Washington-St. Tammany Elec. Co-op., Inc. v. Louisiana Public Service Com'n

• Decision Date: 08 April 1996
• Parties: 95-1932 La
• Court: Louisiana Supreme Court

Page 908

671 So.2d 908

95-1932 La. 4/8/96, Util. L. Rep. P 26,518

WASHINGTON-ST. TAMMANY ELECTRICAL COOPERATIVE, INC. v. LOUISIANA PUBLIC SERVICE COMMISSION.

No. 95-CA-1932.

Supreme Court of Louisiana.

April 8, 1996.

Rehearing Denied May 31, 1996.

On Direct Civil Appeal from the Nineteenth Judicial District Court, Parish of East Baton Rouge.

Robert Lewis Rieger, Jr., Joseph H. Kavanaugh, Adams & Reese, for Applicant.

William O. Bonin, Brian A. Eddington, for Respondent.

[95-1932 La. 1] KIMBALL, Justice.

The issue in this case is whether a new point of connection arises under La.R.S. 45:123 when a structure being served by an electric utility is demolished and a new structure replaces it shortly thereafter. The Public Service Commission ("the Commission") held that a new point of connection is created in such a situation, and the district court affirmed. On direct civil appeal we reverse, holding that a new point of connection is not created under La.R.S. 45:123 when a structure being served by an electric utility is demolished and that structure is replaced shortly thereafter.

I. FACTS

Washington-St. Tammany Electrical Cooperative ("WST") and Central Louisiana Electric Cooperative, Inc. ("CLECO") have overlapping service territories in which they compete for customers. One of these overlapping service territories is located in the vicinity of Gause Boulevard in Slidell. In the 1960s WST installed aerial electrical lines along both sides of Gause Boulevard. CLECO also had an aerial line along one side of Gause Boulevard. Beginning in 1973 WST furnished electrical service to the Baehr Building, located at the corner of Frederick Street and Gause Boulevard. In 1980 Gause Boulevard was widened by the Louisiana Department of Transportation and Development. While WST chose to relocate its lines along Gause Boulevard to the newly [95-1932 La. 2] expanded rights of way in order to accommodate the widening project and maintain service to its existing customers, CLECO chose to dismantle its line along Gause Boulevard. When the widening project was completed, CLECO only served one customer on Gause Boulevard, and it provided this electric service by buying power from WST, whose facilities extended to that customer. However, in 1983 CLECO's customer ceased operations and removed its business structure. No CLECO line existed nor was any CLECO customer served from WST's line for the ten year period from 1983 to 1993. In the spring of 1993, the Baehr Building, still being served by WST, was demolished. When construction on the site began shortly thereafter, WST provided service to the site. Because CLECO had not rebuilt its lines along Gause Boulevard, it had no lines in the vicinity of the site.

In the early summer of 1993, CLECO representatives invited Public Service Commission Chief Engineer and Utilities Hearing Examiner, Edward Gallegos, to review the site of the old Baehr Building where construction of a Kenny Rogers Roasters Restaurant ("the restaurant") was to begin. The CLECO representatives did not inform Gallegos that WST had previously serviced the Baehr Building on the same premises as the new construction, nor did they inform Gallegos that WST was providing service to the contractor on the construction site. Gallegos opined that he viewed this as a "customer choice" situation in which the customer could select the preferred utility under La.R.S. 45:123.

The restaurant contracted with CLECO for electric service. In the summer of 1993, after construction began, CLECO ran a new underground line paralleling WST's along Gause Boulevard and then underneath Gause Boulevard to serve the restaurant at the corner of Gause and Frederick. The CLECO point of connection was within 300 feet of WST's point of connection and within 300 feet of WST's existing lines. The new CLECO line was also within 300 feet of the CLECO line that had been dismantled in 1980.

