ARTICLE 1. General Provisions.

Sec.

§ 62-1. Short title.

This Chapter shall be known and may be cited as the Public Utilities Act.

History

(1963, c. 1165, s. 1.)

Editor's Note. - Session Laws 1963, c. 1165, amended, revised and rewrote Chapters 56, 60, and 62 of the General Statutes and recodified them as Chapter 62 and Chapter 74A.

Chapter 74A was repealed by Session Laws 1991 (Regular Session, 1992), c. 1043, s. 8, effective July 25, 1992. For present provisions pertaining to the subject matter of repealed Chapter 74A, see Chapter 74E.

Legal Periodicals. - For case law survey on public utilities, see 41 N.C.L. Rev. 498 (1963).

CASE NOTES

Editor's Note. - Cases construing provisions of former Chapter 62 have been placed in the annotations under appropriate sections of Chapters 62 and 74E.

Scope of Authority of Utilities Commission. - The Utilities Commission, being an administrative agency created by statute, has no regulatory authority except such as is conferred upon it by this Chapter, and the Commission may not, by its order, require or authorize a rule or practice by a public utility company which is forbidden by statute, or authorize such company to refuse to perform a duty imposed upon it by statute, unless this Chapter has conferred such authority upon the Commission. State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

As to the jurisdiction of the utilities commission to require rail carrier to open drainage ditches along its tracks and to keep its drainage ditches open, see State ex rel. Utils. Comm'n v. Seaboard C.L.R.R., 62 N.C. App. 631, 303 S.E.2d 549, cert. denied and appeal dismissed, 309 N.C. 324, 307 S.E.2d 168 (1983).

Findings Concerning Company Debt Ratios. - Conclusion of the Utilities Commission's that a natural gas company's capital structure should include a short-term debt ratio of 4.02%, based on a short-term debt equal to stored gas inventory rather than "the daily average balance amount of short-term debt for the most recent twelve month period," was supported by substantial evidence and satisfied requirements of this chapter. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Applied in S & R Auto & Truck Serv., Inc. v. City of Charlotte, 268 N.C. 374, 150 S.E.2d 743 (1966).

Cited in North Carolina Utils. Comm'n v. United States, 253 F. Supp. 930 (E.D.N.C. 1966); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986); Shepard v. Bonita Vista Props., L.P., 191 N.C. App. 614, 664 S.E.2d 388 (2008), aff'd, 363 N.C. 252, 675 S.E.2d 332 (2009).


§ 62-2. Declaration of policy.

  1. Upon investigation, it has been determined that the rates, services and operations of public utilities as defined herein, are affected with the public interest and that the availability of an adequate and reliable supply of electric power and natural gas to the people, economy and government of North Carolina is a matter of public policy. It is hereby declared to be the policy of the State of North Carolina:
    1. To provide fair regulation of public utilities in the interest of the public;
    2. To promote the inherent advantage of regulated public utilities;
    3. To promote adequate, reliable and economical utility service to all of the citizens and residents of the State;
    4. To assure that resources necessary to meet future growth through the provision of adequate, reliable utility service include use of the entire spectrum of demand-side options, including but not limited to conservation, load management and efficiency programs, as additional sources of energy supply and/or energy demand reductions. To that end, to require energy planning and fixing of rates in a manner to result in the least cost mix of generation and demand-reduction measures which is achievable, including consideration of appropriate rewards to utilities for efficiency and conservation which decrease utility bills;
    5. To provide just and reasonable rates and charges for public utility services without unjust discrimination, undue preferences or advantages, or unfair or destructive competitive practices and consistent with long-term management and conservation of energy resources by avoiding wasteful, uneconomic and inefficient uses of energy;
    6. To assure that facilities necessary to meet future growth can be financed by the utilities operating in this State on terms which are reasonable and fair to both the customers and existing investors of such utilities; and to that end to authorize fixing of rates in such a manner as to result in lower costs of new facilities and lower rates over the operating lives of such new facilities by making provisions in the ratemaking process for the investment of public utilities in plants under construction;
    7. To encourage and promote harmony between public utilities, their users and the environment;
    8. To foster the continued service of public utilities on a well-planned and coordinated basis that is consistent with the level of energy needed for the protection of public health and safety and for the promotion of the general welfare as expressed in the State energy policy;
    9. To seek to adjust the rate of growth of regulated energy supply facilities serving the State to the policy requirements of statewide development;
    10. To cooperate with other states and with the federal government in promoting and coordinating interstate and intrastate public utility service and reliability of public utility energy supply;
    11. To facilitate the construction of facilities in and the extension of natural gas service to unserved areas in order to promote the public welfare throughout the State and to that end to authorize the creation of expansion funds for natural gas local distribution companies or gas districts to be administered under the supervision of the North Carolina Utilities Commission; and
    12. To promote the development of renewable energy and energy efficiency through the implementation of a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) that will do all of the following:
      1. Diversify the resources used to reliably meet the energy needs of consumers in the State.
      2. Provide greater energy security through the use of indigenous energy resources available within the State.
      3. Encourage private investment in renewable energy and energy efficiency.
      4. Provide improved air quality and other benefits to energy consumers and citizens of the State.
  2. To these ends, therefore, authority shall be vested in the North Carolina Utilities Commission to regulate public utilities generally, their rates, services and operations, and their expansion in relation to long-term energy conservation and management policies and statewide development requirements, and in the manner and in accordance with the policies set forth in this Chapter. Nothing in this Chapter shall be construed to imply any extension of Utilities Commission regulatory jurisdiction over any industry or enterprise that is not subject to the regulatory jurisdiction of said Commission.
  3. Broadband service provided by public utilities as defined in G.S. 62-3(23)a.6. is sufficiently competitive and shall not be regulated by the Commission.
  4. The policy and authority stated in this section shall be applicable to common carriers of passengers by motor vehicle and their regulation by the North Carolina Utilities Commission only to the extent that they are consistent with the provisions of the Bus Regulatory Reform Act of 1985.

Because of technological changes in the equipment and facilities now available and needed to provide telephone and telecommunications services, changes in regulatory policies by the federal government, and changes resulting from the court-ordered divestiture of the American Telephone and Telegraph Company, competitive offerings of certain types of telephone and telecommunications services may be in the public interest. Consequently, authority shall be vested in the North Carolina Utilities Commission to allow competitive offerings of local exchange, exchange access, and long distance services by public utilities defined in G.S. 62-3(23)a.6. and certified in accordance with the provisions of G.S. 62-110, and the Commission is further authorized after notice to affected parties and hearing to deregulate or to exempt from regulation under any or all provisions of this Chapter: (i) a service provided by any public utility as defined in G.S. 62-3(23)a.6. upon a finding that such service is competitive and that such deregulation or exemption from regulation is in the public interest; or (ii) a public utility as defined in G.S. 62-3(23)a.6., or a portion of the business of such public utility, upon a finding that the service or business of such public utility is competitive and that such deregulation or exemption from regulation is in the public interest.

Notwithstanding the provisions of G.S. 62-110(b) and G.S. 62-134(h), the following services provided by public utilities defined in G.S. 62-3(23)a.6. are sufficiently competitive and shall no longer be regulated by the Commission: (i) intraLATA long distance service; (ii) interLATA long distance service; and (iii) long distance operator services. A public utility providing such services shall be permitted, at its own election, to file and maintain tariffs for such services with the Commission up to and including September 1, 2003. Nothing in this subsection shall limit the Commission's authority regarding certification of providers of such services or its authority to hear and resolve complaints against providers of such services alleged to have made changes to the services of customers or imposed charges without appropriate authorization. For purposes of this subsection, and notwithstanding G.S. 62-110(b), "long distance services" shall not include existing or future extended area service, local measured service, or other local calling arrangements, and any future extended area service shall be implemented consistent with Commission rules governing extended area service existing as of May 1, 2003.

The North Carolina Utilities Commission may develop regulatory policies to govern the provision of telecommunications services to the public which promote efficiency, technological innovation, economic growth, and permit telecommunications utilities a reasonable opportunity to compete in an emerging competitive environment, giving due regard to consumers, stockholders, and maintenance of reasonably affordable local exchange service and long distance service.

History

(1963, c. 1165, s. 1; 1975, c. 877, s. 2; 1977, c. 691, s. 1; 1983 (Reg. Sess., 1984), c. 1043, s. 1; 1985, c. 676, s. 3; 1987, c. 354; 1989, c. 112, s. 1; 1991, c. 598, s. 1; 1995, c. 27, s. 1; 1995 (Reg. Sess., 1996), c. 742, ss. 29-32; 1998-132, s. 18; 2003-91, s. 1; 2005-95, s. 1; 2007-397, s. 1; 2021-23, s. 25.)

Editor's Note. - Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subdivision (a)(4a).

Effect of Amendments. - Session Laws 2005-95, s. 1, effective June 21, 2005, added subsection (b1).

Session Laws 2007-397, s. 1, effective January 1, 2008, substituted "Commission; and" for "Commission," at the end of subdivision (a)(9); added subdivision (a)(10); and made a minor stylistic change.

Legal Periodicals. - For survey of 1976 case law dealing with administrative law, see 55 N.C.L. Rev. 898 (1977).

For article, "Ripening on the Vine: North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard Should Be Left Unchanged Ahead of 2012 Compliance Deadline," see 34 N.C. Cent. L. Rev. 111 (2012).

For article, "Seeing Green: North Carolina's Clean Energy Plan, the Social Cost of Carbon, and a Way Forward Under a Least-Cost Framework,” see 99 N.C. L. Rev. Addendum 59 (2020).

CASE NOTES

Rate Scheme Held Unconstitutional Burden on United States. - The State regulatory scheme by which the Utilities Commission sets rates for franchised carriers to charge the U.S. Army in transportation of household goods violates the national procurement policy and is an unconstitutional burden on the United States in the exercise of its constitutional powers. United States v. North Carolina Utils. Comm'n, 352 F. Supp. 274 (E.D.N.C. 1972).

Delegation of Authority to Commission Constitutional. - The standard of public convenience and necessity and the policies of the State were sufficient to guide the North Carolina Utilities Commission in deciding a certificate of public convenience and necessity case, and the legislature's delegation of this authority to the Commission was not unconstitutional. State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993), cert. denied, 335 N.C. 564, 441 S.E.2d 125 (1994).

The expansion fund legislation is a proper delegation of legislative authority to an administrative agency and is not unconstitutional. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

As an administrative agency created by the legislature, the Commission has not been given jurisdiction to determine the constitutionality of legislative enactments, specifically subdivision (a)(9) of this section or G.S. 62-158. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Purpose of Chapter. - The clear purpose of this Chapter is to confer upon the Utilities Commission the power and the duty to compel a public utility company to render adequate service and to fix therefor reasonable rates pursuant to the procedure prescribed in G.S. 62-133. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

The primary purpose of this Chapter is not to guarantee to the stockholders of a public utility constant growth in the value of and in the dividend yield from their investment, but is to assure the public of adequate service at a reasonable charge. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

The provisions of this Chapter, such as G.S. 62-133, designed to assure the utility of adequate revenues, are in the nature of corollaries to the basic proposition that the public is entitled to adequate service at reasonable rates and safeguards against administrative action which would violate constitutional protections by confiscation of the utility's property. Without such assurance, the owners of capital would not invest it in the utility's bonds or stock and the utility could not provide the plant necessary for the rendering of adequate service. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

This section declares the policy of the State, which it is the purpose of this Chapter to put into effect. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The purpose of the Public Utilities Act is to put the policies enumerated in this section into effect. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Commission to Be Guided by Public Interest. - While the Utilities Commission seeks to establish the lowest possible rates, that is not the polar star by which the Commission conducts its business; rather, the Commission is guided by considerations of the public interest. State ex rel. Utils. Comm'n v. Piedmont Natural Gas Co., 346 N.C. 558, 488 S.E.2d 591 (1997).

The entire Chapter is a single, integrated plan. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

The status of an entity as a public utility, entitled to the rights conferred by statute and subject to the jurisdiction of the Commission, does not depend upon whether it has secured a certificate of public convenience and necessity, pursuant to G.S. 62-110, but is determined instead according to whether it is, in fact, operating a business defined by the Legislature as a public utility. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

If an entity is, in fact, operating as a public utility, it is subject to the regulatory powers of the Commission, notwithstanding the fact that it has failed to comply with G.S. 62-110 before beginning its operation. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

The Commission, not the courts, has been given the authority to regulate the rates of public utilities. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Court Must Affirm Commission's Decision. - The General Assembly has given the North Carolina Utilities Commission, not the courts, the authority to regulate the operations of the public utilities; therefore, if the findings and conclusions of the Commission are supported by competent, substantial and material evidence, the Court must affirm the decision even if it may have reached a different determination upon the evidence. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 123 N.C. App. 43, 472 S.E.2d 193 (1996).

The Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 through a rule making procedure rather than a rate making procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

This section does not require the Utilities Commission to adopt a rule of the Interstate Commerce Commission; the Commission must make its own independent investigations, determinations and findings of fact based upon the evidence presented to it. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

This section does not confer an exclusive emolument or privilege by creating a private benefit only for those residents of unserved areas in violation of N.C. Const., Art. I, § 32. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Only Unfair or Destructive Competition Condemned. - There is no public policy condemning competition as such in the field of public utilities; the public policy only condemns unfair or destructive competition. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

Prerogative to Recognize Private Agreements. - The authority to regulate includes the prerogative to recognize private agreements that may have been entered into between parties with respect to the operation of a public utility, as such agreements may be "in the interest of the public". Ocean Glen Townhouse Condominium Owners Ass'n Phase I v. State ex rel. N.C. Utils. Comm'n, 126 N.C. App. 495, 486 S.E.2d 223 (1997), cert. denied, 347 N.C. 136, 492 S.E.2d 36 (1997).

Third-Party Sales of Electricity. - Statutory pronouncements of policy are meant to coexist with North Carolina's well-established ban on third-party sales of electricity rather than supersede it until such time as the monopoly model is abandoned by our legislature; if the legislature desires to except third-party sales of electricity, it is within its province to do so, and it is not for the court to determine the advisability of any change in the law declared in the Public Utilities Act. State ex rel. Utils. Comm'n v. N.C. Waste Awareness & Reduction Network, 255 N.C. App. 613, 805 S.E.2d 712 (2017), aff'd, 812 S.E.2d 804, 2018 N.C. LEXIS 330 (2018).

Transportation of passengers by motor carriers for compensation is a business affected with a public interest. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

All who ship goods with common carriers are required to be treated equally with respect to the same category of service. State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838, rev'd on other grounds, 302 N.C. 14, 273 S.E.2d 232 (1980).

Interconnection with Competitor Cannot Be Required. - There is no provision in this Chapter which requires, or authorizes the Commission to require, a utility, with large investments in its own plant and facilities, to permit interconnection with such plant and facilities by a competitor in order to increase the competitor's opportunity to take away its customers or prospective customers. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Contractual obligation to provide water service to a recreational subdivision, as well as the actual delivery thereof, directly affect a utility's ability to function as a utility. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Authority to Allow Use of Availability Charge. - The Utilities Commission has jurisdiction and authority to allow the use of an availability charge in a rate schedule for a recreational subdivision, should any be deserved. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Landowners in a recreational subdivision who pay availability charges are "consumers" or stand in a consumer-like relationship to the utility providing water service. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Jurisdiction over Rates and Service of Duke Power Company. - The Utilities Commission has general and supervisory jurisdiction over the retail electric rates and service of Duke Power Company pursuant to this Chapter. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).

North Carolina rates may not be structured by external system usage. Such action is outside the intended scope of the Commission's authority under this section. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

Recovery of Reasonable Cost of Approved Gas Exploration Projects. - The Commission, in ordering that the reasonable costs of approved exploration projects were to be recoverable through tracking rate increases, acted within its acknowledged duty and authority to compel adequate and efficient utility service to the citizens of this State, where it was clear from the Commission's findings that, without additional gas supplies, the gas utilities would be unable to render adequate service to their customers, that exploration programs were the most feasible means for obtaining these additional supplies, and that the utilities were unable, through traditional methods of financing, to fund sufficient exploration projects to obtain these supplies. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Order prescribing different Private Line Service rates for AT&T's nonreseller (end user) customers and its reseller customers upon its face was discriminatory, and absent legally adequate reasons in the order why it was not unjustly discriminatory within the meaning of subdivision (4) of this section, the order would be vacated and the cause remanded to the Commission for further proceedings. State ex rel. Utils. Comm'n v. A T & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

The capture of supplier refunds for the purpose of funding the expansion fund does not constitute a taking without compensation in violation of the Fifth and Fourteenth Amendments to the United States Constitution and the "law of the land" clause of N.C. Const., Art. I, § 19. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Plan for Compensation to Local Exchange Companies for Lost Revenues During Transition - Not Invalid. - Plan requiring compensation to local exchange companies for lost revenues during transition period did not violate the equal protection clause or the commerce clause, nor conflict with federal antitrust and communications objectives. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Distribution of Gain From Sale of Water and Sewage Facilities. - North Carolina Utilities Commission's assigning a portion of the gain on sale from a municipal utility's purchase of the existing water and sewer facilities of a publicly franchised utility to the publicly franchised utility's remaining ratepayers, instead of assigning all of the gain on sale to the publicly franchised utility's shareholders, was approved on review pursuant to G.S. 62-94 because the Commission did not violate the Commission's authority under G.S. 62-2 and G.S. 62-23. State ex rel. Utils. Comm'n v. Carolina Water Serv., 225 N.C. App. 120, 738 S.E.2d 187 (2013).

Federal Jurisdiction over Disputes Arising Under This Statute. - The district court erred in asserting federal jurisdiction under 47 U.S.C. § 252(e)(6) over disputes involving contract administration, interpretation and enforcement; the interconnection agreements at the core of those disputes were submitted to the NCUC and approved by it, and no judicial review was sought from these State commission determinations pursuant to this section. BellSouth Telecomms. v. North Carolina Utils. Comm'n, 240 F.3d 270 (4th Cir. 2001).

Same - Not a Penalty or Damages. - Plan requiring compensation to local exchange companies for lost revenues during transition period did not impose a "penalty" or constitute money damages, and could more appropriately be considered as a prerequisite to receiving a certificate. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Same - Statutorily Authorized. - Plan requiring compensation to local exchange companies for lost revenues during transition period was reasonably calculated to provide protection for the local exchanges which provided needed services to local exchange customers, and was a proper "term" or "condition" of certification which was consistent with the public interest. The plan was therefore statutorily authorized. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Applied in State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975); State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 309 N.C. 195, 306 S.E.2d 435 (1983); State ex rel. Utils. Comm'n v. NUI Corp., 154 N.C. App. 258, 572 S.E.2d 176 (2002); Town of Midland v. Morris, 209 N.C. App. 208, 704 S.E.2d 329, review denied, 365 N.C. 198, 710 S.E.2d 3, 2011 N.C. LEXIS 245, dismissed and review denied, 365 N.C. 198, 710 S.E.2d 1, 2011 N.C. LEXIS 265 (2011).

Cited in State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98 (1973); State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Carolina Utils. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 484, 385 S.E.2d 463 (1989); State ex rel. Utils. Comm'n v. North Carolina Elec. Membership Corp., 105 N.C. App. 136, 412 S.E.2d 166 (1992); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 123 N.C. App. 623, 473 S.E.2d 661 (1996); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005); Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 228 N.C. App. 510, 747 S.E.2d 610 (2013).


§ 62-3. Definitions.

As used in this Chapter, unless the context otherwise requires, the term:

  1. "Broadband service" means any service that consists of or includes a high-speed access capability to transmit at a rate of not less than 200 kilobits per second in either the upstream or downstream direction and either (i) is used to provide access to the Internet, or (ii) provides computer processing, information storage, information content, or protocol conversion, including any service applications or information service provided over such high-speed access service. "Broadband service" does not include intrastate service that was tariffed by the Commission and in effect as of the effective date of this subdivision.
  2. "Broker," with regard to motor carriers of passengers, means any person not included in the term "motor carrier" and not a bona fide employee or agent of any such carrier, who or which as principal or agent engages in the business of selling or offering for sale any transportation of passengers by motor carrier, or negotiates for or holds himself, or itself, out by solicitation, advertisements, or otherwise, as one who sells, provides, furnishes, contracts, or arranges for such transportation for compensation, either directly or indirectly.
  3. "Bus company" means any common carrier by motor vehicle which holds itself out to the general public to engage in the transportation by motor vehicle in intrastate commerce of passengers over fixed routes or in charter operations, or both, except as exempted in G.S. 62-260.
  4. "Certificate" means a certificate of public convenience and necessity issued by the Commission to a person or public utility or a certificate of authority issued by the Commission to a bus company.
  5. "Certified mail" means such mail only when a return receipt is requested.
  6. "Charter operations" with regard to bus companies means the transportation of a group of persons for sightseeing purposes, pleasure tours, and other types of special operations, or the transportation of a group of persons who, pursuant to a common purpose and under a single contract, and for a fixed charge for the vehicle, have acquired the exclusive use of a passenger-carrying motor vehicle to travel together as a group to a specified destination or for a particular itinerary, either agreed upon in advance or modified by the chartered group after having left the place of origin.
  7. "Commission" means the North Carolina Utilities Commission.
  8. "Common carrier" means any person, other than a carrier by rail, which holds itself out to the general public to engage in transportation of persons or household goods for compensation, including transportation by bus, truck, boat or other conveyance, except as exempted in G.S. 62-260.
  9. "Common carrier by motor vehicle" means any person which holds itself out to the general public to engage in the transportation by motor vehicle in intrastate commerce of persons or household goods or any class or classes thereof for compensation, whether over regular or irregular routes, or in charter operations, except as exempted in G.S. 62-260.
  10. "Competing local provider" means any person applying for a certificate to provide local exchange or exchange access services in competition with a local exchange company.
  11. , (9) Repealed by Session Laws 1995, c. 523, s. 1.
  12. "Fixed route" means the specific highway or highways over which a bus company is authorized to operate between fixed termini.
  13. "Local exchange company" means a person holding, on January 1, 1995, a certificate to provide local exchange services or exchange access services.
  14. "Plug-in electric vehicle" [means] a four-wheeled motor vehicle that meets each of the following requirements:
    1. Is made by a manufacturer primarily for use on public streets, roads, and highways and meets National Highway Traffic Safety Administration standards included in 49 C.F.R. § 571.
    2. Has not been modified from original manufacturer specifications with regard to power train or any manner of powering the vehicle.
    3. Is rated at not more than 8,500 pounds unloaded gross vehicle weight.
    4. Has a maximum speed capability of at least 65 miles per hour.
    5. Draws electricity from a battery that has all of the following characteristics:
      1. A capacity of not less than four kilowatt hours.
      2. Capable of being recharged from an external source of electricity.
      3. Transporting persons or household goods by street, suburban or interurban bus for the public for compensation;
      4. Transporting persons or household goods by motor vehicles or any other form of transportation for the public for compensation, except motor carriers exempted in G.S. 62-260, carriers by rail, and carriers by air;
      5. Transporting or conveying gas, crude oil or other fluid substance by pipeline for the public for compensation;
      6. Conveying or transmitting messages or communications by telephone or telegraph, or any other means of transmission, where such service is offered to the public for compensation.
    6. The term "public utility" shall include the Town of Pineville insofar as said town supplies telephone services to the public for compensation. The territory to be served by the Town of Pineville in furnishing telephone services, subject to the Public Utilities Act, shall include the town limits as they exist on May 8, 1973, and shall also include the area proposed to be annexed under the town's ordinance adopted May 3, 1971, until January 1, 1975.
    7. The term "public utility" shall not include a hotel, motel, time share or condominium complex operated primarily to serve transient occupants, which imposes charges to occupants for local, long-distance, or wide area telecommunication services when such calls are completed through the use of facilities provided by a public utility, and provided further that the local services received are rated in accordance with the provisions of G.S. 62-110(d) and the applicable charges for telephone calls are prominently displayed in each area where occupant rooms are located.
    8. The term "public utility" shall not include the resale of electricity by (i) a campground operated primarily to serve transient occupants, or (ii) a marina; provided that (i) the campground or marina charges no more than the actual cost of the electricity supplied to it, (ii) the amount of electricity used by each campsite or marina slip occupant is measured by an individual metering device, (iii) the applicable rates are prominently displayed at or near each campsite or marina slip, and (iv) the campground or marina only resells electricity to campsite or marina slip occupants.
    9. The term "public utility" shall not include the State, the Department of Information Technology, or the Microelectronics Center of North Carolina in the provision or sharing of broadband telecommunications services with non-State entities or organizations of the kind or type set forth in G.S. 143B-1371.
    10. The term "public utility" shall not include any person, not otherwise a public utility, conveying or transmitting messages or communications by mobile radio communications service. Mobile radio communications service includes one-way or two-way radio service provided to mobile or fixed stations or receivers using mobile radio service frequencies.
    11. The term "public utility" shall not include a regional natural gas district organized and operated pursuant to Article 28 of Chapter 160A of the General Statutes.
    12. The term "public utility" shall include a city or a joint agency under Part 1 of Article 20 of Chapter 160A of the General Statutes that provides service as defined in G.S. 62-3(23)a.6. and is subject to the provisions of G.S. 160A-340.1.
    13. The term "public utility" shall not include a Ferry Transportation Authority created pursuant to Article 29 of Chapter 160A of the General Statutes.
    14. The term "public utility" shall not include a person who uses an electric vehicle charging station to resell electricity to the public for compensation, provided that all of the following apply:
      1. The reseller has procured the electricity from an electric power supplier, as defined in G.S. 62-133.8(a)(3), that is authorized to engage in the retail sale of electricity within the territory in which the electric vehicle charging service is provided.
      2. All resales are exclusively for the charging of plug-in electric vehicles.
      3. The charging station is immobile.
      4. Utility service to an electric vehicle charging station shall be provided subject to the electric power supplier's terms and conditions.
  15. "Small power producer" means a person or corporation owning or operating an electrical power production facility that qualifies as a "small power production facility" under 16 U.S.C. § 796, as amended.

