Stucker Fork Conservancy Dist. v. Indiana Utility Regulatory Com'n

• Decision Date: 13 October 1992
• Docket Number: No. 93A02-9108-EX-370,93A02-9108-EX-370
• Citation: 600 N.E.2d 955
• Parties: STUCKER FORK CONSERVANCY DISTRICT, Appellant-Petitioner, v. INDIANA UTILITY REGULATORY COMMISSION and Utility Consumer Counselor, Appellees.
• Court: Indiana Appellate Court

Page 955

600 N.E.2d 955

STUCKER FORK CONSERVANCY DISTRICT, Appellant-Petitioner, v. INDIANA UTILITY REGULATORY COMMISSION and Utility Consumer Counselor, Appellees.

No. 93A02-9108-EX-370.

Court of Appeals of Indiana Second District.

Oct. 13, 1992.

John M. Cregor, Douglas E. Cregor, Cregor & Lalley, Indianapolis, Spencer J. Schnaitter, Madison, for appellant-petitioner.

Linley E. Pearson, Atty. Gen., Kirk A. Knoll, Deputy Atty. Gen., Indianapolis, for appellee.

SULLIVAN, Judge.

Appellant Stucker Fork Conservancy District (Stucker) appeals the Order of the Indiana Utility Regulatory Commission (Commission), approved July 31, 1991, which assessed Stucker the Public Utility Annual Fee. ¹ We restate the issue formulated at the pre-appeal conference as follows: Whether the assessment against Stucker must be the fee attributable to a municipal utility?

We affirm.

The Stucker Fork Conservancy District was established on April 9, 1964, pursuant to what is now I.C. 13-3-3-1 (Burns Code Ed.1990), for the purposes, inter alia, of flood prevention and control, improving drainage, and providing water supply, including the treatment and distribution of water for domestic, industrial, and public use. Prior to 1967, Stucker restricted its activities to flood control and drainage purposes. In 1967, Stucker agreed to become the local entity responsible for furnishing the necessary water treatment and regional water distribution for the newly-developed reservoir on Quick Creek, near the Muscatatuck River. Accordingly, Stucker amended its District Plan by electing to provide water supply systems pursuant to I.C. 13-3-4-1 (Burns Code Ed.1990) in order to use revenue bonds for financing.

This election placed Stucker under the jurisdiction of the Indiana Utility Regulatory Commission for the filing of the initial schedule of rates and charges to patrons of the district. I.C. 13-3-4-6 (Burns Code Ed.1990). In four subsequent orders, the Commission granted Stucker's request for a new schedule of rates and charges. ² The Commission also approved Stucker's 1967, 1973, and 1980 petitions for extensions of its territorial authority to render water supply services to additional users outside of the original district boundaries. ³

The Commission found that it had jurisdiction in each of the foregoing proceedings. ⁴ The Commission ordered Stucker to pay various "itemized charges as well as any additional costs which were or may be incurred in connection with th[e] cause[s]" ⁵ in which jurisdiction was established except in the July 31, 1991 Order (Instant Order). Record at Exhibits A, B, D, E, F.

In the Instant Order, the Commission found that Stucker should be assessed the annual fee applicable to public utilities. The Commission also found that Stucker "is a conservancy district ... [which] owns and operates a water utility serving approximately 5,400 customers...." Record at Exhibit A, Finding 2. Stucker's current facilities include a water treatment plant supplied by the Muscatatuck River and supplemental stream flow, eight elevated storage tanks, and over 525 miles of distribution mains. The current water supply operations have been financed by federal loans and local grants.

I.

The issue upon appeal is one of first impression and requires the harmonization of various provisions relating to the regulation of furnishing utilities to the public. ⁶ Our task is to determine the legislature's intent by considering the goals sought to be achieved and the reasons and policies underlying the statutes. Matter of Middlefork Watershed Conservancy District (1987) 1st Dist. Ind.App., 508 N.E.2d 574, 577. This requires a two-part analysis. The threshold determination is whether Stucker should be classified as a "public utility" or as a "municipally owned utility?" The question then posed is with regard to whether the fee attributable to the determined classification is applicable to Stucker?

A. Classification

The terms employed within the public utilities context provide a necessary framework and the starting point for the analysis. The Spencer-Shively Utility Commission Act of 1913 (Public Utilities Act) and subsequent amendments provide key definitions. As used in the Public Utilities Act, the term "public utility" originally referred to "every corporation, company, individual, association of individuals, their lessees, trustees or receivers appointed by any court whatsoever, and every city or town, that now or hereafter may own, operate, manage or control ... any plant or equipment ... for the production, transmission, delivery or furnishing of heat, light, water or power ... either directly or indirectly to or for the pu[b]lic." Acts 1913, ch. 76, p. 167, Sec. 1 (emphasis supplied). In the same Act, "municipality" was defined as "any city or town wherein property of a public utility or any part thereof is located." Acts 1913, ch. 76, p. 167, Sec. 1.

