Public Service Co. of Indiana, Inc. v. Knox County Rural Elec. Membership Corp., 2--874A199

Decision Date09 September 1976
Docket NumberNo. 2--874A199,2--874A199
Citation354 N.E.2d 301,170 Ind.App. 576
PartiesPUBLIC SERVICE COMPANY OF INDIANA, INC., Appellant (Petitioner below), v. KNOX COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Appellee (Respondent below).
CourtIndiana Appellate Court

Duejean C. Garrett, Greg K. Kimberlin, Plainfield, for appellant.

Don F. Morton, Parr, Richey, Obremskey, Pedersen & Morton, Lebanon, Robert V. Kixmiller, Shake, Lewis, Kixmiller & Strum, Vincennes, for appellee.

LOWDERMILK, Judge.

STATEMENT OF THE CASE:

The instant case was transferred to this office from the Second District on August 6, 1976, in order to lessen the disparity in caseloads among the Districts.

Petitioner-appellant Public Service Company of Indiana, Inc. (Public Service) appeals from an order of the Public Service Commission of Indiana (PSCI) which held that a prospective utility customer, O. Ames Company (Customer) should have its utility needs served by respondent-appellee Knox County Rural Electric Membership Corporation (Knox REMC).

We affirm.

FACTS:

The facts necessary for our disposition of this appeal are as follows: On March 17, 1939, the PSCI approved Knox REMC's articles of incorporation which included, among other things, a reasonable description of its intended service area. IC 1971, 8--1--13--4(b) (Burns Code Ed.).

In July, 1945, Public Service obtained the consent of Knox REMC to construct a distribution line into their service territory, and thereafter petitioned for and was granted by the PSCI a certificate of public convenience and necessity to construct a primary distribution line into the service territory of Knox REMC.

On August 10, 1945, Public Service completed construction of a single phase primary distribution line as authorized by the PSCI.

In April, 1972, the Customer located within 750 feet of Public Service's distribution line, requested electric service, and is presently being served by Public Service pursuant to an agreement with Knox REMC.

Public Service has completed construction of a three phase lateral line from the primary distribution line built in 1945, in order to serve Customer, and Knox REMC has also constructed a three phase distribution line to the property of Customer.

ISSUES:

The issue presented in this appeal is whether Public Service possesses under the Rural Electric Membership Corporation Act 1 the right to serve customers at locations originally described in Knox REMC's articles of incorporation, but also within 750 feet of a primary distribution line built by Public Service in 1945, pursuant to a certificate of public convenience and necessity issued by the PSCI.

DISCUSSION AND DECISION:

The Acts of 1935, ch. 175, § 4 currently found at IC 1971, 8--1--13--4(b) (Burns Code Ed.) which states the contents to be included in an REMC's articles of incorporation provides:

'* * *

(b) A reasonable description of the territory in which its operations are to be conducted, and which shall not include any incorporated city or town having a population in excess of fifteen hundred (1500) inhabitants at the time such articles are first approved by the public service commission, or any territory, whether within or without any incorporated city or town, already being served with energy by any public or municipally-owned utility. * * *' (Our emphasis.)

The statutory language found in IC 1971, 8--1--13--4(b), supra, 'territory . . . already being served . . .' was first defined by Acts 1945, ch. 155, § 1 which provides in pertinent part:

'* * *

'(o) As used in this act, the word 'territory' when modified by the phrase 'already being served with energy by any public or municipally owned utility' shall be construed (1) to include such territory as may be served by secondary voltage service lines extending from primary voltage distribution lines existing on the effective date of this act or thereafter built in accordance with the provisions of this act, and . . .. * * *' (Our emphasis.)

In 1951, our legislature defined the phrase 'secondary voltage service lines' in Acts 1951, ch. 162, § 1 as follows:

'* * *

(p) As used in this act, the words 'secondary voltage service line' means a secondary distribution line, not exceeding seven hundred fifty feet in length, and capable of service in accordance with rules and standards of service for electric utilities promulgated by the Public Service Commission of Indiana. * * *' (Our emphasis.)

