State ex rel. Utilities Commission v. Edmisten
| Decision Date | 06 March 1979 |
| Docket Number | No. 7810UC139,7810UC139 |
| Citation | 40 N.C.App. 109,252 S.E.2d 516 |
| Court | North Carolina Court of Appeals |
| Parties | STATE of North Carolina, ex rel. UTILITIES COMMISSION, Nantahala Power & Light Company, Applicant, v. Rufus L. EDMISTEN, Attorney General, Henry J. Truett, County of Swain, North Carolina; Town of Bryson City, North Carolina, Intervenors. |
Crisp, Bolch, Smith & Davis by William T. Crisp, Raleigh, and Spiegel & McDiarmid by Robert H. Bear, Washington, D. C., for Henry J. Truett.
McKeever, Edwards, Davis & Hays by Fred H. Moody, Jr., Bryson City, for County of Swain.
Joseph A. Pachnowski, Bryson City, for Town of Bryson City.
Joyner & Howison by R. C. Howison, Jr. and G. Clark Crampton, Raleigh, for Nantahala Power & Light Co. HARRY C. MARTIN, Judge.
Intervenors argue that the Commission erred in refusing to make Tapoco a party to these proceedings. At the threshold, this requires us to determine whether, on the record before us, Tapoco is a public utility. Utilities Commission v. Water Co., 248 N.C. 27, 102 S.E.2d 377 (1958). A public utility is defined in Section 62-3(23) of the General Statutes of North Carolina (1977 Supplement):
(23) a. "Public utility" means a person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating in this State equipment or facilities for:
1. Producing, generating, transmitting, delivering or furnishing electricity, piped gas, steam or any other like agency for the production of light, heat or power to or for the public for compensation;
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b. The term "public utility" shall for rate-making purposes include any person producing, generating or furnishing any of the foregoing services to another person for distribution to or for the public for compensation.
"Person" includes a corporation. N.C.Gen.Stat. 62-3(21).
The record shows Tapoco is a "person," being a Tennessee corporation domesticated in 1954 to do business in the state of North Carolina. Since 1955 it has owned and operated electric generating facilities at Santeetlah and Cheoah in Graham County, North Carolina. At these two plants Tapoco generates and transmits electricity to TVA, a corporation chartered by acts of Congress. TVA distributes this electricity to or for the public for compensation.
On 16 February 1955, Tapoco, Nantahala, and Carolina Aluminum (a public utility in North Carolina and the previous owner, before Tapoco, of the Santeetlah and Cheoah plants) jointly filed for a certificate of public convenience and necessity with the North Carolina Utilities Commission to permit Tapoco to acquire from Carolina Aluminum the Santeetlah and Cheoah plants and to operate them. In the application Tapoco agreed to make available to Nantahala such electric power as requested by Nantahala to serve the villages of Santeetlah and Tapoco in Graham County. The certificate issued by the Commission ordered Tapoco to so do. Approximately 300 people live in these villages.
By virtue of the New Fontana Agreement of 1962, TVA acquires all the electricity of Nantahala and Tapoco as it is generated at the plants. This includes all four of Tapoco's plants, two being in Tennessee, and eight of Nantahala's eleven plants, Nantahala's three small facilities being excluded. In return for their pooling of this generation with TVA, Nantahala and Tapoco receive entitlements to some 1,912,308,000 KWH annually. These entitlements are shared by agreements of Nantahala, Tapoco and Alcoa executed in 1963 and 1971. With Tapoco still acting under its certificate of public convenience and necessity, Nantahala receives under the apportionment agreement sufficient electricity to serve the villages of Tapoco and Santeetlah and continues to provide this service. All of Tapoco's power is transmitted to TVA for distribution. TVA, through the apportionment agreements, distributes the power to the public. Nantahala receives some and Alcoa receives some. Any surplus over the New Fontana Agreement entitlements can be used by TVW to reduce its steam generated production and thus reduce the cost to the consuming public. Both Alcoa and Nantahala are members of the "public" within N.C.G.S. 62-3(23). "Public" is not defined in Chapter 62 of the General Statutes of North Carolina. "Public" means the whole body politic, the body of the people at large, Black's Law Dictionary 1393 (4th ed. rev. 1968), the people as a whole, Webster's Third New International Dictionary 1836 (1967). Tapoco's delivery of its power to TVA and the distribution by TVA of that power under the pooling and apportionment agreements is the furnishing of electricity "to another for distribution to or for the public for compensation." N.C.Gen.Stat. 62-3(23).
In 1955 Tapoco secured a certificate of public convenience and necessity from the North Carolina Utilities Commission before commencing the generation and transmission of electricity in North Carolina. The articles of incorporation of Tapoco state the purpose of the corporation is to produce and provide electric power to the public. It does produce and sell electricity in North Carolina. To grant a certificate of public convenience and necessity to conduct a business which is not a public utility, within the definition of the statute, would be both arbitrary and in excess of the statutory authority of the Commission. Utilities Commission v. Telegraph Co., 267 N.C. 257, 148 S.E.2d 100 (1966). A public utility must obtain a certificate before beginning operation of any public utility plant. N.C.Gen.Stat. 62-110. "One does not need a certificate of public convenience and necessity in order to engage in a business which is not that of a public utility as defined in G.S. 62-3(23)." 267 N.C. at 267, 148 S.E.2d at 108. In granting Tapoco's certificate, the Commission determined that the action would not be detrimental to the public interest. (Exhibit 7, Commission order in Docket E-27.) Tapoco has never petitioned to have its certificate of public convenience and necessity revoked or abandoned.
Tapoco has, by paragraph 4 of its articles of incorporation, the power of eminent domain. It is domesticated in North Carolina. The power of eminent domain is inherent in the certificate of public convenience and necessity. Carolina Aluminum acquired part of the Santeetlah development, now owned and operated by Tapoco, through the power of eminent domain. Manufacturing Co. v. Aluminum Co., 207 N.C. 52, 175 S.E. 698 (1934). The very purpose of Tapoco seeking the certificate of public convenience and necessity was to allow it to acquire and operate the properties of Carolina Aluminum. After so doing, Tapoco cannot abandon the public purpose status of the properties and convert them to private use. Having received the benefits of its chartered privileges, including the ownership of property obtained, at least in part, by the power of eminent domain, Tapoco is charged with the corresponding responsibilities in a business affected with a public interest. Utilities Com. v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).
In Manufacturing Co. v. Aluminum Co., supra, the Court was required to determine whether Carolina Aluminum Company was a public utility with the right of eminent domain. The tests applied by the Supreme Court there are pertinent here: (a) does the charter give it all rights and privileges of a public utility; (b) is it carrying out the purposes of its charter, generating and selling electricity; (c) does its charter grant it power of eminent domain. Tapoco meets each of these standards. The fact that a corporation has the authority to, and does, engage in private business in addition to its public service does not deprive it of its status as a public service corporation. A public service (public utility) corporation having the power of eminent domain makes such corporation amenable to state control through the Utilities Commission. Id.
One test to determine whether a plant or system is a public utility is whether the public may enjoy it by right or by permission only. Utilities Commission v. Water Co., supra. In applying this test to Tapoco, the Utilities Commission required Tapoco in its...
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