DISTRICTS ‑- PUBLIC UTILITY ‑- MAINTENANCE OF PRIVATE LINES ON COST-PLUS BASIS

DISTRICTS ‑- PUBLIC UTILITY ‑- MAINTENANCE OF PRIVATE LINES ON COST-PLUS BASIS

A public utility district cannot maintain and service power lines owned by private cooperative which carry the power of the cooperative.

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                                                                 August 11, 1955

Honorable Cliff Yelle
State Auditor
Legislative Building
Olympia, Washington                                                                                                              Cite as:  AGO 55-57 No. 125

Attention:  Mr. A. E. Hankins, Chief Examiner

Dear Sir:

            A request has been made to this office for an opinion on the following question:

            "May a public utility district contract with a private electric cooperative for the purpose of performing certain services.  The public utility district would maintain the cooperative's lines and do all necessary construction for them and be paid on a cost-plus basis."

            It is our opinion that a public utility district cannot contract with a private electric cooperative to construct and maintain private lines to carry the power of the private electric cooperative.

             [[Orig. Op. Page 2]]

                                                                     ANALYSIS

            Public utility districts are municipal corporations organized under Title 54 Revised Code of Washington.  It is a well recognized rule that a municipal corporation, being a statutory creature, exercises only such powers as are expressly conferred upon it or are necessarily implied therefrom.  In the absence of statutory authorization a municipal corporation cannot render a private electric cooperative construction and maintenance service, as such an action is not within the scope of the authority granted to the public utility district.

            Section 5, chapter 390, Laws of 1955, provides as follows:

            "A district may purchase, within or without its limits, electric current for sale and distribution within or without its limits, and construct, condemn and purchase, purchase, acquire, add to, maintain, conduct, and operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam, or other methods, within or without its limits,for the purpose of furnishing the district and the inhabitants thereof and any other persons, including public and private corporations, within or without its limits, with electric current for all uses, * * * together with the right to purchase, handle, sell, or lease motors, lamps, transformers and all other kinds of equipment and accessories necessary and convenient for the use, distribution, and sale thereof:  Provided, That the commission shall not supply water to a privately owned utility for the production of electric energy, but may supply, directly or indirectly, to an instrumentality of the United States Government or any publicly or privately owned public utilities  [[Orig. Op. Page 3]] which sell electric energy or water to the public, any amount of electric energy or water under its control, * * *" (Emphasis supplied)

            It can readily be seen from a reading of the above statute that the purpose of a public utility district is to purchase or produce electrical energy and distribute it to the inhabitants of the district.  The district is given express authority to buy, construct and maintain lines and equipment necessary to distribute this power to the users within the district.  The utility district is also given authority to purchase, sell, or lease various kinds of equipment, such as motors, lamps and transformers, when necessary or convenient for the distribution and use of the district's electric energy.  Throughout the whole public utility district law, mention is only made of the utility district power and its distribution and nowhere therein is there any inference that such authority may be used to construct lines or facilities to distribute electric power owned by a private concern, even with the liberal construction given to the public utility district statute.

            InState v. Metropolitan Park District of Tacoma, 100 Wash. 449, (1918), the city of Tacoma ran a restaurant in one of the city parks.  The court there held that the park district had no authority to operate a business for profit, commenting on page 452, the court said:

            "* * * The operation of a public restaurant is not among the powers conferred, nor is it incident or necessary to any conferred power.  It must be, therefore, regarded as anultra vires act.  * * *"

            Concerning the same problem covered by the court in the above case, McQuillin on Municipal Corporations says:

            "* * * In the absence of express legislative sanction, it has no authority to engage in any independent business enterprise or occupation such as is usually pursued by private individuals.  * * *" 12 McQuillin 702.

             [[Orig. Op. Page 4]]

            If a public utility district were permitted to contract to construct and maintain private power lines on a cost-plus basis, it would be acting beyond its statutory authority.

            In addition to the above statutory obstacles to such a project, Article VIII, § 7 of the Washington state constitution provides:

            "No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."

            This provision was discussed in Paine v. Seattle, 70 Wash. 294, 322 (1912), as follows:

            "* * * Perhaps if the sole purpose of acquiring the property was to lease it to an individual or corporation for private use, its acquisition and lease would be in violation of the constitutional provision cited.  * * *"

            Applying the court's reasoning in the Paine case to the present situation such acquisition and service to the private electric cooperative would be in violation of Article VIII, § 7 of the Washington constitution as the sole purpose of the construction contract would be to sell these facilities to the electric cooperative for its private use.

            It is therefore our opinion that a public utility district cannot contract with a private electric cooperative to construct and maintain  [[Orig. Op. Page 5]] its lines, as such activity is not authorized by or necessarily inferred from the statutes, and is prohibited by Article VIII, § 7 of the state constitution.

Very truly yours,

DON EASTVOLD
Attorney General

MAURICE M. EPSTEIN
Assistant Attorney General