Petition for Writ of Certiorari — Arkansas Public Service Commission v. Arkansas Power & Light Co. (No. 827)

Supreme Court brief1959

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MAR 3171950

No. $27 | 7 ; _. DJAMES a BrOwNING,

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SUPREME COURT OF THE UNITED STATES

’

OCTOBER TERM, 1959.

wsiined PUBLIC SERVICE

COMMISSION and FIRST ELECTRIC eg ihe

COOPERATIVE CORPORATION »........... Petitioners -

Vv. a

4.7

“*

-f. _ ARKANSAS POWER & LIGHT COMPANY .. gai

PETITION FOR WRIT OF CERTIORARI

TO THE

SUPREME COURT OF ARKANSAS .

}

TOM GENTRY

"117 National Old Line Building —

Little Rock, Arkansas +

Attorney for Petitioners...

TREVATHAN PRINTING COMPANY. BATESVILLE, ARKANSAS

“

A Na Arn 8 pe pee

INDEX ‘

= Page

Petition for Writ of Certiorari .... .......... ae

Opinions of Triburials Below . . sic Niibe bak oe Seah wes 8

Jurisiiition: ~......jesce.ecsee. Cee errs ee cleeum 2

Questions Presented Tor Review - etkeebietaskeess “a

Constitutional Provisions Involved Fe eneseenaces ia

_ United States Statutory Provisions Involved .......... 4

Arkansas Statutory Provisions Involved hie. ©

| EE een ory See Puawaas o-?

I, oO cnx sanity ss ceases es ae g.

| I. The Decision of the ie Court Below Deprives. ee

—_—— Cooperative of of Property Without -Due Process

of Law in Violation of U. S. Const. Amend.

RRR AR ACI Si TS AES By A 9¢

> II. The Decision of the Court Below Denies to the ey

om __- Cooperative the Equal Protection of the Laws’ - -

Guaranteed by U. S. Const.'Amend. XIV ..... 14

III. The Contract Between the Government and ;

the.Power Company Made the Furnishing of

Electricity to the Government by the Power

Company Subject to Regulation by the Ark-

. ansas Pablic: Service Commission .:.......... . 16

IV. Even if the Contract . Between the Power

* Company and the Government Had Not Spec-

_ -¥fically Provided that the Service Furnished —

Under the Contract Would. Be Subject to Re-

gulation by the Arkansas Public Service. °

Commission, This Commission~Still Would \

Have Had. Such Regulatory Authority ........ 21 rd .

Conclusion eREsNevencschend ep Ans 6 get Olle sere 053 eae

: *

-. INDEX

TABLE OF AUTHORITIES

‘ ae © Page

Adams v. . United States, 319 U.S. 312........ eethcvee 22

' Boston Elevated Ry. Co. v. Commonwealth, | . ;

310 Mass. 528, 39 N. E. 2d 87 emcees jet egaos a ae

Corporation’ Commission ‘v. Lowe, 281 U. S. 431, 5. ia, ail

Ginsberg v. Liridel, 107 F. 2d 721 ......... ae

In re Cosgrove’s Will, ‘225 Minn. 443, 31 N. W. 2d o....8

_ Johnson v. Maryland, 254 U.S. 51°....... Pe MOLE, 28

Leslie Miller v. Arkansas, 352 U.S. 187 ........ .-

" Lovell v. St. Louis Mut. Life Ins: Co., 111 U. S. 264 ..... 12

- New State Ice Co. v, Liebman, 285 U.S. 262 ...... 6.06... 9.0

Olin Mathieson Chemical Corp. v. Francis, E

-- 134 Colo. 160, § SD Bee er errr a 13

_. Penn Dairies v.-Milk Control Commission, - |

318 U. S. 261 ...<....... ek RRO Fi cee 22

People v. Montgomery, 47 Calif. App. 2d ER ies ota

, ERB os cocci cs, DE 70 rere cae ae

“nee Utilities Commission of. California’ v. — o - .

United States, 355 'U. S. 5 Beers Pie eS ore <3.

Shelley v. Kraemer, 334 U.S.1 f...:..0000005e00;000 14

State of Louisiana ex rel. Frances Vv. Resweber, ; |

atin tee eeceeeees 14

Stewart & Co. v. Sadrakula, 309 U.S. 94 ..-.-.....00.. 17

United States v. Behan, 110 U.S. 389 ..,.........500.. 12,

“Wright. v. Nagle, 101 U.S. 791 ........... Pe eet ce 9°

a - i WS

INDEX

_ RE cab eee ' Page

. __Consina Provisions | Ss; — |

U.S. Const. Amend. XIV, sh. See ants 60

U.S. Const. Art. VI ....... ads esate iteree Yd

| : Statutes \ y : Lo

2 ee | fe

- Title 10, ‘United States Code, § 9773S “/. ere we” JB. , 61 .

Title 28, United States Code, $ 1257(3) 2.3... in.

Title 40, United States Code, § 255 ae as he < 21, 64

_ Title 50, Uriited States Code, $491 /......., eee 17, 68

Act 571, Ark. Acts of 1919, § 5, as amended by Att’

124, Ark. Acts of 1921, §3 [Am Stats. (1947)

CUS WD nh icteves PA ee 4, 70

~ Act 342, Ark. Acts of 1937, -§ 2, pia ey Act 85,

Ark. Acts of .1955, § 1, as amended by Act 103, -

Ark. Acts of 1957, § 1 [Ark. Stats: _— | 7 °

§ 77-1102] ...... gh eas aun viee ks Mego, 2. 9, 72

"Act 342, Ark. Acts of 1937, § 31, as aménded by Act ©

85, Ark. Acts of 1955, § 2, as amended by Act

103, Ark. Aéts of 1957, § 2 [Ark. Stats../1947)

§ TBI) (ub daesleweastass wht 73.

Texts baa

5 Williston on Contracts ( Williston & Thompeen Ed:

1937) § § 1293, 1293A, 1318 ..... Rha oe ee tees Aa

' Williston on Contracts (Rev. Ed. 1938) § 1939 sash e.. 43

Restatement, Contracts, § 458, Illustration 2 Dacca re

_ 23 Am. Jur., Franchises, §-$5 and 8 eceeedinys ae as

- NCE. S., ‘Contracts, §°328 Sey New as Saar eer 12

’

‘

aa |

—_—~

INDEX

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| Page

gem ZF

| Decision of Arkansas’ Public Service Commission .. 25 SE. |

Decision of Circuit.Court of Pulaski County,

ATRAQSOS 2.2. cece cc ccacicccccccees eskesen 39

Opinion of, Supreme Court of Arkansas ieee a oeiee ee

Dissenting Opinion of Associate Justice Pau . 81

fn Dissenting Opinion wf Associate Justice Jim Johnson . .. 55

Petition for Rehearing ...... Like baneh ste tohetecvars 58

’ Constitutional Provisions ....1.. Cue caese yee 60

United States Statutory Provisions .................. 61

° oe ; - : eo ‘e

: ’ Arkansas, Statutory Provisions ........ ae Pats aareon waa 70

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: SUPREME COURT OF Se UNITED STATES

OCTOBER TERM, 1959 :

_ ARKANSAS PUBLIC SERVICE

COMMISSION and FIRST ELECTRIC _ ea

COOPERATIVE CORPORATION ........... Petitioners .

| ARKANSAS POWER & LIGHT COMPANY ... Respondent

PETITION FOR WRIT*OF CERTIORARI . | «

; TOTHE .. ee a ee

SUPREME COURT OF ‘ARKANSAS ; 3

\ Gay oes oe

The petitioners pray that a writ of certiorari issue to

review the decision of the Supreme Court of Arkansas and:

the denial by that Court of the petition for. rehearing in this

matter, and for cause state that: —

ay Opinions of the Tribunals Below

The Supreme Court of Arkansas rendered its decision ,

in this matter on November 2, 1959, by a 4 to 3 vote revers-

ing the decision of the Arkansas Public Service Commis-

- Sion and the decision®of the Circuit Court of - Pulaski:

County, Arkansas. The decision of the Supreme Court of

Arkansas became final upon that court’ s denial of a petition

‘for rehearing of the matter on. January~11, 1960. The ma;.

“Ss . 20 ees 1

jority and dissenting opinions” of thé Supreme Court of

Arkansas, as yet unpublished, are ap

also the decisions of the Arkansas’ ‘Pablic ‘ Service . Com-

- mission and the Circuit. Court of Pulaski aati Arkansas.

‘hereto, as are.

J URISDICTION

} ‘The statutory provision believed to oo jurisdic: |

tion on this ‘Court i is Title 28, United States mv, § 1257 a ).

_ aay PRESENTED FOR REVIEW

‘=

The questions pypsented are.as follows:

(1) Cana judgment or consistently with due pro-

cess of law, when the direct effect thereof is to nullify

the rights of a. rural electric cooperative corporation

flowing from. (a) a contract between’ the rural electric

-cooperative corporation and a public utility whereby

the public utility agrees to supply the rural electric co-

operative corporation with electricity for. sale in the

~ latter’s territory allocated’ to it by the. state regulatory

body, and (kh) a certificate of public convenience and

necessity granted by the state regulatory body to the -

rural electric cooperative corporation: to supply with °

“electricity the t

itory iri question, merely because

the public |utility . voluntarily contracts with the,

Government to kupply it with slectricity for use in the

aforesaid territory? .

(2) Can a “judgment ‘stand, consistently with equal

protection of the-laws, when the direct effect thereof

See 3.

\ is to transfer aa rights of a rural electfic cooperative

corporation without.consideration’ to a public utility ;

under the circumstances stated in Question (1)? .

(3) Has the Government submitted its purchase ” |

eléctricity for the Little Rock Air Force Base to re-—

gulation by the state regulatory body, irrespective of |

‘ the Supremacy Clause of the United States Constitu-

tion, by virtue of its contract with the public utility

involved, the. Arkansas Power &' ‘Light Company?

(4) ~—e the Dunneinaes Clause of the. United States

~~Constitution operate to oust the State regulatory body .

of jurisdiction with-respebt to an area owned by the .

Government, but as to which the Gov ernment has

never acquired jurisdiction?

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beg

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CONSTIBUTIONAL PROVISIONS INVOLVED —

(1) United States Coristitution — Amendment XIV:

i ° | ‘ ae,

(a) Due Process Clause. -

(2) United — Constitution _ Article VI:

+ (a) — Clause.

UNITED. STATES STATUTORY

‘PROVISIONS INVOLV ED |

(1) — 10, United. States Code, $9773... a i

: Se, ° ie

(2) “Title 40, United tates Code, § 255. oe

%) Title 50, United States Code, § 491.

ARKANSAS STATUTORY

PROVISIONS INVOLVED

(1) Act 571, Ark. Acts of 1919, 8.6, as smended by Act ;

124, Ark. Acts of 1921, §.3 (Ark. Stats. (1947) -§ .

73-15 (a) J. 7

( 2) Act 342, Ark. Acts of 1937, $ 2, as amended by Act

85, Ark. Acts of 1955, § 1, as amended by Act 103,

Ark. Acts of 1957, *§. 1 [Ark. Stats. (1947)

_ § 77-1102}. = |

*(3) Act 342; Ark. Acts of 1937, § 31, as amended by.

‘Act 85, Ark. Acts of,1955,§ 2, as amended by Act

103, Ark. Acts é6f 1957, §2 seal Stats. (1947) §

77-1131]. 4: | :

.* ;.

. =

~ . 5.

= STATEMENT

The First Electric Cooperative Corporation, a. rural

electric cooperative my Rte (hereinafter referred to as ©

' the Cooperative), was

areas in Pulaski County, Arkansas, allocated to it by a cer-

tificate of public convenience and necessity by the Ark-

ansas Public Service Commission, the state regulatory

roviding electricity to consumers in

body (hereinafter referred to as the Commission), and.. °

the Arkansas Power &, Light Company, a public pity

(hereinafter referred to as the Power Company), was

_ providing electricity to consumers yy. areas in’ Pulaski Coun-

ty, Arkansas, @Jlocated to it by the Commission, when the

United States Government (hereinafter referred to as the

Government) established the Little Rock Air Forc® Base

"near Jacksonville in Pulaski County, Arkansas.. This air

base was established in an area, a part of which had been

allocated to the Cooperative, and a part of. which had been

allocated to the Power. Company.

When: construction was’ begun at the air base, the

Cooperative, the Power Company, and all others having

any property in the air-base area were required by the

Government to remove it. Both the Cooperative and the

Power Company were paid for any interest they had in the -

land and were compensated for the removal of their othe

property. .

Ss .

The location of the air base and the territorial -alfoca- ©

tions to the Cooperative and to the Power Company are

shown in Exhibit 2 at p. 283 of the transcript.

