Opinion
NO. 2015-CA-000805-MR
01-06-2017
GRAYSON RURAL ELECTRIC COOPERATIVE CORPORATION APPELLANT v. KENTUCKY PUBLIC SERVICE COMMISSION; AND KENTUCKY POWER COMPANY APPELLEES
BRIEF FOR APPELLANT: W. Jeffrey Scott Grayson, Kentucky BRIEF FOR APPELLEE, KENTUCKY PUBLIC SERVICE COMMISSION: Richard G. Raff Jonathan D. Beyer David E. Spenard Frankfort, Kentucky BRIEF FOR APPELLEE, KENTUCKY POWER COMPANY: Mark R. Overstreet Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 14-CI-00509 OPINION
AFFIRMING
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BEFORE: MAZE, TAYLOR, AND VANMETER, JUDGES. TAYLOR, JUDGE: Grayson Rural Electric Cooperative Corporation (Grayson Electric) brings this appeal from an April 27, 2015, Opinion and Order of the Franklin Circuit Court affirming an Order of the Kentucky Public Service Commission. We affirm.
Judge VanMeter concurred in this opinion prior to being elected to the Kentucky Supreme Court. Release of this opinion was delayed by administrative handling. --------
Relevant to this appeal, Grayson Electric provided electrical service to two residences located upon Lots 14 and 25 in the Sand Gap Estates Subdivision in Argillite, Kentucky. However, Kentucky Power Company (Kentucky Power) claimed that these lots (Lot 14 and Lot 25) were within its exclusive certified territory and that Grayson Electric was improperly providing electrical services to both Lot 14 and Lot 25.
Consequently, Kentucky Power filed a complaint against Grayson Electric with the Kentucky Public Service Commission (Commission). Kentucky Power alleged that Grayson Electric was providing electrical service to Lots 14 and 25 in violation of Kentucky Revised Statutes (KRS) 278.018(1). Kentucky Power also maintained that both Lot 14 and Lot 25 were located within its exclusive certified territory. Grayson Electric responded and argued that Lots 14 and 25 were either within its certified territory or within a buffer zone between it and Kentucky Power's certified territory. In the latter event, Grayson Electric claimed that KRS 278.017(3) was triggered, and thereunder, it would be the proper electrical provider for Lots 14 and 25.
By Order entered April 1, 2014, the Commission determined that Lot 14 and Lot 25 were within the exclusive certified territory of Kentucky Power and that Grayson Electric improperly provided electric service to both lots:
[T]he Commission finds that Kentucky Power has sufficiently established that Lot 14 and Lot 25 are located within Kentucky Power's service territory. The maps submitted by Kentucky Power reasonably and accurately show the boundary line delineating the service territories of Kentucky Power and Grayson [Electric]. The boundary line depicted in Kentucky Power's maps was a digitized rendering based upon Kentucky Power's copy of the agreed boundary from the United States Geological Survey map signed by Kentucky Power and Grayson [Electric], which is on file with the Commission. Exhibit RLH-3, . . . clearly shows the residence of the property located on Lot 25 as being within Kentucky Power's service territory, even assuming there is a 40-foot margin of error. Likewise, Exhibit RLH-6, . . . clearly shows the location of the residence located on Lot 14 as being within Kentucky Power's service territory. Again, even assuming a 40-foot margin of error, a vast portion of the residence on Lot 14 is located within Kentucky Power's service territory. Accordingly, we find that the residences at issue in this matter are within Kentucky Power's service area and should, therefore, be served by Kentucky Power. (Citations omitted.)Commission's Order at 7-8.
Thereafter, Grayson Electric filed an action in Franklin Circuit Court seeking judicial review of the Commission's Order. KRS 278.410. By Opinion and Order entered April 27, 2015, the circuit court affirmed the Commission's Order and concluded that the Commission properly determined that Lots 14 and 25 were within the Kentucky Power's exclusive certified territory. This appeal follows.
Judicial review of an order rendered by the Commission is limited. A court may only disturb an order of the Commission where such order is "unlawful or unreasonable." KRS 278.410(1). An order is unlawful if it violates a statute or other legal provision, and it is unreasonable "if it is determined that the evidence presented leaves no room for difference of opinion among reasonable minds." Ky. Indus. Util. Customers, Inc. v. Ky. Utils. Co., 983 S.W.2d 493, 499 (Ky. 1998); Nat'l-Southwire Aluminum Co. v. Big Rivers Elec. Corp., 785 S.W.2d 503 (Ky. App. 1990). The Commission acts as fact-finder and possesses the sole authority to assess the credibility of the evidence. Energy Regulatory Comm'n v. Ky. Power, Co., 605 S.W.2d 46 (Ky. App. 1980). Our review proceeds accordingly.
Grayson Electric contends that the Commission improperly determined that Lots 14 and 25 were located within the exclusive certified territory of Kentucky Power. Grayson Electric argues that the Certified Boundary Map created in 1972 sets forth the boundary line between its certified territory and Kentucky Power's certified territory. Grayson Electric maintains that the 1972 Boundary Map contained a 100-foot buffer zone on each side of the boundary line. As both of the residences on Lots 14 and 25 were within the 100-foot buffer zone, the Commission clearly erred by determining that the lots were within the certified territory of Kentucky Power. Rather, Grayson Electric believes that the Commission should have applied KRS 278.017(3) to determine whether it or Kentucky Power should supply electricity to Lots 14 and 25. For the following reasons, we disagree.
