Utah Power & Light Co. v. Public Service Commission, 7803

Decision Date07 November 1952
Docket NumberNo. 7803,7803
Citation249 P.2d 951,122 Utah 284
CourtUtah Supreme Court
Parties, 97 P.U.R.(NS) 373 UTAH POWER & LIGHT CO. et al. v. PUBLIC SERVICE COMMISSION et al.

Charles L. Ovard, Gerald Irvine, Van Cott, Bagley, Cornwall & McCarthy and Clifford L. Ashton, Salt Lake City, for plaintiffs.

Clinton D. Vernon, Atty. Gen., Edward W. Clyde, Salt Lake City, Udell R. Jensen, Nephi, for respondents.

WADE, Justice.

Nephi City, a municipal corporation, owns and operates hydroelectric generating plants and a distributing system to furnish electric energy to itself and its inhabitants. The city is unable to generate sufficient energy for its needs and is compelled to purchase from other electrical corporations energy to supplement its supply. Since 1941 the city had been obtaining this power from Telluride Power Company, a public utility with which it had a 10 year contract. As the termination date of this contract approached the city tried to enter into negotiations with the Utah Power & Light Company, a public utility from whom it would be able to get a cheaper rate, to provide the electrical energy it would need in the future. The Utah Power & Light Company refused to enter into such negotiations because it claimed Nephi City was in the territory served by the Telluride Company. Nephi City thereupon filed an application with the Public Service Commission in June, 1950, requesting that the Commission order the Utah Power & Light Company to serve it. The Utah Power & Light Company did not file a protest to this application but the Telluride Power Company intervened and filed a protest. The Commission granted the application and both the Telluride and Utah Power & Light Company filed petitions for rehearing. These proceedings are brought by both the Telluride Power Company and the Utah Power & Light Company to review the amended order of the Commission granting the application.

The Commission found that among the extensive plants and distribution systems owned and operated by the Utah Power &amp Light Company it 'owns and operates a 44 kv substation located in Santaquin, Utah, known as the Santaquin Substation which is supplied with electrical energy from the company's interconnected system. By means of two 44 kv transmission lines the Santaquin Substation is connected directly with respondent's [Utah Power & Light Co.] Olmstead hydroelectric plant and Hale steam-electric plant, both of which are located east of Orem, Utah in Utah County, which plants have a combined capacity of approximately 70,000 kw. Two 44 kv transmission lines extend south of the Santaquin Substation to the south boundary of Township Eleven (11) South, Range One (1) East, Salt Lake Base and Meridian, near Mona, Utah, where said lines connect with two 44 kv transmission lines owned by Telluride Power Company. By order of the Commission dated June 27, 1946, Utah Power & Light Company was authorized to extend its service south from Mona, Utah, to render electric service to the Thermoid Rubber Company Plant near Nephi, Utah. By agreement with the Telluride Power Company respondent [Utah Power & Light Co.] has leased the two lines extending from Mona south to its switchrack located at the plant of the Thermoid Rubber Company near Nephi, Utah. Under its lease agreement with Telluride respondent may use the leased lines for the transmission of electric energy to serve only Thermoid Rubber Company and Telluride Power Company.'

The Telluride Power Company serves San Pete, Sevier, Piute, Garfield, Juab, Millard and Beaver counties. To serve these communities it purchases about half of its power from the Utah Power & Light Company. Both of these companies have adequate power to serve the needs of their areas, including the needs of Nephi City.

In accordance with the holding of this court in Logan City v. Public Utilities Commission, 72 Utah 536, 271 P. 961, the Commission found that public utilities operated by municipalities are not subject to supervision and regulation by the Public Utilities Commission. It also found that to the extent that Nephi City furnishes electrical energy to itself and its inhabitants it stands in the same position as the Telluride Power Company and may purchase from the Utah Power & Light Company the power it needs for resale the same as Telluride or any other company so purchasing from it.

The Utah Power & Light Company attacks the lawfulness of the order of the Commission that it sell such power to Nephi City at the nearest point on its interconnected system where there are facilities of adequate capacity, on the grounds that it violates the Utah State Constitution and the United States Constitution because the order requires it to render service in an area it has never professed to serve with one exception (The Thermoid Rubber Co.) and such requirement constitutes a taking of property without due process of law. In support of this contention it cites Northern Pac. Ry. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429, 59 L.Ed. 735; Interstate Commerce Commission v. Oregon-Washington R. R. & Navigation Co., 288 U.S. 14, 53 S.Ct. 266, 77 L.Ed. 588; Hollywood Chamber of Commerce v. Railroad Commission of Calif., 192 Cal. 307, 219 P. 983, 30 A.L.R. 68; Oklahoma Natural Gas Co. v. Corp. Comm., 88 Okl. 51, 211 P. 401, 31 A.L.R. 330, P.U.R. 1923B, 823; Oklahoma Natural Gas Co. v. Scott, 115 Okl. 8, 241 P. 164, P.U.R. 1926B, 67; Atchison, T. & S. F. R. Co. v. Railroad Comm., 173 Cal. 577, 160 P. 828, 2 A.L.R. 975, P.U.R. 1917B, 336. Conceding that these cases are authorities for the proposition that it is beyond the powers of a public service commission to compel a public utility without its consent to extend lines into or serve areas it has not professed or agreed to serve the question yet remains: Will the Utah Power & Light Company in selling power to Nephi City be performing a service it had not professed to give? This is a question of fact and not of law. United Fuel Co. v. Public Service Comm., 105 W. Va. 603, 144 S.E. 723.

Nephi City has offered to construct a transmission line to Mona where the Utah Power & Light Company has adequate facilities to serve it. The Commission found: 'That Utah Power & Light Company under the provisions of Schedule No. 33 offers to sell at wholesale to municipalities, governmental agencies or public service companies, at high voltage, electric energy for resale to inhabitants of cities, towns, or villages. Service under this schedule is available at any point on the company's interconnected system where there are facilities or adequate capacity. Respondent [Utah Power & Light Co.] now has a number of customers receiving service under Schedule No. 33 and represents that it is ready, able and willing to serve additional customers desiring such service provided such customers meet the requirements of this schedule and enter into an electrical service agreement with the company.'

By its finding the Commission has determined as a fact that Utah Power & Light Company has held itself out as giving the very service which Nephi City is requiring. By giving such service it is not required to make any expenditures it would not have to make for any customer entitled to its services. As pointed out Nephi City proposes to build a transmission line to a point in Utah Power & Light Company's territory where it has adequate facilities to supply the needs...

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