(10) "Foreign commerce" means commerce between any place in the United States and any place in a foreign country, or between places in the United States through any foreign country.

(11) "Franchise" means the grant of authority by the Commission to any person to engage in business as a public utility, whether or not exclusive or shared with others or restricted as to terms and conditions and whether described by area or territory or not, and includes certificates, and all other forms of licenses or orders and decisions granting such authority.

(12) "Highway" means any road or street in this State used by the public or dedicated or appropriated to public use.

(13) "Industrial plant" means any plant, mill, or factory engaged in the business of manufacturing.

(14) "Interstate commerce" means commerce between any place in a state and any place in another state or between places in the same state through another state.

(15) "Intrastate commerce" means commerce between points and over a route or within a territory wholly within this State, which commerce is not a part of a prior or subsequent movement to or from points outside of this State in interstate or foreign commerce, and includes all transportation within this State for compensation in interstate or foreign commerce which has been exempted by Congress from federal regulation.

(16) "Intrastate operations" means the transportation of persons or household goods for compensation in intrastate commerce.

(17) "Motor carrier" means a common carrier by motor vehicle.

(18) "Motor vehicle" means any vehicle, machine, tractor, semi-trailer, or any combination thereof, which is propelled or drawn by mechanical power and used upon the highways within the State.

(19) "Municipality" means any incorporated community, whether designated in its charter as a city, town, or village.

(20) Repealed by Session Laws 1995, c. 523, s. 1.

(21) "Person" means a corporation, individual, copartnership, company, association, or any combination of individuals or organizations doing business as a unit, and includes any trustee, receiver, assignee, lessee, or personal representative thereof.

(22) "Private carrier" means any person, other than a carrier by rail, not included in the definitions of common carrier, which transports in intrastate commerce in its own vehicle or vehicles property of which such person is the owner, lessee, or bailee, when such transportation is for the purpose of sale, lease, rent, or bailment, or when such transportation is purely an incidental adjunct to some other established private business owned and operated by such person other than the transportation of household goods for compensation.

(23) a. "Public utility" means a person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating in this State equipment or facilities for:

1. Producing, generating, transmitting, delivering or furnishing electricity, piped gas, steam or any other like agency for the production of light, heat or power to or for the public for compensation; provided, however, that the term "public utility" shall not include persons who construct or operate an electric generating facility, the primary purpose of which facility is either for (i) a person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation or (ii) a person who constructs or operates an eligible solar energy facility on the site of a customer's property and leases such facility to that customer, as provided by and subject to the limitations of Article 6B of this Chapter;

2. Diverting, developing, pumping, impounding, distributing or furnishing water to or for the public for compensation, or operating a public sewerage system for compensation; provided, however, that the term "public utility" shall not include any person or company whose sole operation consists of selling water or sewer service to less than 15 residential customers, except that any person or company which constructs a water or sewer system in a subdivision with plans for 15 or more lots and which holds itself out by contracts or other means at the time of said construction to serve an area containing more than 15 residential building lots shall be a public utility at the time of such planning or holding out to serve such 15 or more building lots, without regard to the number of actual customers connected;

b. The term "public utility" shall for ratemaking purposes include any person producing, generating or furnishing any of the foregoing services to another person for distribution to or for the public for compensation.

c. The term "public utility" shall include all persons affiliated through stock ownership with a public utility doing business in this State as parent corporation or subsidiary corporation to such an extent that the Commission shall find that such affiliation has an effect on the rates or service of such public utility.

d. The term "public utility," except as otherwise expressly provided in this Chapter, shall not include the following:

1. A municipality, county, or a city, town, or village.

2. A special district, public authority, or unit of local government, as those terms are defined in G.S. 159-7(b) and that is subject to the provisions of Chapter 159, Subchapter III, Article 3 of the General Statutes.

3. An electric or telephone membership corporation.

4. Any person not otherwise a public utility who furnishes such service or commodity only to himself, his employees or tenants when such service or commodity is not resold to or used by others.

d1. Any person other than a nonprofit organization serving only its members, who distributes or provides utility service to his employees or tenants by individual meters or by other coin-operated devices with a charge for metered or coin-operated utility service shall be a public utility within the definition and meaning of this Chapter with respect to the regulation of rates and provisions of service rendered through such meter or coin-operated device imposing such separate metered utility charge.

d2. If any person conducting a public utility shall also conduct any enterprise not a public utility, such enterprise is not subject to the provisions of this Chapter.

d3. A water or sewer system owned by a homeowners' association that provides water or sewer service only to members or leaseholds of members is not subject to the provisions of this Chapter.

e. The term "public utility" shall include the University of North Carolina insofar as said University supplies telephone service, electricity or water to the public for compensation from the University Enterprises defined in G.S. 116-41.1(9).

Nothing in this sub-subdivision shall be construed to limit the ability of an electric power supplier to use electric vehicle charging stations to furnish electricity for charging electric vehicles. Any increases in customer demand or energy consumption associated with transportation electrification shall not constitute found revenues for an electric public utility.

(24) "Rate" means every compensation, charge, fare, tariff, schedule, toll, rental and classification, or any of them, demanded, observed, charged or collected by any public utility, for any service product or commodity offered by it to the public, and any rules, regulations, practices or contracts affecting any such compensation, charge, fare, tariff, schedule, toll, rental or classification.

(25) "Route" means the course or way which is traveled; the road or highway over which motor vehicles operate.

(26) "Securities" means stock, stock certificates, bonds, notes, debentures, or other evidences of ownership or of indebtedness, and any assumption or guaranty thereof.

(27) "Service" means any service furnished by a public utility, including any commodity furnished as a part of such service and any ancillary service or facility used in connection with such service.

(28) The word "State" means the State of North Carolina; "state" means any state.

(29) "Town" means any unincorporated community or collection of people having a geographical name by which it may be generally known and is so generally designated.

(30) "Panel" means a panel of three commissioners, a division of the Utilities Commission authorized for the purpose of carrying out certain functions of the Commission.

History

(1913, c. 127, s. 7; C.S., s. 1112(b); 1933, c. 134, ss. 3, 8; c. 307, s. 1; 1937, c. 108, s. 2; 1941, cc. 59, 97; 1947, c. 1008, s. 3; 1949, c. 1132, s. 4; 1953, c. 1140, s. 1; 1957, c. 1152, s. 13; 1959, c. 639, ss. 12, 13; 1963, c. 1165, s. 1; 1967, c. 1094, ss. 1, 2; 1971, c. 553; c. 634, s. 1; cc. 894, 895; 1973, c. 372, s. 1; 1975, c. 243, s. 2; cc. 254, 415; 1979, c. 652, s. 1; 1979, 2nd Sess., c. 1219, s. 1; 1981 (Reg. Sess., 1982), c. 1186, s. 2; 1985, c. 676, s. 4; 1987, c. 445, s. 2; 1989, c. 110; 1993, c. 349, s. 1; 1993 (Reg. Sess., 1994), c. 777, s. 1(b); 1995, c. 27, ss. 2, 3; c. 509, s. 34; c. 523, s. 1; 1997-426, s. 8; 1997-437, s. 1; 1998-128, ss. 1-3; 2004-199, s. 1; 2004-203, s. 37(a); 2005-95, s. 2; 2011-84, s. 2(a); 2015-241, s. 7A.4(e); 2017-120, s. 2; 2017-192, ss. 1(a), 6(b); 2019-132, s. 1(a), (b); 2021-23, ss. 2, 25.)

Cross References. - For provision making small power producers as defined in subdivision (27a) of this section subject to the provisions of Part 3 of Article 21 of Chapter 143, the Dam Safety Law, even though certified by the North Carolina Utilities Commission, see G.S. 143-215.25A.

Editor's Note. - Chapter 55, referred to in subdivision (23)c of this section, was rewritten, effective July 1, 1990. For definitions applicable to that chapter, see now G.S. 55-1-40.

Session Laws 2011-84, s. 2(a), which added subdivision (23)( l ), was applicable to the provision of communications service by a city or joint agency under Part 1 of Article 20 of Chapter 160A of the General Statutes on and after May 21, 2011.

Session Laws 2011-84, s. 2(b), provides: "This section shall not be construed to change the regulatory nature of or requirements applicable to any particular service currently regulated by the Commission under Chapter 62 of the General Statutes."

Session Laws 2011-84, s. 5, as amended by Session Laws 2014-115, s. 16.1, provides: "Sections 2, 3, and 4 of this act do not apply to a city or joint agency providing communications service as of January 1, 2011, provided the city or joint agency limits the provision of communications service as provided in G.S. 160A-340.2(c). In the event a city subject to the exemption set forth in this section provides communications service to a customer outside the limits set forth in G.S. 160A-340.2(c), the city shall have 30 days from the date of notice or discovery to cease providing service to the customer without loss of the exemption."

Session Laws 2011-84, s. 6, provides: "Any city that is designated as a public utility under Chapter 62 of the General Statutes when this act becomes law shall not be subject to the provisions of this act with respect to any of its operations that are authorized by that Chapter."

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subdivision (23)b.

Effect of Amendments. - Session Laws 2004-199, s. 1, and 2004-203, s. 37(a), both effective August 17, 2004, substituted "Office of Information Technology Services" for "Office of the State Controller" in sub-subdivision (23)i.

Session Laws 2005-95, s. 2, effective June 21, 2005, added present subsection (1) and redesignated former subsections (1) and (1a) as present subsections (1a) and (1b).

Session Laws 2015-241, s. 7A.4(e), effective September 18, 2015, substituted "Department of Information Technology" for "Office of Information Technology Services" in subdivision (23)i.

Session Laws 2017-120, s. 2, effective July 18, 2017, added subdivision (23)m.

Session Laws 2017-192, ss. 1(a) and 6(b), effective July 27, 2017, in sub-sub-subdivision (23)a.1., substituted "facility is either for (i) a person's" for "facility is for such person's", added "or (ii) a person who constructs or operates an eligible solar energy facility on the site of a customer's property and leases such facility to that customer, as provided by and subject to the limitations of Article 6B of this Chapter", and made a related punctuation change; and substituted "that qualifies as a 'small power production facility' under 16 U.S.C. § 796, as amended." for "with a power production capacity which, together with any other facilities located at the same site, does not exceed 80 megawatts of electricity and which depends upon renewable resources for its primary source of energy. For the purposes of this section, renewable resources shall mean: hydroelectric power. A small power producer shall not include persons primarily engaged in the generation or sale of electricity from other than small power production facilities" at the end of subdivision (27a).

Session Laws 2019-132, s. 1(a), (b), effective July 19, 2019, added subdivision (21a) and sub-subdivision (23)n.

Session Laws 2021-23, s. 2, effective May 17, 2021, inserted "person or" prior to "public utility" in subdivision (2); inserted "or sewer service" prior to "to less than 15 residential customers" and "or sewer" prior to "system in a subdivision" in subdivision (23)a.2; deleted "as defined in G.S. 55-2" in subdivision (23)c; rewrote subdivision (23)d; deleted "switched" prior to "broadband" and substituted "G.S. 143B-1371" for "G.S. 143B-426.39" in subdivision (23)i.

Legal Periodicals. - For survey of 1978 administrative law, see 57 N.C.L. Rev. 831 (1979).

CASE NOTES

Definitions Not Controlling Where Terms Are Used Elsewhere. - The definitions of "public utility" and "franchise" contained in this section are not controlling in determining whether an agreement of a municipality constitutes a franchise or a license, since the definitions of the statute do not purport to be authoritative definitions of those terms as used elsewhere. Shaw v. City of Asheville, 269 N.C. 90, 152 S.E.2d 139 (1967).

The term "franchise," as used by the courts and by text writers, is not limited to a special right granted to a public utility, as it is defined in this section. Shaw v. City of Asheville, 269 N.C. 90, 152 S.E.2d 139 (1967).

Applicability of Article 8. - The General Assembly intended Article 8 to apply to all public utilities doing business in this State, whether they be foreign or domestic corporations, and even though they are also engaged in interstate commerce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 288 N.C. 201, 217 S.E.2d 543 (1975).

There is nothing in the language of Article 8 or of the Public Utilities Act generally to support the contention that Article 8 is not applicable to a multistate foreign corporation engaged in interstate commerce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).

"Public" means the whole body politic, the body of the people at large, the people as a whole. State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part, rev'd on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

What Is the "Public" Dependent on Regulatory Circumstances. - Whether any given enterprise is a public utility within the meaning of a regulatory scheme does not depend on some abstract, formulistic definition of "public" to be thereafter universally applied. What is the "public" in any given case depends rather on the regulatory circumstances of that case. Some of these circumstances are: (1) the nature of the industry sought to be regulated; (2) the type of market served by the industry; (3) the kind of competition that naturally inheres in that market; and (4) the effect of nonregulation or exemption from regulation of one or more persons engaged in the industry. The meaning of "public" must, in the final analysis, be such as will, in the context of the regulatory circumstances, accomplish the legislature's purpose and comport with its public policy. State ex rel. Utils. Comm'n v. Simpson, 295 N.C. 519, 246 S.E.2d 753 (1978).

In determining the scope of the Commission's authority, the emphasis should be placed on the public utility function rather than a literal reading of the statutory definition of "public utility," and the statutory definition should not be read so narrowly as to preclude commission's jurisdiction over a function which is required to provide adequate service to the subscribers. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Definition of "Public Utility" Cannot Be Expanded. - Neither the Commission nor the Supreme Court has authority to add to the types of business defined by the legislature as public utilities. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 93 N.C. App. 260, 377 S.E.2d 772 (1989).

Test of System as Public Utility. - One test to determine whether a plant or system is a public utility is whether the public may enjoy it by right or by permission only. It is immaterial that the service is limited to a specified area and that the facilities are limited in capacity. State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part, rev'd on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

Service Up to Capacity as Service to "Public". - One offers service to the "public" within the meaning of subparagraph 6 of paragraph a of subdivision (23) when he holds himself out as willing to serve all who apply up to the capacity of his facilities. It is immaterial, in this connection, that his service is limited to a specified area and his facilities are limited in capacity. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Sewage Treatment System Is Public Utility. - The operation of a sewage treatment system for compensation is a public utility within the meaning of the Public Utilities Act. Ocean Glen Townhouse Condominium Owners Ass'n Phase I v. State ex rel. N.C. Utils. Comm'n, 126 N.C. App. 495, 486 S.E.2d 223 (1997), cert. denied, 347 N.C. 136, 492 S.E.2d 36 (1997).

Sanitary District Was Not a Utility. - Water customer who was charged late fees failed to state a claim against the sanitary district for overcharging under N.C. Admin. Code tit. 4, r. 11.R12-9 (June 2010) because the sanitary district was a quasi-municipal corporation and therefore not a "utility" within the North Carolina Public Utilities Commission's purview under G.S. 62-3(19) and (23). There was a complete absence of justiciable fact, justifying the trial court's award of attorney's fees against the customers under G.S. 6-21.5. Wayne St. Mobile Home Park, LLC v. N. Brunswick Sanitary Dist., 213 N.C. App. 554, 713 S.E.2d 748 (2011).

As to "service" rendered in contemplation of former statute, see State v. Andrews, 191 N.C. 545, 132 S.E. 568 (1926).

Status of the grantee was a material factor in determining the validity of a grant of a franchise under the authority of former G.S. 160-2, for that statute authorized municipal corporations to grant franchises only to "public utilities," though it did not necessarily follow that such grantee had to be the operator of a business within the definition of "public utility" contained in this section. Kornegay v. City of Raleigh, 269 N.C. 155, 152 S.E.2d 186 (1967).

If Applicant Is Not "Public Utility," Issuance of Certificate Is Nullity. - If an applicant's proposed service is not within the definition of "public utility" contained in subdivision (23) of this section, the issuance of a certificate of public convenience and necessity by the Commission to the applicant would be a nullity. It would not supply a basis for a further order conferring upon the applicant a right which may be granted only to a public utility. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Campground Not Within Exception. - Because owners of a campground charged occupants more than the actual cost of electricity supplied to the campground by an electric company, the owners were not excluded from the statutory definition of public utility under G.S. 62-3(23)(h). Shepard v. Bonita Vista Props., L.P., 191 N.C. App. 614, 664 S.E.2d 388 (2008), aff'd, 363 N.C. 252, 675 S.E.2d 332 (2009).

The fact that a corporation has the authority to, and does, engage in private business in addition to its public service does not deprive it of its status as a public service corporation. A public service (public utility) corporation having the power of eminent domain makes such corporation amenable to State control through the Utilities Commission. State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part, rev'd on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

A mobile radio service falls clearly within the definition of "public utility" in subparagraph 6 of paragraph a of subdivision (23). State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

A medical doctor whose communication service consisted of seven two-way radios, three "beeper" radio devices and one base station, who was providing service only to 10 other members of the County Medical Society, was engaged in the operation of a public utility within the meaning of G.S. 62-3(23)a6 and former 62-119(3). State ex rel. Utils. Comm'n v. Simpson, 32 N.C. App. 543, 232 S.E.2d 871 (1977), aff'd, 295 N.C. 519, 246 S.E.2d 753 (1978).

Telephone Answering or Message Relaying Service Not a "Public Utility". - Neither a telephone answering nor a message relaying service is a public utility within the purview of subdivision (23). State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

Sand-Pit Company Not a "Public Utility." - Sand-pit company which did not own or operate any trucks to haul its sand was not a "public utility" as defined by this section. Gordon v. Garner, 127 N.C. App. 649, 493 S.E.2d 58 (1997), cert. denied, 347 N.C. 670, 500 S.E.2d 86 (1998).

Municipal corporations are specifically excluded from the definition of a "public utility" in subdivision (23) of this section. Dale v. City of Morgantown, 270 N.C. 567, 155 S.E.2d 136 (1967); State ex rel. Utils. Comm'n v. Town of Pineville, 13 N.C. App. 663, 187 S.E.2d 473 (1972), aff'd, 17 N.C. App. 522, 195 S.E.2d 76 (1973); State ex rel. Utils. Comm'n v. Hunt Mfg. Co., 16 N.C. App. 335, 192 S.E.2d 16 (1972).

And Are Not Subject to Commission's Regulation. - A municipal corporation distributing and selling electric energy to its inhabitants, and to others in its vicinity, is not subject to regulation by the North Carolina Utilities Commission, and the provisions of this Chapter do not apply to it, except as otherwise expressly stated therein. Dale v. City of Morgantown, 270 N.C. 567, 155 S.E.2d 136 (1967); State ex rel. Utils. Comm'n v. Hunt Mfg. Co., 16 N.C. App. 335, 192 S.E.2d 16 (1972).

Where parties constructed water mains from end of municipal lines to their properties, permitting others to tap into the mains, and the municipality installed meters and furnished water to the others directly, parties were not public utilities within the Public Utilities Act of 1933 so as to give the Utilities Commission jurisdiction. State v. New Hope Rd. Water Co., 248 N.C. 27, 102 S.E.2d 377 (1958).

Appellate Court Had No Jurisdiction to Review Commission's Interlocutory Order - Water and sewer processing facilities part-owner's appeal of interlocutory orders of the North Carolina Utilities Commission holding that the part-owner was a public utility under G.S. 62-3(23)a.2 and was subject to the Commission's jurisdiction was dismissed as the absence of any exceptions to G.S. 62-90 or G.S. 7A-29, allowing review of interlocutory orders of the Commission, required the appellate court to conclude that it had no jurisdiction to consider appeals of interlocutory orders of the Commission; further, the appellate court did not have authority under G.S. 7A-32(c) to review the part-owner's issues as there was no final order of the Commission. State ex rel. Utils. Comm'n v. Buck Island, Inc., 158 N.C. App. 536, 581 S.E.2d 122 (2003).

The delivery of power by a Tennessee corporation domesticated to do business in this State to Tennessee Valley Authority and the distribution by TVA of that power under pooling and apportionment agreements to North Carolina utilities for distribution in North Carolina was the furnishing of electricity "to another person for distribution to or for the public for compensation" within the meaning of subdivision (23)b of this section. State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part, rev'd on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

The word "rate," as used in the Public Utilities Act, refers not only to the monetary amount which each customer must ultimately pay, but also to the published method or schedule by which that amount is figured. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Rate Formula Permissible. - The definition of "rate" contained in this section is worded in such a broad manner as to encompass the use of a formula, and the fact that the formula must be computed each month does not render it so imprecise as to be statutorily impermissible. State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975), aff'd, 291 N.C. 361, 230 S.E.2d 671 (1976).

