Utah Associated Mun. Power Systems v. Public Service Com'n of Utah, 870201

Decision Date20 March 1990
Docket NumberNo. 870201,870201
PartiesUTAH ASSOCIATED MUNICIPAL POWER SYSTEMS, Petitioner, v. PUBLIC SERVICE COMMISSION OF UTAH, Brian E. Stewart, Brent H. Cameron, and James M. Byrne, Commissioners of the Public Service Commission of Utah, Respondents.
CourtUtah Supreme Court

James A. Holtkamp and Kate Lahey, Salt Lake City, for petitioner.

David Stott and Laurie Noda, Salt Lake City, for Public Service Com'n.

Thomas W. Forsgren, Sidney G. Baucom, and Edward A. Hunter, Jr., Salt Lake City, for Utah Power & Light.

Michael Ginsberg, Salt Lake City, for Div. of Public Utilities.

Sandy Mooy, Salt Lake City, for Committee of Consumer Services.

David S. Christensen, Salt Lake City, for Utah Energy Office.

David L. Wilkinson, Stephen J. Sorenson, and Richard M. Hagstrom, Salt Lake City, for Utah Atty. Gen.

Lynn Mitton, Sandy, for Deseret Generation & Transmission Co-op Donald B. Holbrook, William B. Bohling, Elizabeth M. Haslam, and Sharon E. Sonnenreich, for Utility Shareholders of Utah.

ZIMMERMAN, Justice:

Utah Associated Municipal Power Systems ("UAMPS") seeks a writ of review of a Utah Public Service Commission ("PSC") order assuming jurisdiction over UAMPS and denying it a certificate of convenience and necessity that would allow it to construct a transmission line in southwestern Utah. UAMPS contends that section 11-13-27 of the Code, which requires that it obtain a certificate of convenience and necessity from the PSC before constructing the transmission line, violates article VI, section 28 of the Utah Constitution. See Utah Code Ann. § 11-13-27 (1986) (amended 1987); Utah Const. art. VI, § 28. We uphold the constitutionality of section 11-13-27 and affirm the order of the PSC.

UAMPS is a political subdivision of the state of Utah, organized under the Interlocal Co-Operation Act. Utah Code Ann. §§ 11-13-1 to -36 (1986 & Supp.1989). That Act was initially passed in 1965 and extensively amended in 1977. Its purpose was "to permit local governmental units to make the most efficient use of their powers by enabling them to co-operate with other localities on a basis of mutual advantage." Utah Code Ann. § 11-13-2 (1986). UAMPS is comprised of cities, towns, and local public agencies within Utah whose aim is to construct generating and transmission facilities for their mutual use. UAMPS has the same powers, privileges, and authority accorded its individual political subdivisions. Utah Code Ann. § 11-13-4 (1986); see Utah Power & Light v. Utah Associated Mun. Power Sys., 784 P.2d 137, 137-38 (Utah 1989).

In 1985, UAMPS decided to build a 345 kv electric transmission line from the Intermountain Power Project plant in Lyndll, Utah, to St. George, Utah. The line was to serve the needs of UAMPS member cities in southern Utah. Under section 11-13-27 of the Code, a provision of the Interlocal Co-Operation Act, UAMPS was required to obtain a certificate of convenience and necessity from the PSC before it could construct the line. Utah Code Ann. § 11-13-27 (1986) (amended 1987). In August of 1985, it filed the necessary application. Utah Power & Light ("UP & L") also applied to the PSC for permission to construct a 345 kv electric transmission line over the same general geographic area. It claimed to need the additional capacity to serve its wholesale and retail customers. Both proposals were, at least in part, a response to the population growth, actual and projected, in southwestern Utah. The PSC consolidated its consideration of the two applications in response to expressions of concern by the Bureau of Land Management about the need for and the environmental impact of the proposed construction of two essentially parallel transmission lines between central and southwestern Utah. The matter came to the BLM's attention because both UP & L and UAMPS had sought rights-of-way over public lands. The PSC held over fifty hearings on the proposals from late 1985 to early 1987. Extensive evidence was presented concerning, inter alia, the need for the respective lines, their characteristics, the ability of the parties to finance, construct, and operate the lines, possible alternatives to the lines, and the effect of the projects on the overall public interest.