' The first. construction of ghe air base was entirely

within the area allocated to the Power Company, and, of

course; the Power Company was.entitled to serve any con-

sumer of electricity within this area. However, during the

ray

re 0

latter part of "1957, the Government, in contemplation of.

the construction of permanent housing facilities for air

base personnel within. the air base area, but in the area

with respect to whicli the Cooperative held a certificate of

public convenience and necessity, negotiated a contract with

the Power Company by which the Power Company agreed

to provide electricity for use by the Government in this

area: The contract is dated August 80, 195% with amend- -

_ment dated October 4, 1957 (T. 274) This confract spec-

ifically prov ided that the Commission would regulate the

service prov ‘ided thereunder. The. ue provision of

the contract is as follows: fe’

“5. PUBLIC REGULATION AND. CHANGE OF

RATES. (a) Public regulation. Service furnished

under this contract shall be, subject to regulation in

the manner and* to the extent prescribed by law by

‘ any, Federal, State, or local regulatory commissiort

having jurisdiction. * * * (b) Change of rates. * * *.”

(T. 249) : -

_ The transmission facilities jnside_gf the air base bound- ~

aries are entirely owned by the Government and _ the

‘ Government obtains electricity outside of the- air base

boundaries at a substation of the Power Company. The:sub-

‘ statiorfis within the area allocated to the Power Company. -

In short, the Government receives the electricity from the

Power Company within the area allocated to the Power -°

Company and transmits such electricity over Government

facilities into the area allocated to the Cooperative where

it is used by the consumers. Upon learning that the Power

Company intended to furnish electricity for that ,part

of the housing project of the air base which is within the —

_ area allocated to the Cooperative, the Cooperative on.

CANE?

‘t

“he

ste 5 hatte !

September ‘ 23, 1957, filed its complaint with the Cormmis-

sion, stating that the Power Company had commenced |

serving and offering to serve. or provide: electricity in the

territory which had previously been allocated to the Co-

operative in violation of the certificate of public conven-

lence and necessity theretofore granted to the Cooperative,

and contr. ry to the laws of Arkansas.

As‘ a result of the hearing held .before .the Commis-

sion on the complaint of the Cooperative, the Commission

found that the respective parties had been allocated ' cer-

tain territories by certificates of public’ convenience and

necessity and that there was no reason to change the ter-

ritorial allo€ation theretofore made. The Commission fur-

ther found that when the Power Company supplied elec-

‘tricity to the Government to transmit into the territory

allocated to the Cooperative,. the, Power Company was

violating the laws of Arkansas, the certificate of public con- |

venience and necessity theretofore granted to the Coopera-

tive and the contract between the Power Company and the

Cooperative. Inasmuch as the Power ‘Company was fur-

nishing electricity to be used in‘the territory allocated

to the Cooperative, the.Commission ordered the Power

Company to meter‘the electricity furnished for use in the

Cooperative's territory and that the bills between the Co-

operative and the Power Company be adjusted so‘that each °

might be made whole for services and electricity fur:

nished in their respective areas according to the contract

between the Power Company and the Coonerative. The

contract between the Cooperative and the Power Com-

pany provides that all the electricity sald by the Coopera-

. tive in its legally assigned territory shall be purchased from

the Power Company and the Power Company shall. fur-

( >}

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8 .

nish the Cooperative all of the electricity it needs to oo

‘ply its legally assigned territory as follows:

(1) The Company agrees to sell and deliver to the

Consumer and the Consumer agrees to purchase. and

_ receive from the Company all of the_electric power—+ -

and energy which the Consumer may require for re-

sale to serve the electric requirements of Consumer’s

electric users in its legally assigned territory during

_ the term of this Agreement (T. 316). .”

The order of the Commission was appealed by the

Power Company to the Circuit Court of Pulaski County, -

ich Court. affirmed the order of the Commission. The

Power Company appealed these decisions to the Supreme

Court of Arkansas, and-by a 4 to 3 vote that Court re-

versed the: holdings of the Commission and the Circuit

. Court of Pulaski County on a purely federal question.

The federal questions presented in this petition were

raised in arguments made on the pleadings and testimony

.-before the Commission, the Circuit Court of Pulaski County,

-and'.in the briefs submitted and arguments made before the |

Supreme Court of Arkansas. When the Supreme Court of |

Arkansas reversed the Commission and the Circuit Court of

Pulaski County, a petition for rehearing with brief. in sup-

port thereof was filed in which these federal questions were

argued at length. The Supreme Court of Arkansas held, in

effect, that the Government could contract with anyone it

chose to furnish electricity to the air base regardless of

the contract between the Power Company and the Coopera-

tive, the certificate. of public convenience and necessity

held by the Cooperative, or any law of Arkansas by virtue

' of Title 10, United States Code, § 9773, and the. er

Clause of the United States Constitution.

é gH i

ARGUMENT

6. £

THE DECISION OF THE COURT BELOW DEPRIVES. — -—

_THE COOPERATIVE OF PROPERTY WITHOUT

DUE PROCESS OF LAW IN VIOLATION OF U. §.

CONST. AMEND. XIV. Bee

When the Cooperative ‘was granted its ‘certificate of -

. public convenience and -necessity to provide the area in- .

volved with electricity, and in reliance thereon..expended

its:money for facilities to supply the area, its grant became

a valuable property right. :

Act 343, Ark. Acts of 1937, § 2, as amended by Act 85,

Ark. Acts of 1955, § 1, as amended by Act 103, Ark. Acts

of 1957, 1 [Ark. Stats. (1947) § 77:1102] provides, in

relevant part: , ae ees

, ae and. said Corporation shall not. be ousted

from service in said rural area or deprived of the right

to continue to provide electric service in said rural

area subsequent to the granting of a certificate of

convenience and necessity by the Arkansas Public

_. Service Commission.” - ere

It is common knowledge that certificates of public con-

venience and necessity are bought, sold, traded, mortgaged,

and otherwise dealt with every day. New State Ice Co. v. ,

Liebmann, 285 U..S. 262: Cofporation Commission v. Lowe. are.

281 U.S. 431; Wright v. Nagle, 101 U.S. 791; 23 Am. Jur.. .

Franchises, §§ 5 and 8. Of course, such transactions are

subject to the approval of the regulatory body having juris-

diction over such matters for the protection of the public, .

but in no instance has this Court ever sanctioned the out- .

> '

right confiscation of such property. Yet, this is exactly ati

the Supreme-Court of Arkansas has.permitted the Power

Company to do; namely, to confiscate the property of the

right. In this case, under the decision of tec court below,

the contract for electricity which the Power Company

entered into wiin the Government deprived the Coopera-

tive of its property —— its certificate of public convenience

and necessity, which it had held for many years, to serve

a certain aréa with electricity and its rights under the con-

tract with the Power Company. This result, obviously, was

unintentional on the part of the Government, but the Power

to the Government ‘from whom it received its electricity

as tue price and service. were the same. This fact is de-

monstrated by the Government's nonintervention in? and

’ failure to, take the slightest notice of, this iitigation, even

though it was duly notified of the . Proceeding by the

Sommission. Cen

> S

The decision of the Supreme Court of Arkansas not

only makes a gift of the Cooperative’s assigned territory

tainly does not follow ‘that the Power Company may with

oe violate its contract in the bie

. Cooperative. Even if it be true that the Government’ may |

contract with whom it pleases to supply it with whatever

. it needs, it may not do so by, taking from another a vested

—

Company ‘knew better. Naturally, it made no difference .

. to the Power Company: contrary to. Act. 342, Ark.. Acts —

of 1937, § 2, as amended [Ark. Stats. (1947) § 77-1102].

. but it-sanctioris the Power Company’s flagrant breach of its

‘aforesaid contract with the Cooperative. For, even if the.

Government may contract with anyone it chooses, it cer-

"f°

Suppose John Doe holds a patent for a particular type

of airplane motor. Richard Roe, without license from John

Doe, contracts. with the Government to manufacture for

the Governmeni trie éxact type of airplane motors covered

, by the patent. Does the fact that the Government can con-

-*. tract with whom it pleases confer on Richard Roe the right

to infringe on John. Doe's patent? Of course not. The no-

tion is ridiculous. There. is no difference in principle be-

- tween this example and the present case. The Power Com-

pany, by its contract with the Gov ernment has | ‘infringed

- . on the rights of the Cooperative to serye the area, and the

_ court below in its decision has given the Power Company

the right to violate its contract with the Cooperative, has

given the Power Company the right to y iolate the quoted ©

statute of Arkansas, and) has given the Power Company

the right to ignore the ottificate of public ~onvenience and.

necessity granted to it by” the. Commission contrary to

. the Due Process Clause of the United States Constitution,

Amendment XIV. . .

If the Cooperative must be ousted ‘from serving its

’ legally assigned territory, then ‘it should be compensated

commensurate with its ‘loss. The contract of the Power

Cmpey and the Cooperative provides inter alia:

1) The Company agrees to sell and jt to the .

. “Consumer and the C Consumer agrees to purchase and

receive from. the Company all of the electric power

and Ty, which the Consumer may require for re-

sale to serve the electric requirements of Consumer's -

ao eem scence ns®

a ha ee 12 7

, electric users in its leguily mangas territory during

the term of this agrewment ee, mcs 316)

This contract was in existence at the time*of the events ;

forming the basis of this litigation and it is still in effect.

. Naturally, this: contract contains -no éxpress promise

by the Power Company’ that it will not go behind ‘the —

_ back of the Cooperative and make a contract with the

“Government. which will rob the Coopetative of the bene-

fits therepf. However, such a promise is as much a part

_ of the contract’ as it would be if written into it in capital .

letters. One of the mosteclementary principles of contract

_ law is that every contract contains an implied covenani

_that neither party shall do anything which will*destroy or

injure the other party's right to receive the fruits of the

* contract. Lovell v. St. Louis Mut. Life Ins. Co., 111 U.S. 264,

United States v. Behan, 110 U. S. 339. Also see generally, 5

Williston on Contracts (Williston & Thompgon Ed. 1937)

. § § 1293, 1293A, 1318; 17 C. J. S., Contracts, § 328.

_ The ‘court below has ignored the principle stated by

these’ authorities in giving its blessing to the Power Com-

pany’s breach of the implied condition of its contract with

the’ Cooperative thatsit. should do nothing to prevent the

Cooperative from benefitting thereunder. The Cooperative

. has a right to benefit on behalf of its members from the re-

saie of electricity for use in its legally assigned territory,

and the Power Company had ‘no right, irrespective of the

powers or immunities of the Government, whether direct-

* ly or indirectly, to deprive the Cooperative of such benefits.

“This i is not a case when the Power Company can rely

on the supervention of the powers of the Government as

an excuse for failing to. perform its contract, because the

Power*Company was under no compulsion, instead a

. voluntarily agreed, with: the Government to serve. elec-

tricity to the Cooperative’s territory. See Williston on Con-

tracts. (Rev. Ed. 1938) $ 1939; Restatement, Contracts,

nat § 458, Illustration 2. - .

“The contract t tights of the Cmineinin are property

within the meaning of due prgcess. Boston Elevated Ry. Co.,

v. “Commonwealth, 310 Mass. 528, 39 N. E. 2d 87; Olin”

Mathieson Chemical Corp. v. Francis, 134 Colo. 160, 301 P.

2d 139. The guaranty of due process. prohibits the taking =)

of one person's ‘property and giving it to another con-

trary to settled usages and modes of: procedure. Ginsberg

v. Lindel, 107. F. 2d 721. A taking of property is no less

lacking in due process when done by the courts rather than

some othe? governmental agency. In re Cosgrave’ s Will, |

225 Minn. ‘4438, 31 N. W. 2d 20. . —_

THE DECISION OF THE COURT BELOW DENIES _

TO THE COOPERATIVE THE EQUAL PROTECTION:

OF THE. LAWS GUARANTEED BY U. S. CONST.

| Equal protection of the laws. requires that all persons

_ subject to the laws shall be treated alike, under like cir-

cumstances and conditions, both. in priv ileges conferred’

and in liabilities imposed. State of Louisiana ex rel. Frances

v. Resweber, 329 U. S. 459. It is a’ guaranty. of equality of

_ treatment of all. persons in the same place agd under like

| \circumstances in pursuit of their lawful businesses. People

ZN Montgomery, 47 Calif. App.. 2d 1, 117 P.: 2d 437. The

rights protected by this guaranty include the right to enjoy,

own, and dispose of property. Shelley v. Kraemer, 334 U.S.

I. ‘ * ‘ « o ty -

. The guaranty applies not only to legislative and execu-

“tive action, but to judicial action as well. Shelley v. Kraemer

' supra. Therefore, a‘ discrimination against the Cooperative .

in favor of the Power Company is as much a denial of

equal protection when done by the Supreme Court of Ark-

ansas as it would be if done by the state enacts or

_ executive branch. :

_ There is no evidence whatever in the record of this.

