{
  "id": 8553957,
  "name": "STATE OF NORTH CAROLINA Ex Rel. NORTH CAROLINA UTILITIES COMMISSION v. TRANSYLVANIA UTILITY COMPANY",
  "name_abbreviation": "State ex rel. North Carolina Utilities Commission v. Transylvania Utility Co.",
  "decision_date": "1976-08-04",
  "docket_number": "No. 7610UC93",
  "first_page": "336",
  "last_page": "341",
  "citations": [
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      "type": "official",
      "cite": "30 N.C. App. 336"
    }
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  "court": {
    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
  },
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    "name_long": "North Carolina",
    "name": "N.C."
  },
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    {
      "cite": "203 S.E. 2d 410",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "opinion_index": 0
    },
    {
      "cite": "21 N.C. App. 146",
      "category": "reporters:state",
      "reporter": "N.C. App.",
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        8554747
      ],
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  "last_updated": "2023-07-14T18:42:34.327987+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Martin and Clark concur."
    ],
    "parties": [
      "STATE OF NORTH CAROLINA Ex Rel. NORTH CAROLINA UTILITIES COMMISSION v. TRANSYLVANIA UTILITY COMPANY"
    ],
    "opinions": [
      {
        "text": "VAUGHN, Judge.\nThe thrust of appellant\u2019s argument is that the Commission did not follow the statutory rate making formula. The specific attack on the order is the reduction of the \u201cavailability\u201d charge.\nThe concept of \u201cavailability\u201d charges of water and sewer companies is of relatively recent origin. It appears to have arisen in instances where tracts of land were developed for recreational homes. Most all of the lots would be sold in a relatively short time, but few of the purchasers would immediately build on their lots. The practice has been for the developer and the purchasers of the lots, by uniform contract, to agree that the property owner would pay a fixed monthly sum prior to the time that the owner desired a tap connecting the waterwork system to his lot. Thereafter, the property owner became a customer of the utility and was required to pay the lawfully established rates charged by the utility.\nThe North Carolina Utilities Commission originally took the view that there was no \u201clegal basis for allowing rates to persons not actually receiving the service.\u201d State of North Carolina, ex rel, Utilities Commission v. Carolina Forest Utilities, Inc., Docket No. W-361, 28 June 1973. On the appeal of that case to this Court, the Commission argued in its brief as follows:\n\u201cThe Commission agrees that it has jurisdiction to fix, establish or allow just and reasonable rates subject to certain limitations. GS 62-130 is a general grant of power. GS 62-133 (a) establishes certain limitations to that general grant:\n\u2018Sec 62-133. How Rates Fixed \u2014 (a) In fixing the rates for any public utility subject to the provisions of this chapter, other than motor carriers, the Commission shall fix such rates as shall be fair both to the public utility and to the Consumer.\u2019 (Emphasis added.)\nThis provision directs the Commission to fix just and reasonable rates that shall be fair both to the public utility and to the Consumer. The legislature used the word \u2018consumer\u2019 as opposed to \u2018customer\u2019 or some other less descriptive word. Therefore, the Commission shall fix just and reasonable rates for consumers. There is no provision allowing the Commission to fix rates for nonconsumers or nonusers. Quite the contrary is true. There is an implied prohibition against fixing rates for anyone besides consumers. Appellant is not presently furnishing water to the lot owners against whom he seeks an availability charge since they have not actually tapped onto its line with their own plumbing whether it be residential or merely a yard faucet. Consequently, they are not consumers under the normal understanding of the word or the intention of the Legislature. A consumer is defined as one who uses or consumes economic goods and so diminishes or destroys their utilities. 9 Words and Phrases, \u2018Consumer,\u2019 P 12.\nThe lot owners against whom appellant seeks to impose an \u2018availability charge\u2019 are not consuming or using up any commodity of the appellant. Therefore, the individuals against whom appellant seeks to impose an availability charge are clearly protected against such charge as they do not fall within the proper statutory bounds as provided in GS 62-133 (a) for those against whom rates may be charged.