Extension of Rate Increase Unauthorized. - The contention of the companies and the Commission that other provisions of this Chapter, including subdivision (24) of this section authorizing the Commission to fix reasonable and just rates for public utility service, permit the Commission to extend its previously authorized rate increases "based solely upon the increased cost of fuel" beyond Sept. 1, 1975, contrary to the mandate of G.S. 62-134(e) (now repealed), was utterly without merit. It is well established that when there are two statutes, one dealing specifically with the matter in issue and the other being in general terms which, nothing else appearing, would include the matter in question, the specific statute controls. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

A common carrier by motor vehicle may be defined as a person who is not exempted from regulation under the provisions of G.S. 62-260, and who holds himself out to the general public to engage in transportation of persons or property for compensation. State ex rel. Utils. Comm'n v. J.D. McCotter, Inc., 16 N.C. App. 475, 192 S.E.2d 629 (1972), aff'd, 283 N.C. 104, 194 S.E.2d 859 (1973).

Common carrier of petroleum products which commits part of its equipment to dedicated use should not be regarded as a matter of law as a contract carrier, since common carriers participating in the dedicated rate arrangement are also rendering service to the public generally and are providing service impartially to all persons requesting such service. State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).

Whether Party Operating as Common Carrier Question of Law. - Whether under the undisputed facts a party is operating as a common carrier is a question of law for the court. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

The "crucial test" in determining whether an entity is operating as a common carrier is whether it is holding itself out as such. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

A common carrier generally is not authorized to act as a contract carrier. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

A common carrier must charge all customers uniform rates for the same kind and degree of services; contract carriers, by contrast, are not subject to this requirement. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

A "certificate" authorizes performance as a common carrier, while a "permit" authorizes performance as a contract carrier. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

A contract carrier is not authorized to act as a common carrier; it may not offer its services to the general public. Indeed, it may serve at most a very limited number of shippers, and then only under a private individual contract with each shipper to be served. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

As to what constitutes a contract carrier, see State ex rel. Utils. Comm'n v. Petroleum Transp., Inc., 2 N.C. App. 566, 163 S.E.2d 526 (1968).

A company which offers white-water rafting excursions is not a common carrier, because any "transportation" was merely incidental to primary purpose of outdoor adventure, camaraderie, excitement and thrills. Beavers v. Federal Ins. Co., 113 N.C. App. 254, 437 S.E.2d 881, cert. denied, 336 N.C. 602, 447 S.E.2d 384 (1994).

Requirements for Permit to Operate as Contract Carrier. - In addition to the statutory requirements of G.S. 62-262 and subdivision (8) of this section, an applicant for a permit to operate as a contract carrier in North Carolina must conform to the standards set forth by the Utilities Commission. State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970).

The definition of "contract carrier" includes charter service. State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

Lessor of Vehicles Held Not Contract Carrier. - Where the owner of trucks leased them to another corporation under an agreement requiring lessor to carry insurance and maintain the vehicles and giving lessee control over the operation of the trucks with right to use same exclusively for the transportation and delivery of lessee's goods, the lessor was not a contract carrier within the meaning of the statute as it stood in 1949, since the lessor merely leased its vehicles and was not a carrier of any kind, and lessee was solely a private carrier; therefore, lessor was not liable for additional assessment at the "for hire" rates under the statute. Equipment Fin. Corp. v. Scheidt, 249 N.C. 334, 106 S.E.2d 555 (1959).

Former Definition of Contract Carrier Not Retroactive. - The definition of "contract carrier" in the Bus Act of 1949 (former G.S. 62-121.43 through 62-121.79) was definitive or regulatory and intended to be applied prospectively with respect to applications for permits as contract carriers under the general provisions of the act, and had no bearing on or relation to the grandfather rights confirmed in the act. To make these definitive and regulatory provisions retroactive, so as to place a limitation on the rights of a carrier under the grandfather clause contained in the act, would be in contravention of his constitutional rights and contrary to due process of law. Moreover, such a construction would completely nullify the grandfather clause and make it feckless. State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

For comparison of definitions in Federal Motor Carrier Act and Bus Act of 1949 (former G.S. 62-121.43 through 62-121.79), see State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

Legislative Intent as to Water Systems. - By excluding from its definition of public utility those water systems serving fewer than 10 customers, the General Assembly manifested its clear intent that systems serving 10 or more customers serve a sufficient segment of the public to create a public interest in their regulation, so as to make certain that adequate service is provided at fair rates. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Provision of Water and Sewage Service "To or for the Public". - By selling water to 18 customers and providing sewage disposal service to 19 customers at the time of hearing, individual provided water and sewage disposal service "to or for the public," where, since her acquisition of the water distribution and sewage disposal facilities, she had provided services to any resident of a house connected thereto who desired the services, and where although she had solicited no customers and had not extended her facilities to any residences not previously served, she had willingly provided service to new customers who moved into homes already connected to her facilities. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Hospital Not a Public Utility - As a hospital was not a "public utility" pursuant to the statutory definition or pursuant to any other judicially recognized definition, a claim that a hospital violated the public utility doctrine when it denied a Canadian-trained doctor staff privileges was properly dismissed for failure to state an actionable claim. Kohn v. Firsthealth of the Carolinas, Inc., 229 N.C. App. 19, 747 S.E.2d 395 (2013).

Public Utility Found. - North Carolina Utilities Commission properly ruled that the North Carolina Waste Awareness and Reduction Network's (NC WARN) arrangement with a church to install and maintain a solar panel system constituted a public utility in violation of the Public Utilities Act because NC WARN was operating as a public utility within the meaning of the Public Utilities Act; NC WARN desired to serve customers of its own choosing within an energy company's territory without oversight. State ex rel. Utils. Comm'n v. N.C. Waste Awareness & Reduction Network, 255 N.C. App. 613, 805 S.E.2d 712 (2017), aff'd, 812 S.E.2d 804, 2018 N.C. LEXIS 330 (2018).

Applied in City Coach Co. v. Gastonia Transit Co., 227 N.C. 391, 42 S.E.2d 398 (1947); State ex rel. Utilities Comm'n v. Chapel Hill Tel. Co., 12 N.C. App. 543, 183 S.E.2d 802 (1971); State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974); State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974); State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974); State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 43 N.C. App. 662, 259 S.E.2d 791 (1979); State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 48 N.C. App. 115, 268 S.E.2d 851 (1980); State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982); State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397 (1985); State ex rel. Utils. Comm'n v. Edmisten, 314 N.C. 122, 333 S.E.2d 453 (1985); Bell Arthur Water Corp. v. Greenville Utils. Comm'n, 173 F.3d 517 (4th Cir. 1999).

Cited in State ex rel. Utils. Comm'n v. A.C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966); State ex rel. Utils. Comm'n v. Kenan Transp. Co., 10 N.C. App. 626, 179 S.E.2d 799 (1971); State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98 (1973); Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774 (1974); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976); State ex rel. N.C. Utils. Comm'n v. Transylvania Utils. Co., 30 N.C. App. 336, 226 S.E.2d 824 (1976); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 47 N.C. App. 418, 267 S.E.2d 688 (1980); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983); In re Lower Cape Fear Water & Sewer Auth., 329 N.C. 675, 407 S.E.2d 155 (1991); State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992); State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999); BellSouth Telecomms., Inc. v. City of Laurinburg, 168 N.C. App. 75, 606 S.E.2d 721, cert. denied, - N.C. - , 615 S.E.2d 660, cert. denied, 359 N.C. 629, - S.E.2d - (2005).

Opinions of Attorney General

"Person" Includes Municipalities and Counties. - Municipalities and counties, bodies politic and corporate, are included in the definition of "person" under G.S. 62-3(21). See opinion of Attorney General to Mr. Robert H. Bennink, Jr., General Counsel and Hearing Examiner, North Carolina Utilities Commission, 55 N.C.A.G. 18 (1985).

The Department of Correction (now Division of Adult Correction), as a State agency, is not a public utility and is not subject to the fee requirements of G.S. 62-302. See Opinion of Attorney General to LaVee Hamer, General Counsel, North Carolina Department of Correction, - N.C.A.G. - (October 17, 1994).

Western Carolina University (WCU) is not a public utility subject to supervision by the Commission, except that, pursuant to G.S. 116-35, sales to the public of excess power must be "at a rate or rates approved by the Utilities Commission." See opinion of Attorney General to Mr. Myron L. Coulter, Chancellor, Western Carolina University, 55 N.C.A.G. 55 (1985).


§ 62-4. Applicability of Chapter.

This Chapter shall not terminate the preexisting Commission or appointments thereto, or any certificates, permits, orders, rules or regulations issued by it or any other action taken by it, unless and until revoked by it, nor affect in any manner the existing franchises, territories, tariffs, rates, contracts, service regulations and other obligations and rights of public utilities, unless and until altered or modified by or in accordance with the provisions of this Chapter.

History

(1963, c. 1165, s. 1.)

§ 62-5. Utilities; property affected by boundary certification.

The owner or occupant of a dwelling unit or commercial establishment on improved property that shall be deemed located in whole or in part in the State of North Carolina as a result of the boundary certification described in G.S. 141-9 may continue to receive utility services from the South Carolina utility or its successor that is providing service to the dwelling unit or commercial establishment on January 1, 2017. However, the owner or occupant may, within his or her discretion, elect to have one or more of the utility services being provided to the property by a South Carolina utility on January 1, 2017, be provided by a North Carolina utility as long as the property is located within the North Carolina utility's service area. A North Carolina utility that is a city or county may require the owner of the property to pay a periodic availability fee authorized by law only if the owner elects to have utility service provided to the dwelling unit or commercial establishment by the North Carolina utility. A South Carolina utility that provides service to the property as authorized in this section is not a public utility under G.S. 62-3(23), and is not subject to regulation by the North Carolina Utilities Commission as it relates to providing the particular utility service involved. For purposes of this section only, the term "South Carolina utility" has the same meaning as the term "utility" or "utilities" in the Code of Laws of South Carolina, and the term "North Carolina utility" has the same meaning as the term "public utility" which is defined in G.S. 62-3(23), and also includes a city or county that provides any of the services listed in G.S. 160A-311 or G.S. 153A-274, an authority organized under the North Carolina Water and Sewer Authorities Act, or an electric or telephone membership corporation.

History

(2016-23, s. 11(a).)

Editor's Note. - Session Laws 2016-23, s. 11(a), effective June 22, 2016, was codified as this section at the direction of the Revisor of Statutes.

Session Laws 2016-23, s. 12(a), is a severability clause.

§§ 62-6 through 62-9: Reserved for future codification purposes.

ARTICLE 2. Organization of Utilities Commission.

Sec.

§ 62-10. Number; appointment; terms; qualifications; chairman; vacancies; compensation; other employment prohibited.

  1. The North Carolina Utilities Commission shall consist of seven commissioners who shall be appointed by the Governor subject to confirmation by the General Assembly by joint resolution. The names of commissioners to be appointed by the Governor shall be submitted by the Governor to the General Assembly for confirmation by the General Assembly on or before May 1, of the year in which the terms for which the appointments are to be made are to expire. Upon failure of the Governor to submit names as herein provided, the Lieutenant Governor and Speaker of the House jointly shall submit the names of a like number of commissioners to the General Assembly on or before May 15 of the same year for confirmation by the General Assembly. Regardless of the way in which names of commissioners are submitted, confirmation of commissioners must be accomplished prior to adjournment of the then current session of the General Assembly. This subsection shall be subject to the provisions of subsection (c) of this section.
  2. The terms of the commissioners now serving shall expire at the conclusion of the term for which they were appointed which shall remain as before with two regular eight-year terms expiring on July 1 of each fourth year after July 1, 1965, and the fifth term expiring on July 1 of each eighth year after July 1, 1963. The terms of office of utilities commissioners thereafter shall be six years commencing on July 1 of the year in which the predecessor terms expired, and ending on July 1 of the sixth year thereafter.
  3. In order to increase the number of commissioners to seven, the names of two additional commissioners shall be submitted to the General Assembly on or before May 27, 1975, for confirmation by the General Assembly as provided in G.S. 62-10(a). The commissioners so appointed and confirmed shall serve new terms commencing on July 1, 1975, one of which shall be for a period of two years (with the immediate successor serving for a period of six years), and one of which shall be for a period of two years.
  4. A commissioner in office shall continue to serve until his successor is duly confirmed and qualified but such holdover shall not affect the expiration date of such succeeding term.
  5. On July 1, 1965, and every four years thereafter, one of the commissioners shall be designated by the Governor to serve as chairman of the Commission for the succeeding four years and until his successor is duly confirmed and qualifies. Upon death or resignation of the commissioner appointed as chairman, the Governor shall designate the chairman from the remaining commissioners and appoint a successor as hereinafter provided to fill the vacancy on the Commission.
  6. In case of death, incapacity, resignation or vacancy for any other reason in the office of any commissioner prior to the expiration of his term of office, the name of his successor shall be submitted by the Governor within four weeks after the vacancy arises to the General Assembly for confirmation by the General Assembly. Upon failure of the Governor to submit the name of the successor, the Lieutenant Governor and Speaker of the House jointly shall submit the name of a successor to the General Assembly within six weeks after the vacancy arises. Regardless of the way in which names of commissioners are submitted, confirmation of commissioners must be accomplished prior to the adjournment of the then current session of the General Assembly.
  7. If a vacancy arises or exists pursuant to either subsection (a) or (c) or (f) of this section when the General Assembly is not in session, and the appointment is deemed urgent by the Governor, the commissioner may be appointed and serve on an interim basis pending confirmation by the General Assembly; provided, however, no person may be appointed to serve on an interim basis pending confirmation by the General Assembly if the person was subject to but not confirmed by the General Assembly within the preceding four years. The limitation on appointment contained in this subsection includes, among other things, unfavorable action on a joint resolution for confirmation, such as the resolution failing on any reading in either chamber of the General Assembly, and failure to ratify a joint resolution for confirmation prior to adjournment of the then current session of the General Assembly.
  8. The salary of each commissioner and that of the commissioner designated as chairman shall be set by the General Assembly in the Current Operations Appropriations Act. In lieu of merit and other increment raises paid to regular State employees, each commissioner, including the commissioner designated as chairman, shall receive as longevity pay an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service. "Service" means service as a member of the Utilities Commission.
  9. In addition to compensation for their services, each member of the Commission who lives at least 50 miles from the City of Raleigh shall be paid a weekly travel allowance for each week the member travels to the City of Raleigh from the member's home for business of the Commission. The allowance shall be calculated for each member by multiplying the actual round-trip mileage from that member's home to the City of Raleigh by the rate-per-mile which is the business standard mileage rate set by the Internal Revenue Service in Rev. Proc. 93-51, December 27, 1993.
  10. The standards of judicial conduct provided for judges in Article 30 of Chapter 7A of the General Statutes shall apply to members of the Commission. Members of the Commission shall be liable to impeachment for the causes and in the manner provided for judges of the General Court of Justice in Chapter 123 of the General Statutes. Members of the Commission shall not engage in any other employment, business, profession, or vocation while in office.
  11. Except as provided in subsection (h1) of this section, members of the Commission shall be reimbursed for travel and subsistence expenses at the rates allowed to State officers and employees by G.S. 138-6(a).

Thereafter, the terms of office of the additional commissioners shall be for six years as provided in G.S. 62-10(b).

History

(1941, c. 97, s. 2; 1949, c. 1009, s. 1; 1959, c. 1319; 1963, c. 1165, s. 1; 1967, c. 1238; 1975, c. 243, s. 3; c. 867, ss. 1, 2; 1977, c. 468, s. 1; c. 913, s. 2; 1983 (Reg. Sess., 1984), c. 1116, s. 91; 1989, c. 781, s. 41.2; 1993 (Reg. Sess., 1994), c. 769, s. 7.4(b); 1996, 2nd Ex. Sess., c. 18, s. 28.2(b); 1997-443, s. 33.5; 1999-237, s. 28.21(a), (b); 2011-145, s. 14.8A(a); 2018-114, s. 23(a).)

Editor's Note. - Session Laws 2018-114, s. 23(c), made the amendment of subsection (g) by Session Laws 2018-114, s. 23(a), effective June 27, 2018, and applicable to appointments made on or after that date.

Sessions Laws 2018-114, s. 29 is a severability clause.

Effect of Amendments. - Session Laws 2011-145, s. 14.8A(a), effective January 1, 2012, and applicable to all vacancies on the Utilities Commission occurring on or after that date, in the last sentence of subsection (b), substituted "six years" for "eight years" and "sixth year" for "eighth year"; in the last paragraph of subsection (c), substituted "six years" for "eight years"; and made a minor stylistic change in subsection (i).

Session Laws 2018-114, s. 23(a), rewrote subsection (g). For effective date and applicability, see editor's note.

State Government Reorganization. - The Utilities Commission was transferred to the Department of Commerce by former G.S. 143A-174.

CASE NOTES

Applied in State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).


§ 62-11. Oath of office.

Each utilities commissioner before entering upon the duties of his office shall file with the Secretary of State his oath of office to support the Constitution and laws of the United States and the Constitution and laws of the State of North Carolina, and to well and truly perform the duties of his said office as utilities commissioner, and that he is not the agent or attorney of any public utility, or an employee thereof, and that he has no interest in any public utility.

History

(1933, c. 134, s. 5; 1935, c. 280; 1939, c. 404; 1941, c. 97; 1963, c. 1165, s. 1.)

§ 62-12. Organization of Commission; adoption of rules and regulations therefor.

To facilitate the work of the Commission and for administrative purposes, the chairman of the Commission, with the consent and approval of the Commission, may organize the work of the Commission in several hearing divisions and operating departments and may designate a member of the Commission as the head of any division or divisions and assign to members of the Commission various duties in connection therewith. Subject to the provisions of the North Carolina Human Resources Act (Article 2 of Chapter 143 of the General Statutes), the Commission shall prepare and adopt rules and regulations governing the personnel, departments or divisions and all internal affairs and business of the Commission.

History

(1941, c. 97, s. 3; 1949, c. 1009, s. 2; 1957, c. 1062, s. 1; 1963, c. 1165, s. 1; 2013-382, s. 9.1(c).)

Editor's Note. - Article 2, Chapter 143, referred to in this section, was repealed by Session Laws 1965, c. 640, s. 1. For present provisions as to State Human Resources System, see G.S. 126-1 through 126-12.

Effect of Amendments. - Session Laws 2013-382, s. 9.1(c), effective August 21, 2013, substituted "North Carolina Human Resources Act" for "State Personnel Act."

§ 62-13. Chairman to direct Commission.

  1. The chairman shall be the chief executive and administrative officer of the Commission.
  2. The chairman shall determine whether matters pending before the Commission shall be considered or heard initially by the full Commission, a panel of three commissioners, a hearing commissioner, or a hearing examiner. Subject to the rules of the Commission, the chairman shall assign members of the Commission to proceedings and shall assign members to preside at proceedings before the full Commission or a panel of three commissioners.
  3. The chairman, the presiding commissioner, hearing commissioner, or hearing examiner shall hear and determine procedural motions or petitions not determinative of the merits of the proceedings and made prior to hearing; and at hearing shall make all rulings on motions and objections.
  4. The chairman acting alone, or any three commissioners, may initiate investigations, complaints, or any other proceedings within the jurisdiction of the Commission.

History

(1941, c. 97, s. 4; 1957, c. 1062, s. 2; 1963, c. 1165, s. 1; 1975, c. 243, ss. 9, 10; 1977, c. 468, s. 2; c. 913, s. 2.)

§ 62-14. Commission staff; structure and function.

  1. The Commission is authorized and empowered to employ hearing examiners; court reporters; a chief clerk and deputy clerk; a commission attorney and assistant commission attorney; transportation and pipeline safety inspectors; and such other professional, administrative, technical, and clerical personnel as the Commission may determine to be necessary in the proper discharge of the Commission's duty and responsibility as provided by law. The chairman shall organize and direct the work of the Commission staff.
  2. The salaries and compensation of all such personnel shall be fixed in the manner provided by law for fixing and regulating salaries and compensation by other State agencies.
  3. The chairman, within allowed budgetary limits and as allowed by law, shall authorize and approve travel, subsistence and related expenses of such personnel, incurred while traveling on official business.

History

(1963, c. 1165, s. 1; 1977, c. 468, s. 3.)

§ 62-15. Office of executive director; Public Staff, structure and function.