‘ease which justifies the taking of the property of the. Co-

operative and bestowing it on the, Power Company. Yet,

this is the direct effect of the decision- of the court below,

and this is a result which the guaranty of equal protec- .

tion is intended to prevent. Thus, unless it can be made to:

appear that the Cooperative | somehow stands on a legal

basis inferior to the Power Company in a way which war-

fants a difference in treatment, then the decision of the

court below. violates the guaranty of = Protection of

the laws.

2 °9

a ne ae et tse een Ne cr tee Peareee cee

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THE CONTRACT BETWEEN THE. GOVERNMENT |

AND THE*POWER COMPANY MADE THE FUR-

NISHING OF ELECTRICITY TO THE .GOVERN: -

MENT BY THE POWER COMPANY SUBJECT TO

VICE COMMISSION. t

The Secretary of the Air Force is, given specific au- :

thority to establish air bases under the terms and provisiong:

- of Title 10, United States: Code, § 9773, and Subsection

(f) of that statute provides as’ follows: :

“At each air base or depot established under this sec-

. tion, the Secretary shall remove or remodel existing a

struetures as necessary; do necessary grading; and pro-

vide buildings, utilities, communication systems, land- -

ing ‘fields and mats, roads, walks, aprons, docks, run-

ways, facilities for the storage and distribution of am-

munition, fuel, oil, necesgary protection against, bombs,

and all appurtenances to the foregoing.” (Italics sup-

plied) ~. :

‘It thus: appears that’ the siaiis ‘of the Air Force

is empowered to provide electricity for the Little Rock Air

‘Force Bast. In doing so he entered into a contract with

the Power Company for that. company to supply such

electricity. This contract specifically provided that -the.ser-

- vice “furnished thereunder should be subject to regula- —

_. tion by the Arkansas: Public Service Commission, as that is

the . reBylatory commission in Arkansas Ahaving jurisdic-

tion ovér such matters. The fontract an in pertinent

” part, as follows:

REGULATION BY THE ARKANSAS vicinal emma ; ;

. .

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Sa .

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17 *

1g, i and Change of Rates. (a) Pub- °

"lie regifatiom Service furnished under this. contract

shall be subject to regulation in the mannemand to the |

extent prescribed by law by any Federal; State or local, «

regulatory commission havirig pea “> (T. 249),

(Italics supplied) -

There is Qo question but, that the Government, under

the circumstances, may submit to state regulations of the

kind involved. tewart & Co. v. Sadrakula, 309 Y. S. 94..

- Moreover, it is the settled policy of the Government to do

so. This is illustrated by Title 50, United StatenEpde $0

491, which is as follows:

“The Secretary of the Air Force is authorized to esta-

blish and dévelop' within and ‘without the continental .

limits of the United States in fulfilling the air de-

' fense responsibilities of the Department -of the Air.

. Force such land-based air warning and control - in-

stallations and facilities, by the construction, installa-.

tion, or equipment of temporary or permanent public —

works, including buildings, facilities, appurtenances, .

utilities, and access roads, and to provide for necessary

' gdministration and planning therefor, without regard

_ ‘to Section 1339 of Title 10, Section 529 of Title 31, and

tion 259\of Title 40, as he may deem necessary ins

e interest of national security: Provided, that not to

_exeeed $85,500,000 shall be appropriated for the con- .

‘struction of public works authorized by this section.

“The Secretary of the Air Force is authorized to pro- -

cure communication services required for the semi-

automatic ground environment system. No contracts

‘for such services may be for a period of more-tharr ten’

years from the date communication service. ar: first,

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furnished under ‘such contract. The aggregate, con-

tingent liability of the Government under the termina-

tion, x de ns of all-contracts authorized hereunder.

may not e a total of $222,000,000 and no fermina-

tion payment shall be final until audited and approved

_ by the General Accounting Office which shall have

access to such carrier records and accounts as it may-

deem necessary for the purpose. In procuring such

services, the Secretary of the Air Force shall utilize

to the fullest extent practicable the facilities and’ cap-

abilities of communication common carriers, including -

rural telephone cooperatives within their. respective

‘service areas and for power suppty, shall utilize to the

fullest extent practicable, the facilities and capabilities

of public, utilities and rural electric cooperatives with-

* in their respective. service areas. Negotiations — with

communication common carriers, including coopera-

tives, and representation in proceedings involving such

carriers before Federal.and State regulatory bodies

where such negotiations or proceedings involve” con-

tracts authorized -by this paragraph shall be in -ac-

cordance with the provisions of Section 481 of Title

40.” (Italics supplied) | °

‘ 7

* The meaning of the ‘language used in ‘the contract be-

tween the Government and the Power Company is

_ clear and unambiguous. The caption, “Public Regulation

and Change’ of Rates” indicates-beyond cavil that the con-

‘tracting parties understood that the paragraph related to

two Separate, distinct matters, i. e., (1) regulation, and (2)

‘change of tates. What else could the conjunction “and”

import? Why .in the name of reason would the parties em-

? :

° 7,

ee , . :

_ ploy the term if they did noi intend it to mean what every

school child apprehends? Why, if the parties intended only -

. e . ° .

may be ignored, that it has no meaning, that- it is a mere

superfluity? Rha aces, SWE

~ The language of the contract is obviously that of a

draftsman for the Government, for it is a standard form, i.

-e., DA AGO Form R-5629, I July 1950. (T. 246) Can it be

‘. assumed that the contract was hastily drawn or that, the

_ draftsman and/or the Governitaeht wan be charged with in-

» competence inthe art of draftsmanghip? Can the agents of .°

the Government be charged with ignorance of utility re-

_* gulation? Of course not. The mere asking of these ques-

tions compels .a negative answer.

The reason for this provision is obvidus. The Govern-

nent wanted this service to be furnjshed, dnd if there was ©

any dispute about it, then the digpute should be settled ”

by thgtregulatory commission having jurisdiction. That is

’ exactly what was done in the case at bar. The Cooperative

was entitled to furnish electricity to this area under its’

certificate of public convenience and necessity granted by

the Commission years ago. The Power Company had enter-

ed into a contract’ with the Cooperative to furnish the

Cooperative all the electricity it needed to supply the users

in its assigned area. Therefore, when the Power Company

. furnished the Government the electricity to use in this area

the Power, Company violated not only the certificate of

to provide for “change of rates,” did they employ the - |

20 .

public convenience and. necessity of the Cooperative grant-

ed by the Commission, but also violated its contract. with

the Cooperative to furnish to it the electricity td be used

in its area. When this happened the matter was placed be-

fore the regulatory commission having jurisdiction of the

mattef, the Arkansas Public Service Commission, exactly

as agreed on in the coftract between the Power Company

and the Government.

The Arkansas Public Service Commission rule’ that _ .

the Power Company was selling electricity in the area as-

- signed to the Cooperative in violation of its contract with

the Cooperative, the certificate of public convenience and

necessity granted to the Cooperative, and in‘ violation of

the Iaws of Arkansas, ari that the Commission had juris-

’ diction over the matter. This was so not only because the

Power Company by statute, was subject to its jurisdiction,

but also because of the contract provision involved. The

Commission sought to regulate the service furnishéd under

this contract so that both the Power Company and the Co-

operative would serve their respective areas and the

Government. would receive uninterrupted service to the

air base. The Circuit Court of Pulaski County affirmed

this action, but the Supreme Court of Arkansas held that

the Commission had no jurisdiction because the Govern-

ment was a party to the contract with the Power Com-

pany. The holding of the Supreme Court of Arkansas is,

therefore, in plain violation of the contract provision fixing —

the jurisdiction as aforesaid. ~ .

EE ee — al

| Iv. | |

‘EVEN IF THE CONTRACT BETWEEN THE POWER

COMPANY AND THE GOVERNMENT HAD NOT

SPECIFICALLY PROVIDED THAT THE SERVICE

FURNISHED UNDER THE CONTRACT WOULD BE

SUBJECT TO REGULATION BY THE ARKANSAS ©

PUBLIC SERVICE COMMISSION, THIS COMMIS-

‘SION STILL WOULD HAVE HAD SUCH REGULA-

TORY AUTHORITY, a ae

The denial by the Power iia that the ‘dst

tive had any present right or franchise to serve any

of the air base area because such area is now the property,

of the Government and ngf subject to any state law or

regulation is fallacious even if the contract had not spec-

ifically provided that the. Commission should have such

jurisdiction. . ; <2

Title 40, United States Code, § 255, provides in relevant

part:

“Notwithstanding any other provision of law, ‘the

obtaining of exclusive jurisdiction in the United States

over lands ‘or. interests therein which have been or

_ shall hereafter be acquired by it shall not be required;

but the head or other authorized officer of any depart-

ment or independent establishment or agency of the

‘Government may, in such cases and at such times as -

‘ hé may deem desirable, accept ar securé from the

State in which any lands or interest therein under his

’. immediate jurisdiction, custody, or control are situated,

consent. to’ or cession of ‘jurisdiction,* exclusfve. or

partial, not ‘heretofore obtained, over any such lands

: 22 a

or interests as he may deem desirable and indicate ac-

ceptance of such jurisdiction on behalf of the United |

States by filing a notice of such acceptance with the

_ Governor of such’State or in such other manner as may

be prescribed by the laws of ‘the State where such

lands are situated. Unless and until the’ United States

has accepted \jurisdiction over lands hereafter to be

acquired as‘aforesaid, it shall be conclusively presumed

that no such jurisdiction has been accepted.” Pe

Under this sectiorf the notice is required in order to |

give the United States any jurisdiction, whether exclusive,

- partial or concurrent, over such land. Adams ov. United

States, 319 U. S. 312.

It is undisputed that the Government has not accepted

jurisdiction over the Little Rock Air Force Base as requir-

ed by the quoted statutory provision. It follows, therefore, —

that if there is any regulatory power in the premises, it is

the power of the state to be exercised through its Com-

mission having the pertinent jurisdiction. _ °

The contract for electricity between the Government

and the Power Company was not executed on the air base.

and the electricity is not delivered to the Government on

the air base. It is delivered to the Government at a point

outside the air base, and then transmitted inside the air

base by the Governnient.

In the case of Penn Dairies v. Milk Control Commis-

sion, 318 U. S. 261, this Court stated:

“We may assume also that, in the absence of Con-

gressional consent, there is an implied constitutional

_ immunity of the national government from state taxa-.

tion and from state regulation of the performance, by,

federal officers and agencies, of governmental fun-

ctions. Ohio v. Thomas, 143 U. S: 276; Johnson v. Marys

land, 254 U. S. 51; Hunt v. United States, 278 U. S. 96;

Arizona v. California, 283 U. S. 423. But those who con-

tract to furnish supplies or render services to the

government are not ‘such agencies and do not perform

governmental functions, Metcalf & Eddy v. Mitchell,

269 U. S. 514, 524-5;. James v. Dravo Contracting Co.;

302 U. S. 134, 149; Buckstaff Co: v. McKinley, 308 U. S.

358, 362- 63 and cases cited; cf. Susquehanna Co. v. Tax,

‘Comm’n., 283 U. S. 291, 294; Helvering v. Mountain

. Producers Corp., 303 U. S. 376; 385-86, and the mere

fact that non-discriminatory taxation or regulation of

the contractor imposes an increased economic burden

on the government is no longer regarded as bringing

. the contractor within any implied immunity ofthe |

government from state tawation or regulation. Ala-

bama. v King & Boozer, 314 U. S. 1, 9, and cases cited;

. Baltimore & Annapolis R. Co. v. Litchtenberg, 176 Md. .

' 383, 4 A. 2d 734, sc, United States v. Baltimore & An-

napolis R. Co., 308 U. S. 525.

“Here the state regulation’imposes no prohibition of

the national government or its officers. They may pur-

* chase milk from whom and at what. price they will,

without incurring any penalty. See the opinion below,

148 Pa. Super. 270-71. As in the case of state taxation

of the seller, the government, is affected only as the

state’ s regulation may increase the price which the

‘government must’ pay for milk. By the -exercise of.

economic burden on the government, for it may be as-

sumed that the-regulation if enforceable and enforced

will increase*the price of milk'purchased for consump-

tion in Pennsylvania, unless the government jis able

* 24

_ to procure a supply from within the state, see Bald-

win v. Seelig, 294 U. S. 511. But in this burden, if Con-

gress has not acted to forbid it, we can find no differemt

or greater impairment of federal authority’ than in the ©

_ tax on sales to a gov ernment contractor sustained in

_ Alabama v. King. & Boozer, supra; .or the state re- :

' gulation of the operations of a trucking company in

. performing its contract with: the government ‘to trans--

port workers employed on a Public. Works Admire

istration ‘project, upheld in Baltimore & Annapolis R.

Co. v. Lichenberg, supra; or the local building regula-

tions applied to a contractor engaged ‘in tonstructing a

post office building for the Government, sustained in

Stewart & Co. v. Sadrakula, 309 U. S. 94.