\nNeither are the nonusers or nonconsumers receiving a service furnished by a public utility as provided for in GS 62-3(27) :\n\u2018Service\u2019 means any service furnished by a public utility, including any commodities furnished as a part of such service and any ancillary service or facility used in connection with such service.\u2019\nAppellant may be providing somewhat of a benefit to the nonusers; however, he is not providing any service or commodities to them so as to enable the Commission to classify them as consumers and levy a charge against them.\u201d\nThereafter, at its next session, House Bill 1491 was introduced in the General Assembly on 31 January 1974. The final version of that bill was ratified as Chapter 956 of the Session Laws of 1973, Second Session, 1974. That chapter, in pertinent part, is as follows:\n\u201cAn Act Establishing Guidelines for Establishing Charges and Setting Rates of Water and Sewer Utilities.\nThe General Assembly of North Carolina enacts:\nSection 1. Paragraph (a) of Section 133 of Chapter 62 of the General Statutes of North Carolina is hereby amended by deleting the words \u2018other than motor carriers\u2019 and by adding in lieu thereof the words \u2018other than motor carriers and certain water and sewer utilities.\u2019\nSec. 2. There is hereby added to Chapter 62 of the General Statutes of North Carolina a new section G.S. 62-133.1 which shall read as follows:\n\u2018\u00a7 62-133.1. Small water and sewer utility rates.\u2014 (a) In fixing the rates for any water or sewer utility, the Commission may fix such rates on the ratio of the operating expenses to the operating revenues, such ratio to be determined by the Commission, unless the utility requests that such rates be fixed under G.S. 62-133 (b). Nothing in this paragraph shall be held to extinguish any remedy or right not inconsistent herewith. This paragraph shall be in addition to other provisions of this Chapter which relate to public utilities generally, except that in cases of conflict between such other provisions, this section shall prevail for water and sewer utilities.\n(b) A water or sewer utility may enter into uniform contracts with non-users of its utility service within a specific subdivision or development for the payment by such non-users to the utility of a fee or charge for placing or maintaining lines or other facilities or otherwise making and keeping such utility\u2019s service available to such nonusers; or such a utility may, by contract of assignment, receive the benefits and assume the obligations of uniform contracts entered into between the developers of subdivisions and the purchasers of lots in such subdivisions whereby such developer has contracted to make utility service available to lots in such subdivision and purchasers of such lots have contracted to pay a fee or charge for the availability of such utility service; provided, however, that the maximum non-user rate shall be as established by contract, except that the contractual charge to non-users of the utility service can never exceed the lawfully established minimum rate to user customers of the utility service.\u2019\nSec. 3. Except as herein amended, the provisions of Chapter 62 of the General Statutes of North Carolina shall remain in full force and effect. To the extent that other laws or clauses of law are in conflict with the provisions of this act, such laws and clauses are, to that extent, hereby repealed.\u201d\nThe act is codified as G.S. 62-133.1.\nIt seems clear to us that the new statute was enacted in direct response to the Commission\u2019s conclusion that nonusers were not \u201cconsumers\u201d of the utility and that an \u201cavailability charge\u201d could not be made to property owners solely because they owned land in an area served by the utility.\nThe Utilities Commission exercises a function of the legislative branch of the government, but only that portion of the legislative power conferred upon it by legislative act. It may not act in an instance where the Legislature has, by specific legislation, preempted such action.\nG.S. 62-133.1 (b) expressly provides that a water or sewer utility may enter into uniform contracts with nonusers for payment by nonusers of a \u201cfee or charge\u201d for making the utilities\u2019 service available to nonusers. The parties have stipulated that appellant\u2019s application for utility service together with the lot sales agreements into which they are incorporated \u201cconstitute . . . \u2018uniform contracts with nonusers . . .