Union Rural Elec. Ass'n, Inc. v. Town of Frederick

• Decision Date: 26 February 1981
• Docket Number: No. 80CA0511,80CA0511
• Citation: 629 P.2d 1093
• Parties: UNION RURAL ELECTRIC ASSOCIATION, INC., Plaintiff-Appellant, v. The TOWN OF FREDERICK, Colorado, Board of Trustees of the Town of Frederick, Colorado, Holly Hall, Beulah Meeker, John DiGregoria, Paul DiPaolo, Emilio Ruscitti, Deryl Collier, and Carmen DeSantis, as Mayor and Members of the Board of Trustees of the Town of Frederick, Colorado, Defendants-Appellees. . I
• Court: Colorado Court of Appeals

Page 1093

629 P.2d 1093

UNION RURAL ELECTRIC ASSOCIATION, INC., Plaintiff-Appellant, v. The TOWN OF FREDERICK, Colorado, Board of Trustees of the Town of Frederick, Colorado, Holly Hall, Beulah Meeker, John DiGregoria, Paul DiPaolo, Emilio Ruscitti, Deryl Collier and Carmen DeSantis, as Mayor and Members of the Board of Trustees of the Town of Frederick, Colorado, Defendants-Appellees.

No. 80CA0511.

Colorado Court of Appeals, Div. I.

Feb. 26, 1981.

Rehearing Denied March 19, 1981.

Certiorari Granted May 26, 1981.

Walker Miller, Greeley, for plaintiff-appellant.

Leroy Pete Goter, Frederick, for defendants-appellees.

Robert T. James, Colorado Springs, for amicus curiae Mountain View Elec. Assn., Inc.

John J. Conway, Denver, for amicus curiae Colorado Rural Elec. Assn.

Susan K. Griffiths, Wheatridge, for amicus curiae Colorado Mun. League.

PIERCE, Judge.

Plaintiff, Union Rural Electric Association, Inc., (Union Rural) appeals from the trial court's order denying it injunctive relief against defendant Town of Frederick (Frederick). We affirm.

Union Rural is a public utility possessing a certificate of public convenience and necessity which authorizes it to furnish electricity to the service area designated in the certificate.

Frederick operates its own electrical power system within its municipal boundaries. Part of Union Rural's certificated area was annexed by Frederick, which has extended electrical service to this annexed area. Frederick does not seek to acquire Union Rural's facilities or to prevent it from continuing to provide electricity to its present or potential future customers.

Union Rural sought to enjoin Frederick from continuing to serve the annexed area. The trial court denied injunctive relief, and this appeal followed.

I.

Plaintiff contends that its certificate of public convenience and necessity grants it an exclusive right to provide electricity to its entire service area and that, therefore, defendant could not extend electrical service to any part of plaintiff's certificated area. We disagree.

Once an area has been certificated by the Public Utilities Commission (Commission) to one public utility, the Commission may not certificate another public utility to serve that area until a showing is made that the certificated utility is either unwilling or unable to serve an existing or a newly-developing load. Public Utilities Commission v. Home Light & Power Co., 163 Colo. 72, 428 P.2d 928 (1967). See § 40-5-101, C.R.S.1973. To this extent, plaintiff's certificate is exclusive.

However, the exclusivity of a utility's certificate only precludes competition from other public utilities operating under the jurisdiction of the Commission, and does not prevent a municipality from providing public utility services within its boundaries. See City of Loveland v. Public Utilities Commission , 195 Colo. 298, 580 P.2d 381 (1978). See generally, Colo.Const. Art. V, Sec. 35. A municipality may provide electrical service within its boundaries without a certificate of public convenience and necessity, although in doing so it enters into competition with a certificated public utility. People ex rel. Utilities Commission v. City of Loveland, 76 Colo. 188, 230 P. 399 (1924).

Since Frederick extended electrical service within its municipal boundaries, the trial court did not err in denying injunctive relief to plaintiff. See People ex rel. Utilities Commission v. City of Loveland, supra.

II.

Union Rural asserts that if Frederick intends to provide electricity to the annexed area it must condemn plaintiff's property, since competing with plaintiff is tantamount to a taking of its property without just compensation. We disagree.

Although an electrical plant is subject to a municipality's power of eminent domain, see Colo.Const. Art. XV, Sec. 8, and Public Service Co. v. City of Loveland, 79 Colo. 216, 245 P. 493 (1926), competition by a municipality with a certificated public utility does...