground electric utility service.

4. That both Petitioner and Johnson REMC presently have service rights inside the Valle Vista development.

5. That the Valle Vista development is contiguous to the City of Greenwood; that approximately one-half of the development has been annexed into the City of Greenwood; and that it is possible that the entire development will be annexed to the City of Greenwood.

6. That Petitioner is the franchised electric utility serving the City of Greenwood.

7. That underground service to Valle Vista by both Petitioner and Johnson REMC as the service boundaries now exist would involve a substantial duplication of electric facilities, would inconvenience the customers of both utilities in Valle Vista, and would not be in the public interest.

8. That Petitioner is presently rendering service in the western and southern portions of the development, and Johnson REMC is presently rendering service to a motel, service station and gift shop in the extreme northeastern portion of the development.

9. That the system being used by Johnson REMC to render its existing service inside the development to the motel, service station and gift shop consists of underground taps off of an existing three phase overhead line.

10. That Johnson REMC has the capacity and facilities presently in place to continue rendering its existing service without any additional capital expenditures.

11. That the Johnson REMC's service to the motel, service station and gift shop is electrically severable and involves no substantial duplication of facilities needed to serve the remaining portion of the development.

12. That the entire Valle Vista development, excluding the motel, service station and gift shop presently being served by Johnson REMC, should be served by one electric utility.

13. That service of the entire development by Petitioner, excluding the motel, service station and gift shop presently being served by Johnson REMC, would avoid the wasteful duplication of electric facilities.

14. That Petitioner can serve the Johnson REMC portion of Valle Vista with less expense than can Johnson REMC.

15. That Petitioner can render more reliable service to the Johnson REMC portion of Valle Vista than can Johnson REMC.

16. That the plan of service of Petitioner is more economically feasible than the plan of Johnson REMC.

17. That Petitioner has historically rendered electric utility service to the area now composing Valle Vista.

18. That Petitioner is ready, willing and able to furnish adequate service to the entire Valle Vista development.

19. That Petitioner has a great deal more experience in rendering underground electric service than does Johnson REMC.

20. That service of Valle Vista load would have less of a financial impact on Petitioner than on Johnson REMC.

21. That Petitioner is better able to serve the Johnson REMC portion of Valle Vista than is Johnson REMC.

22. That in order for new delivery points to be established for Johnson REMC, the provisions of the Interconnection Agreement referred to above and the Order of this Commission issued on June 25, 1971, in Cause No. 32032, must be complied with, and that such provisions were complied with only as to a delivery point in Section 35 or 36, Range 4 East, Township 14 North, Johnson County, Indiana.

23. That Yeager Contracting Company, Incorporated has expressed no preference with regard to electric utilities.

24. That public convenience and necessity require the construction, ownership, operation, management and control by Petitioner of the required additional electric lines and facilities for the rendering of electric service in the area petitioned for in this cause, excluding only the motel, service station and gift shop presently being served by Johnson REMC, and it should and will be so ordered.

IT IS THEREFORE ORDERED BY THE PUBLIC SERVICE COMMISSION OF INDIANA that it be and there is hereby issued to Public Service Company of Indiana, Inc. (Petitioner), a declaration that public convenience and necessity require the construction, ownership, operation, management and control by Petitioner of such electric lines and facilities as will be from time to time necessary for the rendering of electric service to that parcel of land situated in Pleasant Township, Johnson County, Indiana, and located in the following area: (There follows a legal description of the land.) and Petitioner is hereby authorized and permitted to construct, own, operate, manage and control such electric lines and related facilities necessary to render service to the above described area, excluding only the motel, service station and gift shop presently being served by Johnson REMC.

IT IS FURTHER ORDERED THAT nothing contained in this order shall affect the application of Section 18 a of the REMC Act with respect to the territory excluded from this order.

IT IS FURTHER ORDERED that in view of the disposition of this matter that Respondent's Cross-Petition be denied.

IT IS FURTHER ORDERED that Petitioner offer to purchase from the Respondent the underground electric facilities of Respondent presently in place inside the Valle Vista development, at a price representing the reproduction cost new less depreciation thereof, excluding only those facilities used to serve the motel, service station and gift shop located in the extreme northeastern portion of the development.

IT IS FURTHER ORDERED that this order shall be effective on and after (May 19, 1976)."

Johnson REMC contends that IC 1971, 8-1-13-18(b) (Burns Code Ed.), is unconstitutional because it permits a non-REMC to petition the Public Service Commission for a certificate of public convenience and necessity to serve territory described in the Articles of Incorporation of an REMC without permitting an REMC to likewise seek a declaration of public convenience and necessity to serve in non-REMC areas. This, it is said, violates the provision of the Indiana Constitution requiring laws to be general and of uniform operation throughout the state ¹ as well as the equal protection provisions of both the state ² and federal ³ constitutions.

Statutes are presumed valid and the burden is upon the challenger to overcome such presumption. In the...