  1. There is established in the Commission the office of executive director, whose salary and longevity pay shall be the same as that fixed for members of the Commission. "Service" for purposes of longevity pay means service as executive director of the Public Staff. The executive director shall be appointed by the Governor subject to confirmation by the General Assembly by joint resolution. The name of the executive director appointed by the Governor shall be submitted to the General Assembly on or before May 1 of the year in which the term of his office begins. The term of office for the executive director shall be six years, and the initial term shall begin July 1, 1977. The executive director may be removed from office by the Governor in the event of his incapacity to serve; and the executive director shall be removed from office by the Governor upon the affirmative recommendation of a majority of the Commission, after consultation with the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources of the General Assembly. In case of a vacancy in the office of executive director for any reason prior to the expiration of his term of office, the name of his successor shall be submitted by the Governor to the General Assembly, not later than four weeks after the vacancy arises. If a vacancy arises in the office when the General Assembly is not in session, the executive director shall be appointed by the Governor to serve on an interim basis pending confirmation by the General Assembly.
  2. There is established in the Commission a Public Staff. The Public Staff shall consist of the executive director and such other professional, administrative, technical, and clerical personnel as may be necessary in order for the Public Staff to represent the using and consuming public, as hereinafter provided. All such personnel shall be hired, supervised, and directed by the executive director, as provided by law. The Public Staff shall not be subject to the supervision, direction, or control of the Commission, the chairman, or members of the Commission.
  3. Except for the executive director, the salaries and compensation of all such personnel shall be fixed in the manner provided by law for fixing and regulating salaries and compensation by other State agencies.
  4. It shall be the duty and responsibility of the Public Staff to:
    1. Review, investigate, and make appropriate recommendations to the Commission with respect to the reasonableness of rates charged or proposed to be charged by any public utility and with respect to the consistency of such rates with the public policy of assuring an energy supply adequate to protect the public health and safety and to promote the general welfare;
    2. Review, investigate, and make appropriate recommendations to the Commission with respect to the service furnished, or proposed to be furnished by any public utility;
    3. Intervene on behalf of the using and consuming public, in all Commission proceedings affecting the rates or service of any public utility;
    4. When deemed necessary by the executive director in the interest of the using and consuming public, petition the Commission to initiate proceedings to review, investigate, and take appropriate action with respect to the rates, operations, or service of public utilities;
    5. Intervene on behalf of the using and consuming public in all certificate applications filed pursuant to the provisions of G.S. 62-110.1, and provide assistance to the Commission in making the analysis and plans required pursuant to the provisions of G.S. 62-110.1 and 62-155;
    6. Intervene on behalf of the using and consuming public in all proceedings wherein any public utility proposes to reduce or abandon service to the public;
    7. Investigate complaints affecting the using and consuming public generally which are directed to the Commission, members of the Commission, or the Public Staff and where appropriate make recommendations to the Commission with respect to such complaints;
    8. Make studies and recommendations to the Commission with respect to standards, regulations, practices, or service of any public utility pursuant to the provisions of G.S. 62-43; provided, however, that the Public Staff shall have no duty, responsibility, or authority with respect to the enforcement of natural gas pipeline safety laws, rules, or regulations;
    9. When deemed necessary by the executive director, in the interest of the using and consuming public, intervene in Commission proceedings with respect to transfers of franchises, mergers, consolidations, and combinations of public utilities pursuant to the provisions of G.S. 62-111;
    10. Repealed by Session Laws 2021-23, s. 3, effective May 17, 2021.
    11. Review, investigate, and make appropriate recommendations to the Commission with respect to contracts of public utilities with affiliates or subsidiaries, pursuant to the provisions of G.S. 62-153;
    12. When deemed necessary by the executive director, in the interest of the using and consuming public, advise the Commission with respect to securities, regulations, and transactions, pursuant to the provisions of Article 8 of this Chapter.
    13. When deemed necessary by the executive director in the interest of the using and consuming public, appear before State and federal courts and agencies in matters affecting public utility service.
  5. The Public Staff shall have no duty, responsibility, or authority with respect to the laws, rules or regulations pertaining to the physical facilities or equipment of common, contract and exempt carriers, the registration of vehicles or of insurance coverage of vehicles of common, contract and exempt carriers; the licensing, training, or qualifications of drivers or other persons employed by common, contract and exempt carriers, or the operation of motor vehicle equipment by common, contract and exempt carriers in the State.
  6. The executive director representing the Public Staff shall have the same rights of appeal from Commission orders or decisions as other parties to Commission proceedings.
  7. Upon request, the executive director shall employ the resources of the Public Staff to furnish to the Commission, its members, or the Attorney General, such information and reports or conduct such investigations and provide such other assistance as may reasonably be required in order to supervise and control the public utilities of the State as may be necessary to carry out the laws providing for their regulation.
  8. The executive director is authorized to employ, subject to approval by the State Budget Officer, expert witnesses and such other professional expertise as the executive director may deem necessary from time to time to assist the Public Staff in its participation in Commission proceedings, and the compensation and expenses therefor shall be paid by the utility or utilities participating in said proceedings. Such compensation and expenses shall be treated by the Commission, for ratemaking purposes, in a manner generally consistent with its treatment of similar expenditures incurred by utilities in the presentation of their cases before the Commission. An accounting of such compensation and expenses shall be reported annually to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources and to the Speaker of the House of Representatives and the President Pro Tempore of the Senate.
  9. The executive director, within established budgetary limits, and as allowed by law, shall authorize and approve travel, subsistence, and related necessary expenses of the executive director or members of the Public Staff, incurred while traveling on official business.

History

(1949, c. 1009, s. 3; 1963, c. 1165, s. 1; 1977, c. 468, s. 4; 1981, c. 475; 1983, c. 717, s. 12.1; 1985, c. 499, s. 4; 1989, c. 781, s. 41.3; 1989 (Reg. Sess., 1990), c. 1024, s. 13; 1999-237, s. 28.21A; 2011-291, ss. 2.8, 2.9; 2017-57, s. 14.1(p); 2021-23, ss. 3, 24, 25.)

Editor's Note. - Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in this section.

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (h).

Effect of Amendments. - Session Laws 2011-291, ss. 2.8 and 2.9, effective June 24, 2011, in the sixth sentence of subsection (a) and in the last sentence of subsection (h), substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee."

Session Laws 2017-57, s. 14.1(p), effective July 1, 2017, substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "Joint Legislative Commission on Governmental Operations" in the third sentence of subsection (a) and the last sentence of subsection (h).

Session Laws 2021-23, s. 3, effective May 17, 2021, substituted "hired” for "appointed” and "director, as provided by law” for "director” in the third sentence of subsection (a); substituted "rates, operations” for "rates” in subdivision (d)(4); deleted subdivision (d)(10); and added subdivision (d)(13).

Legal Periodicals. - For brief comment on this section, see 27 N.C.L. Rev. 489 (1949).

For survey of 1977 law on common carriers, see 56 N.C.L. Rev. 853 (1978).

For article, "Ripening on the Vine: North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard Should Be Left Unchanged Ahead of 2012 Compliance Deadline," see 34 N.C. Cent. L. Rev. 111 (2012).

CASE NOTES

Public staff represented all of a utility's rate-paying customers in an investigation of regularities in the way in which the utility reported its regulated income to the North Carolina Utilities Commission and the Commission's order approving a settlement agreement resulting from that investigation. Therefore, a utility customers association and a customer could not properly intervene in the investigation and the order as the public staff represented their interests. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 163 N.C. App. 1, 592 S.E.2d 277 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 683 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 684 (2004), cert. denied, appeal dismissed, 358 N.C. 739, 602 S.E.2d 683 (2004), cert. dismissed, 358 N.C. 739, 602 S.E.2d 684, 602 S.E.2d 685 (2004).

Applied in State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982); State ex rel. Utils. Comm'n v. Seaboard C.L.R.R., 62 N.C. App. 631, 303 S.E.2d 549 (1983).

Cited in State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014); In re Investigation of Duke Energy Corp. & Progress Energy, Inc., 234 N.C. App. 20, 760 S.E.2d 740 (2014); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).


§ 62-16: Repealed by Session Laws 1977, c. 468, s. 5.

Cross References. - For present provisions relating to Commission staff, see G.S. 62-14.

§ 62-17. Annual reports; monthly or quarterly release of certain information; publication of procedural orders and decisions.

  1. It shall be the duty of the Commission to make and publish annual reports to the Governor of Commission activities, including copies of its general orders and regulations, comparative statistical data on the operation of the various public utilities in the State, comparisons of rates in North Carolina with rates elsewhere, a detailed report of its investigative division, a review of significant developments in the fields of utility law, economics and planning, a report of pending matters before the Commission, and a digest of the principal decisions of the Commission and the North Carolina courts affecting public utilities. A monthly or quarterly release of such information shall be made if the Commission deems it advisable or if the Governor shall so request.
  2. The Public Staff of the Commission shall make and publish annual reports to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources on its activities in the interest of the using and consuming public.
  3. The Commission shall publish in a separate volume at least once each year its final decisions made on the merits in formal proceedings before the Commission, and may include significant procedural orders and decisions.

History

(1899, c. 164, s. 27; Rev., s. 1117; 1911, c. 211, s. 9; 1913, c. 10, s. 1; C.S., s. 1065; 1933, c. 134, s. 8; 1941, c. 97; 1955, c. 981; 1957, c. 1152, s. 1; 1963, c. 1165, s. 1; 1977, c. 468, s. 6; 2017-57, s. 14.1(o); 2021-23, s. 24.)

Editor's Note. - Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'"

Session Laws 2017-57, s. 39.6, is a severability clause.

Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (a1).

Effect of Amendments. - Session Laws 2017-57, s. 14.1(o), effective July 1, 2017, substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "General Assembly" in subsection (a1).

CASE NOTES

Matters of Public Record. - Reports of the Corporation Commission (now Utilities Commission) of North Carolina are matters of public record, of which the courts therein will take judicial notice. Staton v. Atlantic C.L.R.R., 144 N.C. 135, 56 S.E. 794 (1907), decided under former statutory provisions.


§ 62-18. Records of receipts and disbursements; payment into treasury.

  1. The Commission shall keep a record showing in detail all receipts and disbursements.
  2. Except as provided in G.S. 62-110.3, all license fees and seal taxes, all money received from fines and penalties, and all other fees paid into the office of the Utilities Commission shall be turned in to the State treasury.

History

(1899, c. 164, ss. 26, 33, 34; Rev., ss. 1114, 1115; C.S., ss. 1063, 1064; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1987, c. 490, s. 1.)

§ 62-19. Public record of proceedings; chief clerk; seal.

  1. The Commission shall keep in the office of the chief clerk at all times a record of its official acts, rulings, orders, decisions, and transactions, and a current calendar of its scheduled activities and hearings, which shall be public records of the State of North Carolina.
  2. Upon receipt by the Commission, the chief clerk shall furnish to the executive director copies of all rates, tariffs, contracts, applications, petitions, pleadings, complaints, and all other documents filed with the Commission and shall furnish to the executive director copies of all orders and decisions entered by the Commission.
  3. The Commission shall have and adopt a seal with the words "North Carolina Utilities Commission" and such other design as it may prescribe engraved thereon by which it shall authenticate its proceedings and of which the courts shall take judicial notice. Where an exemplified copy of Commission records and proceedings is required for full faith and credit outside of the State, such records and proceedings shall be attested by the chief clerk, or deputy clerk, and the seal of the Commission annexed, and there shall be affixed a certificate of a member of the Commission that the said attestation is in proper form. Such exemplification shall constitute an authenticated or exemplified copy of an official record of a court of record of the State of North Carolina.

History

(1933, c. 134, ss. 13, 15; 1941, c. 97; 1963, c. 1165, s. 1; 1977, c. 468, s. 7.)

§ 62-20. Participation by Attorney General in Commission proceedings.

The Attorney General may intervene, when he deems it to be advisable in the public interest, in proceedings before the Commission on behalf of the using and consuming public, including utility users generally and agencies of the State. The Attorney General may institute and originate proceedings before the Commission in the name of the State, its agencies or citizens, in matters within the jurisdiction of the Commission. The Attorney General may appear before such State and federal courts and agencies as he deems it advisable in matters affecting public utility services. In the performance of his responsibilities under this section, the Attorney General shall have the right to employ expert witnesses, and the compensation and expenses therefor shall be paid from the Contingency and Emergency Fund. Upon request, the Commission shall furnish the Attorney General with copies of all applications, petitions, pleadings, order and decisions filed with or entered by the Commission. The Attorney General shall have access to all books, papers, studies, reports and other documents filed with the Commission.

History

(1949, c. 989, s. 1; c. 1029, s. 3; 1959, c. 400; 1963, c. 1165, s. 1; 1977, c. 468, s. 8; 2021-23, s. 4.)

Effect of Amendments. - Session Laws 2021-23, s. 4, effective May 17, 2021, substituted "Upon request, the” for "The” in the penultimate sentence of this section.

Legal Periodicals. - For brief comment on earlier section, see 27 N.C.L. Rev. 489 (1949).

CASE NOTES

Applied in State ex rel. N.C. Utils. Comm'n v. Old Fort Finishing Plant, 264 N.C. 416, 142 S.E.2d 8 (1965); State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982); Bailey v. North Carolina Dep't of Revenue, 353 N.C. 142, 540 S.E.2d 313 (2000).

Cited in State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972); State ex rel. Utils. Comm'n v. United Tel. Co., 15 N.C. App. 740, 190 S.E.2d 656 (1972); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).


§ 62-21: Repealed by Session Laws 1977, c. 468, s. 9.

Cross References. - For present provisions relating to Commission staff, see G.S. 62-14.

§ 62-22. Utilities Commission and Department of Revenue to coordinate facilities for ratemaking and taxation purposes.

The Commission, at the request of the Department of Revenue, shall make available to the Department of Revenue the services of such of the personnel of the Commission as may be desired and required for the purpose of furnishing to the Department of Revenue advice and information as to the value of properties of public utilities, the valuations of which for ad valorem taxation are required by law to be determined by the Department of Revenue. It shall be the duty of the Commission and the Department of Revenue, with regard to the assessment and valuation of properties of public utilities doing business in North Carolina, to coordinate the activities of said agencies so that each of them shall receive the benefit of the exchange of information gathered by them with respect to the valuations of public utilities property for ratemaking and taxation purposes, and the facilities of each of said agencies shall be made fully available to both of them.

History

(1949, c. 1029, s. 3; 1963, c. 1165, s. 1; 1973, c. 476, s. 193; 2021-23, s. 25.)

Editor's Note. - Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in this section.


§ 62-23. Commission as an administrative board or agency.

The Commission is hereby declared to be an administrative board or agency of the General Assembly created for the principal purpose of carrying out the administration and enforcement of this Chapter, and for the promulgation of rules and regulations and fixing utility rates pursuant to such administration; and in carrying out such purpose, the Commission shall assume the initiative in performing its duties and responsibilities in securing to the people of the State an efficient and economic system of public utilities in the same manner as commissions and administrative boards generally. In proceedings in which the Commission is exercising functions judicial in nature, it shall act in a judicial capacity as provided in G.S. 62-60. The Commission shall separate its administrative or executive functions, its rule making functions, and its functions judicial in nature to such extent as it deems practical and advisable in the public interest.

History

(1963, c. 1165, s. 1.)

CASE NOTES

The rate making activities of the Commission are a legislative function. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Rule making is an exercise of the delegated legislative authority of the Commission, under G.S. 62-30 and G.S. 62-31, to supervise and control the public utilities of this State and to make reasonable rules and regulations to accomplish that end. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Benefits of 1986 Tax Reform Act to Ratepayers Through Rule Making Procedure. - The Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 through a rule making procedure rather than a rate making procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

Administrative Rule Making Not Res Judicata. - Actions of an administrative agency which involve the exercise of a legislative rather than a judicial function are not res judicata. Exercises of the Commission's rule making power, therefore, are not governed by the principles of res judicata and are reviewable by the Supreme Court in later appeals of closely related matters. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Distribution of Gain From Sale of Water and Sewage Facilities. - North Carolina Utilities Commission's assigning a portion of the gain on sale from a municipal utility's purchase of the existing water and sewer facilities of a publicly franchised utility to the publicly franchised utility's remaining ratepayers, instead of assigning all of the gain on sale to the publicly franchised utility's shareholders, was approved on review pursuant to G.S. 62-94 because the Commission did not violate the Commission's authority under G.S. 62-2 and G.S. 62-23. State ex rel. Utils. Comm'n v. Carolina Water Serv., 225 N.C. App. 120, 738 S.E.2d 187 (2013).

Policy Making. - Where the North Carolina Utilities Commission enacted a policy which assigned gain or loss to shareholders within an adjudicative proceeding, the action did not constitute an abuse of discretion. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 123 N.C. App. 623, 473 S.E.2d 661 (1996).


§§ 62-24 through 62-29: Reserved for future codification purposes.

ARTICLE 3. Powers and Duties of Utilities Commission.

Sec.

§ 62-30. General powers of Commission.

The Commission shall have and exercise such general power and authority to supervise and control the public utilities of the State as may be necessary to carry out the laws providing for their regulation, and all such other powers and duties as may be necessary or incident to the proper discharge of its duties.

History

(1933, c. 134, s. 2; 1941, c. 97; 1963, c. 1165, s. 1.)

Legal Periodicals. - For comment, see 12 N.C.L. Rev. 292 (1934).

CASE NOTES

Power of Legislature Through Agencies to Establish Reasonable Regulations. - Power of the legislature, either directly or through appropriate agencies, to establish reasonable regulations for public service corporations in matters affecting the public interests is now universally recognized, and the principle has been approved in well considered decisions dealing directly with the question. SCC v. Railroad, 137 N.C. 1, 49 S.E. 191 (1904), aff'd, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907); SCC v. Railroad, 140 N.C. 239, 52 S.E. 941 (1905); Atlantic C.L.R.R. v. City of Goldsboro, 155 N.C. 356, 71 S.E. 514 (1911), aff'd, 232 U.S. 548, 34 S. Ct. 364, 58 L. Ed. 721 (1914); Southern Pub. Utils. Co. v. City of Charlotte, 179 N.C. 151, 101 S.E. 619 (1919). See also, Atlantic Express Co. v. Wilmington & W.R.R., 111 N.C. 463, 16 S.E. 393, 32 Am. St. R. 805 (1892); Corporation Comm'n v. Seaboard Air Line Sys., 127 N.C. 283, 37 S.E. 266 (1900).

The reason for strict regulation of public utilities is that they are either monopolies by nature or given the security of monopolistic authority for better service to the public. The public is best served in many circumstances where destructive competition has been removed and the utility is a regulated monopoly. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Commission Has No Authority Other Than Granted by Legislature. - The Utilities Commission was created by the General Assembly. In fixing rates to be charged by utilities, it exercises a legislative function and has no authority other than that given to it by the legislature. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

General Power and Authority. - Through this section and G.S. 62-32 the legislature has granted the Utilities Commission such general power and authority to supervise and control public utilities of the State as may be necessary. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Under G.S. 62-42(a)(5) the Commission has the authority to order the utility to take action necessary to secure reasonably adequate service for the public's need and convenience. Undoubtedly yellow pages could fall within this provision. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

If the Commission may refuse to accept the uncontradicted evidence presented to it by a utility, it most certainly may reject the utility's evidence in favor of evidence presented by other witnesses. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

North Carolina Utilities Commission properly ruled that the North Carolina Waste Awareness and Reduction Network's (NC WARN) arrangement with a church to install and maintain a solar panel system constituted a public utility in violation of the Public Utilities Act because NC WARN was operating as a public utility within the meaning of the Public Utilities Act; NC WARN desired to serve customers of its own choosing within an energy company's territory without oversight. State ex rel. Utils. Comm'n v. N.C. Waste Awareness & Reduction Network, 255 N.C. App. 613, 805 S.E.2d 712 (2017), aff'd, 812 S.E.2d 804, 2018 N.C. LEXIS 330 (2018).

Regulatory Condition was Authorized. - Where G.S. 62-30 and G.S. 62-32(b) gave the Utility Commission "all powers necessary" to regulate public utilities to ensure the citizens of North Carolina were provided with reasonable service, a regulatory condition was authorized because the regulation's purpose was to ensure the supply of electricity to retail customers. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 174 N.C. App. 681, 622 S.E.2d 169 (2005).

The Commission has no jurisdiction over parties unless they are public utilities within the meaning of the statute. State ex rel. N.C. Utils. Comm'n v. New Hope Rd. Water Co., 248 N.C. 27, 102 S.E.2d 377 (1958); State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

The rate making activities of the Commission are a legislative function. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Rule making is an exercise of the delegated legislative authority of the Commission, under this section and G.S. 62-31, to supervise and control the public utilities of this State and to make reasonable rules and regulations to accomplish that end. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Benefits of 1986 Tax Reform Act to Ratepayers Through Rule Making Procedure. - The Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 through a rule making procedure rather than a rate making procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

Commission, Not Courts, Is to Determine Fair Rate of Return. - The Commission, not the courts, is authorized by the legislature to determine what is a fair rate of return. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Court's Review of Commission's Determination of Fair Rate of Return. - In reviewing the Commission's determination of fair rate of return, the court will only review the record and evidence to determine if the Commission's order is supported by competent evidence. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Commission's Rule Making Not Res Judicata. - Actions of an administrative agency which involve the exercise of a legislative rather than a judicial function are not res judicata. Exercising of the Commission's rule-making power, therefore, are not governed by the principles of res judicata and are reviewable by the Supreme Court in later appeals of closely related matters. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Yellow Page Revenue and Expenses Included When Utility Applies for Rate Increase. - Yellow page revenue and expenses should be included in the revenues and expenses of the company when it applies for a rate increase. This is clearly the majority rule. State ex rel. Utils. Comm'n v. Central Tel. Co., 60 N.C. App. 393, 299 S.E.2d 264 (1983).

Telephone utility enjoys a great advantage over all competitors in the field of directory advertising. In addition, this preferred position with all its benefits and revenues is directly related to and a result of the company's public utility function. Therefore, the Utilities Commission does have the authority to include the expenses, revenues and investments related to directory advertising in its rate making proceedings. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Incorrect Telephone Number Listings. - The Utilities Commission had jurisdiction over complaints concerning incorrect telephone number listings in the telephone directory even when the regulated utility had delegated to another company the public utility function of publishing its directory which also included paid advertising. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Proper Listings in Advertisements in Yellow Pages. - If a utility elects to include yellow pages advertising in the directory which it is required to publish, then clearly proper listings in the advertisements in the yellow pages become a part of the utility's "function of providing adequate service" to the public. The public is not well served by listings in the yellow pages or the white pages of the directory which are incorrect or confusing to the consuming public. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Providing a correct telephone listing in the yellow pages as well as in the white pages of the directory is a utility function, and the Commission properly has jurisdiction over complaints which arise from this function. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Whether there shall be competition in any given field and to what extent is largely a matter of policy committed to the sound judgment and discretion of the Commission. The Commission must maintain a reasonable balance to see that the public is adequately served and at the same time to see that the public and the public utilities involved are not prejudiced by the effects which flow from excessive competition brought about by excessive services. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Authority of Commission to Authorize Sale of Facilities of Power Company to Municipality. - A power company, with the consent and approval of the Commission, has the right to sell its facilities to a city, and thereby permit the city to assume the obligation for meeting the public convenience and necessity for the service theretofore rendered by the power company. The Commission has not only the authority but the duty to pass upon such a contract and to determine whether or not it is in the public interest to permit its consummation. State ex rel. N.C. Utils. Comm'n v. Casey, 245 N.C. 297, 96 S.E.2d 8 (1957); Duke Power Co. v. Blue Ridge Elec. Membership Corp., 253 N.C. 596, 117 S.E.2d 812 (1961).

As to the piercing of the corporate veil between corporation and its wholly-owned public utility subsidiary to establish refund obligation, see State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, probable jurisdiction noted, 474 U.S. 1018, 106 S. Ct. 565, 88 L. Ed. 2d 550 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Propriety of Order Requiring Continued Operation of Utilities. - An order of the Commission, based upon proper findings and conclusions, requiring appellant to continue operation of her utilities would not violate constitutional prohibitions against involuntary servitude. Appellant voluntarily put her land and equipment to a public use and collected compensation for the services which she provided, and having done so, the Commission could require that she continue to use them in the service to which she voluntarily dedicated them, so long as she was justly compensated for such service. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Former Railroad Commission did not interfere with interstate commerce, being concerned solely in domestic affairs and trade. State ex rel. Caldwell v. Wilson, 121 N.C. 425, 121 N.C. 480, 28 S.E. 554 (1897).

Applied in City Coach Co. v. Gastonia Transit Co., 227 N.C. 391, 42 S.E.2d 398 (1947); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982).

Cited in State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. General Tel. Co., 17 N.C. App. 727, 195 S.E.2d 311 (1973); State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 99, 234 S.E.2d 628 (1977); State ex rel. Utils. Comm'n v. Simpson, 295 N.C. 519, 246 S.E.2d 753 (1978); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999); State ex rel. Utils. Comm'n v. Thrifty Call, Inc., 154 N.C. App. 58, 571 S.E.2d 622 (2002), cert. denied, appeal dismissed, 357 N.C. 66, 579 S.E.2d 575 (2003); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005).


§ 62-31. Power to make and enforce rules and regulations for public utilities.

The Commission shall have and exercise full power and authority to administer and enforce the provisions of this Chapter, and to make and enforce reasonable and necessary rules and regulations to that end.

History

(1907, c. 469, s. 1a; 1913, c. 127, s. 2; C.S., s. 1037; 1933, c. 134, s. 8; 1941, c. 97; 1947, c. 1008, s. 2; 1949, c. 1132, s. 3; 1963, c. 1165, s. 1.)