[95-1932 La. 3] II. PROCEDURAL HISTORY

WST brought this action against CLECO, alleging that CLECO's servicing of the restaurant violated La.R.S. 45:123 which states, in pertinent part:

A. (1) No electric public utility shall construct or extend its facilities or furnish or offer to furnish electric service to any point of connection which at the time of the proposed construction, extension, or service is being served by, or which is not being served but is located within three hundred feet of an electric line of another electric public utility, except with the consent in writing of such other electric public utility. However, nothing contained herein shall preclude:

(a) Any electric public utility from extending service to an applicant for service at an unserved point of connection located within three hundred feet of an existing line of such electric public utility, unless:

(i) Such line was not in operation on April 1, 1970, and

(ii) The point of connection is located within three hundred feet of an existing electric line of another electric public utility, which line was in operation on said date, or

(b) Any electric public utility from extending service to its own property or to another electric public utility for resale.

(2) Further, any consumer receiving electric service from a public utility that is subject to the jurisdiction of the Louisiana Public Service Commission who feels aggrieved with the electric service being received by him may apply to the Louisiana Public Service Commission for an order directed to his present supplier to show cause why the consumer should not be released from said supplier, and if the commission shall find that the service rendered to such consumer is inadequate, and will not be rendered adequate within a reasonable time the release shall be granted.

B. As used in this Section, "electric line" means a line constructed and operated for the transmission or distribution or transmission and distribution of electricity, and that was not originally constructed for the principal purpose of preempting territory.

On May 10, 1994, a hearing was held in front of Hearing Examiner Gallegos. Gallegos took the matter under advisement, and on June 22, 1994, issued a memorandum summarizing the evidence adduced at the hearing as follows:

Witness L. Lenel, Staking Engineer for WST, testified that WST served the Baehr building at approximately the same location as the new Kenny Rogers building. A gentleman, Mr. Smith told him [95-1932 La. 4] that he owned the property and demolished the old building to build the Kenny Rogers Restaurant. WST provided construction power for the contractor. The old building was served by WST from 1973 to 1993. There were no CLECO lines in the area at that time.

Witness John Hawkins, CLECO Senior Engineer, testified that CLECO established a new point of connection within 300 feet of a new underground electric line constructed by CLECO along Gause Blvd. in 1993. This underground line parallels the location of an aerial line removed by CLECO in 1980 at the request of the Department of Transportation and Development when Gause Blvd. was widened to four lanes. The line could not be rebuilt because the WST poles were not tall enough to allow "joint use." CLECO had a customer along this over-head route before the highway was widened. CLECO purchased power for this customer from WST until this customer moved away and terminated service.

He further testified that the Examiner visited the area prior to the hearing and advised CLECO that this was a "customer choice" situation and CLECO could serve. He responded on cross examination that CLECO may have failed to advise the Examiner that WST had served a point of connection at this location prior to the construction of Kenny Rogers Restaurant.

Based on this evidence, the hearing examiner opined:

It is the opinion of the Examiner that WST had a point of connection on this property prior to the construction of the new building and thus was the electric utility to serve the new construction. It is unfortunate that CLECO did not provide the Examiner with full data during an on-site visit that revealed that WST had removed its facilities from the old building and provided construction power to allow the new construction.

On November 9, 1994, the matter was considered by the Public Service Commission at an Open Session. ¹ The Commission issued an order (U-20816) which contained the identical evidentiary summary of the hearing examiner, with the exception of the omission of the third paragraph wherein CLECO failed to inform Gallegos that WST [95-1932 La. 5] served the new building when Gallegos visited the site prior to this litigation. The Commission then concluded:

It is the opinion of the Commission that both CLECO and WST have had electric facilities along Gause Blvd. adjacent to the property in question for a number of years and both are within 300 feet of the "point of connection" of the new construction. This is a customer choice situation with no exclusive right granted to either party. CLECO will be permitted to serve this customer and this docket is hereby dismissed.

WST appealed to the Nineteenth Judicial District Court. The district court affirmed, stating in part:

I am going to uphold the Public Service Commission's decision. I don't think the hearing examiner gave proper weight in considering CLECO's historical jurisdiction over that area. CLECO's lines were removed in order to widen Gause Boulevard, and it did not replace their lines because there was no customer to serve. When a new point of connection arose within 300 feet of where the line was, the Public Service Commission was correct to recognize CLECO's historical line rights, in this court's opinion. Revised Statute 45:123 relates to point of connection and not to an area as interpreted by the supreme court in South Louisiana Electric Cooperative Association v. Louisiana Public Service Commission[, 309 So.2d 287 (La.1975) ]. If a new point of connection arises within 300 feet of two utility...