In 1933, a series of significant terms were added to the Public Utilities Act. For the first time, the term "utility" was used to mean "every plant or equipment within the state used for ... the production, transmission, delivery, or the furnishing of heat, light, water or power ... to the public." Acts 1933, ch. 190, p. 930, Sec. 1. ⁷ The legislature also created a definition for the term "municipally owned utility" which included "every utility owned or operated by a municipality." Acts 1933, ch. 190, p. 930, Sec. 1. The term "municipality" was amended to mean "any city or town of the State of Indiana." Acts 1933, ch. 190, p. 929, Sec. 1.

The legislative additions prompted a critical deletion from the definition of "public utility." Beginning with the 1933 amendment, a public utility no longer included or includes a municipality that may acquire, own, or operate a utility. Acts 1933, ch. 190, p. 929, Sec. 1. For present provisions, see I.C. 8-1-2-1(a). Our Supreme Court affirmed the intent of the legislature to remove municipally owned utilities from the general public utilities statute. Wilkins v. Leeds (1940) 216 Ind. 508, 510, 25 N.E.2d 442, 444. Consequently, municipally owned utilities are subject to the jurisdiction of the Commission only when specifically provided for by statute. Accord Cities & Towns of Anderson v. Public Service Commission of Indiana (1979) 2d Dist. Ind.App., 397 N.E.2d 303, 307 (conclusively establishing that "municipal utilities are not subject to the general grant of authority to the Commission" and that "those statutory provisions granting Commission certain powers over municipal utilities are strictly construed").

More recently, the legislature enacted special provisions regulating the transfer, acquisition, improvement, and operation of municipally owned utilities. I.C. 8-1.5-1-1 through 8-1.5-3-15 (as added by Acts 1982, P.L. No. 74, Sec. 1). The statutes apply only to municipalities, except consolidated cities, that own or operate utilities. I.C. 8-1.5-2-1, 8-1.5-3-1. The legislature expressly stated that the municipal utilities statutes do not apply to utilities governed by I.C. 8-1-2 (Public Utilities Act) or I.C. 8-1-13 (Rural Electric Membership Corporation Act). I.C. 8-1.5-2-2.

The definitional section of Article 1.5 replicates several definitions used within the Public Utilities Act. No mention is made nor can an inference be drawn that conservancy districts were meant to be included under the municipal utilities statutes. As our Third District noted: "In construing a statute, it is just as important to recognize what a statute does not say as it is to recognize what it does say." Irmscher v. McCue (1987) 3d Dist. Ind.App., 504 N.E.2d 1034, 1037; see also City of Muncie v. Campbell (1973) 2d Dist., 156 Ind.App. 59, 295 N.E.2d 379, 383. Had the legislature intended to include conservancy districts which own or operate utilities within the classification of municipal utilities, as Stucker surmises, it could have done so. Clearly, Stucker and, presumably, a host of other similarly-situated water supply systems were fully operational by the time the 1982 additions were promulgated. The municipal utilities statutes, however, do not recognize their existence.

Stucker nevertheless insists that it is not a public utility. Stucker relies upon Martin v. Ben Davis Conservancy District (1958) 238 Ind. 502, 153 N.E.2d 125, 133-34 for the proposition that conservancy districts are special taxing districts that have characteristics and attributes of a municipal corporation, although not municipal corporations for the purpose of the Indiana constitutional limitation on debt of two percent of assessed valuation. Stucker asserts that a conservancy district "is so similar to a municipal corporation, i.e., city or town, that the legislature found it necessary [in I.C. 13-3-3-74] ... to declare that a conservancy district is not subject to the constitutional limitation of indebtedness regardless of how it raised funds or the fact that its property and income were exempt from taxation." Brief of Appellant at 9-10. The implication that Stucker's perceived similarities are sufficient to establish itself as a "city or town" for utility classification purposes rests upon a weak foundation. ⁸

First, the fact that conservancy districts are exempt from the two percent debt ceiling is inconclusive insofar as our analysis comparing the attributes of "public" versus "municipally owned" utilities. We note that municipally owned utilities are also exempt from the constitutional debt limitation. I.C. 8-1.5-2-14. Thus, it appears that by eliminating the limitation on constitutional debt, the legislature intended to place owners of utilities upon an equal footing regarding the costly enterprise of constructing or acquiring utility facilities. To suggest otherwise is to attribute an unlikely, if not absurd, legislative result. We will not do so. Guinn v. Light (1990) Ind., 558 N.E.2d 821, 823.

Second, Stucker left its "conservancy district" hat at the door when it...