Editor's Note. - Session Laws 2013-316, s. 4.2(a), as amended by Session Laws 2015-6, s. 2.4(b), provides: "The Utilities Commission must adjust the rate set for the following utilities:

"(1) Electricity to reflect the repeal of G.S. 105-116 and the resulting liability of electric power companies for the tax imposed under G.S. 105-122, the increase in the rate of tax imposed on sales of electricity under G.S. 105-164.4, and the reduction in the corporate income tax rate imposed under G.S. 105-130.3

"(2) Piped natural gas to reflect the repeal of Article 5E of Chapter 105 of the General Statutes, the repeal of the credit formerly allowed under G.S. 105-122(d1), the resulting liability of companies for the tax imposed on sales of piped natural gas under G.S. 105-164.4, and the reduction in the corporate income tax rate imposed under G.S. 105-130.3.

"(3) Public water and wastewater companies to reflect the repeal of G.S. 105-116 and the resulting liability of public water and wastewater companies under G.S. 105-122, and the reduction in the corporate income tax rate imposed under G.S. 105-130.3."

Session Laws 2015-6, s. 2.4(a), provides: "The purpose of this section is to clarify the intent of the 2013 Session of the General Assembly that the Utilities Commission must adjust the rate for sales of electricity, piped natural gas, and water and wastewater services to reflect all of the tax changes as enacted in S.L. 2013-316."

Session Laws 2015-6, s. 2.4(c), provides: "The Utilities Commission must order a utility to add interest to money refunded to its customers for refunds resulting from the reduction of the corporate income tax rate effective for taxable years beginning on or after January 1, 2014. Refunds subject to interest shall not include any amounts to be refunded arising from excess deferred income taxes due to the reduction in the corporate income tax rate effective for taxable years beginning on or after January 1, 2014. The interest rate applied to the refund must be set in accordance with G.S. 62-130."

CASE NOTES

The rate making activities of the Commission are a legislative function. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Rule making is an exercise of the delegated legislative authority of the Commission, under G.S. 62-30 and this section, to supervise and control the public utilities of this State and to make reasonable rules and regulations to accomplish that end. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Tax Reform Benefits Passed on to Ratepayers by Rule Making Rather Than Rate Making Procedure. - Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 (TRA-86) through a rule making procedure rather than a rate making procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

Commission's Rule Making Not Res Judicata. - Actions of an administrative agency which involve the exercise of a legislative rather than a judicial function are not res judicata. Exercises of the Commission's rule making power, therefore, are not governed by the principles of res judicata and are reviewable by the Supreme Court in later appeals of closely related matters. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Authority to determine adequacy of public utility's service and rates to be charged therefor has been given to the Utilities Commission, not to the Supreme Court or the Court of Appeals. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 24 N.C. App. 327, 210 S.E.2d 543 (1975), vacated and appeal dismissed, 289 N.C. 286, 221 S.E.2d 322 (1976).

Finding That Rule Is Reasonable and Necessary Not Required. - In adopting a rule pursuant to this section, the Utilities Commission need not make a finding of fact that the rule is reasonable and necessary in order for it to administer and enforce the provisions of the Public Utilities Act. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

Jurisdiction of Commission to Investigate. - The Commission had the jurisdiction to investigate, upon complaint or upon its own initiative without complaint, to determine whether any motor carrier was operating in violation of the provisions of the Bus Act of 1949 (former G.S. 62-121.43 through 62-121.79). State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

Rule Denying Rights Under Grandfather Clause. - The Utilities Commission did not have the power to promulgate a rule and then to interpret or enforce the rule in such manner as to deny the exercise of rights which the legislature in clear and express terms preserved to all motor vehicle carriers of property who were in bona fide operation on January 1, 1947, and who met the additional requirements contained in the Bus Act of 1949 (former G.S. 62-121.43 through 62-121.79). State ex rel. Utils. Comm'n v. Fox, 239 N.C. 253, 79 S.E.2d 391 (1954).

Supervisory Powers of Former Corporation Commission. - There was no intent to give a schedule of the thousands of appliances used in handling the business of common carriers, nor to enumerate the countless dealings between them and their patrons which the former Corporation Commission should supervise. The clearly declared purpose was to put the control and supervision of the whole matter in the hands of an impartial commission, with power to make reasonable rules and orders, subject to the right of appeal by either party, the shipper or the carrier, to the courts, instead of leaving such dealing to the unrestricted will of the carrier. Corporation Comm'n v. Railroad, 139 N.C. 126, 51 S.E. 793 (1905).

The former Corporation Commission was given the power to make orders and regulations for the safety, etc., of shippers or patrons of any public service corporation. Tilley v. Norfolk & W. Ry., 162 N.C. 37, 77 S.E. 994 (1913).

Applied in State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975); State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 43 N.C. App. 662, 259 S.E.2d 791 (1979).

Cited in State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964); State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. Kenan Transp. Co., 10 N.C. App. 626, 179 S.E.2d 799 (1971); State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. J.D. McCotter, Inc., 16 N.C. App. 475, 192 S.E.2d 629 (1972); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 48 N.C. App. 115, 268 S.E.2d 851 (1980); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 47 N.C. App. 418, 267 S.E.2d 488 (1980); State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999).


§ 62-32. Supervisory powers; rates and service.

  1. Under the rules herein prescribed and subject to the limitations hereinafter set forth, the Commission shall have general supervision over the rates charged and service rendered by all public utilities in this State.
  2. Except as provided in this Chapter for bus companies, the Commission is hereby vested with all power necessary to require and compel any public utility to provide and furnish to the citizens of this State reasonable service of the kind it undertakes to furnish and fix and regulate the reasonable rates and charges to be made for such service.

History

(1913, c. 127, s. 7; C.S., s. 1112(b); 1933, c. 134, s. 3; 1937, c. 108, s. 2; 1941, cc. 59, 97; 1959, c. 639, s. 12; 1963, c. 1165, s. 1; 1985, c. 676, s. 5.)

Cross References. - As to report from municipality operating own utilities, see G.S. 62-47.

Legal Periodicals. - For note on control of public utilities through zoning ordinances, see 42 N.C.L. Rev. 761 (1964).

For article on antitrust and unfair trade practice law in North Carolina, comparing federal law, see 50 N.C.L. Rev. 199 (1972).

CASE NOTES

Editor's Note. - This section is similar to former G.S. 1035 of the Consolidated Statutes. Many of the following cases dated prior to 1963 were decided under that section and are given as an aid in construing the present law, but should be considered in light of the former law.

Right of State to Regulate. - The right of the State to establish regulations for public service corporations, and over business enterprises in which the owners, corporate or individual, have devoted their property to a public use, and to enforce these regulations by appropriate penalties, is firmly established. Efland v. Southern Ry., 146 N.C. 135, 59 S.E. 355 (1907). See also Whiting Mfg. Co. v. Carolina Aluminum Co., 207 N.C. 52, 175 S.E. 698 (1934).

Railroad companies, due to the public nature of the business carried on by them and the interest which the public has in their operation, are subject as to their State business to State regulation, which may be exerted either directly by the legislative authority or by administrative bodies endowed with power to that end. Atlantic Coast Line R.R. v. North Carolina Corp. Comm'n, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907).

Purpose of Regulation. - An uncontrolled legal monopoly in an essential service leads, normally and naturally, to poor service and exorbitant charges. To prevent such result, the legislature has conferred upon the Utilities Commission the power to police the operations of the utility company so as to require it to render service of good quality at charges which are reasonable. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

With public utilities the State has undertaken to protect the public from the customary consequences of monopoly, by making the rates and services of the certificate holder subject to regulation and control by the Utilities Commission. In re Certificate of Need for Aston Park Hosp., 282 N.C. 542, 193 S.E.2d 729 (1973).

Regulatory Condition Authorized. - Where G.S. 62-30 and G.S. 62-32(b) gave the Utility Commission "all powers necessary" to regulate public utilities to ensure the citizens of North Carolina were provided with reasonable service, a regulatory condition was authorized because the regulation's purpose was to ensure the supply of electricity to retail customers. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 174 N.C. App. 681, 622 S.E.2d 169 (2005).

Rate Fixing Power May Be Delegated. - The General Assembly has the power to establish a commission to supervise and regulate the rates of common carriers. Atlantic Express Co. v. Wilmington & W.R.R., 111 N.C. 463, 16 S.E. 393 (1892); SCC v. Seaboard Air Line Sys., 127 N.C. 283, 37 S.E. 266 (1900); SCC v. Railroad, 137 N.C. 1, 49 S.E. 191 (1904), aff'd, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907); SCC v. Railroad, 139 N.C. 126, 51 S.E. 793 (1905); Corporation Comm'n v. Railroad, 140 N.C. 239, 52 S.E. 941 (1905).

Scope of Power Delegated to Commission Not a Federal Question. - Whether a regulation of a state railroad commission otherwise legal is arbitrary and unreasonable because beyond the scope of the power delegated to the commission is not a federal question. Atlantic Coast Line R.R. v. North Carolina Corp. Comm'n, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907).

General Power and Authority of Commission. - Through G.S. 62-30 and this section the legislature has granted the Utilities Commission such general power and authority to supervise and control public utilities of the State as may be necessary. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Under G.S. 62-42(a)(5) the Commission has the authority to order the utility to take action necessary to secure reasonably adequate service for the public's need and convenience. Undoubtedly yellow pages could fall within this provision. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

If the Commission may refuse to accept the uncontradicted evidence presented to it by a utility, it most certainly may reject the utility's evidence in favor of evidence presented by other witnesses. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Because G.S. 62-32 and G.S. 62-42 authorized the North Carolina Utilities Commission to compel utility companies to render adequate service and to set reasonable rates, the Commission was the proper body to hear a dispute between a power company and the town. Although the town could have granted a variance to its ordinance that would have allowed the company to build the proposed new line, the ordinance was not consistent with state law, and the town cited no statutory authority or precedent that required the company to seek such a variance where an administrative agency specifically designed to handle such disputes had jurisdiction. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).

Authority of Commission to Regulate Service and Rates. - Under this section and G.S. 62-42, the Utilities Commission is given the power and the duty to compel utility companies to render adequate service and to set reasonable rates for such service. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

The Utilities Commission is the administrative agency charged with the duty of regulating the intrastate retail rates of public utilities within this State. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Authority to determine adequacy of public utility's service and rates to be charged therefor has been given to the Utilities Commission, not to the Supreme Court or to the Court of Appeals. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 24 N.C. App. 327, 210 S.E.2d 543 (1975), vacated and appeal dismissed, 289 N.C. 286, 221 S.E.2d 322 (1976).

The Commission, not the courts, is authorized by the legislature to determine what is a fair rate of return. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

In reviewing the Commission's determination of fair rate of return, the court will only review the record and evidence to determine if the Commission's order is supported by competent evidence. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Commission's Regulatory Powers Limited. - Notwithstanding the authority of the Commission to regulate its services and rates and other matters incidental thereto, the property of the utility is private property and the business is private business. Except as otherwise provided, expressly or by reasonable implication, in this Chapter, a utility is free to manage its property and business as it sees fit and the Commission may not restrict or control the discretion of the board of directors in the acquisition of property, or in the price paid for it. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Arbitrary Exercise of Regulatory Power. - The public power to regulate railroads and the private right of ownership of such property coexist, and the one does not destroy the other; and where the power to regulate is so arbitrarily exercised as to infringe the rights of ownership, the exertion is void because repugnant to the due process and equal protection clauses of the Fourteenth Amendment. Atlantic Coast Line R.R. v. North Carolina Corp. Comm'n, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907).

As to intrastate or domestic matters, the General Assembly has the right to establish regulations for public service corporations and for business enterprises in which the owners have devoted their property to public use, and to apply these regulations to certain classes of pursuits and occupations, imposing these requirements equally on all members of a given class, the limitation of this right of classification being that the same must be on some reasonable ground that bears a just and proper relation to the attempted classification and is not a mere arbitrary selection. Efland v. Southern Ry., 146 N.C. 135, 59 S.E. 355 (1907).

Recovery of Reasonable Cost of Approved Gas Exploration Projects. - The Commission, in ordering that the reasonable costs of approved exploration projects were to be recoverable through tracking rate increases, acted within its acknowledged duty and authority to compel adequate and efficient utility service to the citizens of this State, where it was clear from the Commission's findings that, without additional gas supplies, the gas utilities would be unable to render adequate service to their customers, that exploration programs were the most feasible means for obtaining these additional supplies, and that the utilities were unable, through traditional methods of financing, to fund sufficient exploration projects to obtain these supplies. State ex rel. Utils. Comm'n Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Contractual obligation to provide water service to a recreational subdivision, as well as the actual delivery thereof, directly affect a utility's ability to function as a utility. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Authority to Allow Use of Availability Charge. - The Utilities Commission has jurisdiction and authority to allow the use of an availability charge in a rate schedule for a recreational subdivision, should any be deserved. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Landowners in a recreational subdivision who pay availability charges are "consumers" or stand in a consumer-like relationship to the utility providing water service. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Fees and Charges Made by Municipality. - The North Carolina Utilities Commission has no jurisdiction to fix or supervise the fees and charges to be made by a municipality for connections with a city sewerage system, either within or without its corporate limits. Atlantic Constr. Co. v. City of Raleigh, 230 N.C. 365, 53 S.E.2d 165 (1949). See also Town of Grimesland v. City of Washington, 234 N.C. 117, 66 S.E.2d 794 (1951).

A rider approved by the Commission, which provided that the utility involved in a rate hearing would meter the protesting municipalities separately for purchases by the municipalities for normal resale and purchases by the municipalities for resale to industrial users, but which contained a provision that the municipalities were free to contract in respect to the price they would require the industrial users to pay, did not fix the rate at which the municipalities would be required to sell to industrial users in violation of the statute. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

A sanitary district which, as a part of its functions, furnishes drinking water to the public and also filters water for industrial consumers is a quasi-municipal corporation, and is not under the control and supervision of the North Carolina Utilities Commission as to services or rates. Halifax Paper Co. v. Roanoke Rapids San. Dist., 232 N.C. 421, 61 S.E.2d 378 (1950).

Former Corporation Commission had general control and supervision of all railroad corporations. Tilley v. Norfolk & W. Ry., 162 N.C. 37, 77 S.E. 994 (1913).

But No Power to Appraise and Assess. - The former Corporation Commission was not clothed with the power of appraising and assessing railroad property. Southern Ry. v. North Carolina Corp. Comm'n, 97 F. 513 (E.D.N.C. 1899), aff'd on rehearing, 99 F. 162 (E.D.N.C. 1900).

The State has power to compel a railroad company to perform a particular and specified duty necessary for the convenience of the public, even though it may entail some pecuniary loss. Atlantic Coast Line R.R. v. North Carolina Corp. Comm'n, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907).

Commerce Between States. - The power of Congress over commerce between the states is, as a general rule, exclusive, and its inaction is equivalent to a declaration that it shall be free from any restraint which it has the right to impose, except by such statutes as are passed by the states for the purpose of facilitating the safe transmission of goods and carriage of passengers, and are not in conflict with any valid federal legislation. Morris-Scarboro-Moffitt Co. v. Southern Express Co., 146 N.C. 167, 59 S.E. 667 (1907).

As to when a telegram is not interstate commerce, see State ex rel. R.R. Comm'rs v. Western Union Tel. Co., 113 N.C. 213, 18 S.E. 389 (1893), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897); Leavell v. Western Union Tel. Co., 116 N.C. 211, 21 S.E. 391 (1895), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897).

Telephone Company Subject to State Control. - A telephone company, acting under a quasi-public franchise, is properly classified among the public service corporations, and as such is subject to public regulation and reasonable control. Leavell v. Western Union Tel. Co., 116 N.C. 211, 21 S.E. 391 (1895), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897); Godwin v. Telephone Co., 136 N.C. 479, 48 S.E. 813 (1904); Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 159 N.C. 9, 74 S.E. 636 (1912).

A local telephone company having an arrangement for the transmission of long distance messages over the lines of another company for pay is a public service corporation and comes within the provisions of this section. Horton v. Interstate Tel. & Tel. Co., 202 N.C. 610, 163 S.E. 694 (1932).

Statute giving general control of telephone companies to former Corporation Commission did not oust court of its jurisdiction to compel the company to perform a public duty it owed to an individual. Walls v. Strickland, 174 N.C. 298, 93 S.E. 857 (1917).

Yellow page revenue and expenses should be included in the revenues and expenses of the company when it applies for a rate increase. This is clearly the majority rule. State ex rel. Utils. Comm'n v. Central Tel. Co., 60 N.C. App. 393, 299 S.E.2d 264 (1983).

Classified Directory Advertising Revenues. - In making judgment that telephone company's classified directory was an essential aspect of telephone service generally Commission was clearly acting within its authority under G.S. 62-30 and this section, and the Commission correctly concluded that the classified directory advertising revenues should continue to be accounted for in establishing just and reasonable rates for the company in this State. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982), modified, 307 N.C. 541, 299 S.E.2d 763 (1983).

Telephone utility enjoys a great advantage over all competitors in the field of directory advertising. In addition, this preferred position with all its benefits and revenues is directly related to and a result of the company's public utility function. Therefore, the Utilities Commission does have the authority to include the expenses, revenues and investments related to directory advertising in its rate making proceedings. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

Propriety of Order Requiring Continued Operation of Utilities. - An order of the Commission, based upon proper findings and conclusions, requiring appellant to continue operation of her utilities would not violate constitutional prohibitions against involuntary servitude. Appellant voluntarily put her land and equipment to a public use and collected compensation for the services which she provided, and having done so, the Commission may require that she continue to use it in the service to which she voluntarily dedicated it so long as she is justly compensated for such service. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

When the Utilities Commission found that natural gas corporation had received payments in lieu of what it would have received under a service contract and that the customers of the company were bearing the company's contract costs, it was within the power of the Commission under subsection (b) of this section and G.S. 62-130(a) and (d) to take these payments into account in setting a reasonable rate. State ex rel. Utils. Comm'n v. North Carolina Natural Gas Corp., 76 N.C. App. 330, 332 S.E.2d 755, cert. denied, 314 N.C. 675, 336 S.E.2d 405 (1985).

Applied in City Coach Co. v. Gastonia Transit Co., 227 N.C. 391, 42 S.E.2d 398 (1947); Fulghum v. Town of Selma, 238 N.C. 100, 76 S.E.2d 368 (1953); State ex rel. N.C. Utils. Comm'n v. City of Wilson, 252 N.C. 640, 114 S.E.2d 786 (1960); State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975); State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980).

Cited in State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966); State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968); State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005).


§ 62-33. Commission to keep informed as to utilities.

The Commission shall at all times keep informed as to the public utilities, their rates and charges for service, and the service supplied and the purposes for which it is supplied.

History

(1933, c. 134, s. 16; 1937, c. 165; 1939, c. 365, ss. 1, 2; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005).


§ 62-34. To investigate companies under its control; visitation and inspection.

  1. The Commission shall from time to time visit the places of business and investigate the books and papers of all public utilities to ascertain if all the orders, rules and regulations of the Commission have been complied with, and shall have full power and authority to examine all officers, agents and employees of such public utilities, and all other persons, under oath or otherwise, and to compel the production of papers and the attendance of witnesses to obtain the information necessary for carrying into effect and otherwise enforcing the provisions of this Chapter.
  2. Members of the Commission, Commission staff, and Public Staff may during all reasonable hours enter upon any premises occupied by any public utility, for the purpose of making the examinations and tests and exercising any power provided for in this Article, and may set up and use on such premises any apparatus and appliances necessary therefor. Such public utility shall have the right to be represented at the making of such examinations, tests and inspections.
  3. The Public Staff shall have the right to examine confidential information as defined in G.S. 132-1.2 in exercising any power or performing any duty authorized by this Chapter. The Public Staff shall not disclose confidential information except as authorized by (i) the person or entity having the right to assert confidentiality, (ii) the Commission, or (iii) a court of competent jurisdiction. Any information not designated in writing as confidential by the person or entity disclosing it to the Public Staff is subject to disclosure. Any dispute about whether information has been properly designated as confidential shall be determined by the Commission upon motion and response of interested parties. Information shall be considered confidential only to the extent provided by law.

History

(1899, c. 164, s. 1; Rev., s. 1064; 1913, c. 127, ss. 1, 2, 7; 1917, c. 194; C.S., s. 1060; 1933, c. 134, s. 8; c. 307, s. 14; 1941, c. 97; 1963, c. 1165, s. 1; 1977, c. 468, s. 10; 2021-23, ss. 5, 24.)

Editor's Note. - Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (b).

Effect of Amendments. - Session Laws 2021-23, s. 5, effective May 17, 2021, added subsection (c).

§ 62-35. System of accounts.

  1. The Commission may establish a system of accounts to be kept by the public utilities under its jurisdiction, or may classify said public utilities and establish a system of accounts for each class, and prescribe the manner of keeping such accounts.
  2. The Commission may require any public utility under its jurisdiction to keep separate or allocate the revenue from and the cost of doing interstate and intrastate business in North Carolina.
  3. The Commission may ascertain, determine, and prescribe what are proper and adequate charges for depreciation of the several classes of property for each public utility. The Commission may prescribe such changes in such charges for depreciation as it finds necessary.

History

(Ex. Sess. 1913, c. 20, s. 14; C.S., s. 1088; 1931, c. 455; 1933, c. 134, s. 8; c. 307, s. 13; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

Review of Annual Charge to Operating Expenses on Account of Depreciation. - If a reasonably close relationship between the reserve for depreciation and the actual accumulated depreciation is not present, the Utilities Commission may and should review and make appropriate changes in the annual charge to operating expenses on account of depreciation. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).


§ 62-36. Reports by utilities; canceling certificates for failure to file.

The Commission may require any public utility to file annual reports in such form and of such content as the Commission may require and special reports concerning any matter about which the Commission is authorized to inquire or to keep informed, or which it is required to enforce. All reports shall be under oath when required by the Commission. The Commission may issue an order, without notice or hearing, canceling or suspending any certificate of convenience and necessity or any certificate of authority 30 days after the date of service of the order for failing to file the required annual report at the time it was due. In the event the report is filed during the 30-day period, the order of cancellation or suspension shall be null and void.

History

(1931, c. 455; 1933, c. 134, s. 8; c. 307, s. 15; 1941, c. 97; 1959, c. 639, ss. 7, 8; 1963, c. 1165, s. 1; 1985, c. 676, s. 6.)

Legal Periodicals. - For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

§ 62-36A: Repealed by Session Laws 2014-120, s. 10(a), effective September 18, 2014.

History

(1989, c. 338, s. 1; 1993 (Reg. Sess., 1994), c. 560, s. 1; 1995, c. 216, s. 1; c. 271, s. 1; 2011-291, s. 2.10; repealed by 2014-120, s. 10(a), effective September 18, 2014.)

Local Modification. - Camden, Currituck, Dare and Tyrrell: 1998-8.

Editor's Note. - Former G.S. 62-36A, which was recodified as G.S. 62-36.1 by Session Laws 2012-194, s. 16, pertained to natural gas planning.