“The trend of our decisions is not to extend govern-

mental immunity from state taxation and regulation—

_: beyond the government itself and government func-

tions performed by its officers and agents. We have

recognized that the Constitution . presupposes the con- . .

tinued existence of the states functioning in. coordina-

tion with the government, with authority in thé states

to lay taxes and to regulate their-internal affairs and

policy, and that state regulation like state taxation in-

evitably imposes some burdens on the government of

the same kind as those imposed on citizens of the United,

_ States within the state’s borders. And we have heid

“hat those burdens, save as Congress may act to remove |

them, are to be regarded as the normal incidents of -

the operation within the same territory of (a dual

system of government from which burdens is tobe —

implied from the Constitution which established the

’ system, see Graves v. New York ex rel O'Keefe, 306

U. S. 466, 483, 487.

““Gince the Constitution has left Congress free to get

aside local taxation and regulation of government c6n-

_ tractors which burden the government, we see no

i“

“3

basis for implying from the Constitution alone a re-

striction upon, such regulations which Congress has not

seen fit to impose, unless the regulations are shown

to be inconsistent with Congressional. policy. Even in —

the case of agencies. created or appointed to do the

government's work we have been slow to infer an im-

munity which Congress -has not granted and which .

Congressional policy does not require. Reconstruct:on

Finan€e Corp. v. Menihan Corp., 312 U. S. 81, and cases

cited: Colorado Bank v. Bedford, 310 U. S. 41, 53, and —

__cases cited; cf. Baltimore National Bank v. Tax*Com-

~ mission, 297 U. S. 209°. . .” 318 U. aie 269.°

“Hence, in the absence of some evide sce of an inflex-

ible Congressional policy requiring government con-

tracts to be awarded on the lowest bid despite ‘non-

compliance -with state regulations otherwise applica-

ble, we cannot, say that the Pennsylvania milk re- ~

gulation conflicts with Congressional legislation or

policy and must be set aside merely because it increases

the price of milk to the government. It would be no

more than speculation for us to “say that Congress

would consider the government’s pecuniary interest as

“which the state concededly ‘had power to enact, be- |

a purchaser of milk more important than the interest

asserted by Pennsylvania in the stabilization of her

milk supply through control of price. Courts . should

guard against resolving these competing considerations

of policy by imputing to Congress a decision which

quire clearly it has not undertaken to make. Further-

more we should be slow to strike down legislation

a. 26 |

cause of its asserted burden on the federal govern-

*. ment. For the state is powerless to remove the ill ef-

fects of our decisions, while the pational government,

which has;the ultimate power, remains free to remove

the burden.” 318 U. S. at 275.

_In the case at bar, the Gov ernment was not a party to

the proceeding. No penalty was. sought against the Govern-

ment, nor Was t -:re any attempt to order the Government

to do anything. -— ,

This is a proceeding instituted by the Cooperative

against the Power Company to prevent the Power Com-

- pany from encroaching on territory which had been as-. |

signed to the Cooperative by the state regulatory Commis:

sion. In its decision, the Commission did not attempt to

ail ca : ,

’ but’ merely enforced the regulations of the Commission

_ and the laws of Arkansas with regard to the rights of the -

_ Cooperative:and the Power Company and with regard to

. o

the contract between them.

The decision of the Commission directed no prohibi-

tion against the Government or its officers, and did not

- disturb or purport to disturb the contract which the Govern- °

ment had with the Power Compan¥ to furnish. electricity to

the air base;.nor did it have any effect on the price the

Government agreed to pay for electricity. There is no bur-

den, ecohomic or otherwise, placed upon the Government

_by the decision of the Commission. The Commission was.

merely applying the law of Arkansas to an Arkansas pub-

lic utility. The utility is now claiming it is not subject

to Arkansas law since it has a contract with the Govern-

ment —-*though no part of the contract is performed ‘or to

be performed on the air base.

-~ <

| eS ah

Furthermore, as shown above, Congressional policy in

‘such matters as this is to utilize the facilities of ‘state re-

gulatory bodies as set forth in Title 50, ‘United States Code,

§ 491 supra, and as plainly stated in- the contract between

the Government and the Power Companiy..

The Supreme Court of Arkansas in its apinion made

the following statement:

“The real question is whether the Public © Service

- Commission has authority to force the Government

to buy electricity from the tia for such is the effect

of the order.”

That court then proceeded to decide the case exclu-

. sively within ‘the limits of that question and ruled that |

the Arkansas Public Service Commission could not dictate _

to the Government from-whom, it should purchase elec-

tricity because oi the Supremacy Clause of the United

States. Constitution. There’ is no quarrel about the law

as ; applied to the narrow question set forth, by the’court be-

low. to decide. But, and this is the very crux of this whole

case, the question decided by the court below is not the

question presented for decision by this litigation. At no

time and in no way did the Arkansas Public Service Com-°

mission ever attempt to invalidate the contract between °

the Government and the Power Company. At no time did

.the Commission ever try to dictate to the Government from -

whom it should purchase electricity or place any restriction

on the Government in any respect concerning its purchase

of electricity or anything in cennection therewith.

_ The decision of .the Commission coheerned the rights

of the Power Company and the Cooperative with regar@

to their respective certificates_pf public’ convenience and

° . +

2 é .

ORT oT er Ls ea Ee Cn ee Ag NAR RCL OR < OF re eT CA rR

, is . . > °

. . e

under the laws of Arkansas.

Lal 2

. 28 : |

necessity, and the contract between the Power Company

and the Cooperative with regard to furnishing electricity. -

The case at bar is wholly unlike the situation in tne

case of Public Utilities Commission of California v. United

' States, 355 U. S. 534. In that case the California commission’ ”

‘required any contract for negotiated treight-rates between -

the Government and the carrier to be first approved by

. the California commission before such contract could be

effective. é

Nothing like. that exists in ‘the case at bar. The Ark- -

~ ansas Public Service Commission did not subjeet the .con-

tract. between the’ Power Company and the Government

to its proval as a condition to its validity or effective-

ness, nor did it place any requirement upon the Govern-

ment or ‘the Power Company before they’, could enter

into a contraet for electricity.

The case of Johnson v. Maryland, 254 U. 8 51, also:

relied on by the ceurt below is beside ‘the point. n that -

- case the state of Maryland sought to require J ohnson, a:

truck driver for the Post Office Department, to comply

with a state statute that he satisfy a state officer that he

was competent to perform the work for which he was em-

ployed by the Government to do and to pay a fee to the \

state for permission to do so. This Court in that case held

that the Maryland statute required qualifications in addi-

_.tion to those established by the Government. and was

. therefore invalid as applied to this employee of the Gov-.

ernment. The situation in the case of Leslie Miller v. Ark-

,ansas, 352 U. S, 187, is totally different from the situation ;

here, for.in that case the state of Arkansas attempted to

- require a contractor of the Government to: ‘meet certain

*. + @

eae

23 ;

state requirements before he could perform work for

the Government in Arkansas. It was held that this would,

give the state’ s licensing board a virtual power of review

_. over. the Government’s determination of “responsibility”

| ‘and’ would thus frustrate the expressed Government

policy oftselecting the lowest responsible bidder.. ©

In the instant case no attempt was made to review,

approve, supervise or in any way control or regulate the

__ power of the Government to contract with whom it pleased. *

The Commission held that the Power Company could not

violate its contract with the Cooperative and ignore the

laws of Arkansas merely because it had a contract with

the Government.

As the Cooperative held a valid certificate of public

convenience and necessity under the laws of Arkansas to

* supply electricity to a certain area and the Cooperative

had a valid agreement with the Power Company to fur-

nish the Cooperative the power to serve the area assigned 3

to it by the-Arkansas Public Service Commission, the

Pawer Company was simply ordered to keep a separate

meter record of electricity supplied to the respective ser-—

vice areas and, in effect, to account to the Cooperative on |

the basis ef the meter record. This, ‘the Commission cer:

below would admit — but,- unfortunately that court com-

__\,.~pletely missed the point. :

CONCLUSION

For the foregoing peasons it is believed that the rights

of the petitioner, First Electric Cooperative Corporation,

‘under the United States Constitution, specifically the Due

Process and Equal Protection Clauses of the Fourteenth

Amendment thereto, have been violated, and that.therefore

this Court should issue the writ of certiorari as prayed to

review the decision of the Supreme Court of Arkansas,

and thereupon to reverse it with directions to reinstate the

decision of the petitioner Arkansas Public Service Com-

. mission as approved by the Circuit Court of Pulaski

' County, Arkansas. - :

RESPECTFULLY SUBMITTED,

TOM GENTRY

‘117 National Old Line Building |

- ‘Little Rock; Arkansas

Attorney for Petitioners

Dated: March 3, 1960

‘a

APPENDIX

ARKANSAS PUBLIC SERVICE COMMISSION _

PRESENT: ,

Lewis M. Robinson: Chairman _At a session of the Pub-

J. M. Malone, Commissioner lic Service Commission -

__ John R. Thompson, Commissioner held in its. offices in

Little Rock, Arkansas,

. on November 25, 1958.

FIRST ELECTRIC COOPERATIVE. —s

_ CORPORATION cy el

. Complainant ) .

Vs. .. | &&#F or No. U-1285

ARKANSAS POWER & LIGHT co.

. "-. . — ‘Defendant

ORDER tad

This case inv olves the complaint of the. First Electric

. Cooperative Corporation, hereinafter referred to as “First

Electric”, complaining against the Arkansas Power &'Light

Company, hereinafter referred to as the “Power Company

serving electricity in a territory which was allocated by

this Commission to “Fir— Electric”. This allocation of ter-.

ritory has never been-changed by the Commission. The ser-

_ vjce complained of is furnished the United States Govern-

* ment; hereinafter referred to as the “Government”, at

what is known as the Little Rock Air Force Ba— - Before

the Air Force Base was icc cated upon the territory in ‘ dis-

“pute, the First Electric was serv ing electricity and the

. Power Company was serving electricity in their réspec-

tive divisions of. the territory. Both the First Electric and ©

the Power Company quitclaimed by identical instruments,

except as to description of power lines and real éstate, all

of their property~rights in the Air Base territory to the’

Government at the time of the commencement of the

building of the facilities. In the course of the develop-.

ment by the Gov ernmeht of its Air Force Base, -it develop-

ed what is referred to in the evidence as a’ housing area.

This housing area is lovated along either, side of the line |

_’, Separating the territory of the First Electric and the Power

Comgany as allocated by this Commission.

‘An issue developed in this matter to ‘the effect that

'. the First Electric, by the quitclaim deed given to the Gov-

ernment, which is Exhibit 3, abandoned and forfeitegl its

; Certificate of Convenience and Necessity granted by this

Commission to serve in ‘the: territory. ‘

= - The language of this po is not anaiide of this

interpretation and the intention of the parties thereto can-

not be so found. Exhibit 7 in this record is the contract

referred, to in said deed, which deed is referred.to above

as Exhibit 3. Exhibit 7 consists of a contract between the __

First Electric and the Gov ernment, dated May 20, 1954, and

be “numer DA- 03- -05(-eng- -2396. ° *

r .

“Section 1 (a) of this contract is as follows:

“(a) The Owner shall furnish all services, labor, ma-

« * terials, tools, and equipment necessary to perform the’

*. relocation and ‘or alterations of the following-described ©

* facilities and shall relocate such facilities in accordance

with the drawings, schedules, or. spectfications hereto

attached and made a part hereof. designated as’ Ex-

hibit A.” ; |

)

° J r

‘ . e *

bed .

2 | | 33

Attached to this contract as part of the Exhibit are draw-

-ings, schedules, and specifications referred to in this Sec-

tion as Exhibit “A”. The legend of which explains the lines

.on the Exhibits and refers to them as:

(1) Existing Power Line.

(2) Existing Power. Line to -be releiened.

(3) Existing Power Line ‘to be relocated with Con-

veyance of Real Property Rights to the Govern.

ment.

“@) Proposed Relocated Power Line.

and other notes which seem to have no bearing on this i,

_ question. This contract an— Exhibit “A” thereto, clearly

corroborates and establishes the clearness of the testimony ~

- of witness Crowell for the First Electric, ‘and witness Minnis |

for the Power Company. e

_-<Mr. Crowell, Manager of the First Eletttric, testified

that it ‘was -not his intention to abandon First Electric's

rights under its certificate of Convenience and Necessity,

- but that the deed only transferred title to the proper.

; Mr. Minnis, a witness for the Power Company, finally

concluded his testimony with reference to the deed given

by. the Power Company, wifich is identical to that given by

First Electric, by saying:

(Tr. 147) ; don’t ever intend to give any of Arkansas

_° Power & Light Company’s rights away, to

a be frank with you.”

Even if First Electric or the Power Company had in-

“tended to abandon: its privilege or obligatiori to serve in

the territory as allocated to them respectively, the power

there to to would not not exist under the law. Urider the

law only the Public Service Commission can allocate terri-.

_° tory and it alone can change these allocation orders.:There-

fore, the contention of sale and abondonment of the ter-

' ritory by either of the parties must fall.and the territories

-as allocated remains the same until changed by the Com-

‘mission.

