Pitt & Greene Elec. Membership Corp. v. Carolina Power & Light Co.

• Decision Date: 07 July 1961
• Docket Number: No. 315,315
• Citation: 255 N.C. 258,120 S.E.2d 749
• Court: North Carolina Supreme Court
• Parties: , 40 P.U.R.3d 201 PITT & GREENE ELECTRIC MEMBERSHIP CORPORATION v. CAROLINA POWER AND LIGHT COMPANY.

Page 749

120 S.E.2d 749

255 N.C. 258, 40 P.U.R.3d 201

PITT & GREENE ELECTRIC MEMBERSHIP CORPORATION v. CAROLINA POWER AND LIGHT COMPANY.

No. 315.

Supreme Court of North Carolina.

July 7, 1961.

Lewis & Rouse, Farmville, and J. A. Jones, Kinston, for plaintiff, appellant.

I. Joseph Horton, Snow Hill, A. Y. Arledge and W. Reid Thompson, Raleigh, for defendant, appellee.

William T. Crisp, Raleigh, for North Carolina Electric Membership Corporation, amicus curiae.

BOBBITT, Justice.

Statutory provisions relating to electric membership corporations and to public utility corporations are set forth and discussed in Duke Power Co. v. Blue Ridge Elec. Membership Corp., 253 N.C. 596, 117 S.E.2d 812, and in Pee Dee Elec. Membership Corp. v. Carolina Power & Light Co., 253 N.C. 610, 117 S.E.2d 764.

In Carolina Power & Light Co. v. Johnston County Electric Membership Corp., 211 N.C. 717, 192 S.E. 105, decided in 1937, this Court held that an electric membership corporation and a public utility corporation were free to compete in rural areas. Unless restricted by the provisions of Article 8 of their contract of January 5, 1956, plaintiff and defendant may continue to do so.

Article 8, entitled 'Service Facilities,' consists of the two paragraphs designated (a) and (b). The restrictions imposed thereby apply equally to plaintiff and defendant. Judge Mintz, in Conclusion of Law No. 3, construed Article 8 as follows:

'Clause (a) prohibits either party unless ordered to do so by a lawful order issued by a properly constituted authority from supplying electric service to anyone who, at the time of the proposed service, is receiving electric service from the other or whose premises are capable of being served by the existing facilities of the other without extension of its distribution system other than by the construction of lines not exceeding three hundred feet in length.

'Clause (b) must be construed in pari materia with clause (a), and clause (b) prohibits either party, unless ordered to do so by a properly constituted authority, from constructing duplicating facilities within 300 feet of the lines of the other, except insofar as such construction within such 300-foot zone shall be necessary to transmit electric energy between unconnected points on its lines, and except for crossing of the lines of the other; but no service shall be rendered from such interconnecting facilities or crossing lines in competition with the other party, that is, no service shall be furnished from such interconnecting facilities or crossing lines to any applicant whose premises are capable of being served by the existing facilities of the other without extension of its distribution system other than by the construction of lines not exceeding three hundred feet in length.

'There is no prohibition in the contract against either party furnishing electricity to any location which is more than 300 feet from the existing lines of the other, nor is there any prohibition in the contract against either party constructing any facilities at places more than 300 feet from the existing facilities of the other.'

Whether the construction by defendant of its proposed line would violate the provisions of Article 8 is, as stated in plaintiff's brief, 'the heart of the lawsuit.'

Defendant is subject to the supervision and jurisdiction of the Utilities Commission. The clause, 'unless ordered so to do by a lawful order issued by a properly constituted authority,' indicates the parties were advertent to statutory provisions vesting in the Utilities Commission all power necessary to require and compel defendant to provide and furnish reasonable electric service to the citizens of this State. G.S. § 62-30.

Defendant, if its proposed extension is constructed, will have no right to distribute electric energy therefrom to anyone now served by plaintiff or whose premises can be served by plaintiff from its existing facilities or extensions thereof not exceeding 300 feet. Plaintiff does not allege defendant proposes to do so. Defendant disavows any intent to do so.

Paragraph (a) defines the specific area in which the right to compete is restricted. The right of each party to continue to compete in areas more than 300 feet from the existing facilities of the other is clearly implied.

Plaintiff contends paragraph (b) is a separate and independent contractual provision; that, when so construed, the construction of defendant's proposed extension would duplicate plaintiff's facilities within the meaning of paragraph (b); and that such duplication is not necessary in order to transmit electric energy between unconnected points on defendant's lines.

In determining the meaning of Article 8, consideration must be given the interpretation heretofore placed thereon by the parties. Duke Power Co. v. Blue Ridge Elec. Membership Corp., supra.

It was stipulated: 'The lines of plaintiff and defendant cross at various points, and the plaintiff and the defendant have always understood and agreed that the crossing of the lines of the one by the other does not per se constitute a violation of the terms of the contract between the parties.'

Moreover, the stipulated facts disclose: (1) Lines constructed by plaintiff prior to 1952 then and now cross at two points lines constructed by Tide Water prior to 1937 and in use continuously thereafter by Tide Water and by defendant. (2) In 1955, when plaintiff constructed its substation, it then constructed, in addition to the lines extending east (crossing Highway No. 91) therefrom, a distribution line extending southwest from the substation. This distribution line then and now crosses a distribution line constructed by Tide Water prior to 1937 and in use continuously thereafter by Tide Water and by defendant; and, at the nearest point, this distribution line was and is only 856 feet from another line of defendant constructed by Tide Water prior to 1937.

It is noted: Defendant's proposed extension will not parallel but will cross (approximately at right angles) the lines (extending east from the substation) constructed by plaintiff in 1955. It will not be within 300 feet of plaintiff's existing facilities except in the immediate area where it crosses plaintiff's said lines. While it would involve greater distance and cost, defendant (as shown by the maps) could reach the particular area in which the Harper property is located without crossing any line of plaintiff. The line defendant proposes to construct is an extension of a line constructed by Tide Water prior to 1937 and in use continuously thereafter by Tide Water and by defendant.

Ordinarily, plaintiff concedes, either party may construct a line over or under a previously constructed line of the other. Plaintiff contends defendant cannot do so in order to compete with plaintiff in an area where adequate service can be provided by plaintiff, at less construction cost, by an extension of plaintiff's previously constructed facilities. To do so, plaintiff contends, would constitute a duplication of its facilities within the meaning of paragraph (b). However, in our opinion, the reference in paragraph (b) to 'the other's facilities' refers to the other's existing facilities; and paragraph (b) prohibits service from 'interconnecting facilities in competition with' the existing facilities of the other party. We find nothing in paragraph (b) that suggests either party cannot construct a line over or under a line of the other for the purpose of distributing electric energy in an (undefined) area more than 300 feet from such other party's existing facilities because such other party may, by extension of its existing facilities, provide adequate service therein. Obviously, the only reason either party would construct such a line would be to supply electric energy to customers, present or prospective.

It seems clear that all of Article 8 relates to the area defined in paragraph (a), an area not exceeding 300 feet from existing lines of plaintiff or defendant; that par...