Supreme Court rules in favor of co-op
On July 27, the N.D. Supreme Court issued a ruling which
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In a unanimous decision, the North Dakota Supreme Court awarded the electric service rights of the Boulder Ridge subdivision to Capital Electric Cooperative. The co-op has provided service to the area since 1948. |
stated Capital Electric was best positioned to serve the Boulder Ridge subdivision north of Bismarck. Central to the Supreme Court’s opinion was its conclusion that the Bismarck City Commission misinterpreted the co-op’s franchise rights.
In a unanimous decision, Justice Dale Sandstrom wrote, “each franchise authorizes (both utilities) to provide electric service to Boulder Ridge, and, therefore, the Public Service Commission’s (PSC) decision controls the distribution of electric service in Boulder Ridge.”
Dennis Hill, executive vice president and general manager of the North Dakota Association of Rural Electric Cooperatives, says the ruling is good news for the state’s citizens and electric cooperatives.
“This decision upholds the public interest in maintaining safe, reliable and reasonably priced electric service by avoiding unnecessary duplication of expensive electric infrastructure and preventing potentially hazardous interference among competing electric systems,” he says.
“We have long said that our state’s citizens cannot afford wasteful duplication of electric facilities. With energy costs on the rise, it’s more important than ever that the state encourage wise investment in electric infrastructure.”
Doug Mork, member services director for Capital Electric, says he’s felt confident the N.D. Supreme Court would recognize a duplication of services.
“Before we decided to add the Ward Delivery Substation, which is one of several Capital Electric substations that can provide service to Boulder Ridge, we evaluated our load flows, growth requirements and long-range designs for our distribution system. The addition of that particular substation was the result of careful planning to provide future reliability and capacity for our members,” he says.
“Utility companies need to make long-range plans to serve consumers,” he says. “It just didn’t make sense to build what already existed—at a cost to every consumer.”
In the ruling, the court said the PSC looked at the existing electric facilities of both utility companies to determine whether the extension of Montana-Dakota Utilities’ (MDU) services into the area would constitute an unreasonable duplication of capital-intensive facilities and services provided by the co-op.
With Capital Electric’s three-phase feeder lines tying substations at other locations together, the co-op would be able to provide “looped service” to Boulder Ridge. In the event of an outage, the co-op’s three-phase framework would shorten outage time. However, MDU’s current facilities in Boulder Ridge cannot be operated in a looped fashion, so residents would experience longer outage time in the event of a power failure.
The PSC found that “service by Capital Electric would best promote and serve orderly and economic development of electric service in the Boulder Ridge subdivision.” It also found the co-op “is able to extend service to Boulder Ridge through a shorter extension at a lower cost.”
“As an electric cooperative, it’s our mission to provide reliable and affordable electricity to our member-owners,” Mork says. “This decision will save consumers money and reiterate the necessity of long-range planning.”
Lars Nygren, general manager of Capital Electric, says the co-op continues to work with MDU to reach a service-area agreement that will benefit both utilities. He also thanks members for calling or stopping by the co-op to express their support.
“With their support, we decided to take this dispute to the highest statewide level. Many of our older members remember how rural electric cooperatives got together to provide service to areas no other utility would serve because a profit wouldn’t be made.
“We have continued to invest money into our system to serve areas we’ve served since 1948. I thank those members who remember our commitment and who believe we have a right to keep our investments,” Nygren says.
(A copy of the opinion can be found on the North Dakota Supreme Court Web site at www.court.state.nd.us/court/opinions/20060199.htm.)
The future of Boulder Ridge
Making the transition of electric service from MDU to Capital Electric should be fairly seamless, says Ron Lipp, engineering and operations manager for the co-op. Depending on the weather and teamwork between utility companies, Lipp speculates it will take about 30 days for the transfer to be complete.
Approximately 51 residents currently live in Boulder Ridge. Lipp says his main concern is to minimize any inconvenience new members may encounter through a series of brief yet necessary outages.
“As a member-owned organization, our co-op exists to provide affordable and reliable electric service to the people who own us. These people now own us,” Lipp says. “Our focus always was, and always will be, to do what’s best for the consumer at the end of the line.”
Capital Electric will purchase some of the infrastructure built by MDU. The rest will be abandoned and buried underground. Consumers will experience a short outage that will last about a minute when the MDU meters are read, pulled and replaced with co-op meters. A secondary outage will occur when the co-op adds secondary cable and splices into existing cable.