Before the development-of the huusing area by the

Government, the Power Company had entered into a con-

tract with the Government to deliver at a certain point in

the Power Company's territory, electricity to be used by

the Government through: the facilities on its own distribu-

tion.system to serve the Air Force Base. This contract

which is Exhibit No. “D” to Exhibit 1, contains a para-

graph ween “Paragraph 5”, which provides:

“PUBLIC REGULATION AND CHANGE OF RATES.”

(a) “Public Regulation. Service furnished under this: Con-

tract shall be subject to regulation in the manner and

to the extent prescribed by law by any Federal, State, or

local regulatory Commission having jurisdiction.” |

At the time of the dev lopment of the housing area,

the contract between the Power Company and the Govern-

ment, herein referred to as Exhibit “D” to Exhibit 1, was

amended to provide a specific rate or charge for electricity

used in the housing area. The contract as amended pro-

vided that a metering point be established at the place

- where electricity. enters the systems serving the housing

area,-a part of which area being herein in dispute. This

provision of the contract clearly separates the Electric

“power and energy supply to the housing aréa from the

'. other operation of the Air Force Base, and clearly simpli- -

fied the task of this Commission to arrive at a solution .

to the problem presented to us.

According to the testimony before us, a street or public

way separate the territory heretofore allocated to the

respectivé litigants in this cause, and-brings us to the ques-

tion of determining the rights of the respective parties

under the law of the State of Arkansas.

Territorial disputes between, Electric Cooperatives and

the Arkansas Power & Light Company are nothing new

to this Commission, The first dispute came to this Com-

mission’s attention in the case of Farmers’ Electric Coopera-

tive Corporation v. Arkansas Power & Light Gompany, ©

which will be referred to herein as the “Trimfoot .Case”.

When this case reached the Supreme Court (220 Ark.

652), the Court said: “No doubt the General Assembly

failed to foresee the, conflict here presented when Act ,

342 was being considered, else some prov isions would have

‘been made for the awkward situation.” After the decision

of the Court in the “Trimfoot Case”, the legislature in 1955

attempted to stabilize the territory allocations by the.Com-

mission to the different suppliers of electricity and passed

‘Act No. 85. More difficulty arose after passage of this Act’

and the legislature in 1957 amended “the law again in the

passage of Act 103. A pertinent part of this Act is as fol-

lows: “SECTION 1. Section Two (2) Paragraph Eight (8)

of Act 342 of the Acts of the General Assembly of Ark-

ansas of 1937, as amended by Act 85 of:the Acts of the

. (General Assembly of Arkansas of 1955 (Arkansas Statutes

77-1102 (8) is amended to read as follows: °

- “Rural Area” means any area not included within the

boundaries of any incorporated or unincorporated city,

town or village having a population in excess. of

, twenty-five “hundred (2,500) inhabitants, and includes

-both the, farm and nen-farm population thereof. The

determination of a rural area shall be made as of the

time the Arkansas Public Service Commission or pre-

decessor Commission’ or Department of Public Utilities

grants a Certificate of Convenience and Necessity to a

Rural Electric Cooperative Corporation organized

under said Act 342 of 1937; and said Corporation shall.

- not be ousted from service in said rural area or de-

. prived of the right to continue to provide electric ser-

vice in said rural area subsequent to the grant of a

Certificate of Convenience and Necessity by the Ark-

ansas Public Service Commission.”

“SECTION 3. * * * Notwithstanding the provisions of

this Act or any. other provisions of law, or the terms

of any certificate of convenience and necessity, fran-

, chise, permit, license or. other authority granted to a

public utility by the State or a municipality no: pub- *

lic utility-shall furnish or. offer to furnish electric ser-

. vice at retail and not for resale in any area heretoforé .

allocated by the Commission to an electric cooperative

corporation pursuant to Section 31 of Agt 342 of the

_ Acts of the General Assembly of 1937. (Arkansas Sta-

. tutes, Section 77-1131).” .

“SECTION 4. Nothing in this Act shall be parser

‘to prohibit or ‘prevent a ‘rural electric cooperative

corporation and another supplier of electric service

from entering into and carrying out a voluntary agrec- |

ment for the exchange of facilities.”

Regardless of the wishes of any of the parties. hereto,

the law as. declared by the legislature must be complied

with. It is not within the power of this Commission to abro-

* gate the law above quoted and make a ruling to satisfy

parties-litigants. li the law as declared in this Act and

interpreted in this order should inconvenience the parties

‘hereto, then Section 4 above quoted is ample legislature ~

guidance to an amicable way to eliminate ‘any awkward-:

ness in the situation that has arisen: because of allocated

territory in the Air Force Base Area.

The Power Compeny attacks the validity of pan 103

of the 1957 legislature on the grounds that it did not re-

ceive a sufficient number of votes for passage. Even though _

this Act be held by the courts to have failed passage, the

law in existence before the passage of this Act required

the allocation of territory to the different suppliers of

électricity. The territory, as heretofore said in this order,

was allocated to the’ respective parties and they were serv-

ing therein. We now see’no reason to change this allocation

irrespective of Act 103. —

Since the contract between the Government and the

Power Company provide for metering the power flowing

into the: housing.area, it seems a simple matter to meter

at the point where the transmission lines cross the line |

separating the territory allocated to the respective litigants.

If the power is so metered under the contract between the

Power Company and the First Electric whic: is in evi-

dence as Exhibit 12, the Company agrees to sell and de-

liver to the First Electric such power as the First Electric

may require for resale to service the electric requirements

of consumers in its legally assigned territory. |

The Power Company belabored this record with its

theories about the wishes of’the Government and ‘the

Government's integrated power system at the Air Force

Base. -By ‘such metering, it seems relatively simple that

. 38 ? | t-

there would be no inconvenience to the Government and

.no material change in its transmission facilities.

IT IS, THEREFORE ORDERED THAT:

The Arkansas Power & Light Company deliver under

its contract, through meters along the line separating the _

territory of.the Power Company and the First Electric Co- |

operative Corporation, power to First Electric te be used

in that part of the housing area of the Government's. Air

_ Force Base as is necessary to serve the area, and that the

bills be adjusted for the same between the said Arkansas _

' Power & Light Company and the First Electric Cooperative, —

Corporation so that each is made whole for services and

power furnished in their respective area irivolved in these ~

proceedings. ,

This order wl become effective on and after 15 days

from the date hereof.

BY ORDER OF THE COMMISSION

This 25th day af November, 1958.

(SEAL)

_ /s/ Tommie Castillow

TOMMIE CASTILLOW, SECRETARY

/s/ Lewis M. Robinson

LEWIS M. ROBINSON, CHAIRMAN

“* 19/3. Mi. Malone

J. M. MALONE, COMMISSIONER

4s/ John R. Thompson

JOHN R. THOMPSON, COMMISSIONER

= °

- 49 €.

PULASKI CIRCUIT COURT, THIRD DIVISION . -

: ©

MARCH TERM, 1959

MONDAY; MARCH 30TH, 1959.

Arkansas Power & Light Company, ..... ‘ ... Petitioner, -

Vs. 46505 | ar

Arkansas Public Service Commission and ;

First Electric Cooperative Corporation, ..... Respondents. -

JUDGMENT

On this day comes on for consideration, by the Court:

the petition of the Arkansas Power & Light Company to

review and vacate the order of the Arkansas Public Service

Commission entered on the 25th day of November, 1958,

in the proceeding before the said Commission designated as

Docket’ No. U-1285, the said cause having been presented

to this court upon the said petition to review and vacate,.a

certified copy of the record of. the proceedings before the

said Commission and briefs presented to the Court by the

petitioner and the First Electric Cooperative Corporation;

and the Court being well and sufficiently advised. as to all

‘Matters of law.and fact herein doth find that the said order

_ Of the Commission was issued in regular pursuance of its.

authority and that said order does not.violate any rights of —

the petitioner under the Constitution of the United States

or the State of Arkansas and that the Commission’s ortler }

;

is supported by substantial evidence, free from fraud and __

- not arbitrary. | i | .

IT IS, THEREFORE, BY THE COURT CONSIDER- .

ED, ORDERED AND ADJUDGED that the. Petition to re-

view and Vacate the Order of the Arkansas Public Service

- Commission dated November 25th, 1958, be and the same

.is hereby dismissed. |

This judgment made and entered on the 30 day of

March, 19599,

(signed) J. Mitchell Cockrill *

Circuit Judge

SUPREME COURT OF ARKANSAS °

ros ‘ No. 1940

“ARKANSAS POWER & LIGHT COMPANY | .. Appellant,

'. ARKANSAS PUBLIC SERVICE . |

‘+: * COMMISSION, et.al............... Sete ees :. Appellees

Opinion Delivered — - Nov ember 2, 1959

_ Appeal. from Pulaski Circuit Court, Third Division

Reversed

Chief Justice Harris and Justices

Ward and Johnson dissent

‘SAM ROBINSON, Associate Justice

The United States Government purchased. several

thousand acres in Pulaski County to be used as an Air

Force Base. Prior to this purchase by the Government, the

right. to sell electricity in a portion of the area had been

allocated to the First. Electric Cooperative Corporation, .

hereinafter called the Co-op, and the right to sell electricity

in the other portion had been allocated to the Arkansas

Power & Light Company, hereinafter called the Power

Company. After the Government acquired the land it re-

quired the Co-op and the Power Company to remove all

their electrical equipment- of every kind and description

from the area and paid them for doing so. Subsequently

the Government constructed on the property an electrical

distribution system that it owns and operates. In 1954 the /

Government contracted with the Power- Company for the’

purchase by the Government of electricity to be used at the

. Q

/ .

Air Base. The electricity is supplied by the Power Com-

- pany at its substation located in an area previously allocat-

ed to it by the Public Service Commission and adjacent ..

to the Air Base property. |

_In 1957 the Government began construction of several

hundred housing units for Air Force personnel. Some

of. these ‘houses are located in the area formerly supplied

with electricity by the Co-op before the Air Base was

established, and part were constructed in the area which ©

had been dupplied by the Power Company under the allot-

ment made before acquisition of the land by the Govern-

ment. The Government uses electricity Obtained under a

1957 supplemental contract with the Power Company to

supply all the housing units within the Air Base area.

This litigation was started when the Co-op filed a com-

plaint with the Arkansas Public Service Commission ask-

ing that the Power Company be ordered to cease and desist

from furnishing electric power to the Government to be _

_used in supplying the Government housing units located

in that part of the Air Fr rce Base.which had been serviced

by the Co-op before acquisition of the property by the ~

Government. Of course, the effect of such an order would

be to enable the Co-op to supply electricity to the area

mentioned. The Commission in effect granted the petition

but attempted to simplify the matter by ordering the .

- Power.Company to meter separatély the electricity going

into that part of the housing units located .on property

formerly supplied by the Co-op.and to settle With the Co-op’

by charging it at the rate it pays the Power Company for

electricity and giving it credit for the price neceived from

the Government. A meter or meters would have to be

installed on Government property and made a part of the

i : a: |

Government distribution system. Such - an arrangement

would give the Co-op a handsome profit without any in-

vestment whatever on its part. It was shown that the Power

Company has spent several hundred thousand dollars to

. enable it to supply-electricity to the Air Base. The’ circuit

court affirmed the order of the Commission.

The real question is whether the Public. Service Com-

_mission has authority to force the Government to ‘buy elec-

fficity from the Co-op, for such js the effect of the order.

The Government wanted to construct in the area its own .

-electricial distribution system: The Power Company and

the Co-op were required to remove their equipment from *

the property. In contracting with the Power Company for

electricity, the Government required the Company to pro-

vide certain facilities to guarantee as nearly as possible

an uninterrupted supply of electricity. The Government: —

then tied its facilities in to those constructed by the Power

Company. It was shown that the Government initiated the

negotiations with the Power Company to purchase eléc-

tricity. A fair abstract of the testimony of Mr. H. F. Minnis,

Vice-President of the Power Company, on this point, as

prepared by appellant, is as follows:

“The negotiations first stertied on February 5, 1953

when the Corps of Engineers came to us about relocation

or removal of our existing facilities in the Air Base area

and the possible relocation of our 115 kv transmission.

line. That was ali consummated wy the Corps of Engineers,

but later on February 25, 1953 Colonel Ben Harvey of the

Corps of Engineers asked our Company for a conference

with reference to a power supply. The government solicited

us to furnish.the power supply and set a tenative date for

, & conference on October 8, 1953. On that date we had a

Shae “

ot é .

meeting and went into all requirements upon the power

‘supply. In these negotiations the’government laid down

specifications as to the material and kind of power it. would

need to serve the Air Base and the type of load it would

be.' They requested a source-of power from our trans-

mission. system and that the sub-station be located adjacent

_ to the Air Base property but not on it. They requested that

_ the service be metered and the point of delivery be at the

south boundary line of the Air Force property so that from

that. location the Air Force would build its entire distribu-

tion system to serve the requirements of the Air Base. . ...