Cross References. - As to current provisions relating to natural gas expansion, see G.S. 62-158.

As to current provisions relating to gas cost adjustment for natural gas local distribution companies, see G.S. 62-133.4.

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994); State ex rel. Utils. Comm'n v. North Carolina Gas Serv., 128 N.C. App. 288, 494 S.E.2d 621 (1998).


§ 62-36B: Recodified as G.S. 62-36.01 by Session Laws 2015-264, s. 10, effective October 1, 2015.

§ 62-36.01. Regulation of natural gas service agreements.

Whenever the Commission, after notice and hearing, finds that additional natural gas service agreements (including "backhaul" agreements) with interstate or intrastate pipelines will provide increased competition in North Carolina's natural gas industry and (i) will likely result in lower costs to consumers without substantially increasing the risks of service interruptions to customers, or (ii) will substantially reduce the risks of service interruptions without unduly increasing costs to consumers, the Commission may enter and serve an order directing the franchised natural gas local distribution company to negotiate in good faith to enter into such service agreements within a reasonable time. In considering costs to consumers under this section, the Commission may consider both short-term and long-term costs.

History

(1989 (Reg. Sess., 1990), c. 962, s. 5; 2015-264, s. 10.)

Editor's Note. - This section is former G.S. 62-36B, as recodified by Session Laws 2015-264, s. 10, effective October 1, 2015.

§ 62-36.1: Repealed by Session Laws 2014-120, s. 10(a), effective September 18, 2014.

History

(1989, c. 338, s. 1; 1993 (Reg. Sess., 1994), c. 560, s. 1; 1995, c. 216, s. 1; c. 271, s. 1; 2011-291, s. 2.10; 2012-194, s. 16; repealed by 2014-120, s. 10(a), effective September 18, 2014.)

Editor's Note. - Former G.S. 62-36.1, which was formerly codified as G.S. 62-36A and recodified as G.S. 62-36.1 by Session Laws 2012-194, s. 16, pertained to natural gas planning.

§ 62-37. Investigations.

  1. The Commission may, on its own motion and whenever it may be necessary in the performance of its duties, investigate and examine the condition and management of public utilities or of any particular public utility. In conducting such investigation the Commission may proceed either with or without a hearing as it may deem best, but shall make no order without affording the parties affected thereby notice and hearing.
  2. If after such an investigation, or investigation and hearing, the Commission, in its discretion, is of the opinion that the public interest shall be served by an appraisal of any properties in question, the investigation of any particular construction, the audit of any accounts or books, the investigation of any contracts, or the practices, contracts or other relations between the public utility in question and any holding or finance agency with which such public utility may be affiliated, it shall be the duty of the Commission to report its findings and recommendation to the Governor and Council of State with request for an allotment from the Contingency and Emergency Fund to defray the expense thereof, which may be granted as provided by law for expenditures from such fund or may be denied. Provided, however, that the Commission is authorized to order any such appraisal, investigations, or audit to be undertaken by a competent, qualified, and independent firm selected by the Commission, the cost of such appraisal, investigation or audit to be borne by the public utility in question. Notwithstanding any other provisions of this Chapter, the Commission is authorized to initiate a full and complete management audit of any public utility company once every five years, by a competent, qualified, and independent firm, such audit to thoroughly examine the efficiency and effectiveness of management decisions among other factors as directed by the Commission. The cost of such audit is to be borne by the particular public utility subject to the audit; provided, however, that carriers subject to regulation by and auditing of the Interstate Commerce Commission shall not be required to bear the expense of additional audit of accounts or management audit required hereunder.

History

(1931, c. 455; 1933, c. 134, s. 8; c. 307, s. 16; 1941, c. 97; 1963, c. 1165, s. 1; 1975, c. 867, s. 4.)

CASE NOTES

Parties Affected. - Decision of the North Carolina Utilities Commission to recognize a utility customers association and a customer as interveners in a settlement proceeding resulting from an investigation that was conducted, pursuant to G.S. 62-37, of accounting irregularities in the way in which a utility reported its regulated income to the Commission was an abuse of the Commission's discretion; the association and the customer were not parties affected by the Commission's order approving the settlement, within the meaning of G.S. 62-37, and as such had no standing to appeal the Commission's approval of the settlement agreement. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 163 N.C. App. 1, 592 S.E.2d 277 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 683 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 684 (2004), cert. denied, appeal dismissed, 358 N.C. 739, 602 S.E.2d 683 (2004), cert. dismissed, 358 N.C. 739, 602 S.E.2d 684, 602 S.E.2d 685 (2004).

Utilities Commission properly denied a proposed intervenor's motion to intervene because the proposed intervenor was not a party affected within the meaning of G.S. 62-37(a). In re Investigation of Duke Energy Corp. & Progress Energy, Inc., 234 N.C. App. 20, 760 S.E.2d 740 (2014).

Applied in State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980).

Cited in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Opinions of Attorney General

Issuance of Order Requiring Auditor to Be Hired at Public Utility's Expense. - Where the Utilities Commission issues an order requiring an auditor to be hired at a public utility's expense, neither Article 3 (Purchases and Contracts) of Chapter 143, G.S. 143-48 et seq., nor the rule promulgated thereunder, 1 N.C.A.C. 5B.0301, applies, as there is no expenditure of state funds to purchase contractual services. See opinion of Attorney General to Mr. Robert H. Bennink, Jr., General Counsel, Utilities Commission, 2001 N.C. AG LEXIS 41 (10/11/01).


§ 62-38. Power to regulate public utilities in municipalities.

The Commission shall have the same power and authority to regulate the operation of privately owned public utilities within municipalities as it has to regulate such public utilities operating outside of municipalities, with the exception of the rights of such municipalities to grant franchises for such operation under G.S. 160A-319, and such public utilities shall be subject to the provisions of this Chapter in the same manner as public utilities operating outside municipalities.

History

(1917, c. 136, subch. 3, s. 3; C.S., ss. 2783, 2784, 2785; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1989, c. 770, s. 11.)

CASE NOTES

Power of Commission to Regulate Privately Owned Public Utilities Within Cities. - The Utilities Commission has the same power and responsibility to regulate the operation of privately owned public utilities within cities as it does their operation outside of cities. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).

The power of a municipality to grant franchises to public utilities for the use of its streets, and to provide service to its citizens, must yield to the paramount right of the State to regulate, through the Utilities Commission, public utilities even when they are operated within the corporate boundaries of a municipality. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).

Municipal Charter Subject to State Powers. - The power conferred by a city charter "to provide water and lights and to contract for same" is subject to the police power of the State with respect to rates to be charged by a public service corporation under such contract as the city may make under its charter. Corporation Comm'n v. Henderson Water Co., 190 N.C. 70, 128 S.E. 465 (1925).

Although the rate to be charged for water is stipulated by contract between city and water company, this may be changed by the Commission if it appears that the rate contracted for is too low, and the one fixed by the Commission is just. The burden of proof is on the one alleging that the rate fixed by the Commission is unreasonable. Corporation Comm'n v. Henderson Water Co., 190 N.C. 70, 128 S.E. 465 (1925).

Corporation Held Not Entitled to Injunction Against Commission. - A public service corporation having a contract with a city, applying to the Commission for the increase of the rate contracted for with the city and obtaining partial relief, would not be granted an injunction by the federal court against the Commission on the grounds that the rate was confiscatory, for such increase as was allowed by the Commission was that much more than could have been received under the contract with the city had the Commission refused to act. Henderson Water Co. v. Corporation Comm'n, 269 U.S. 278, 46 S. Ct. 112, 70 L. Ed. 273 (1925).

Consent of Customer or Commission Necessary Before Service May Be Abandoned. - Power company may not abandon service to any customer, subject to the customer's paying his bill, without the consent of the customer or authorization of the Utilities Commission. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).


§ 62-39. To regulate crossings of telephone, telegraph, electric power lines and pipelines and rights-of-way of railroads and other utilities by another utility.

  1. The Commission, upon its own motion or upon petition of any public utility or upon petition of the North Carolina Rural Electrification Authority on behalf of any electric membership corporation, shall have the power and authority, after notice and hearing, to order that the lines and right-of-way of any public utility or electric membership corporation may be crossed by any other public utility or electric membership corporation. The Commission, in all such cases, may require any such crossings to be constructed and maintained in a safe manner and in accord with accepted and approved standards of safety and may prescribe the manner in which such construction shall be done.
  2. The Commission shall also have the power and authority to discontinue and prohibit such crossings where they are unnecessary and can reasonably be avoided and to order changes in existing crossings when deemed necessary.
  3. In all cases in which the Commission orders such crossings to be made or changed and when the parties affected cannot agree upon the cost of the construction of such crossings or the damages to be paid to one of the parties for the privilege of crossing the lines of such party, it shall be the duty of the Commission to apportion the cost of such construction and to fix the damage, if any, to be paid and to apportion the damages, if any, among the parties in such manner as may be just and equitable.
  4. This section shall not be construed to limit the right of eminent domain conferred upon public utilities and electric membership corporations by the laws of this State or to limit the right and duty conferred by law with respect to crossing of railroads and highways, but the duty imposed and the remedy given by this section shall be in addition to other duties and remedies now prescribed by law. Any party shall have the right of appeal from any final order or decision or determination of the Commission as provided by law for appeals from orders or decisions or final determinations of the Commission.

History

(1913, c. 130, s. 1; C.S., s. 1052; 1933, c. 134, s. 8; 1941, c. 97; 1949, c. 1029, s. 1; 1963, c. 1165, s. 1; 2021-23, s. 6.)

Local Modification. - Ashe: 1929, c. 101.

Effect of Amendments. - Session Laws 2021-23, s. 6, effective May 17, 2021, substituted "highways" for "highways or railroads crossing railroads" in subsection (d).

Legal Periodicals. - For note, "The Modern-Day Case of the Lorax Within the Fourth Circuit,” see 13 Elon L. Rev. 291 (2020).

§ 62-40. To hear and determine controversies submitted.

When a public utility embraced in this Chapter has a controversy with another person and all the parties to such controversy agree in writing to submit such controversy to the Commission as arbitrator, the Commission shall act as such, and after due notice to all parties interested shall proceed to hear the same, and its award shall be final. Such award in cases where land or an interest in land is concerned shall immediately be certified to the clerk of the superior court of the county or counties in which said land, or any part thereof, is situated, and shall by such clerk be docketed in the judgment docket for such county, and from such docketing shall have the same effect as a judgment of the superior court for such county. Parties may appear in person or by attorney before such arbitrator.

History

(1899, c. 164, s. 25; Rev., s. 1073; C.S., s. 1059; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

Cross References. - As to power of Utilities Commission to settle dispute between railroad and drainage district, see G.S. 156-91.


§ 62-41. To investigate accidents involving public utilities; to promote general safety program.

The Commission may conduct a program of accident prevention and public safety covering all public utilities with special emphasis on highway safety and transport safety and may investigate the causes of any accident on a highway involving a public utility. Any information obtained upon such investigation shall be reduced to writing and a report thereof filed in the office of the Commission, which shall be subject to public inspection but such report shall not be admissible in evidence in any civil or criminal proceeding arising from such accident. The Commission may adopt reasonable rules and regulations for the safety of the public as affected by public utilities and the safety of public utility employees. The Commission shall cooperate with and coordinate its activities for public utilities with similar programs of the Division of Motor Vehicles, the Insurance Department, the Industrial Commission and other organizations engaged in the promotion of highway safety and employee safety.

History

(1899, c. 164, s. 24; Rev., s. 1065; C.S., s. 1061; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1975, c. 716, s. 5; 1995 (Reg. Sess., 1996), c. 673, s. 2.)

§ 62-42. Compelling efficient service, extensions of services and facilities, additions and improvements.

  1. Except as otherwise limited in this Chapter, whenever the Commission, after notice and hearing had upon its own motion or upon complaint, finds:
    1. That the service of any public utility is inadequate, insufficient or unreasonably discriminatory, or
    2. That persons are not served who may reasonably be served, or
    3. That additions, extensions, repairs or improvements to, or changes in, the existing plant, equipment, apparatus, facilities or other physical property of any public utility, of any two or more public utilities ought reasonably to be made, or
    4. That it is reasonable and proper that new structures should be erected to promote the security or convenience or safety of its patrons, employees and the public, or
    5. That any other act is necessary to secure reasonably adequate service or facilities and reasonably and adequately to serve the public convenience and necessity,
  2. If such order is directed to two or more public utilities, the utilities so designated shall be given such reasonable time as the Commission may grant within which to agree upon the portion or division of the cost of such additions, extensions, repairs, improvements or changes which each shall bear. If at the expiration of the time limited in the order of the Commission, the utility or utilities named in the order shall fail to file with the Commission a statement that an agreement has been made for division or apportionment of the cost or expense, the Commission shall have the authority, after further hearing in the same proceeding, to make an order fixing the portion of such cost or expense to be borne by each public utility affected and the manner in which the same shall be paid or secured.
  3. Repealed by Session Laws 2013-187, s. 1, effective July 1, 2013.

the Commission shall enter and serve an order directing that such additions, extensions, repairs, improvements, or additional services or changes shall be made or affected within a reasonable time prescribed in the order. This section shall not apply to terminal or terminal facilities of motor carriers of property.

History

(1933, c. 307, s. 10; 1949, c. 1029, s. 2; 1963, c. 1165, s. 1; 1965, c. 287, s. 6; 1985, c. 676, s. 7; 2013-187, s. 1.)

Effect of Amendments. - Session Laws 2013-187, s. 1, effective July 1, 2013, deleted subsection (c) relating definition of public utility.

CASE NOTES

Purpose of Regulation. - With public utilities the State has undertaken to protect the public from the customary consequences of monopoly, by making the rates and services of the certificate holder subject to regulation and control by the Utilities Commission. In re Certificate of Need for Aston Park Hosp., 282 N.C. 542, 193 S.E.2d 729 (1973).

Power and Duties of Commission. - This Chapter confers upon the Utilities Commission the power and the duty to compel a public utility to render adequate service, and it also confers upon the Commission the duty to fix reasonable rates for the rendering of adequate service. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

Under G.S. 62-32 and this section, the Utilities Commission is given the power and the duty to compel utility companies to render adequate service and to set reasonable rates for such service. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Under subdivision (a)(5) of this section the Commission has the authority to order the utility to take action necessary to secure reasonably adequate service for the public's need and convenience. Undoubtedly yellow pages could fall within this provision. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

As to the jurisdiction of the Utilities Commission to require rail carrier to open drainage ditches along its tracks and to keep its drainage ditches open, see State ex rel. Utils. Comm'n v. Seaboard C.L.R.R., 62 N.C. App. 631, 303 S.E.2d 549, cert. denied and appeal dismissed, 309 N.C. 324, 307 S.E.2d 168 (1983).

North Carolina Utilities Commission's conclusion that it had jurisdiction to review, prior to execution, proposed wholesale electric energy contracts granting native load priority supplied from a utility to retail ratepayers and to take appropriate action to protect reliable service to retail customers in North Carolina by obtaining written notice prior to the execution of any wholesale electric energy contracts in interstate commerce for its consent was vacated as the matter was preempted by the Federal Power Act, 16 U.S.C.S. § 791 et seq. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 161 N.C. App. 199, 588 S.E.2d 77 (2003).

There was no conflict between G.S. 62-106 and G.S. 62-42 because they served different purposes and were reconcilable; the provisions of G.S. 62-100 through G.S. 62-107 dealt with the siting of certain large transmission lines and were not applicable to the case, and G.S. 62-42 was much broader in scope, dealing with compelling any type of needed improvement to a public utility system. The siting of lines of at least 161 kV was often controversial and the legislature's decision to require specialized procedures for the siting of these lines was logical. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).

Town's ordinances, as applied to a power company's proposed transmission line, were invalid given the North Carolina Utilities Commission's G.S. 62-42 authority and duty to compel a power company to complete certain improvements in accordance with the purposes of the Public Utilities Act. The Commission appropriately placed the burden of proof as to the validity of the ordinances on the power company; once the Commission became aware of hazardous conditions affecting a public utility or its service to the public, the Commission was obligated to remedy the situation. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).

Because G.S. 62-32 and G.S. 62-42 authorized the North Carolina Utilities Commission to compel utility companies to render adequate service and to set reasonable rates, the Commission was the proper body to hear a dispute between a power company and the town. Although the town could have granted a variance to its ordinance that would have allowed the company to build the proposed new line, the ordinance was not consistent with state law, and the town cited no statutory authority or precedent that required the company to seek such a variance where an administrative agency specifically designed to handle such disputes had jurisdiction. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).

The Commission, not the courts, is authorized by the legislature to determine what is a fair rate of return. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

In reviewing the Commission's determination of fair rate of return, the court will only review the record and evidence to determine if the Commission's order is supported by competent evidence. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983).

This section must be construed in connection with G.S. 62-110, which requires the issuance of a certificate of public convenience and necessity to construct new facilities except where such construction is into territory contiguous to that already occupied and not receiving similar service from another public utility. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

Thus, Commission Is Without Authority to Compel Duplicate Telephone Service. - A reading of this section in pari materia with G.S. 62-110 results in the determination that the Commission does not have the authority to compel a public utility to provide local exchange service to an area which is already receiving such service from another public utility. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

To order a telephone company to render service to an area already occupied by another telephone company would foster duplication, wastefulness, and unwarranted competition, all of which are repugnant to the avowed policy of the public utility law. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

Proposed Siting of Electrical Transmission Line. - North Carolina Utilities Commission had jurisdiction to hear and resolve dispute arising from the proposed siting of an electrical transmission line against electric membership corporations. State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992), aff'd per curiam, 334 N.C. 681, 435 S.E.2d 71 (1993). Decided prior to effective date of § 62-100, et seq.

Duty of Utility to Render Reasonably Adequate Service. - Having been granted a monopoly in its franchise area, the utility is under a duty to render reasonably adequate service. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Utility Must Accept Responsibility. - A public utility which has been allowed to charge rates sufficient to enable it to maintain its properties, in addition to the earning of a fair return thereon, and which nevertheless permits its properties to fall into such a poor state of maintenance as to impair the quality of its service, must accept responsibility for its resulting inability to render adequate service to its patrons. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Providing a correct telephone listing is part of providing "reasonably adequate service" as required by subdivision (a)(5) of this section. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Providing a correct telephone listing in the yellow pages as well as in the white pages of the directory is a utility function, and the Commission properly has jurisdiction over complaints which arise from this function. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Incorrect Telephone Number Listings. - The Utilities Commission had jurisdiction over complaints concerning incorrect telephone number listings in the telephone directory even when the regulated utility had delegated to another company the public utility function of publishing its directory which also included paid advertising. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Proper Listings in Advertisements in Yellow Pages. - If a utility elects to include yellow pages advertising in the directory which it is required to publish, then clearly proper listings in the advertisements in the yellow pages become a part of the utility's "function of providing adequate service" to the public. The public is not well served by listings in the yellow pages or the white pages of the directory which are incorrect or confusing to the consuming public. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

As to reduction of fair value of utilities' property where service is inadequate, see State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

Recovery of Reasonable Cost of Approved Gas Exploration Projects. - The Commission, in ordering that the reasonable costs of approved exploration projects were to be recoverable through tracking rate increases, acted within its acknowledged duty and authority to compel adequate and efficient utility service to the citizens of this State, where it was clear from the Commission's findings that, without additional gas supplies, the gas utilities would be unable to render adequate service to their customers, that exploration programs were the most feasible means for obtaining these additional supplies, and that the utilities were unable, through traditional methods of financing, to fund sufficient exploration projects to obtain these supplies. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Protest by City Not Notice. - A protest filed by a city in a proceeding by a power company for an increased cash fare on its city buses was not sufficient to constitute such notice as is required by this section so as to authorize the Commission to consider whether or not the service rendered by the power company was adequate or inadequate. State ex rel. Utils. Comm'n v. City of Greensboro, 244 N.C. 247, 93 S.E.2d 151 (1956).

Cited in State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968); State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397 (1985); State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005).


§ 62-43. Fixing standards, classifications, etc.; testing service.

  1. The Commission may, after notice and hearing, had upon its own motion or upon complaint, ascertain and fix just and reasonable standards, classifications, regulations, practices, or service to be furnished, imposed, observed or followed by any or all public utilities; ascertain and fix adequate and reasonable standards for the measurement of quantity, quality, pressure, initial voltage or other condition pertaining to the supply of the product, commodity or service furnished or rendered by any and all public utilities; prescribe reasonable regulations for the examination and testing of such product, commodity or service and for the measurement thereof; establish or approve reasonable rules, regulations, specifications and standards to secure the accuracy of all meters and appliances for measurement; and provide for the examination and testing of any and all appliances used for the measurement of any product, commodity or service of any public utility.
  2. The Commission shall fix, establish and promulgate standards of quality and safety for gas furnished by a public utility and prescribe rules and regulations for the enforcement of and obedience to the same.

History

(1919, c. 32; C.S., s. 1055; 1933, c. 134, s. 8; c. 307, s. 11; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

For case holding notice adequate under this section, see State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).


§ 62-44. Commission may require continuous telephone lines.

The Commission may, upon its own motion or upon written complaint by any person, after notice and hearing, require any two or more telephone or telegraph utilities to establish and maintain through lines within the State between two or more localities, which cannot be communicated with or reached by the lines of either utility alone, where the lines or wires of such utilities form a continuous line of communication, or could be made to do so by the construction and maintenance of suitable connections or the joint use of equipment, or the transfer of messages at common points. The rate for such service shall be just and reasonable and the Commission shall have power to establish the same, and declare the portion thereof to which each utility affected thereby is entitled and the manner in which the same must be secured and paid. All necessary construction, maintenance and equipment in order to establish such service shall be constructed and maintained in such manner and under such rules, with such divisions of expense and labor, as may be required by the Commission.

History

(1933, c. 307, s. 9; 1963, c. 1165, s. 1.)

CASE NOTES

Statutes Requiring Interconnection with Competitor Should Not Be Extended Beyond Plain Meaning. - The power to require the proprietor of a business to interconnect its facilities with those of a competitor is a drastic power. Statutes conferring it should not be extended beyond their plain meaning. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

When Interconnection of Lines May Be Required. - This section authorizes the Commission to require a connection of the lines of two telephone companies, but only when they serve localities which cannot be communicated with by the lines of one of them alone. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

There is no provision in this Chapter which requires, or authorizes the Commission to require, a utility, with large investments in its own plant and facilities, to permit interconnection with such plant and facilities by a competitor in order to increase the competitor's opportunity to take away its customers or prospective customers. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Section Does Not Authorize Commission to Compel Telephone Company to Interconnect with Radio Company Serving Same Area. - This section may not reasonably be extended by construction to authorize the Commission to compel a telephone company to interconnect its system with the system of a radio company serving the identical area which the telephone company, itself, serves or desires to serve. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Mobile Radio Service Company Is Not "Telephone or Telegraph Utility". - Even if the record is sufficient to support an order granting an applicant a certificate of public convenience and necessity to act as a common carrier of communications providing mobile radio service, the Commission has no statutory authority to require a telephone utility to interconnect applicant's radio communications system with the utility's land telephone system. If permitted to render such service, the applicant would not be a "telephone or telegraph utility." State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).


