Lumbee River Elec. Membership Corp. v. City of Fayetteville

• Decision Date: 06 December 1983
• Docket Number: No. 126PA83,126PA83
• Citation: 309 N.C. 726,309 S.E.2d 209
• Parties: LUMBEE RIVER ELECTRIC MEMBERSHIP CORPORATION and North Carolina Electric Membership Corporation v. The CITY OF FAYETTEVILLE, the Public Works Commission of the City of Fayetteville, and Southwest Development Corporation of Cumberland County.
• Court: North Carolina Supreme Court

Page 209

309 S.E.2d 209

309 N.C. 726

LUMBEE RIVER ELECTRIC MEMBERSHIP CORPORATION and North Carolina Electric Membership Corporation v. The CITY OF FAYETTEVILLE, the Public Works Commission of the City of Fayetteville, and Southwest Development Corporation of Cumberland County.

No. 126PA83.

Supreme Court of North Carolina.

Dec. 6, 1983.

Crisp, Davis & Schwenter, William T. Crisp, Joyce L. Davis and Robert F. Page, Raleigh, for plaintiffs-appellees Lumbee River Elec. Membership Corp. and North Carolina Elec. Membership Corp.

Reid, Lewis & Deese by Richard M. Lewis, Jr. and Renny W. Deese, Fayetteville, Spruill, Lane, Carlton, McCotter & Jolly by J. Phil Carlton, Raleigh, for defendants-appellants.

J. Phil Carlton and Ernie K. Murray, Raleigh, for amicus curiae, the Towns of Scotland Neck and Shelby and the Cities of Gastonia, Greenville, Newton and Rocky Mount, North Carolina.

MEYER, Justice.

Before proceeding with the opinion in chief, it is necessary to dispose of a motion in the cause pending before this Court.

On the day of the oral argument before this Court, Fayetteville filed a written motion pursuant to Rule 9(b)(6) of the Rules of Appellate Procedure to amend the record on appeal to include the affidavit of Mr. Claude I. Burkhead, Jr., the City of Fayetteville's chief electrical engineer. The affidavit was attached to Fayetteville's response to plaintiffs' motion for a preliminary injunction, and was thus a part of the original record proper on file and available to Judge Braswell at the hearing on the motion for preliminary injunction. The affidavit was not made a part of the record on appeal to the Court of Appeals and therefore was not originally a part of the record before this Court. Plaintiffs filed a response to Fayetteville's motion to amend the record to include the affidavit, seeking its denial on the ground that the affidavit was never formally offered into evidence before Judge Braswell at the hearing on the motion for preliminary injunction. Plaintiffs contend that because the affidavit was not formally presented in evidence, it was not a part of the trial court record. We do not agree. The affidavit was attached to a formal pleading--the response. It was therefore a part of that pleading and thus a part of the record in the case. We will assume that the able and experienced trial judge who heard the motion read the pleadings upon which the motion was based. We have allowed the motion to amend the record on appeal.

The sole issue on this appeal is whether Fayetteville's extension of electric service to the Montibello Subdivision was "within reasonable limitations" as that term is utilized in G.S. § 160A-312. We conclude that it was.

Lumbee River Electric Membership Corporation is an electric membership corporation organized pursuant to Chapter 117 of the North Carolina General Statutes and is engaged in the business of furnishing electric service in several southeastern North Carolina counties, including Cumberland County where it serves approximately 3,400 of its members. North Carolina Electric Membership Corporation (of which Lumbee River EMC is a member) is organized pursuant to the same chapter of the General Statutes and is a bulk, wholesale power supplier of its member cooperatives. The City of Fayetteville is a municipal corporation existing under the laws of North Carolina. The Public Works Commission is an agency of the city which supervises, plans and operates various public utility services of the city, including the distribution of electric service. Southwest Development Corporation is the owner of the Montibello Subdivision which is located wholly within Cumberland County, contains approximately 521 acres and is located approximately four miles from the corporate limits of the City of Fayetteville. The subdivision is residential in nature and at the time here pertinent was in the early stages of development. The subdivision is located entirely within territory assigned to the EMC by order of the North Carolina Utilities Commission in 1969. Fayetteville distributes electric service at retail both within and outside the corporate limits of the city and has distributed electric service to customers in the general area of the subdivision in question both before and since the assignment of the area to the EMC in 1969, including service to new customers within the assigned area after that date.

