State ex rel. Utilities Commission v. Haywood Elec. Membership Corp., 747

• Decision Date: 19 July 1963
• Docket Number: No. 747,747
• Citation: 260 N.C. 59,131 S.E.2d 865
• Court: North Carolina Supreme Court
• Parties: , 50 P.U.R.3d 342 STATE of North Carolina, ex rel. UTILITIES COMMISSION v. HAYWOOD ELECTRIC MEMBERSHIP CORPORATION et al.

Page 865

131 S.E.2d 865

260 N.C. 59, 50 P.U.R.3d 342

STATE of North Carolina, ex rel. UTILITIES COMMISSION v. HAYWOOD ELECTRIC MEMBERSHIP CORPORATION et al.

No. 747

Supreme Court of North Carolina.

July 19, 1963

E. B. Whitaker, Bryson City, Lacy H. Thornburg, Sylva, Vaughan S. Winborne, and William T. Crisp, Raleigh, for protestant appellants.

Carl Horn, Jr., Charlotte, General Counsel Duke Power Co. and Joyner & Howison by R. C. Howison, Jr., Raleigh, for Nantahala Power and Light Co.

RODMAN, Justice.

Art. 2, c. 62 of the General Statutes prescribes the procedure in matters before the Commission. As a part of that article, G.S. § 62-26.3 requires: 'All final orders and decisions of the Commission shall be sufficient in detail to enable the court on appeal to determine the controverted questions presented in the proceedings and shall include (1) findings and conclusions and the reasons or basis therefor upon all the material issues of fact, law, or discretion presented in the record, and (2) the appropriate rule, order, sanction, relief, or statement of denial thereof.'

The Commission's findings, summarized or quoted, follow: (1) Notice of the time fixed for the hearing was published; (2) and (3) Nantahala and Duke are public utilities engaged in generating, transmitting, distributing, and selling electric current and energy; (4) a description of the properties as set out in the application; (5) the price to be paid; (6) the date when the sale will become effective; (7) the area in which Nantahala now operates, which Duke will serve if the sale is approved; (8) the dates when the four hydroelectric plants which Nantahala proposed selling were built and the dates when the seven plants which it proposed retaining were built; (9) 'That from the combined capacities of the aforesaid plants Nantahala has a dependable capacity of 41 megawatts; that the plants are, of course, under favorable conditions capable of producing more electricity than 41 megawatts; that they have at one time produced a peak capacity of 42 megawatts; that Nantahala has approximately 16,600 customers; that for the calendar year of 1960 these customers used approximately 460 millions kwh of electricity; that it is necessary, in order to serve its public utility customers, that Nantahala have sufficient primary dependable power to meet these requirements; that Nantahala's public utility customers' use of electric energy has been increasing over the past years; that, by projecting this increase at a reasonably anticipated rate of increase into the future, Nantahala estimates that its present dependable power capacity will carry it through the year 1965; that after the year 1965 it will not have sufficient generating facilities to enable it to produce dependable power in sufficient capacity to supply the needs and requirements of its public utility customers; that Nantahala has made studies and estimates looking toward the acquiring of additional land for and the construction of additional hydroelectric generating facilities so as to enable it to meet its anticipated requirements; that, from these studies and estimates, it appears that the cost of acquiring and constructing the additional facilities necessary will be greater than economically feasible'; (10) Duke presently serves an area of approximately 20,000 square miles with a population of 2,900,000; its lines extend into Transylvania County where it serves the towns of Brevard and Rosman; it has 12,700 acres of land in the southwest part of Transylvania County which can be used in the future for a hydroelectric generating plant; Duke is interconnected with Carolina Power & Light, Virginia Electric & Power, and South Carolina Electric & Gas; these connections lend strength to each of the utilities; Duke proposes to construct a transmission line into the Nantahala area if the sale is approved and 'can put electric current and energy into the area economically and at reasonable rates;' (11) Duke is qualified and financially able to fulfill all its obligations; (12) neither Duke nor any other public utility company has offered to purchase the remaining hydroelectric generating plants of Nantahala; (13) it is Duke's policy to advertise the services it can render; (14) 'That it will be in the public interest for Duke to acquire from Nantahala its distribution lines, generating facilities and properties, as hereinbefore set out, and operate them, serving the public in the area now served by Nantahala.'

After stating protestants' contention that Nantahala, a public service corporation, authorized to exercise the power of eminent domain, could not turn its back on the public and deliver all the power it generates to its sole stockholder, Alcoa, the Commission said: 'The nature of hydroelectric generating plants being what it is, it would seem logical to assume that Nantahala owns in fee simple the lands on which these plants and their storage lakes and ponds are situate. Except for the inference implied by the statutory authority conferred upon all public utilities, the record is void of any competent evidence which would support a finding of fact that any particular tract of land was acquired for these purposes by the use, or threat of use, of the power of eminent domain. * * * The law applicable to abandonment of easements acquired by eminent domain is different from that which applies to lands acquired in fee.'

The Commission concluded 'the sale and transfer will be in the public interest,' the sale should be approved, and when consummated Nantahala 'should be relieved of its obligation to serve and should be permitted to abandon its Certificate of Public Convenience and Necessity.'

The exceptions and assignments of error raise these questions: (1) Has the Commission found facts as required by G.S. § 62-26.3? (2) Is the Commission's order based on a misinterpretation of the law applicable to the facts of the case?

The Commission is required by G.S. § 62-26.3 to find all facts essential to a determination of the question at issue. Having found the facts, it may then make factual conclusions. State ex rel. Utilities Comm. v. State and State ex rel. Utilities Comm. v. Southern Bell Telephone & Telegraph Co., 239 N.C. 333, 80 S.E.2d 133; 43 Am.Jur. 718. The reason for compelling adequate factual findings is to permit proper judicial review. G.S. § 62-26.10.

The duty imposed by G.S. § 62-26.3 is similar to the duty imposed on a judge of the Superior Court by G.S. § 1-185 when a jury trial is waived and on the Industrial Commission by G.S. § 97-84 before it can award or deny compensation.

Bobbitt, J., speaking with reference to the duty imposed by G.S. § 97-84, said in Guest v. Brenner Iron & Metal Co., 241 N.C. 448, 85 S.E.2d 596: 'Specific findings of fact by the Industrial Commission are required. These must cover the crucial questions of fact upon which plaintiff's right to compensation depends. (Citing authorities.) Otherwise, this Court cannot determine whether an adequate basis exists, either in fact or in law, for the ultimate finding as to whether plaintiff was injured by accident arising out of and in the course of his employment.'

The reasons assigned to secure approval of the sale and release of Nantahala from its obligation to the public are twofold: (1) Nantahala, a small company, does not have and cannot economically provide the energy which the public in its service area will in the near future demand. (2) Duke, an electrical giant, has an abundance of power. It can provide all electricity which is now or may be needed in the foreseeable future. Not only does it have adequate power but it can render more efficient service at less cost to the public than Nantahala can.

As said by the Commission, protestants do not challenge Duke's ability to meet public demand. What protestants say is Nantahala can meet the demand and do so at less cost to the public than the service would cost if rendered by Duke.

To support their contention protestants point to the evidence of applicants to establish these facts:

(1) COST OF SERVICE: Duke, while possessing large water power, depends primarily on steam to generate electricity, using its hydroelectric...