With passage of KRS 278.016-278.018 by the General Assembly, each retail electric supplier in this Commonwealth was restricted to supplying electricity only within its geographical certified territory. The boundaries of the certified territories were established by the Commission under the authority of KRS 278.017. Under KRS 278.017(2), the Commission was required to issue "maps of uniform scale to show, accurately and clearly, the boundaries of the certified territory of each retail electric supplier." If a retail electric supplier was "aggrieved" by the Commission's certification of its territory, the retail electric supplier must have filed a protest within 120 days after the Commission's issuance of the boundary map. KRS 278.017(2).
In this case, the Commission and the parties relied upon the 1972 Boundary Map that delineated the respective boundary between the certified territories of Grayson Electric and Kentucky Power in the geographical area where Lots 14 and 25 are located. The 1972 Boundary Map was subsequently signed by representatives of Grayson Electric and Kentucky Power in 1982. It is undisputed that in 1972, Sand Gap Estates Subdivision did not exist, and the area was undeveloped. So, the exact location of the boundary line in relation to Lots 14 and 25 was in controversy.
To fix the exact position of the boundary line, Kentucky Power provided the expert testimony of Richard Howerton, a civil engineer and land surveyor. Howerton testified that he was able to fix the precise position of the boundary line between Grayson Electric and Kentucky Power as reflected on the 1972 Boundary Map. Because of the scale of the 1972 Boundary Map and the width of the boundary line as drawn thereupon, it was Howerton's opinion that the actual boundary line is a total of 80 feet wide. Howerton prepared two specific maps (Exhibit Nos. RLH-3 and RLH-6) illustrating the boundary line in relation to Lots 14 and 25. On these maps, Howerton fixed a line at the center of the 80 foot wide boundary line and represented it as the true boundary line between Grayson Electric's and Kentucky Power's certified territories. Also, Howerton testified that his maps were accurate within a plus or minus of five feet.
In its role as fact-finder, the Commission found Howerton's testimony credible and relied upon the same in locating the boundary line between Grayson Electric's and Kentucky Power's certified territories. As reflected on Exhibit Nos. RLH-3 and RLH-6, both Lot 14 and Lot 25 are located within Kentucky Power's certified territory. According to Howerton, there only existed a five-foot tolerance zone on his maps, and it is clear that Lot 14 and Lot 25 are not within such five-foot tolerance zone. Based upon such evidence, we cannot conclude that the Commission erred by finding that both Lots 14 and 25 were within Kentucky Power's certified territory.
Grayson Electric next asserts that the Commission erred by failing to conclude that Kentucky Power was equitably estopped from claiming that Lots 14 and 25 are within its certified territory. Grayson Electric maintains that representatives of both power companies orally agreed in 2005 that Grayson Electric would supply electricity to Sand Gap Estates Subdivision where Lots 14 and 25 are located. In reliance upon the oral agreement, Grayson Electric started supplying electric services to the Subdivision in 2005, without objection from Kentucky Power.
At the hearing before the Commission, Carol Fraley testified on behalf of Grayson Electric; she was the President and CEO of Grayson Electric. Fraley testified that a former employee of Grayson Electric had previously reached an oral agreement in 2005 with an unidentified employee of Kentucky Power whereby Grayson Electric would serve electricity to that portion of Sand Gap Estates Subdivision containing Lots 14 and 25. Kentucky Power denied that such oral agreement existed.
Considering the evidence at the hearing, we cannot say that the Commission erred by failing to conclude that Kentucky Power was equitably estopped from asserting its right to provide electrical service to these properties. The evidence provided by Grayson Electric mostly constituted hearsay statements, and the employee who entered into the oral agreement on behalf of Kentucky Power was never identified. Furthermore, KRS 278.018(6) provides that a contract to allocate territories between retail electric suppliers must be approved by the Commission in order to be valid and enforceable, which did not occur in this instance. Upon the whole, we do not believe the Commission erred by failing to conclude that Kentucky Power was equitably estopped from asserting its exclusive right to provide electricity to Lots 14 and 25.
In summary, we are of the opinion that the circuit court properly affirmed the Commission's Order. We hold that the Commission's Order was neither unlawful nor unreasonable. See Ky. Indus. Util. Customers, Inc., 983 S.W.2d 493; Nat'l-Southwire Aluminum Co., 785 S.W.2d 503.
For the forgoing reasons, the Opinion and Order of the Franklin Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT: W. Jeffrey Scott
Grayson, Kentucky BRIEF FOR APPELLEE,
KENTUCKY PUBLIC SERVICE
COMMISSION: Richard G. Raff
Jonathan D. Beyer
David E. Spenard
Frankfort, Kentucky BRIEF FOR APPELLEE,
KENTUCKY POWER COMPANY: Mark R. Overstreet
Frankfort, Kentucky