§ 62-45. Determination of cost and value of utility property.

The Commission, after notice and hearing, may ascertain and fix the cost or value, or both, of the whole or any part of the property of any public utility insofar as the same is material to the exercise of the jurisdiction of the Commission, make revaluations from time to time, and ascertain the cost of all new construction, extensions and additions to the property of every public utility.

History

(1933, c. 307, s. 12; 1963, c. 1165, s. 1.)

§ 62-46. Water gauging stations.

The Commission may require the location, establishment, maintenance and operation of any water gauging station which it finds is needed in the State over and above those required by federal agencies, and the Commission may cooperate with federal and other State agencies as to the location, construction and reports and the results of operation of such station.

History

(1933, c. 307, s. 33; 1963, c. 1165, s. 1.)

§ 62-47. Reports from municipalities operating own utilities.

Every municipality furnishing gas, electricity or telephone service shall make an annual report to the Commission, verified by the oath of the general manager or superintendent thereof, on the same forms as provided for reports of public utilities, giving the same information as required of public utilities.

History

(1933, c. 307, s. 34; 1963, c. 1165, s. 1.)

Cross References. - As to admissibility of records in utility rate hearing, see G.S. 62-65.

§ 62-48. Appearance before courts and agencies.

  1. The Commission is authorized and empowered to initiate or appear in such proceedings before federal and State courts and agencies as in its opinion may be necessary to secure for the users of public utility service in this State just and reasonable rates and service; provided, however, that the Commission shall not appear in any State appellate court in support of any order or decision of the Commission entered in a proceeding in which a public utility had the burden of proof.
  2. The Commission may, when appearing before federal courts and agencies on behalf of the using and consuming public in matters relating to the wholesale rates and supply of natural gas, employ, subject to the approval of the Governor, private legal counsel and be reimbursed for any resulting legal fees and costs from past and future refunds received by the North Carolina natural gas distribution companies, and may establish procedures for those natural gas distribution companies to set aside reasonable amounts of those refunds for this purpose. The Commission is also authorized to establish procedures whereby the State may be reimbursed from past and future refunds received by the North Carolina natural gas distribution companies for travel expenses incurred by staff members of the Commission and Public Staff designated to provide assistance to the Commission's private legal counsel in natural gas matters before federal courts and agencies.

History

(1899, c. 164, s. 14; Rev., s. 1110; 1907, c. 469, s. 5; C.S., s. 1075; 1929, c. 235; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1977, c. 468, s. 11; 1985, c. 312, s. 1; 1985 (Reg. Sess., 1986), c. 1014, s. 233.)

§ 62-49. Publication of utilities laws.

The Commission is authorized and directed to secure publication of all North Carolina laws affecting public utilities, together with the Commission rules and regulations, in an annotated edition, and the Commission may adopt rules for distribution of said publication and may republish said laws at such times as may be reasonable and necessary.

History

(1963, c. 1165, s. 1; 1967, c. 1133; 2021-23, s. 7.)

Effect of Amendments. - Session Laws 2021-23, s. 7, effective May 17, 2021, substituted "publication” for "publication, and shall publish biennial supplements to said utilities laws containing all amendments and additions thereto.”

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Petroleum Transp., Inc., 2 N.C. App. 566, 163 S.E.2d 526 (1968); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 367, 174 S.E.2d 808 (1970).


§ 62-50. Safety standards for gas pipeline facilities.

  1. The Commission may promulgate and adopt safety standards for the operation of natural gas pipeline facilities in North Carolina. These safety standards shall apply to the pipeline facilities of gas utilities and pipeline carriers under franchise from the Utilities Commission and to pipeline facilities of other gas operators, as defined in subsection (g) of this section. The Commission shall require that all gas operators file with the Commission reports of all accidents occurring in connection with the operation of their gas pipeline facilities located in North Carolina. The Commission may require that all gas operators file with the Commission copies of their construction, operation, and maintenance standards and procedures, and any amendments thereto, and such other information as may be necessary to show compliance with the safety standards promulgated by the Commission. Where the Commission has reason to believe that any gas operator is not in compliance with the Commission's safety standards, the Commission may, after notice and hearing, order that gas operator to take such measures as may be necessary to comply with the standards. The Commission may require all gas operators to furnish engineering reports showing that their pipeline facilities are in safe operating condition and are being operated in conformity with the Commission's safety standards.
  2. The Commission is hereby authorized to enter into agreements with the United States Department of Transportation and other federal agencies and with other states or public utilities commissions of other states for the regulation of natural gas pipelines located within the State of North Carolina and upon the execution of such cooperative agreements, the Commission is authorized to utilize Commission personnel for inspection, investigation, and regulation of safety standards for interstate and intrastate natural gas pipelines in North Carolina, and to share in the cost of such regulation with other agencies having duties with respect to the regulation of said natural gas pipelines, and to receive funds from the United States Department of Transportation for such regulation. The Commission may use Commission personnel to inspect and investigate all gas incidents, facilities, and records kept pursuant to the provisions of 49 Code of Federal Regulations, Parts 191, 192, and 193, and to cooperate with other state and federal agencies in determining the probable cause or causes of gas incidents. Any information obtained during an investigation of a gas incident shall be reduced to writing and a report containing that information shall be filed with the Chief Clerk of the Commission and the report shall be subject to public inspection but the report shall not be admissible in evidence in any civil or criminal proceeding arising from the incident.
  3. The Utilities Commission is hereby authorized to enter into cooperative agreements for inspection of all natural gas pipelines of North Carolina to the end that the Utilities Commission may enter into agreements with the United States Department of Transportation or other federal or state agencies to regulate and inspect the safety standards for all natural gas pipelines in the State of North Carolina, including interstate natural gas pipelines.
  4. Any person who violates any provision of this section, or any regulation of the Utilities Commission issued thereunder, shall be subject to a civil penalty for each violation for each day that the violation continues. The maximum penalty for each day of a violation and for all the days of a continuing violation may not exceed the maximum penalties that would apply if the penalties had been imposed under 49 U.S.C. Appx. § 1679a(a) by the Secretary of the United States Department of Transportation. Penalties assessed under this subsection shall be credited to the General Fund as nontax revenue.
  5. Any action for civil penalty or any claim for said penalty may be compromised by the Utilities Commission and settled for an agreed amount. In determining the amount of the penalty imposed in civil action, or the amount agreed upon in compromise, the amount of the penalty shall be considered in relation to the size of the business of the person charged, the gravity of the violation, and the good faith of the person charged in attempting to achieve compliance, after any prior notification of a violation. The amount of the penalty, when finally determined in a civil action, or the amount agreed upon in compromise, may be deducted from any sums owing by the State to the person charged, or may be collected as in the case of any judgment in a civil action in the State courts.
  6. The General Court of Justice of North Carolina is authorized to issue court orders, restraining orders, injunctions and other processes of the court in actions by the Utilities Commission to enforce the provisions of this Chapter relating to gas pipeline safety, and the Commission is authorized to bring actions in said court, including actions for mandatory injunctions, restraining orders, temporary restraining orders, penalties, damages and such other relief as may be necessary to secure compliance with the provisions of this section and regulations of the Commission duly enacted and adopted hereunder relating to gas pipeline safety. This provision is in addition to other powers of the Commission and the courts in relation to the enforcement of provisions of this Chapter in the courts, and shall not limit the present powers of the Commission in bringing actions in the courts for enforcement of other provisions of this Chapter.
  7. For the purpose of this section, "gas operators" include gas utilities and gas pipeline carriers operating under a franchise from the Utilities Commission, municipal corporations operating municipally owned gas distribution systems, regional natural gas districts organized and operated pursuant to Article 28 of Chapter 160A of the General Statutes, and public housing authorities and any person operating apartment complexes or mobile home parks that distribute or submeter natural gas to their tenants. This section does not confer any other jurisdiction over municipally owned gas distribution systems, regional natural gas districts, public housing authorities or persons operating apartment complexes or mobile home parks.

History

(1967, c. 1134, s. 1; 1969, c. 646; 1971, cc. 549, 1145; 1979, c. 269, s. 1; 1989, c. 481, ss. 1, 2; 1993, c. 189, s. 1; 1997-426, s. 9.)

Legal Periodicals. - For note, "The Modern-Day Case of the Lorax Within the Fourth Circuit,” see 13 Elon L. Rev. 291 (2020).

§ 62-51. To inspect books and records of corporations affiliated with public utilities.

Members of the Commission, Commission staff, and Public Staff are hereby authorized to inspect the books and records of corporations affiliated with public utilities regulated by the Utilities Commission under the provisions of this Chapter, including parent corporations and subsidiaries of parent corporations. This authorization shall extend to all reasonably necessary inspection of all books and records of account and agreements and transactions between public utilities doing business in North Carolina and their affiliated corporations where such records relate either directly or indirectly to the provision of intrastate service by the utility. The right to inspect such books and records shall apply both to books and records in the State of North Carolina and such books and records located outside of the State of North Carolina. If any such affiliated corporation shall refuse to permit such inspection of its books and records and its transactions with public utilities doing business in North Carolina, the Utilities Commission is empowered to order the public utility regulated in North Carolina to show cause why it should not secure from its affiliated corporation such books and records for inspection in North Carolina or why their franchise to operate as a public utility in North Carolina should not be cancelled.

History

(1969, c. 764, s. 1; 1977, c. 468, s. 12; 2021-23, s. 24.)

Editor's Note. - Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in this section.

CASE NOTES

Broad Authority to Inspect and Investigate. - Within its proper rate-making authority, the Commission is expressly authorized to inspect the books and records of affiliated companies and to investigate contracts and practices between the petitioning utility and its affiliated companies, including parent corporations and subsidiaries of parent corporations. The authority of the Commission to inspect books and records and to make investigations into transactions between affiliates, as conferred by this section, is quite broad. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

This section cannot give the Utilities Commission jurisdiction over Bellsouth Advertising and Publishing Company. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 93 N.C. App. 260, 377 S.E.2d 772 (1989), rev'd on other grounds, 326 N.C. 522, 391 S.E.2d 487 (1990).

Applied in State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980).

Cited in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981).


§ 62-52. Interruption of service.

The Utilities Commission may adopt appropriate rules and regulations which would allow public utilities to temporarily interrupt service when a structure is moved by the owner of such structure (or by a licensed mover authorized and acting on behalf of the owner) over or along public roads or streets and there are public utility facilities in place which would impede the movement of such structure. Such rules and regulations shall require:

  1. The owner to demonstrate that the public health and safety of the utility's customers and that of the general public will not be affected by the interruption of such service,
  2. That the inconvenience to said customers and the general public can be fully anticipated and reduced to a minimum,
  3. The utility cooperate with the owner in furnishing information relative to (1) and (2), and
  4. An initial application fee be paid the utility toward its cost to be incurred in investigating and planning.

Should the owner and the public utility be unable to agree on a practical procedure and/or the direction to follow in overcoming the impeding facilities in order that the public health and safety of the utility's customers and that of the general public will not be affected, then and in such event the owner may petition the Utilities Commission to require the utility to temporarily interrupt its service to its customers by disconnecting the impeding facilities, provided the owner can demonstrate to the satisfaction of the Commission that the public health and safety of the utility's customers and that of the general public will not be affected by such interruption of service and that the public utility was unreasonable in the procedure, direction and cost proposed to the owner to overcome the impeding facility.

In any event, the owner of said structure shall reimburse the utility its full cost involved in such disconnection and reconnection including but not limited to planning, engineering, notification and administrative costs, labor, material and equipment. Should the impeding facility be overcome other than by disconnection, the owner shall nevertheless reimburse the utility its full cost related thereto.

History

(1981 (Reg. Sess., 1982), c. 1186, s. 1.)

§ 62-53. Electric membership corporation subsidiaries.

In addition to any other authority granted to the Commission in this Chapter, the Commission shall have the authority to regulate electric membership corporations as provided in G.S. 117-18.1.

History

(1999-180, s. 4.)

§ 62-54. Notification of opportunity to object to telephone solicitation.

The Commission shall require each local exchange company and each competing local provider certified to do business in North Carolina to notify all telephone subscribers who subscribe to residential service from that company of the provisions of Article 4 of Chapter 75 of the General Statutes and of the federal laws and regulations allowing consumers to object to receiving telephone solicitations. The notification shall be drafted pursuant to G.S. 75-102(m), shall be distributed at least annually, and shall be distributed by one of the following methods: bill insert or bill message, direct mail, or e-mail when the subscriber has affirmatively selected e-mail as a means of notification. The Commission shall also ensure that this information is printed in a clear, conspicuous manner in the consumer information pages of each telephone directory distributed to residential customers.

History

(2000-161, s. 3; 2003-411, s. 5; 2009-122, s. 2.)

Cross References. - As to increased consumer protections from unwanted telephone solicitations, see G.S. 75-100 et seq.

Editor's Note. - Session Laws 2000-161, s. 3, enacted this section as G.S. 62-53. It was recodified as this section at the direction of the Revisor of Statutes.

Session Laws 2003-411, s. 6, provides: "Should one or more of the terms or provisions of this act or any application thereof be held or declared unenforceable or invalid to any extent, the remainder of this act, and the applications thereof that have not been held or declared unenforceable or invalid, shall remain in effect. In the specific event that the provisions of G.S. 75-102, 75-103, 75-104, or 75-105 as enacted in Section 3 of this act, are declared to be preempted or otherwise unenforceable in relation to interstate telephone calls, those provisions shall remain in force and effect with respect to intrastate telephone calls." Session Laws 2003-411, s. 5, rewrote the section.

Session Laws 2003-411, s. 7, provides: "Consistent with protected speech rights of businesses that engage in telephone solicitations, the provisions of this act shall be given broad construction so as to protect telephone subscribers from unwanted telephone solicitations and from problematic sales techniques and payment procedures often associated with these solicitations."

Effect of Amendments. - Session Laws 2009-122, s. 1, effective October 1, 2009, substituted "The notification shall be drafted pursuant to G.S. 75-102(m), shall be distributed at least annually, and shall be distributed by one of the following methods: bill insert or bill message, direct mail, or e-mail when the subscriber has affirmatively selected e-mail as a means of notification" for "by enclosing a bill insert, drafted pursuant to G.S. 75-102(m), at least annually, in at least one telephone bill mailed to every residential customer" near the middle.

§§ 62-55 through 62-59: Reserved for future codification purposes.

ARTICLE 4. Procedure before the Commission.

Sec.

§ 62-60. Commission acting in judicial capacity; administering oaths and hearing evidence; decisions; quorum.

For the purpose of conducting hearings, making decisions and issuing orders, and in formal investigations where a record is made of testimony under oath, the Commission shall be deemed to exercise functions judicial in nature and shall have all the powers and jurisdiction of a court of general jurisdiction as to all subjects over which the Commission has or may hereafter be given jurisdiction by law. The commissioners and members of the Commission's staff designated and assigned as examiners shall have full power to administer oaths and to hear and take evidence. The Commission shall render its decisions upon questions of law and of fact in the same manner as a court of record. A majority of the commissioners shall constitute a quorum, and any order or decision of a majority of the commissioners shall constitute the order or decision of the Commission, except as otherwise provided in this Chapter.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

Legal Periodicals. - For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

CASE NOTES

This section does not give the Commission the authority to determine the constitutionality of the legislation. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Commission Is Administrative Agency with Powers of a Dual Nature. - The Utilities Commission, a creature of the General Assembly, is an administrative agency of the State, with such powers and duties as are given it by this Chapter. These powers and duties are of a dual nature - supervisory or regulatory, and judicial. State ex rel. N.C. Utils. Comm'n v. Atlantic Greyhound Corp., 224 N.C. 293, 29 S.E.2d 909 (1944); Utilities Comm'n v. Atlantic Greyhound Corp., 224 N.C. 672, 32 S.E.2d 23 (1944).

The rate making activities of the Commission are a legislative function. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Rule Making Is a Legislative Function. - Rule making is an exercise of the delegated legislative authority of the Commission, under G.S. 62-30 and G.S. 62-31, to supervise and control the public utilities of this State and to make reasonable rules and regulations to accomplish that end. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

When the Commission is conducting a hearing, it is acting in a judicial capacity and shall render its decision upon questions of law and of fact in the same manner as a court of record. State ex rel. Utils. Comm'n v. Town of Pineville, 13 N.C. App. 663, 187 S.E.2d 473 (1972).

As to Commission's having powers of court of general jurisdiction as to certain matters, see State ex rel. N.C. Utils. Comm'n v. Atlantic Greyhound Corp., 224 N.C. 293, 29 S.E.2d 909 (1944); Utilities Comm'n v. Atlantic Greyhound Corp., 224 N.C. 672, 32 S.E.2d 23 (1944).

Commission Is Without Inherent Powers of Appellate Court. - The North Carolina Utilities Commission is a court of general jurisdiction only as to subjects embraced within this Chapter. It is a court of original jurisdiction and does not possess the inherent powers of an appellate court. State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 224 N.C. 762, 32 S.E.2d 346 (1944).

Liberality and informality are essential to the workings of the Commission. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Ordinarily, the procedure before the Commission is more or less informal, and is not as strict as in superior court, nor is it confined by technical rules. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962); State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 48 N.C. App. 115, 268 S.E.2d 851 (1980).

The Commission is required by G.S. 62-65 (a) in deciding on an application for a certificate of public convenience and necessity to apply the rules of evidence applicable in civil actions in the superior court "insofar as practicable." This section provides that the Commission shall render its decision "in the same manner as a court of record." The procedure before the Commission is, however, not as formal as that in litigation conducted in the superior court. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Since the regulation of public utilities is a continuing and continuous process as to each utility, procedure before the Commission must be more or less informal and not confined by technical rules, in order that regulation may be consistent with changing conditions. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

Great liberality is indulged in pleadings in proceedings before the Commission, and the technical and strict rules of pleading applicable in ordinary court proceedings do not apply. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Substance and not form is controlling. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962); State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

Commission may enlarge or restrict the inquiry before it unless a party is clearly prejudiced thereby. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962); State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

Issues of Fact Not to Be Decided Before All Evidence Is Offered. - It is erroneous if controverted questions of fact, or issues of fact, are decided by the Commission before all of the competent evidence of the parties is offered with respect thereto. State ex rel. Utils. Comm'n v. Town of Pineville, 13 N.C. App. 663, 187 S.E.2d 473 (1972).

Findings Must Be Supported by Competent Evidence. - Since the Commission is required to render its decisions upon questions of law and of fact in the same manner as a court of record, its findings must be, as a matter of law, supported by competent evidence. State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979).

Finding May Be Based on "Late" Exhibits. - The statutes prescribing the procedure for hearings before the Commission do not forbid it to make a finding, as to the capacity and ability of an applicant for a certificate of public convenience and necessity to serve, upon the basis of facts arising between the conclusion of the hearing and the entry of the order, when those facts are shown by "late" exhibits, otherwise competent, and when the adverse party has had adequate notice that such exhibits have been filed with the Commission for inclusion in the record. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Findings of Fact Not Disagreed with in Other Opinions as Those of Commission. - Where neither of the two concurring opinions nor the two dissenting opinions indicated any disagreement with any of the findings of fact stated in the opinion of another commissioner, and the opinion of no other commissioner suggested any other findings of fact, the findings of fact so stated in the opinion of the commissioner were, therefore, concurred in by a majority, if not all of the members of the Commission, and were, therefore, the findings of the Commission. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Different Reasons Given by Concurring Commissioners Are Not Grounds for Reversal. - When this section and G.S. 62-79(a) are construed together, as they must be, it is apparent that the General Assembly did not intend that an order of the Commission concurred in by the majority of its members, based upon findings of fact concurred in by a majority of its members, might be reversed solely because the members of the concurring majority chose different rules, or supposed rules, of law as support for their decision and order. The diversity of the reasons given by the three commissioners who join in an ultimate decision and order are not a sufficient ground for its reversal. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Order in Opinion Concurred in by Majority Is Order of Commission. - Where a majority of the commissioners concurred in the order set forth in the opinion by one of them, it was the order of the Commission. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

If three commissioners concur, the order entered by them constitutes the order of the Commission. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).

But all commissioners concurring must have heard evidence. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).

It seems inconceivable that the General Assembly intended that when a matter was heard by a hearing division, if "as many as three commissioners hearing the case approved the recommended order," as provided by G.S. 62-76, the order should become a final order, but that the Commission, when a matter was heard before it, could issue a final order when only one of the commissioners who heard the case approved the order. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).

Order Approved by Only One Commissioner Not Final. - An order was held to be a recommended order and not a final order where only one of the three commissioners who had heard the evidence in a hearing before the Commission participated in approving the order. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).

Res Judicata. - Only specific questions actually heard and finally determined by the Commission in its judicial character are res judicata, and then only as to the parties to the hearing. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Actions of an administrative agency which involve the exercise of a legislative rather than a judicial function are not res judicata. Exercises of the Commission's rule making power, therefore, are not governed by the principles of res judicata and are reviewable by the Supreme Court in later appeals of closely related matters. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Deferring Use of Increased Rates Pending Investigation. - After rates for certain intrastate shipments had been duly established by the Utilities Commission, defendant sought to increase such rates by filing tariff schedules to that effect. The Commission, in a proceeding to which defendant was a party, by order of postponement, which was not objected to, deferred use of the new increased rates pending investigation, and also directed that the rates previously fixed should not be changed by subsequent tariffs or schedules until this investigation and suspension proceeding had been disposed of, continuing the investigation from time to time at the request of defendant. It was held that such action of the Commission was binding on defendant. However, defendant was entitled to a reasonable time to comply with the order before penalties might be invoked. State ex rel. N.C. Utils. Comm'n v. Atlantic C.L.R.R., 224 N.C. 283, 29 S.E.2d 912 (1944).

For cases construing § 1023 of the Consolidated Statutes, containing similar provisions, see State ex rel. Caldwell v. Wilson, 121 N.C. 425, 121 N.C. 480, 28 S.E. 554 (1897); State ex rel. N.C. Utils. Comm'n v. Southern Ry., 151 N.C. 447, 66 S.E. 427 (1909); North Carolina Corp. Comm'n v. Winston-Salem Southbound Ry., 170 N.C. 560, 87 S.E. 785 (1917); State ex rel. Corp. Comm'n v. Southern Ry., 185 N.C. 435, 117 S.E. 563 (1923).

Cited in State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 123 N.C. App. 623, 473 S.E.2d 661 (1996); State ex rel. Utils. Comm'n v. Thrifty Call, Inc., 154 N.C. App. 58, 571 S.E.2d 622 (2002), cert. denied, appeal dismissed, 357 N.C. 66, 579 S.E.2d 575 (2003); State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009); In re Redmond, 369 N.C. 490, 797 S.E.2d 275 (2017); In re Cube Yadkin Generation, LLC v. Duke Energy Progress, LLC, - N.C. App. - , 837 S.E.2d 144 (2019).


§ 62-60.1. Commission to sit in panels of three.