Oy,

“We built a 115 kv transmission line adjacent to the

south border of the Air Base property fed directly from

our 415 kv transmission system, that is energized from two

ways so that they could have continuous service so far as

primary distribution voltage was concerned. In order to do’

that we built a new eS it line’ from Little Rock

to Jacksonville completely’Shielded up to this sub-station

‘ site and put; in an oil circuit breaker that would protect

the rest of the line towards Newport so if there was a fauilt

beyond Jacksonville to Newport it would not afféct the

Air Base. The contract was reduced to writing as to.the,

electric service specifications in which the Government

stated the amount of capacity ‘and energy they wanted

- and the delivery voltage. The contract provides that the

premises to be served is the Little Rock Air Force Base.

The electric seryice specifications are on page 10 of the

contract, showing 7500 kilowatts estimated maximum de-_

mand and 32,400 kilowatts estimated annual consumption.

‘It provides that the point of delivery of service should be

_ at thé Base boundary as shown on Exhibit D'to the contract.

Exhibit, A to the contract, or the specifications of the sub-

“s *

45 =

station we were required to furnish the Government, con-

‘sists of a schematic diagram which showS exactly how. to

build the station and shows the point of delivery and that

the government would have as near a continucus source

of supply as possible. From the point of delivery to the _

_ south boundary indicated on Exhibit A to the contract,

the government. bwit their entire distribution system #o

serve the whole Air Base. On the map introduced in evi-

dence the sub-station site is shawn in Section 18 adjacent

to the south boundary of the Base. and is shown as a small

green square south of the Air Base boundary. The 115 kv

_ line-is fed frorti two ends and originated at the Dixie sub-*

station. at one end and. the Newport sub-station at the

other. We built an entirely new line from the Dixie ‘sub-

station to the Air Base. I don’t know the exact cost of the

construction, but | judge it is approximately ten miles

and costs about $25,000 a mile so it is approximately $250,-"

000. It is a heavy: line, big conductor, sae mad shielded. ‘

“Our qub-siation Was built according to’ government

requirements, and the line was built according to govern-

ment requirements’ set forth in the contract. The govern-

ment gets transmission line connection at our sub-station ~

right at the terminus ofthe new line which’ we built from

the sub-station. On towards Newport the old line goes in

and that is the reason they-insisted wé put an oil circuit

breaker there so if there is a fault between the sub-station

~ and Newport “it would not interrupt sérvice to the Air

Base. All of this. was done to meet requirements of the

United States. Cost of te sub-station was negotiated, and .

the government paid approximately three-fourths. of it and

the power company paid the other one-fourth Jess any

salvage we might get if the government discontinues ser-

46 ° ‘ 8

vice. It resolves itself down into a. connection charge of

$85,860, and’ this is detailed in the contract.

“Under the terms of our agreement-with the govern-

ment they will get back the connection charge in electricity

“as we give them credit for ten per cent of the monthly.

billing until they recover their money. I.am familiar with

the government's distribution system within the Base-and

have been over it. From: the point of delivery at our sub-

station the government built two circuits. of heavy con-

ductors, about 500,000 circular mills: aluminum to a sWitch-

ing station, which is about three-fourths of a mile north-

west from the sub-station-in the Air Base. From there it

goes into the switching station, and they installed three

circuit breakers. From these circuit breakers go three dif-

ferent 13 kv:lines that radiate out over all the Air Base pro-

' perty on which are installed air break switches which per-

mit the government to sectionalize any part of these feeder |

circuits and operate them as a loop. Where they have a

_ small lateral over one of there big feeder circuits. they have

installed fuse switches so if there is a fault enone of the

~ small laterals it does not intérfere with fe from the

main feeder and if ‘there is a fault on the er circuit

they ‘can sectionalize it quickly and feed the rest of the

area from the other circuits. To protect it from lightning,

which is quite %problem,: they shielded their feeder cir-

cuit just as we shiékded our 115 kv line. Their whole grid

system of Cistribution - voltage, except for some laterals,

which are. not complete, is shielded. The government's en-

tire system at the Air Base is what is ordinarily known as

a loop system, and you can-get service three ways from

almost any portion of it. This was done to preserve the

continuity’ of service as far as is possible.’*

Although it does not appear that the United States ©

ves has: acquired jurisdiction pursuant to Title 40, $255, USCA, .

in the circumstances oNhis. case the Power Company can-

not be prevented trom selling electricity to the Govern- .

ment for use over the entire area of the Air Base. The

‘Air Base is a facility established for a national purpose.

In the case of Public Utilities Commission of California v.

U. S., 355 U. S, 534, 24L. ed. 2d 470, 78 S. Ct.4446, the prin-

ciple was reiterated ‘by the United States Supreme Couft

that state’ laws or their administrators cannot interfere

with the carrying out of a national purpose. There the |

court held invalid a state statute authorizing the state com-

mission to approve rates charged by common:carriers to the

: United States as being an unlawful interference with the —

activities of the Federal Government. If a ‘state cannot. '

regulate the rates a utility charges the Federal Government,

‘then it is hard to understand how*the commission can en-

join the utility company from furnishing all the service.

the Government requires.

In 1958 an issue: aimost identical with the one in the

case at bar’ was before the North Dakota Public Service

Commission. Re Souris Pivcr Telephone Mutual Aid Corp.,

24 PUR 2d 84. There the question was whether the public

service commission should revoke a certificate of conven-.

‘ience and necessity. theretofore granted to the + North-

western Bell Telephone-Company and grant such a cer-

tificate to the Souris River Telephone Mutual Aid. Cor-

poration. The commission held that it had no authority ‘to

; dictate to the Goverriment as to the persons or corporations

. ‘ é +) .

e -

with which. it should contract for utility facilities. In that

case it was said: “The thing to be :emembered is that the °

responsibility for this decision [the obtaining of outility

facilities] is with the Secretary of the Air Force and no

one else. if it was to be said that a company not having

an established service area must obtain a certificate from

the commission before it can enter into a contract with

the secretary, then it follows that the commission would

also have the power to deny the company such authority

and thus directly interfere with the discretion rested by

* Congress in the federal ‘officer. The’ federal statute does

not require that the company with whom the secretary de-

sires to contract also obtain a certificate of authority from

a state commission and if Congress had intended such to be

the case it would have so stated.” The Commission was

referring ‘to USCA, Title 50, $491, but Title 10, $9773 is’

equally applicable. It provides: “The Secretary of the Air

Force shall determine the sites of such additional perman-

ent air bases and depots in all s.rategic areas of the United

States 2nd the Territories, Commonwealths, possessions, .

and holdings as he considers necessary. He shall also deter- .

mine when the enlargement of existing air bases and depots

is necessary and for the effective peacetime tFaining of

the Air Force. ... : At each Air Base or depot established _

under this section the Secret..ry shall remove or remodel

existing structures as necessarv; do necessary grading: and |

provide: buildings u!‘lities. communication systems, land-

ing fields and mats. roads, walks. aprons. docks, runways.

facilities for the storage and distribution of ammunition.

fuel, oil, necessary protection against bombs, and. all ap-

purtenances to the foregoing. ., .” (Emphasis supplied )

In Johnson v. Maryland, 254 U. S. 51, 65 L. ed. 126, 41

S. Ct. 16, Mr. Justice Holmes quoted from Osborn v. Bank

of U. S., 9 Wheat. 738, 867, 6 L. ed. 204, as follows: “Can

a con‘.actor, fer supplying a military post with provisions,

be restrained from making purchases within any state, or

from transporting the provisions to the place at which _

the. troops were stationed? Or could he be fined or taxed _

for doing so? We have .not- yet heard these questions

answered in the affirmative.”

And in the Osborn case the court- goes on to say: “It

is true, that the property of the contractor may: be taxed,

as the property of other citizens . . . But we do not admit

that the act of purchasing, or of conveying the articles pur-

chased, can be under state control.” Likewise, in the case

at bar the Public Service Commission cannot designate the

utility company from whom the Government must pur-

chase electricity, nor can the Commission dictate the area

of Government owned property in which the Government

must use the electric aed it has purchased.

. The Die argues, also, that under the terms of the

contract between the Power Company and the Govern-

ment, regulations adopted by the. Public Service Commis-

sion shall prevail. The cont.act provision in question’ is as

_ follows:

“5 PUBLIC REGULATION AND CHANGE OF

RATES. (a) Public regulation. Service furnished under

‘ 50 ;

this contract shall be subject to regulation in’ the manner

‘and to the extent prescribed by law by any Federal, State,

or local regulatory commission having jurisdiction. If.

during the term of this contract the public regulatory com-

mission having jurisdiction receives. for file in authorized

‘manner rates that are higher or rates that are lower than

these stipulated herein for like conditions of service, the

Contractor agrees to continue to furnish service as stipu-

lated in this contract and the Government agrees to pay

for such service at the higher or lower rates from and after

the date when such rates are made effective.”

Disregarding the question of whether the. Co-op can

properly invoke a provision of the contract between the

Government and the Power Company, the above quoted

provision of the contract appears to apply only to rates.

But in any event, it is not subject to-the construction that

the Government. cannot do the ‘principal thing it was

seeking to dO, and, that was to buy electricity from the

Power Company for use on the entire Air Base. |

Reversed, with directions to dismiss the complaint.

. i 5)

SUPREME COURT OF ARKANSAS

No. 1940

ARKANSAS POWER & LIGHT COMPANY ... Appellant

ARKANSAS PUBLIC SERVICE

Ce, = weyeeer ee eegedageeecioes | Ans,

oe Delivered — - Nov ember 2, 1959

APPEAL FROM PULASKi CIRCUIT

. COURT, THIRD DIVISION

DISSENT

_ PAUL WARD, Associate Justice.

There is nothing in the record in this case to show that

the United States Government cared which Company.

_ furnished its eleetricity, but; as pointed out in another dis-

‘sent, the record does show that it was willing to abide by |

State regulations.” This, I submit, is the reasonable and |

sensible atiitude that the Government should have taken a

and did in fact take.

2°

It is apparent to me that this case is before us now -

in its present status simply because appellant contracted

with the. Government before the question here involved

could “be raised. Putting it, another way, ‘it appears that

‘appellant never dis¢losed. to the Government that any

question of assignment. of territory might be involved. On

52 :

this point consider the testimony of appellant's | Vice-

‘President: :

“Q. The question that I asked you is this: Did you. teil

the government at the time that they contacted you

concerning the power for the Air Base that you

did not have a Certificate of Public: Convenience

and Necessity to.serve the entire Air me

A., In the negotiation the Gov ernment gave us 5 the

_ point of delivery they wanted. We looked at that

_and saw that it was in an area that was allocated to:*-

' the Arkansas Power and Light.

Q. Now then, answer my question. Did you tell them

the First Electric Cooperative had a Certificate of

Public Convenience and Necessity to serve the

area? ;

A. Did I tell them? ee

Q. Yes, sir. :

“A. No, sir, I did not.

Q. Do you know of your own knowledge, Mr. Minnis,

whether or not the Contracting Officer had auy idea

who had ‘the: “Tight to ‘serve that territory under a

Certificate of Conv enience and Necessity fron. this

» Commission?

A. I think I know the Contracting Officer had the right

to sell the service at the point he Sold it and I think _.

he knew the U. S. Government can a what they

dern please with it after they get it. ;

Q. That is not the ‘question T asked. you wit la am going

to stay here all day until I get an answer ito my ques-

tion if the Commission will permit me. My question

was: You did not know whether or not the Con-

tracting Officer knew that the First Flectric Co-

operative had a right to serve a part of that te_ritory

at that time when you entered into the vontract, do

‘’ ‘you? : :

A. I.don’t think these Contracting Officers are dumb.

We have deait with them a lot of i es and they

knew all about théir business in a big way and they

came in with their requirements and we met them

on that basis. }

. Q. And you did not tell them that vou did not have a

Certificate of Necessity to serve all the territory in

thesAir Base?

A. We have a certificate to serve the Base at the place

we did serve it and he knows that.

— Q. But you c’Ynot*tell him that you did not have a

Certificate of Public Convenience and Necessity to

serve all of the-Air Base, did you? —

A. It was not neces’ary from our nce ania

Q. You did not do it whether it was necessary or not,

did you? Why are vou so reluctant to answer?

a oe : -

| ie Sra a

A. Because we did not try to tell the Government how

to run their business. | |

Q. Just answer my question, did you or did you not?

‘A: They asked us for a point of delivery and it was at

-a place we had a right to serve. We sold it there and

they took it from there.

; :

: Q. You did not tell them? _

A. I told them just exactly what I told you.

Q. And that was no, I believe you said.

A. Sir?

lies . |

A. I said we had a right to serve at the place we did

serve and they took it from there.” _

Q. That was no.

55 :

SUPREME COURT OF ARKANSAS

No. 1930

ARKANSAS POWER & LIGHT COMPANY, .. Appellant, -

ARKANSAS PUBLIC SERVICE

CERRRRIEBIOM, of ah, . 2005 ic ce icccescee: .. Appellees -

OPINION DELIVERED

Appeal from Pulaski Circuit Court,

Third Division.