In 1953, our legislature again defined the phrase 'territory . . . already being served . . .' in Acts 1953, ch. 23, § 1. The lenguage of the 1953 Act was incorporated in relevant part by IC 1971, 8--1--13--3(n) (Burns Code Ed.) and provides:

'* * *

(n) As used in this act (8--1--13--1--8--1--13--27), the word 'territory' when modified by the phrase 'already being served with energy by any public or municipally-owned utility' shall be construed (1) to include, in respect to rural territory, only such territory as is within 750 feet of a primary distribution line as existing on the effective date of this act or thereafter built in territory that was not at the time of such building included in territory of any corporation organized, or admitted to do business, under this act, and . . .. * * *' (Our emphasis.)

Public Service contends that as a result of the certificate of convenience and necessity it acquired from the PSCI in July, 1945, which authorized it to construct a primary line into the service territory of Knox REMC, it automatically acquired the right to serve future customers who located within 750 feet of either side of this primary line. They continue by urging that this was the intention of our legislature as manifested by their definition of the phrase 'territory . . . already being served . . .' in Acts 1945, ch. 155, § 1, supra.

The PSCI, in both its order dated May 30, 1974, and its order dated July 11, 1974, found as follows:

'. . . We deem it very important to note that the only use of the phrase 'already being served with energy by any public or municipally owned utility' is that contained in Subsection B of IC 8--1--13--4. That section is only applicable to the territory to be included in the Articles of Incorporation of an REMC as originally submitted and approved or as later amended.

We therefore find that the phrase 'already being served with energy by any public or municipally owned utility' must be construed to apply to only the point and/or time of the original filing of the original Articles of Incorporation of an REMC or amendments to those Articles where an increase in territory is sought.

The stipulation of facts entered into between Petitioner and Respondent establishes that the territory in question was a part of the territory originally included in the original Articles of Incorporation of Respondent, Knox County REMC. Therefore, it is unnecessary for the Commission to interpret the effect of the 1945 definition of the phrase 'already being served with energy by any public or municipally owned utility' and/or either the 1951 or 1953 amendments thereto. . . .'

We are of the opinion that this finding by the PSCI is in harmony with the overall statutory scheme found in the REMC Act, IC 1971, 8--1--13--1, et seq., supra.

The phrase 'territory . . . already being served . . .' is found only in IC 1971, 8--1--13--4(b) of the REMC Act. This statute deals exclusively with the contents which must be included in an REMC's articles of incorporation. There is nothing in this statute to indicate that if a non-REMC obtains a certificate of convenience and necessity from the PSCI, that it automatically obtains a 750 foot service corridor on each side of its primary distribution line by operation of law. Rather, we are of the opinion that IC 1971, 8--1--13--4(b), supra, governs only the conduct of REMCs currently incorporating, or thereafter, seeking to amend their articles of incorporation. Simply stated, an REMC's articles of incorporation cannot describe territory closer than 750 feet to an existing utility's primary line of distribution.

If a non-REMC wishes to encroach upon the service area of an REMC, our legislature has provided the proper vehicle in IC 1971, 8--1--13--18(b) (Burns Code Ed.) which states:

'(b) Except as provided in the last sentence of this subdivision (b) no person, copartnership or corporation not formed, or admitted to do business in this state, under this act, shall construct, own, manage or control any system within any territory included in that described in the articles of incorporation of, and to be served by, any corporation formed, or admitted to do business in this state, under this act, to any extent greater than such construction, ownership, operation, management, control or system actually exists on the effective date (March 9, 1935) of this act or on the date when such territory is first included in that to be served by such corporation formed, or admitted to do business in this state, under this act 8--1--13--1--8--1--13--27, whichever date is later, unless or until the following condition shall have been met, to wit: The one seeking such construction, ownership, operation management or control shall first file, or cause to be filed, with the public service commission a petition therefor and obtain from such commission a declaration that public convenience and necessity require the repective construction, ownership, operation, management or control. Before making such declaration, the service commission shall ascertain whether the proposed construction, ownership, operation, management or control, is to be made or exercised within territory which any corporation formed, or admitted to do business in this state, under this act, or any other corporation or public...

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