Prior to the commencement of this action, Southwest Development Corporation requested that Fayetteville provide the electric service for Montibello Subdivision and in fact had entered into a contract with Fayetteville whereby Fayetteville is to provide electric service to Section 1 of the subdivision. Mr. John Koenig, President of Southwest, testified at a hearing on plaintiffs' request for a preliminary injunction that he had requested service exclusively from Fayetteville and stated his apparent reasons for doing so:

I have scheduled an underground electrical system for section one of Montibello, and I requested in the early part of this year, in February, that PWC, Mr. Ray Munch's department, provide the power. I have other subdivisions in Cumberland County and have experience with Public Works Commission providing power to those subdivisions. I built and developed homes in what is known as Water's Edge and had power provided by PWC and then developed a new subdivision which is called Lake Shores and I have PWC in there. Montibello is my third subdivision.

I consider myself as having a fair amount of experience with the Public Works Commission providing power. I have always had timely, good service from them. I have never had any problems. We have gone with underground power in Lake Shores in the development of the first section of that subdivision, and we never have encountered any problems. I think I have established an excellent working relationship with PWC. On a daily basis, we have to work together on each individual lot and the development of each phase of construction. The well site located in Lots one and two of section one of Montibello requires three-phase power.

Around February, I requested Public Works Commission to provide the power. I have had some experience with the Commission providing power. I also have a real estate company in which we sell existing or new homes, perhaps somewhere around an average of five hundred homes per year. Over the last several years you develop an extraneous factor in what the consumer, the ultimate consumer, the home owner, would like to have.... My experience with reference to the dependability of power that has been provided by the Public Works Commission is excellent.

The well site requires three-phase electrical power because of the size of the subdivision and the reliability of having adequate water....

I ... entered into a contract with the Public Works Commission for the providing of power to section one of the Montibello Subdivision. Prior to my request to the Public Works Commission to provide the electrical power to section one of the Montibello Subdivision, I knew that Lumbee River was out in that general area, but I did not know the exact location of their line. I did not make any request to Lumbee River to service Montibello. I have exclusively asked Public Works Commission to provide electrical power to the subdivision, and the power has been provided.

The two earlier subdivisions, Water's Edge and Lake Shore, are outside the city limits of Fayetteville.

When this action was begun, Fayetteville was serving 22 customers, and the EMC 5 customers within a one-half mile radius of the subdivision entrance, and within a one mile radius of the same point, Fayetteville was serving 229 customers and the EMC 75 customers.

It is quite clear from the record evidence that in order to provide adequate service to the Montibello subdivision, three-phase (as opposed to single-phase) electric service was and is required. Fayetteville has had a three-phase line immediately adjacent to the subdivision proper since 1973. In 1981, at the request of the developer, Fayetteville extended its three-phase line some 1,148 feet to the desired connection point at the entrance to Section 1 of the Subdivision. Thus on the date this action for injunctive relief was filed by plaintiffs, Fayetteville's three-phase line was in fact available directly across the street from the entrance to the subdivision tract. The EMC had no three-phase line adjacent to the subdivision but did have a single-phase electric line within 170 feet of the entrance to Section 1 of the subdivision. The single-phase line had been in existence since 1948 and was once used to serve a customer directly across the street from the subdivision entrance. Prior to 1957 that line served a residence on the tract of land now occupied by the subdivision. The EMC's three-phase line is located 1,850 feet from the nearest boundary of the subdivision and approximately 3,174 feet from the entrance to Section 1 of the subdivision. It would require 5 days for the EMC to extend its three-phase service to the subdivision and the extension would cost $11,700.00.

With this brief factual background, we move now to a consideration of Fayetteville's authority or lack thereof to serve the Montibello subdivision.

Municipalities owning and operating their own electric systems do so upon the authority of specific provisions of the city or town charter or of Article 16 of Chapter 160A of the General Statutes which allows municipalities to operate public enterprises, including "[e]lectric power generation, transmission, and distribution systems." G.S. § 160A-312 is the specific statute which authorizes municipalities to operate their various public enterprises, including electric systems, outside the corporate limits "within reasonable limitations."

At least as early as 1917 our Legislature enacted legislation authorizing a municipality to "own and maintain its own light ... system to...