DISSENTING OPINION

JIM JOHNSON, Dimestans Sutton

Ip respectfully disserting to the majority opinion, |

~ want-to state at. the outset that I do not disagree with any

of the cases cited therein. The cases, as I view them, simply

do not touch top, side nor bottom the issues involved in

this lawsuit. This dissent is based wholly upon ‘the clear

language .of Sectiori 5 of the Contract between the United

States and the Arkansas Power & Light Company. This

section is headed: “Public Regulation and Change of

Rates.” The title alone shows that two subjects are covered

in Section 5: (1) Public Regulation; and (2). Change of ‘

Rates. The first sentence in Section 5 is as follows:

“Service furnished under this contract shall be subject

to regulation in the manner and to the extent pre-

. .

scribed by law by: any Federal, State, or local regula-

tory commission having jurisdiction.” (Emphasis Sup-—

plied). ale ‘ rs Weta,

I can. place only one interpretation upon this sentence

and that is the United States voluntarily submitted to the

regulations of the commission having jurisdiction. In read-

ing Section 5 and the contract in its entirety 1 am unable

to find one word indicating that it was the intention of the

United States to limit the jurisdiction to which it volun-

‘ tarily submitted to rates alone. Section 5, as I:see it,. (1) -

submits the United States to general public utility regula-

tion, including (2) regulation of rates.

It must be conceded that under our law the Public

Service Commission is the “regulatory commission having

jurisdiction.” This being true, I gan see no good reason for

abandoning our well settled rule that we only teview the

. following four questions on appeals from the Public Serr

vice Commission:

1. Is. the Commission’s order supported by substantial .

evidence?

| yada Commission's order free from fraud?

3. Is the Commission’ s ender arbitrary?

4. — the order of the Commission-v1 olate any y right .

of the appellant under the Urited States. or State

Constitutions? See: Inc. Town of Emerson v. “Ark.

Public Service Commission, 227 Ark. 20, 295 S. W.

+ 2-778: ee. araee

Nowhere in the record is it seriously: indicated that

any of the above questions’ could be answered in the af-

firmative. In fact, I.am convinced that: the Commission's

Order is the only logical conclusion that could possibly

be reached in this case under the. circumstances. The

United States indicated its recogriition of the clear terms

of its contract by its failure to intervene in this lawsuit. The

; majority opinion, in effect, is saying that this does not mat-

ter: Arkansas Power & Light Company is entitled to all

the privileges and irnmunities of the United States Govern-

" ment, yea even entitled to rights that the Government itself

is not claiming. The states of this Union -have .already,

voluntarily or otherwise, relinquished too many ‘rights to

the central Government without our forcing ypon a con-

tractor with the Gove rnment rights which the Government

has voluntarily relinquished to our State utility regulatory

authority’

Fo reasons stated above, I respectfully disscit. *

IN THE SUPREME COURT OF ARKANSAS

ARKANSAS.POWER & LIGHT re oe ‘i

COMPANY RN ST ee Jietinaaesduvnes APPELLANT

“ARKANSAS. PUBLIC ‘SERVICE eS ete

EE et ee iy attandend pete APPELLEES * ,

ee PETITION F FOR REHEARING

‘Come the @pellees and move the court that they be

ae ee granted a tehearing in the above styled action, and for

«, “* ,Cause,state: -' a.

/ | | ; doe >

' ‘The court’s decision deprives. the. First Electric - Co-

operative of its property without que process of law in

violation of U. S. Const. Amend. XIV, $1 1, and Ark. Const.

‘Art. 11, § 8 8. ia .

. wy .

The. court’s decisioti denies to the First Electric Co-

operative Corporation the equal ‘protection of the Jaws -

guaranteed by U.S. Const. Amend. XIV, §} and Ark. Const. |

Art. II, § 3.

| © Bisa as

The court erred in construing the contract between

“the United States and the Arkansas Power, & Light Com-

pany to mean that the United States had not submitted to

the regulations of the Arkansas Public Service Commission.

the court erred in assuming that the regulations of the

Arkansas Public-Service Commission would necessarily

interfere with a‘federal furiction when, in fact, the United

. ¢ Y

ae as 59

States has evidenced its complete indifference in this con-

nection by its failure to intervene or in my, other way to.

show an interest in this proceedi

The cour€erred in failixg to give weight to the fact .

that the United States apparently did not know of the

_ existence of the contract betWeen the. First Electric Co-

. operative Corporation. and the Arkansas Power. & Light

_ Company and the rights of the First Electric Cooperative

Corporation under its certificate of public convenience and

hecessity when the United States — with the Ark-

. ansas Power & Light Company. \ : ee

7 WHEREFORE, Appellee orad that a yeieerinn be

granted, and that the nals of the trial c@urt be affirm-

ed.

ad Js) TOM GENTRY a.

'-: TOM GENTRY... °

. Attorney ‘for Appelldes -

a _ 117 Nat'l Old Line Bldg.

i eae Little Rock, Arkansas *-

CERTIFICATE . "

I, Tortf Gentry, the attorney for appellees: do certify

‘that I have carefully read and considered the.opinion of

the court herein; that I verily, believe that the court has

‘committed error as above set forth’ in the petition for re-

hearing; that said. Petition is meritorious, and is not filed

for the purpose of delay, but in order that justice. may be

e- served. A copy of this pane has been servéd on opposing

counsel. Lae _

/s/ Tom Gentry

_TOM GENTRY

» 60.

U. S. Const. Amend. XIV, §1: a

“All persons born or naturalized in the United States,

and subject to the ‘jurisdiction thereof, are citizens of

‘the United States and of the state wherein they reside.

No. state. shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the —

ote ” United States; nor shall any state deprive any person

‘. of life, liberty, or property, without due process of law;

-_ nor deny to any person. within its jurisdiction the equal "

~protection of the laws.” io

-U. S.-Const. Art. VI:

“1. Atl debts contracted. and engaguhents entered

into, before the adoption of this Constitution, shall be

@=5 valid against the United States under this Constiti-

tion, as under the confederation.

“2. This Constitution, and the laws of the United

States which shall be made in pursuance thereof; and

- all treaties made, or which shall be made, under the__

authority of the United States, shall be the supreme

law of the land; and the judges in every state shall be

bound thereby, anything in the Constitution or laws

of any state to the contrary notwithstanding. |

“3 e senators and representatives before mein-

ioned, and the members of fhe several staft legisla- ;

tures, ona all executive and judicial officers, both of -

the United States and of the several states, shall be

' bound by oath or affirmation, to support this Con-

- stitution; but no religious test shall ever be required

as a qualification to amy office or public trust under

the United States.” a A

: 61 | |

‘UNITED STATES STATUTORY

"PROVISIONS INVOLVED

- a ad :

Title 10, United States Code, §9773; Neen Wh

“(a) The Secretary of the Air Seeee shall determine

the sites“of such additidnal permanent air basés and

depots in’ all strategic areas of the United States and

‘holdings as he considers necessary. He shall determine

‘when the enlargement of existing air bases and depots

is riecessary for the effective peacetime training of the

Air Force.

“(b) In determining the sites of. new air bases and

depots, the Secretary shall.consider the following re- .

gions for the purposes indicated —

(1) the Atlantic northeast, for training in cold

weather.and in fog;

(2) the Atlantic squtheast and Caribbean areas,

for training in long-range ,operations, especially

those incident to reinforcing the defenses of the |

te Panama Canal; ~

ae Be (3). the squtheastern United States, to provide a

depot necessary to maintain the Air Force;

(4) the Pacific northwest, to establish and main- .

)

tain air communication with Alaska;

(5) Alecks. . for ‘training woler conditions , of

extreme cold; | . .* :

(6) the Rocky Mountain area, to provide a depot

necessary to maintain the Air Force, and for train-

ing in operations from fields in high altitudes; and

‘

A7) other: regions, for the establishment of inter-.

mediate air;bases to provide for transcontinental

movements of the Air F orce for maneuvers.

“(c) In selecting sites for air bases and depots cofter-

ed by this section and in determining the alteration

‘or enlargement of existing air bases or " depots, the

Secretary shall consider the need —

”

(1) ‘to form the’ nucleus for concentration of Air

Force units in time of war;

(2) to permit, in time of peace, training and effec-

‘tive planning in each strategic area for the use and

- expansion of commercial, municipal, and private

flying installations in time of war},

(3) to locate, in each strategic area in which it is

considered necessary, adequate storage facilities

for munitions and other articles necessary to fac-

‘ ilitate the movement, concentration, maintenance, ‘

-and operation of the Air Force; and . oe

(4) to-afford the maximum warning against sur-

prise attack by enemy aircraft upon aviation of

the United, States and its necessary installations

consistent ‘with maintaining, an connection with

existing or contemplated’ landing fields, the full

power of the Air Force for operations. necessary

in the defense of the United States, and in the de-

fense and reinforcement of .the Territories,-Com-

monwealths,. possessions, and holdings.

“(d) In carrying out this: section, the Secretary, on.

behalf. of the United States; may acquire titie, A

; simple and free of encumbrance, to any land. that ne

considers necessary —

R 6- ma

“ (1) .by savasting title without cost to the United

States; ae | 7

(2) by exchanging military ‘reservations or parts

thereof for that land, upon the written ee

of the President; | OF,

(3) _ by purchase or condemnation, if acquisition

by gift or exchange is impracticable. = 8 . . *

“‘tfe) The Secretary may,. by purchase, gift, lease, or,

otherwise, acquire at desired locations bombing and,

machine gun ranges necessary for practice by, and the

training of, tactical units.

“est each air base or depot established under this

section, the Secretary shall remove or remodel exjst-

ing structures as necessary; do necessary grading; EY

provide buildings, utilities; communication systems, .

’ landing fields and mats, roads, walks, aprons, docks, |

runways, facilities for the storage and . distribution of

‘ ammunition, fuel, oil, necessary protection against

‘bombs, and all appurtenances to the foregoing.

personnel, and the’ purchase, renovation, and trans-

portation of material, that he considers ninioanty to:

carry out this section.” ctr 9

Title 28, United States Code, $1257 (3)?

“By writ of certiorari, wheré the validity of a treaty or

statute of the United States is drawn.in question or

where the validity of a State statute is drawn in ques- |

tion on the ground of its being repugnant to the Con-

stitution, treaties or laws of the United States, or where

any title, right, privilege or immunity} is specially set.

ai . >

‘-

>»

‘ - up or claimed wile the Constitution, treaties or sta-

tutes of, or commission’ held or authority exercised

ufider, the United States.”

Title, 40, U |, United States Cade, $255: . Sera

Ke public money shall -be expended u ny site or

Jand purchased by the United SS da purposes

of erecting thereon any armory, arsehal, fort fortifica-

tion, navy yard, customhouse, lighthouse, or other

public building of any kind whatever, until the writ-

ten opinion of the Attorney General shall - had in

_favor of the validity of the title.

“Notwithstanding the prov isions of this or any other.

law, whenever the average value of any lands or inter- *

_ ests in land to be acquired by ay on behalf of the United:

States under a single option or contract of sale.does. _

not exceed $10 per acre (hereinafter referred to as

“low-value lands”), the title may be accepted subject

to such infirmities as, in the opinion of the Attorney

. General, may, wit .out jeopardizing the interests of the.

United States, be left for removal by condemnation or

other appropriate proceedings. if and when necessary:

. Provided, That the total value of any lands or interests

to be acquired under a single option or. contract of sale .

* subject to ah infirmity doés not exceed $3,500. No

public money shall hereafter be expended for the

acquisition of such low-value lands orjinterests in land

by or on behalf of the United States for any purpose

until the written opinion of the- Attorney General has

- been had approving the title subject, if expedient, to.

infirmities as hefein ‘provided. However, no money in

excess of $2,500 shall be expended for the construction

of buildings, works, or other improvements (except

a is

- roads, trails, and fire-protection improv ements) on any

_ site, tract, or parcel of land the title to which is sub-

ject to infirmities, until the written opinion of the At-

—torney General i in favor of the validity of t the title has

been had as in the case of other lands. For the purpose

of this section, values of lands and interests in land

shall be determined by the ‘eqnsideration paid « orto. .

be paid. ts i ; ;

“The Atiorney General is -authorizéd to approve the —————~

__+___-+_title te-easements or rights-of-way to be acquired by or

on behalf of the. United States, siibject to such . infitm-

ities as, in‘his opinion, will not jeopardize the interests

of the United States. --_

-“Nothing in this section shail be construed to. limit

the authority now or hereafter delegated to any of-

- ficer in exercising the power of eminent domain for or

on behalf of the United States, to take title to or pos-

session of or,to expend money for or upon any land or

4 interest. in land, or to expend money as security for an

ultimate award in. advance of final judgment ~ in any

proceedings to determine just compensation; nor shall

this section be construed to preclude any acquiring

agency from-expensding money for the erection of any ~~

— wit temporary structure upon ‘any land.