On March 3, 1987, the PSC issued a report and order that provided an interim solution for the short-term electrical transmission shortfall in southwestern Utah. This report and order denied the applications of both UAMPS and UP & L to build their proposed 345 kv lines. The PSC cited the high cost of the transmission lines and the many uncertainties about the need for the proposed transmission capacity in the near term. The PSC particularly noted that the UAMPS proposal was very expensive and seemed largely motivated by UAMPS' desire to have its own transmission facilities so that it would not have to use those of UP & L, rather than a search for the alternative least costly to its customers.

The PSC's interim order authorized construction by UP & L of a shorter, twenty-mile transmission line in southwestern Utah from Newcastle to UP & L's central substation. This line would connect with an existing line and enable UP & L to provide the emergency transmission capacity needed to handle the short-term requirements for the area in question. The PSC's order also indicated that the PSC would begin studying UP & L's wheeling practices and that other issues would be subject to future consideration, including possible joint ownership of transmission facilities by UP & L and UAMPS and the future construction of UAMPS' requested transmission facilities, as demand warranted.

UAMPS requested a rehearing and a stay of the UP & L line construction authorization. See Utah Code Ann. § 54-7-15 (1986) (amended 1988). On May 21, 1987, the PSC denied UAMPS' application for rehearing and stay. UAMPS sought review by this Court, but did not ask us to stay construction during the review process. The line, therefore, has been completed and is providing service to southwestern Utah.

Before this Court, UAMPS does not challenge the specific order of the PSC granting UP & L a certificate for construction of the short line and denying UAMPS' request for a certificate. Rather, UAMPS mounts a frontal attack on the requirement in section 11-13-27 of the Code that UAMPS obtain a certificate of convenience and necessity from the PSC before building the proposed transmission line. UAMPS contends that section 11-13-27 is unconstitutional because it requires UAMPS, an entity composed of various local governments, to obtain a certificate from the PSC, contravening article VI, section 28 of the Utah Constitution, which prohibits the delegation of authority over "municipal functions" to a "special commission." Utah Const. art. VI, § 28.

We first consider UP & L's argument that under section 54-7-15 of the Code, an issue is not preserved for consideration on appeal unless it has been specifically raised in a petition for rehearing before the PSC. We agree with this contention. UP & L asserts that UAMPS' rehearing petition did not squarely raise the question of the constitutionality of PSC jurisdiction over the construction of a transmission line by UAMPS. We agree that UAMPS' petition for rehearing was not as focused as it could have been on this point; however, we deem the petition sufficient to give us jurisdiction over the question. 1

We next consider the primary issue of this case--UAMPS' challenge to the requirement that it submit to the jurisdiction of the PSC under section 11-13-27. Section 11-13-27 provides in pertinent part:

Any political subdivision organized pursuant to this act [Interlocal Co-Operation Act] before proceeding with the construction of any electrical generating plant or transmission line shall first obtain from the public service commission a certificate, after hearing, that public convenience and necessity requires such construction and in addition that such construction will in no way impair the public convenience and necessity of electrical consumers of the state of Utah at the present time or in the future.

Utah Code Ann. § 11-13-27 (1986) (amended 1987).

Article VI, section 28 of the Utah Constitution, which UAMPS contends conflicts with section 11-13-27, states, "The legislature shall not delegate to any special commission ... any power to make, supervise or interfere with any municipal improvement, money, property or effects ... or to perform any municipal functions." Utah Const. art. VI, § 28.

UAMPS contends that the PSC is a "special commission" within the meaning of article VI, section 28, that UAMPS acts in the stead of the municipalities of which it is composed, and that the construction of the transmission line is a "municipal function"; therefore, it argues, the requirement that UAMPS obtain a certificate of convenience and necessity from the PSC before proceeding with construction runs afoul of article VI, section 28. 2 The PSC contends that UAMPS cannot bring itself within article VI, section 28, because it is not a municipality and is not performing a "municipal function."

We first note the presumption of validity accorded legislative enactments when attacked on constitutional grounds. The burden is on those who would have us strike down the statute. E.g., City of West Jordan v. Utah State Retirement Bd., 767 P.2d 530, 532, 537 (Utah 1988); Lehi City v. Meiling, 87 Utah 237, 246-47, 48 P.2d 530, 535 (1935).

UAMPS bases its challenge to section 11-13-27 largely on the decisions in Logan City v. Public Utilities Commission, 72 Utah 536, 271 P. 961 (1928), and Barnes v. Lehi City, 74 Utah 321, 279 P. 878 (1929). In Logan City, the Public Utilities Commission ("PUC") had been given the power by the legislature to fix rates charged by utilities, including municipally owned utilities that served citizens of the municipality. The PUC attempted to exercise this power over Logan City's utility. We held that this offended ...

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