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Capital Electric Cooperative, Inc. v. North Dakota Public Service Commission

Supreme Court of North Dakota

March 28, 2016

Capital Electric Cooperative, Inc., Appellant
v.
North Dakota Public Service Commission and Montana-Dakota Utilities Co., a Division of MDU Resources Group, Inc., Appellees

          Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable James S. Hill, Judge.

         Matthew H. Olson, Minot, N.D., for appellant.

         John M. Schuh, Special Assistant Attorney General, North Dakota Public Service Commission, Bismarck, N.D., for appellee North Dakota Public Service Commission.

         Paul R. Sanderson (argued), Bismarck, N.D., and Daniel S. Kuntz (on brief), MDU Resources Group, Inc., Bismarck, N.D., for appellee Montana-Dakota Utilities Co.

         Carol Ronning Kapsner, Lisa Fair McEvers, Daniel J. Crothers, Mary Muehlen Maring, S.J., Dale V. Sandstrom, Acting C.J. The Honorable Mary Muehlen Maring, S.J., sitting in place of VandeWalle, C.J., disqualified. Opinion of the Court by Kapsner, Justice.

          OPINION

Page 305

          Carol Ronning Kapsner, Justice.

          [¶1] Capital Electric Cooperative, Inc. (" Capital" ), appeals from a judgment affirming a Public Service Commission order granting Montana-Dakota Utilities Company (" MDU" ) a certificate of public convenience and necessity to extend its electric service in Burleigh County. Because the Commission's order is in accordance with the law, its findings of fact are supported by a preponderance of the evidence and sufficiently address the evidence presented, and those findings support the conclusions of law, we affirm the judgment.

         I

          [¶2] Menard, Inc., is developing a manufacturing and distribution center near McKenzie, an unincorporated community located in Burleigh County. Capital, a rural electric cooperative, and MDU, an investor owned electric utility, are the only electric suppliers operating in the general area of the Menard site. Since 1928 MDU, through its predecessors in interest, has held a franchise and a certificate of public convenience and necessity issued by the Commission, then called the Board of Railroad Commissioners, to serve the McKenzie community. The certificate of public convenience and necessity allows MDU service to the eastern boundaries of McKenzie, which is immediately northeast of and adjacent to the Menard site. Capital serves rural customers adjacent to the site. MDU serves 28 customers within a onemile radius of the Menard site and 29 customers within a two-mile radius. Capital serves four customers within a onemile radius of the Menard site and 11 customers within a two-mile radius.

          [¶3] In October 2013, Menard requested estimated rates from Capital and MDU based on the anticipated load at its site of approximately 1.2 MW and an estimated annual consumption of 7 million kWh. Both MDU and Capital would need to construct extensions to provide three-phase electric supply lines to serve the Menard site. MDU estimated the total annual estimated cost to Menard would be $513,669.84 while Capital estimated the cost would be $575,883.84. Menard requested service from MDU based on present and future cost savings, reliability of service, and the Commission's regulatory oversight over rates and services.

          [¶4] In November 2013, MDU applied to the Commission to extend electric service to the Menard site. Capital filed a protest and requested a hearing. Following a public hearing, the Commission, in a two-to-one decision, decided to grant MDU a certificate of public convenience and necessity and allow the company to provide electric service to the Menard site. In a nine-page decision consisting of 34 findings of fact, the Commission explained:

34. The Commission finds that public convenience and necessity reasonably requires approval of Montana-Dakota's application because:
o The customer prefers electric service from Montana-Dakota as it results in more than $60,000 in annual cost savings and better meets the customer's needs;

o Montana-Dakota has served customers in the area since 1928 and has more customers within a onemile and two-mile radius of the location;

Page 306

o Montana-Dakota's substation is located closer to the Menard Site providing less voltage drop and less line length on which a fault could occur;
o The proposed extension of Montana-Dakota's three-phase system to serve the site is shorter than the proposed extension of Capital Electric's three-phase system.
o Montana-Dakota will serve the Menard Site more economically when considering both the cost to extend service and the annual costs to the customer as reflected in rates for service;
o Montana-Dakota's extension of service would best serve the community of McKenzie and realize significant cost savings to Menard, Inc., therefore best serving orderly and economic development of the area.

         The district court affirmed the Commission's order.

         II

          [¶5] Capital argues the Commission erred in granting MDU a certificate of public convenience and necessity to provide electric service to the Menard site.

          [¶6] In North Cent. Elec. Coop., Inc. v. N.D. Pub. Serv. Comm'n, 2013 ND 158, ¶¶ 6-7, 837 N.W.2d 138, we explained:

An appeal from a Commission decision is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Capital Elec. Coop., Inc. v. City of Bismarck, 2007 ND 128, ¶ 30, 736 N.W.2d 788. As relevant to this appeal, a district court must ...

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