“The head or other authorized officer of any depart-

ment, independent establishment, or agency, shall pro-.

cure any evidence of title which the Attorney Gen-

* € 1 .

eral may. deem necessary, and the expenses of procure-

ment, except where otherwise authorized’ by law or

"prov ided by contract, may be ‘paid out of the appropria-

tions made’ for the contingencies of the acquiring de- »

ees ‘independent in ata amstaals agency. :

“The Attorney General may, in his discretion, basé any

‘opinion as to title’ required: either by _ section or

‘any other law upon-either or both of the ' * following: Ri

of title as he may deem. satisfactory. |

“The iaieks provisions of this section’ shall. not be

* construed to affect in any manner any existing pro-

c-)

» visions. of law which are applicable to the acquisition Sy

of lands or interests in land by the Tennessee Valley ,

Authority; and nothing in this section shall’ be con-—

| strued. to affect in any manner, any authority which

‘the Secretary of the Army, the Chief of Engineers, or

the Secretary of the Interior have. under the provisions |

of law. in force on October 9, 1940, with respect to the \

" approv al by them of title to land or interest in land

acquiréd by the Department of the Army or the De-:

partment of the Interior, as the case may be. Nor shall

\ the. foregoing’ provisions of this section, or the pro-

visions of any other law. be construed to require any

-opinion of the Attorney General in ‘connection, with

the acquisition or improvement, of . easements and

rights-of-way for military or naval purposes; or for

loti Yor ; f i ; oy,

x, 67. ah iis ;

et".

+ _the aequisition or improv ement, of easements 7

of-way. dy the Department of’ Agriculture for forest

-and other conserv ation purposes, where the cost of any

such easement’ of right-of-way" acquired der a single ;

instrument of conveyance and the cos6f any improve-

_ ment thereon doesnot" exceed $2,5 sogf’and the Attorney.:

: General-may, in his ‘discretion, W Mm the requirement

for his opinior’ in connection with the. acquisition or

7 improvement of easements nd rights-of- -way for other:

purposes when, in his inion, suth waiver “will not

7 -Jeopardize the — of the United States.

in which any lands: or interests init under ‘his im-

“Notwithstandi g any iitine’ iiolaages af law, the

, obtaining of exclusive jurisdiction in the United States.

* over lands a interests therein which have been or shall :

hereafter be: acquired by it shal] not be requiged; but

the head or other authorized officer of any department

or indépendent - establishment or ‘agency of the Gov-

ernment may, in such cases and at such times as he’

may deem desifable, accept or secure from the State

mediate jurisdiction; custody, or control are situated,

consent to or cession of such jurisdiction, exclusive.

_ or partial, not theretofore obtained, over any such

lands or interests as he may deém desirable and indicate ~

acceptance of such jurisdiction on behalf of the United |

States by filing a notice of such acceptance with the

Goveinér of such State or in such other manner as may

. be prescribed by the laws of the State where such lands.

° .

» ob

- 1

are situated. Unless and until the United States has ~

. accepted jurisdiction over lands hereafter to’ be ac-_

quired as aforesaid, it shal] be conclusively presumed ,

. that no such ane has been — *

-Title 50, United States Code, "g4o1: at

“The ecoeteicy of the Air Force is authorized to esta-

. -blish arid develop within and without the continental

limits of the United States in fulfilling the air defense

; responsibilities of the Department of the Air Force |

such land-based air warning and control. installations ,,

_ and facilities by the construction, installation, or equip-

ment of. temporary or permanent public-works, includ- .

. ing buildings, facilities, appurtenances, utilities, and -

at¢cess roads, and to provide for necessary administra- <

tion and planning therefor, without regard to section

1339 of Title 10, section 529 of Title 31, and section 259

of Title 40, as he may deem “necessary in the ‘interest

of national security: Provided, That not to exceed $85,-

500,000 shall be appropriated for .the construction of |

public works authorizéd by this section. -

. “The Secretary of the Air Force is authorized to ‘pro-

cure communication services required for. the - semi-

‘automatic ground environment system. No contract for

such services may be for a. period of ‘more than ten > -

years from the date communication services are first ~ —

furnished under’such contract. The aggregate con- *

tingent liabilitv of the Government under the termina-

, }

" provisions of section 481 of Title 40. oil

69 ae

; tion provisions of all contracts: authorized ‘hereunder ,

may not exceed a total of $222,000,000 and no termina- ;

_ tion payment shall be final until audited and/approved

by the General, Accounting’ Office which shall have

“aceess to sueh carrier records and accounts as it may

deem necessary for the purpose. In procuring such ser-.

vices, the Secretary of the Air Force shall utilize to.

the fullest extent practicable the facilities and’ cap-

abilities of communication ‘common carriers, including ;

rural telephone “cooperatives, within their respective

service areas and-for power supply, shall utilize to: the -

fullest extent practicable, the facilities and capabilities

of public utilities and rural electric cooperatives with-

in ‘their respective service areas. Negotiations with =!

communication carriers, including cooperatives, and

representation jn proceedings inyplving such carriers

‘before Federal and State regulatory bodies where such

negotiations or proceedings involve contracts author-

, ized -by this paragraph shall be in accordance axe the <u

‘ ARKANSAS STATUTORY PROVISIONS VOLVED

Act 571, Ark. Acts of 1919, §5, as amended by Act 124, Ak.

Acts of 1921, ‘$3 [Ark. Stats. (1947) $73-115 (a)]:

“The jurisdiction of the [Arkansas Public Service Com-

aa mission and the Arkansas Commerce] Commission -

. hoe shall extegd to and include all matters pertaining to

the regulation and operation vad _ ;

Pi ae 3 (a) All -

\ Common carriers,

‘Railroads,

Express companies, ;

; Car companies, eet | 4 :

Oe Freight lines, | |

Toll bridges,

Ferries,

Steamboats, oa

- Street railroads,

Telegraph companies,

Telephone, companies,

Pipeline companies for tr ansportatién of oil, gas ed |

water, — ; a

Gas companies, a

Electric lighting companies, and other companies Ses

nishing gas or electricity for light, heat, or power pur- °

, poses, : . @. . *

\.,

Hydro-electric companies for the:.generation and for

_ transmission of light, heat or wen

, Water companies, furnishing wake within munici-:

" palities for municipal, domestic or industrial use.

“Provided, however, that nothing herein shall vest said

commission with jurisdiction as’ ‘to any rate, charge, —

rule, regulation, order, hearing, investigation, or other

matter. pertaining to the operation: within the limits

-. Of any ‘municipality of any street railroad, telephone |

* company; gas company, pipe line company for trans-

portation of oil, gas or-water, electrical company, water

_ company, hydro-electric company. or other company

operating? a public utility or furnishing public. ser-

_ vice as to which jurisdiction may be elsewhere. con-

ferred in this act upon any municipal council -or city

commission; notwithstanding, however, the jurisdic-

tion of the municipality as-to the above mattérs within

. the limits of such municipality, the said Arkansas Rail-

/ road: Commission [Arkansas Public Service Commis-

* sion] shall have and is ‘hereby delegated the authority _

and duty to require ‘all utility companies now fur-

nishing. public service within the'limits of any. munici- |

‘pality 4o-furnish and continue furnishing such service

to such municipality, though the right of regulation of

such utility as to rates and all other matters within

such municipality®is. herein. elsewhere conferred ‘upon

the’ municipal councils: or city commissions Subject to

Tigh: of appeal to the courts. /

| “Provided, aitnel, that rey herein shall vest said’

commission with jurisdiction as to any improvement’

distriet or municipality furnishing gas or electricity for

| .

oo. |

? P | . @ P . f

f S 72 ee ~

“And for the purpose of this act, and in the construc-

tion of this act, every person, firm, association, com-

pany, partnership or corporatjon or other.’ offganiza-_

tions engaged in the ‘operation of any”. public utility

above. indicated, shall’ be deemed to be a company

within the meaningyof this act.”

Act 342, Ark. Acts of 1937; $2, as amended by Act 85, Ark.

Acts. of 1955, §1, aS amended by Act 103, Ark Acts of °

1087, §1 [Ark. Stats. (1947) §77- 1102]:

“In this act, unless the context otherwise requires:

“(1) ‘Corporation’ means a ie gn organized pur-

ee to the provis: isions of this act. , .

&@) ‘Board’ means a board of aferors of a corpora-

tion organized under -_ act.

“(3) " ‘Member’ means the incorporat eof a cor-

poration and each person thereafter lawfully admitted

to mamnbereniy therein. é |

“(%) ‘Federal Agency’ nereren the United States of.

America and any department, administration, commis-,

sion,’ board, bureau, office, establishment, agency,

authority, or instrumentality of the United Statics of .

* America heretofore or hereafter created. .

(5) ‘Person’ includes: any natural person, firm, as-

sociation, corporation, business trust, partnership, Fed-

eral agency, Statesor political subdivision thereof. or

anf ‘body politic, g

“(6)* Acquire’ means and -includes construct, acquire

‘by purchase, lease, devise; gift, or other mode ew,

acquisition. .

ia q

; . : 26 « a

‘ , 73 : ®

'“(7)° ‘Obligations’ include bonds; notes, debentures,

interim certificates or réceipts, and all other evidences

of indebtedness issued by a corporation.

«(gh ‘Rural Area’ means any area not included ‘with-

in the boundaries of any incorporated or unincorpor-

ated city, town, or village having a’ population in excess’

_of twénty-five hundred (2,500) inhabitants, afd in-

cludes both the farm and nonfarm population thereof.

The determinatic n.of a rural area shall be made as of

the time the Arkansas Public SA&ice Commission or

predecessor Commission. or, Department ‘ of Public

%. Utilities grants a certificate of convenience’ and neces;

sity to a Rural Electric Cooperative Corporation organ-

ized ‘urider said Act 342. 6f 1937 and said Corporation

shall not be ousted from service in said rural area’

- or-deprived of the right to continue to provide electric.

Service in~-said: ‘rural area subsequent to the granting

of a cértificate of convenience and: necessity. by the

Arkansas Public Servi ice Commission.”

Act 342, Ark. Acts of 1937, $31, as amended by Act 85,

“ Ark. Acts of 1955, §2, as ‘nail by Act 103, Ask. Acts.

wef 1957, §2 [Ark. Stats Natal §$77- 1131]:

’ “All corporations organized under this a: shall be. .

_exempt in any and ll respects from the jurisdiction

and control of the Public Service Commission of this

State, except as herein ‘provided. Said corporations

shal] secure from the Public Service Commission, be-

fore construction or operation is begun, a certificate

of convenjence and necessity for the construction or

operation of any equipment or facilities for’ supplying

electric service ‘fn rural areas. Said corporatiqns shall

pay..a fee of twenty-five ($25.00) dollars to the Public

‘

Service Commission for éach certificate of convenienee

- and necessity granted said corporations.-This fee is col-

lected for the service rendered in investigating and

granting a certificate of convenience and necessity.

“The inclusion by incorporation, annexation or other-

wise of any portion of a rural area, as defined. in this

act, within the limits ofan incorporated or unincorpor-

ated city, town or village, regardless of its population,

shall not in any respect impair or affect the rights of

said corporationg under their. certificates of conven-'

_ience and necessity to continue and.extend electric ser-

vice in such included areas; and notwithstanding any

other provisions of law, said corporations shall be

entitled to continue and extend service therein under

the same tesms and conditions as those contained in.

the franchise or indeterminate permit of any other

supplier of electric service in said cit$, town, or village

the same as though it was a party to such franchise

or indeterminate permit, and provided that a Rural

Electric Cooperative which serves an area within the

limits of any municipality under the terms of this act

shall as to such.area be subject in all respects to the ~

jurisdiction of the Public Service Commissjon to the

“electric utility ‘serving within such municipality; and

. any such city, town or village shall have the same

authority to impose taxes, charges or fees in respect

_ of the business of a corporation conducted within. the

corporate limits of such city, town or village, as it- has

in respect of business conducted, by other suppliers of

electric service; and provided further that where a cor-

_ poration comtinues and extends its yee service in

Barf 75

“areas. which are. so included within the limits of such

a city, town or village which is alsc receiving electric

service at‘ rétail from another supplier of such service,

the retail rates charged by a corporation to its various

-classes of consumers shall be comparable with those

charged ‘by such other supplier for comparable retail

service to comparable classes of consumers;

“Provided, nothing in this oct shall in any ‘manner

restrict or impair the right of any municipality to ac-

quire, construct, expand, maintain, or operate any

electrit generation, transmission or distribution facil-

ities within the corporate limits of said city, town or

village in Arkansas as such limits may now exist or as

. Such limits -may, exist upon the, .extension ‘or expan-

sion of the: city limits of said as, town or village.”

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.