Capital Electric Cooperative, Inc. v. North Dakota Public Service Commission
2016 ND 73
| N.D. | 2016Background
- Menard, Inc. planned a 1.2 MW manufacturing/distribution facility near McKenzie in Burleigh County and solicited service estimates from the two nearby suppliers: investor-owned Montana‑Dakota Utilities Co. (MDU) and rural cooperative Capital Electric Cooperative (Capital).
- MDU held a longstanding certificate of public convenience and necessity to serve McKenzie to a point adjacent to the Menard site; both suppliers would need three‑phase extensions to serve Menard.
- MDU’s bid projected ~ $513,670 annual customer cost under its rates; Capital’s bid projected ~ $575,884 annually. MDU’s physical three‑phase facilities were closer to the site.
- MDU applied to the North Dakota Public Service Commission for a certificate to serve the Menard site; Capital protested and requested a hearing.
- The Commission (2–1) granted MDU the certificate, finding MDU would serve more economically, had closer/longstanding facilities, and that customer preference (Menard’s choice) and orderly economic development favored MDU. The district court affirmed and the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether customer preference may be considered | Capital: customer preference is not a proper criterion | Commission/MDU: preference is a proper, though not controlling, consideration | Court: Preference is admissible; Commission did not give it undue weight |
| Accuracy/relevance of local customer counts and proximity | Capital: Commission erred about which supplier has more nearby customers and adjacency of McKenzie | Commission/MDU: MDU serves more customers in the broader vicinity; McKenzie is adjacent and MDU’s certificate covers adjacent land | Court: Findings on adjacency and customer counts supported by evidence; broader vicinity may be considered |
| Which supplier’s physical extension is shorter/closer | Capital: Capital’s proposed one‑mile conversion is shorter than MDU’s total proposed construction | Commission/MDU: MDU’s existing three‑phase system is closer; MDU needs only short extension/upgrades | Court: Commission reasonably found MDU’s extension of its existing three‑phase system would be shorter/closer |
| Comparative cost, adequate return, and duplication concerns | Capital: Its lower extension cost and used‑transformer allocation show Commission erred; decision causes wasteful duplication | Commission/MDU: MDU showed lower annual customer costs, revenue contribution to system, and system benefits; Capital failed to present full revenue/upgrade analysis; duplication would not be wasteful | Court: Commission’s cost/revenue findings supported by record; Capital’s incomplete evidence undermines its challenge; duplication not wasteful as a matter of fact |
Key Cases Cited
- Capital Elec. Coop., Inc. v. Pub. Serv. Comm’n, 534 N.W.2d 587 (N.D. 1995) (factors for issuing certificate of public convenience and necessity)
- Application of Otter Tail Power Co., 169 N.W.2d 415 (N.D. 1969) (list of criteria to weigh customer preference, reliability, economics, and duplication)
- North Cent. Elec. Coop., Inc. v. N.D. Pub. Serv. Comm’n, 837 N.W.2d 138 (N.D. 2013) (standard of review for agency decisions on appeal)
- Power Fuels, Inc. v. Elkin, 283 N.W.2d 214 (N.D. 1979) (preponderance/weight‑of‑evidence standard for agency factfinding)
- N. States Power Co. v. Pub. Serv. Comm’n, 452 N.W.2d 340 (N.D. 1990) (treatment of duplication of distribution facilities and agency factfinding)