\u2019 within G.S. 67-133.1 (b).\u201d The act further expressly provides that the maximum nonuser rate \u201cshall be as established by contract\u201d but \u201ccan never exceed the lawfully established minimum rate to user customers of the utility service.\u201d (Emphasis added.) The uniform contract between the utility and property owner in the development calls for a $5.00 monthly charge and that sum is identical to the minimum rate to user customers of the utility.\nBy enacting the foregoing legislation, the General Assembly, we believe, proscribed the Commission\u2019s power to disapprove charges called for in uniform contracts between utilities and nonuser property owners if the charges do not exceed those expressly authorized by the statute. It appears to us that the foregoing result was the legislative intent at the time the legislation was ratified and made effective on 7 March 1974.\nSubsequently, on 20 March 1974, this Court filed its opinion on the appeal from the Commission\u2019s order in Docket No. W-361, 28 June 1973. The opinion is reported in Utilities Comm. v. Carolina Forest Utilities, 21 N.C. App. 146, 203 S.E. 2d 410. The Court held that, under the statutes [as they existed prior to the enactment of G.S. 62-133.1] the Commission had authority to allow the use of an availability charge in a rate schedule of a water utility. The Court did not consider the act now in question and, because of its recent enactment, was most likely unaware of its existence.\nIn supplemental briefs, filed at the request of this Court, both parties to the appeal oppose our interpretation of G.S. 62-133.1 as set out in this opinion. We hold to the view, however, that the opinion reflects the legislative intent at the time the bill was enacted. If more careful reasoning calls for a change in the statute, that action should be left to the General Assembly.\nThe order of the Utilities Commission is reversed. The cause is remanded for reconsideration of the proposed rate schedule in accord with the views expressed in this opinion.\nReversed and remanded.\nJudges Martin and Clark concur.",
        "type": "majority",
        "author": "VAUGHN, Judge."
      }
    ],
    "attorneys": [
      "Weaver, Noland & Anderson, by William Anderson, for applicant appellant.",
      "Commission Attorney Edward B. Hipp and Assistant Commission Attorneys John R. Molm and Wilson B. Partin, Jr., for respondent appellees, North Carolina Utilities Commission."
    ],
    "corrections": "",
    "head_matter": "STATE OF NORTH CAROLINA Ex Rel. NORTH CAROLINA UTILITIES COMMISSION v. TRANSYLVANIA UTILITY COMPANY\nNo. 7610UC93\n(Filed 4 August 1976)\nUtilities Commission \u00a7 6\u2014 availability charge \u2014 power of Commission to disapprove\nBy enacting G.S. 62-133.1 (b), the General Assembly proscribed the Utilities Commission\u2019s power to disapprove charges called for in uniform contracts between utilities and nonuser property owners if the charges do not exceed those expressly authorized by statute; therefore, the order of the Utilities Commission approving a rate schedule which included a monthly availability charge of $3.00 per month while the uniform contract between the utility and property owner called for a $5.00 monthly charge is reversed, since $5.00 was also the sum of the minimum rate to user customers of the utility.\nAppeal by applicant from an order of the North Carolina Utilities Commission issued 1 July 1975. Heard in the Court of Appeals 12 May 1976.\nThe appeal stems from a proceeding filed 2 March 1973, in which applicant sought a franchise and approval of a rate schedule as a water and sewer utility. As finally approved, the rate schedule included a monthly \u201cavailability\u201d charge of $3.00 per month for \u201cnonusers\u201d of water and a like amount for sewer. The applicant had previously entered into uniform contracts with nonusers calling for the payment of a minimum monthly \u201cavailability charge\u201d of $5.00 for each service.\nWeaver, Noland & Anderson, by William Anderson, for applicant appellant.\nCommission Attorney Edward B. Hipp and Assistant Commission Attorneys John R. Molm and Wilson B. Partin, Jr., for respondent appellees, North Carolina Utilities Commission."
  },
  "file_name": "0336-01",
  "first_page_order": 364,
  "last_page_order": 369
}