  1. The Utilities Commission shall sit in panels of three commissioners each unless the chairman by order shall set the proceeding for hearing by the full Commission.
  2. Any order or decision made unanimously by a panel of three commissioners shall constitute the order or decision of the Commission, except as otherwise provided in this Chapter; provided, however, that upon motion of any three commissioners not sitting on the panel, made within 10 days of issuance of such order or decision of the panel, with notice to parties of record, the order or decision of the panel shall thereby be stayed and the full Commission shall review the order or decision of the panel and shall within 30 days of said motion either affirm or modify the order or decision of the panel or remand the matter to the panel for further proceedings; provided that the foregoing shall not limit the right of parties to seek review of such order or decision under G.S. 62-90.
  3. In the event an order or decision of the panel of three is not made unanimously, such order or decision shall be a recommended order only, subject to review by the full Commission, with all commissioners eligible to participate in the final arguments and decision. Review shall take place in accordance with the provisions of G.S. 62-78 and the Commission shall decide the matter in controversy and make appropriate order or decision thereon within 60 days of the date of the recommended order. If within the filing period specified by the panel no exception has been filed by a party, or if the Commission within the same period has not advised the parties that it will conduct a review upon its own motion, the recommended order or decision shall become the final order or decision of the Commission. Nothing in this section shall amend or repeal the provisions of G.S. 62-134.
  4. This section shall become effective July 1, 1975, and shall not affect the utilization of or the procedures outlined for utilization of a hearing commissioner or a hearing examiner as provided for elsewhere in Chapter 62.

History

(1975, c. 243, s. 4; 1977, c. 468, s. 13.)

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).


§ 62-61. Witnesses; production of papers; contempt.

The Commission shall have the same power to compel the attendance of witnesses, require the examination of persons and parties, and compel the production of books and papers, and punish for contempt, as by law is conferred upon the superior courts.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

Cross References. - As to contempt, see G.S. 5A-11 et seq.

As to attendance of witnesses, see G.S. 8-59 et seq.

§ 62-62. Issuance and service of subpoenas.

All subpoenas for witnesses to appear before the Commission, a division of the Commission or a hearing commissioner or examiner and notice to persons or corporations, shall be issued by the Commission or its chief clerk or a deputy clerk and be directed to any sheriff or other officer authorized by law to serve process issued out of the superior courts, who shall execute the same and make due return thereof as directed therein, under the penalties prescribed by law for a failure to execute and return the process of any court. The Commission shall have the authority to require the applicant for a subpoena for persons and documents to make a reasonable showing that the evidence of such persons or documents will be material and relevant to the issue in the proceeding.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1995, c. 379, s. 14(c).)

§ 62-63. Service of process and notices.

The chief clerk, a deputy clerk, or any authorized agent of the Commission may serve any notice issued by it and his return thereof shall be evidence of said service; and it shall be the duty of the sheriffs and all officers authorized by law to serve process issuing out of the superior courts, to serve any process, subpoenas and notices issued by the Commission, and such officers shall be entitled to the same fees as are prescribed by law for serving similar papers issuing from the superior court. Service of notice of all hearings, investigations and proceedings by the Commission may be made upon any person upon whom a summons may be served in accordance with the provisions governing civil actions in the superior courts of this State, and may be made personally by an authorized agent of the Commission or by mailing in a sealed envelope, registered, with postage prepaid, or by certified mail.

History

(1949, c. 989, s. 1; 1957, c. 1152, s. 2; 1963, c. 1165, s. 1.)

Cross References. - As to penalty imposed upon sheriff for failing to execute and return process, see G.S. 162-14.

§ 62-64. Bonds.

All bonds or undertakings required to be given by any of the provisions of this Chapter shall be payable to the State of North Carolina, and may be sued on as are other undertakings which are payable to the State.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

§ 62-65. Rules of evidence; judicial notice.

  1. When acting as a court of record, the Commission shall apply the rules of evidence applicable in civil actions in the superior court, insofar as practicable, but no decision or order of the Commission shall be made or entered in any such proceeding unless the same is supported by competent material and substantial evidence upon consideration of the whole record. Oral evidence shall be taken on oath or affirmation. The rules of privilege shall be effective to the same extent that they are now or hereafter recognized in civil actions in the superior court. The Commission may exclude incompetent, irrelevant, immaterial and unduly repetitious or cumulative evidence. All evidence, including records and documents in the possession of the Commission of which it desires to avail itself, shall be made a part of the record in the case by definite reference thereto at the hearing. Any party introducing any document or record in evidence by reference shall bear the expense of all copies required for the record in the event of an appeal from the Commission's order. Every party to a proceeding shall have the right to call and examine witnesses, to introduce exhibits, to cross-examine opposing witnesses on any matter relevant to the issues, to impeach any witness regardless of which party first called such witness to testify and to rebut the evidence against him. If a party does not testify in his own behalf, he may be called and examined as if under cross-examination.
  2. The Commission may take judicial notice of its decisions, the annual reports of public utilities on file with the Commission, published reports of federal regulatory agencies, the decisions of State and federal courts, State and federal statutes, public information and data published by official State and federal agencies and reputable financial reporting services, generally recognized technical and scientific facts within the Commission's specialized knowledge, and such other facts and evidence as may be judicially noticed by justices and judges of the General Court of Justice. When any Commission decision relies upon such judicial notice of material facts not appearing in evidence, it shall be so stated with particularity in such decision and any party shall, upon petition filed within 10 days after service of the decision, be afforded an opportunity to contest the purported facts noticed or show to the contrary in a rehearing set with proper notice to all parties; but the Commission may notify the parties before or during the hearing of facts judicially noticed, and afford at the hearing a reasonable opportunity to contest the purported facts noticed, or show to the contrary.

History

(1949, c. 989, s. 1; 1959, c. 639, s. 2; 1963, c. 1165, s. 1; 1973, c. 108, s. 21.)

Cross References. - As to rules of evidence generally, see G.S. 8C-1 et seq.

Legal Periodicals. - For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

For article, "A New Paradigm for Understanding Judicial Notice and its Implications in the Modern Digital Age," see 9 Elon L. Rev. 267 (2017).

CASE NOTES

Informality of Procedure. - The Commission is required by subsection (a) in deciding on an application for a certificate of public convenience and necessity to apply the rules of evidence applicable in civil actions in the superior court "insofar as practicable." G.S. 62-60 provides that the Commission shall render its decision "in the same manner as a court of record." The procedure before the Commission is, however, not as formal as that in litigation conducted in the superior court. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Procedure before the Commission in the trial of utilities matters, and particularly in the admission of evidence, is not so formal as litigation conducted in the superior court. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

Admissibility of Annual Reports of Municipalities. - In a proceeding by a utility for an increase in rates, wherein municipalities engaged in resale of electrical energy purchased from the utility protested against the proposed schedules of the utility, copies of annual reports of the municipality to the Commission pursuant to statute, which showed profits made by the municipalities from resale of electrical energy, were admissible in evidence on the question of whether the proposed schedules were fair and equitable as between groups or classifications to be served under such schedules. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Admissibility of Evidence of Rates Charged by Another Utility. - In a proceeding by a utility for a rate increase, the Commission properly excluded evidence of rates charged by another utility in the same area as that involved in the proceeding, in the absence of evidence as to the relative cost conditions of the two utilities. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Evidence Held Sufficient. - The Commission heard ample evidence to support its finding that the introduction of natural gas facilities into unserved areas would assist in the economic development of those areas. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Admission of Expert-Opinion Evidence. - In a rule making proceeding, the Utilities Commission did not err in admitting expert opinion evidence without a specific finding that the witness was an expert, since the admission of the evidence over objection and the denial of a motion to strike constituted the Commission's ruling that the witness was qualified as an expert. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

Findings May Be Based on "Late" Exhibits. - The statutes prescribing the procedure for hearings before the Commission do not forbid it to make a finding, as to the capacity and ability of an applicant for a certificate of public convenience and necessity to serve, upon the basis of facts arising between the conclusion of the hearing and the entry of the order, when those facts are shown by "late" exhibits, otherwise competent, and when the adverse party has had adequate notice that such exhibits have been filed with the Commission for inclusion in the record. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Judicial Notice of Financial Data. - Although the record before the Commission did not include testimony or documentary evidence as to the earnings of the 24 electric utilities whose earnings were shown in Moody's Investment Service, subsection (b) expressly authorizes the Commission to take judicial notice of data published by reputable financial reporting services, so that there was no error in the consideration of this data by the Commission in determining a fair rate of return to be allowed the utility. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977).

Judicial Notice of Industry Trend. - The Utilities Commission did not act arbitrarily in judicially noticing the current restructuring trend in the electric utility industry, where the reality of this trend was not subject to reasonable dispute because it was generally known within the industry. State ex rel. Utils. Comm'n v. Carolina Indus. Group For Fair Util. Rates, 130 N.C. App. 636, 503 S.E.2d 697 (1998), cert. denied, 349 N.C. 377 (1998).

Burden of Proof. - In the hearing before the Utilities Commission, the burden was on the applicant to offer competent, material and substantial evidence in support of his application for modification of his existing franchise. State ex rel. Utils. Comm'n v. Great S. Trucking Co., 223 N.C. 687, 28 S.E.2d 201 (1943); State ex rel. Utils. Comm'n v. Ray, 236 N.C. 692, 73 S.E.2d 870 (1953).

The "whole record test" set forth in this section requires the Commission's order to be affirmed if, upon consideration of the whole record as submitted, the facts found by the Commission are supported by competent, material and substantial evidence, taking into account any contradictory evidence or evidence from which conflicting inferences could be drawn. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

"Substantial evidence" is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

Cited in State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966); State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966); State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 337 N.C. 236, 446 S.E.2d 348 (1994); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998); In re Petition of Utils., Inc., 147 N.C. App. 182, 555 S.E.2d 333 (2001).


§ 62-66. Depositions.

The Commission or any party to a proceeding may take and use depositions of witnesses in the same manner as provided by law for the taking and use of depositions in civil actions in the superior court.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

§ 62-67: Repealed by Session Laws 1981, c. 193, s. 1.

§ 62-68. Use of affidavits.

At any time, 10 or more days prior to a hearing or a continued hearing, any party or the Commission may send by registered or certified mail or deliver to the opposing parties a copy of any affidavit proposed to be used in evidence, together with the notice as herein provided. Unless an opposing party or the Commission at least five days prior to the hearing, if the affidavit and notice are received at least 20 days prior to such hearing, otherwise at any time prior to or during such hearing, sends by registered or certified mail or delivers to the proponent a request to cross-examine the affiant at the hearing, the right to cross-examine such affiant is waived and the affidavit, if introduced in evidence, shall be given the same effect as if the affiant had testified orally. If an opportunity to cross-examine an affiant at the hearing is not afforded after request therefor is made as herein provided, the affidavit shall not be received in evidence. The notice accompanying the affidavit shall set forth the name and address of the affiant and shall contain a statement that the affiant will not be called to testify orally and will not be subject to cross-examination unless the opposing parties or the Commission demand the right of cross-examination by notice mailed or delivered to the proponent at least five days prior to the hearing if the notice and affidavit are received at least 20 days prior to such hearing, otherwise at any time prior to or during such hearing.

History

(1949, c. 989, s. 1; 1957, c. 1152, s. 3; 1963, c. 1165, s. 1.)

Legal Periodicals. - For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

§ 62-69. Stipulations and agreements; prehearing conference.

  1. In all contested proceedings the Commission, by prehearing conferences and in such other manner as it may deem expedient and in the public interest, shall encourage the parties and their counsel to make and enter stipulations of record for the following purposes:
    1. Eliminating the necessity of proof of all facts which may be admitted and the authenticity of documentary evidence,
    2. Facilitating the use of exhibits, and
    3. Clarifying the issues of fact and law.
  2. Unless otherwise provided in the Commission's rules of practice and procedure, such prehearing conferences may be ordered by the Commission or requested by any party to a proceeding in substantially the same manner, and with substantially the same subsequent procedure, as provided by law for the conduct of pretrial hearings in the superior court.

The Commission may make informal disposition of any contested proceeding by stipulation, agreed settlement, consent order or default.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

CASE NOTES

Adoption of Nonunanimous Stipulation. - The Utilities Commission may adopt the recommendations or provisions of a nonunanimous stipulation as long as the Commission sets forth its reasoning and makes its own independent conclusion supported by substantial evidence on the record that the proposal is just and reasonable to all parties in light of all the evidence presented. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).

Cited in In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).


§ 62-70. Ex parte communications.

  1. In all matters and proceedings pending on the Commission's formal docket, with adversary parties of record, all communications or contact of any nature whatsoever between any party and the Commission or any of its members, or any hearing examiner assigned to such docket, whether verbal or written, formal or informal, which pertains to the merits of such matter or proceeding, shall be made only with full knowledge of, or notice to, all other parties of record. All parties shall have an opportunity to be informed fully as to the nature of such communication and to be present and heard with respect thereto. In all matters and proceedings which are judicial in nature, it is the specific intent of this section that all members of the Commission shall conduct all trials, hearings and proceedings before them in the manner and in accordance with the judicial standards applicable to judges of the General Court of Justice, as provided in Chapter 7A of the General Statutes, and upon the initiation of any such proceedings, and particularly during the trial or hearing thereof, there shall be no communications or contacts of any nature, including telephone communications, written correspondence, or direct office conferences, between any party or such party's attorney and any member of the Commission or any hearing examiner, without all other parties to such proceeding having full notice and opportunity to be present and heard with respect to any such contact or communication.
  2. In the event any such communication or contact shall be received by the Commission or any commissioner or any hearing examiner assigned to such docket without such knowledge or notice to all other parties, the Commission shall immediately cause a formal record of such violation to be made in its docket and thereafter no ruling or decision shall be made in favor of such violating party until the aggrieved party shall waive such violation or the Commission shall find as a fact that such party was not prejudiced thereby or that any such prejudice, if present, has been removed.
  3. Any contacts or communications made in violation of this section which are not recorded by the Commission may be recorded by notice to the Commission by any aggrieved party and, unless the Commission shall find that such violation did not in fact occur, such recording shall have the same effect as if done by the Commission.
  4. In matters not under this section, the Commission may secure information and receive communications ex parte, it being the purpose of this section to protect adversary interests where they exist but not otherwise to restrict unduly the administrative and legislative functions of the Commission.
  5. This section shall not modify any notice required in the case of pleadings and proceedings which are subject to other requirements of notice to parties of record, whether by statute or by rule of the Commission, and the Commission may adopt reasonable rules to coordinate this section with such other requirements.
  6. In addition to the foregoing provisions regarding contacts with members of the Commission and hearing examiners, if any party of record, including the assistant attorney general when he is a party, confers with or otherwise contacts any staff personnel employed by the Commission regarding the merits of a pending proceeding, the staff employee shall promptly forward by regular mail a memorandum of the date and general subject matter of such contact to all other parties of record to the proceeding.
  7. Notwithstanding the foregoing, no communication by a public utility or by the Public Staff regarding the level of rates specifically proposed to be charged by a public utility shall be made or directed to the Commission, a member of the Commission, or hearing examiner, except in the form of written tariff, petition, application, pleading, written response, written recommendation, recorded conference, intervention, answer, pleading, sworn testimony and related exhibits, oral argument on the record, or brief. Willful violations of the provisions of this section on the part of any public utility shall subject such public utility to the penalties provided in G.S. 62-310(a). Willful violations of the provisions of this section by a member of the Public Staff shall subject such person to dismissal for cause.

Any commissioner who knowingly receives any such communication or contact during such proceeding and who fails promptly to report the same to the Attorney General, or who otherwise violates any of the provisions of this subsection shall be liable to impeachment. Any examiner who knowingly receives any such communication or contact during such proceeding and who fails promptly to report the same to the Attorney General or who otherwise violates any of the provisions of this subsection shall be subject to dismissal from employment for cause.

History

(1963, c. 1165, s. 1; 1977, c. 468, s. 14; 1979, c. 332, s. 2; 2021-23, s. 24.)

Editor's Note. - Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (g).

CASE NOTES

Applied in State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990).


§ 62-71. Hearings to be public; record of proceedings.

  1. All formal hearings before the Commission, a panel of three commissioners, a commissioner or an examiner shall be public, and shall be conducted in accordance with such rules as the Commission may prescribe. A full and complete record shall be kept of all proceedings on any formal hearing, and all testimony shall be taken by a reporter appointed by the Commission. Any party to a proceeding shall be entitled to a copy of the record or any part thereof upon the payment of the reasonable cost thereof as determined by the Commission.
  2. The Commission in its discretion may approve stenographic or mechanical methods of recording testimony, or a combination of such methods, and a transcript of any such record shall be valid for all purposes, subject to protest and settlement by the Commission.
  3. The Commission is authorized to provide daily transcripts of testimony in cases of substantial public interest and in other cases where time is an important factor to the parties involved.
  4. The Commission shall have authority to contract with or employ on a temporary basis, when deemed necessary by the chairman of the Commission, court reporters in addition to those employed on a full-time basis by the Commission, for the purpose of recording and transcribing testimony given at hearings before the Commission involving any Class A or B utility. The Commission is authorized to charge the cost of employing such court reporters directly to the involved utility or utilities.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1975, c. 243, s. 9; 1981, c. 1022.)

CASE NOTES

Formal Hearing. - An informal conference between members of the Commission and representatives of the utility involved in a rate proceeding, which was called at the suggestion of the Commission, and which involved only a single question as to whether the protesting municipalities having industrial users could secure an industrial rate, and at which conference no testimony and no record was taken, was not a formal hearing within the meaning of this section. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).


§ 62-72. Commission may make rules of practice and procedure.

Except as otherwise provided in this Chapter, the Commission is authorized to make and promulgate rules of practice and procedure for the Commission hearings.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

Legal Periodicals. - For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

CASE NOTES

In the absence of statutory inhibition, the Commission may regulate its own procedure within broad limits, and may prescribe and adopt reasonable rules and regulations with respect thereto, provided such rules are consistent with the statutes governing its actions. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962); State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

Rules Must Not Be Contrary to Statutes. - While the power of the legislature to delegate authority to an administrative agency of the State to prescribe rules and regulations for the due and orderly performance of its public functions is unquestioned, this does not authorize the formulation of rules contrary to the statute. State ex rel. N.C. Utils. Comm'n v. Atlantic C.L.R.R., 224 N.C. 283, 29 S.E.2d 912 (1944).

Waiver or Suspension of Rules. - The Commission may adopt its own rules governing pleadings, and has the power to waive or suspend the rules. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

As to challenge to validity of rules by appeal under former law, see State ex rel. N.C. Utils. Comm'n v. Atlantic Greyhound Corp., 224 N.C. 293, 29 S.E.2d 909 (1944); Utilities Comm'n v. Atlantic Greyhound Corp., 224 N.C. 672, 32 S.E.2d 23 (1944).

Power to Grant Continuance or Extend Hearing. - The Commission may regulate its own procedure within broad limits and that it may suspend or waive its rules. Thus, the commission has the power, within its discretion, to grant a continuance or extend a hearing. State ex rel. Utils. Comm'n v. Conservation Council, 64 N.C. App. 266, 307 S.E.2d 375 (1983), modified on other grounds on rehearing, 66 N.C. App. 456, 311 S.E.2d 617, rev'd in part, 312 N.C. 59, 320 S.E.2d 679 (1984).

Cited in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).


§ 62-73. Complaints against public utilities.

Complaints may be made by the Commission on its own motion or by any person having an interest, either direct or as a representative of any persons having a direct interest in the subject matter of such complaint by petition or complaint in writing setting forth any act or thing done or omitted to be done by any public utility, including any rule, regulation or rate heretofore established or fixed by or for any public utility in violation of any provision of law or of any order or rule of the Commission, or that any rate, service, classification, rule, regulation or practice is unjust and unreasonable. Upon good cause shown and in compliance with the rules of the Commission, the Commission shall also allow any such person authorized to file a complaint, to intervene in any pending proceeding. The Commission, by rule, may prescribe the form of complaints filed under this section, and may in its discretion order two or more complaints dealing with the same subject matter to be joined in one hearing. Unless the Commission shall determine, upon consideration of the complaint or otherwise, and after notice to the complainant and opportunity to be heard, that no reasonable ground exists for an investigation of such complaint, the Commission shall fix a time and place for hearing, after reasonable notice to the complainant and the utility complained of, which notice shall be not less than 10 days before the time set for such hearing.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

CASE NOTES

In determining the scope of the Commission's authority, the emphasis should be placed on the public utility function rather than a literal reading of the statutory definition of "public utility," and the statutory definition should not be read so narrowly as to preclude commission jurisdiction over a function which is required to provide adequate service to the subscribers. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

In a complaint case the field of inquiry is limited to the comparatively narrow question of fair treatment to a group or to a class. State ex rel. Utils. Comm'n v. County of Harnett, 30 N.C. App. 24, 226 S.E.2d 515 (1976).

As to standing of manufacturer and distributor of plastic telephone directory covers to complain and appeal, see State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

Evidence of Actual Costs of Shipments by Protestant Not Required. - In a complaint proceeding to determine the reasonableness of proposed increased intrastate rates for the shipment of crude earth by rail, respondent railroads were not required to present evidence of actual costs of shipments by protestant brick company between its mine and its manufacturing plant, since the appropriate group or class for the Utilities Commission's consideration was not protestant as an individual shipper at a certain mileage level, but all present and future shippers of crude earth who would be affected by the scale of rates. State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234, cert. denied, 301 N.C. 531, 273 S.E.2d 461 (1980).

The Utilities Commission was without jurisdiction to require VEPCO to comply with regulations of the Roanoke Voyages Corridor Commission, or to effect and encourage restoration, preservation, and enhancement of the appearance and aesthetic quality of the U.S. Highway 64 and 264 travel corridor through Roanoke Island, to bear the additional expense of supplying electrical service through underground facilities. The Corridor Commission did not argue or allege inadequate service or unreasonable rates, so the complaint was properly dismissed. State ex rel. Utils. Comm'n v. Roanoke Voyages Corridor Comm'n, 76 N.C. App. 324, 332 S.E.2d 753 (1985).

Providing a correct telephone listing in the yellow pages as well as in the white pages of the directory is a utility function, and the Commission properly has jurisdiction over complaints which arise from this function. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Incorrect Telephone Number Listings. - The Utilities Commission had jurisdiction over complaints concerning incorrect telephone number listings in the telephone directory even when the regulated utility had delegated to another company the public utility function of publishing its directory which also included paid advertising. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Proper Listings in Advertisements in Yellow Pages. - If a utility elects to include yellow pages advertising in the directory which it is required to publish, then clearly proper listings in the advertisements in the yellow pages become a part of the utility's "function of providing adequate service" to the public. The public is not well served by listings in the yellow pages or the white pages of the directory which are incorrect or confusing to the consuming public. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 326 N.C. 522, 391 S.E.2d 487 (1990).

Petition Properly Denied. - The Utilities Commission did not improperly resolve issues of fact without benefit of a hearing by denying petition where the Commission found that no reasonable ground existed for investigating the utility's rates. State ex rel. Utils. Comm'n v. Carolina Indus. Group For Fair Util. Rates, 130 N.C. App. 636, 503 S.E.2d 697 (1998), cert. denied, 349 N.C. 377 (1998).

Applied in State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982).

Cited in State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 93 N.C. App. 260, 377 S.E.2d 772 (1989); State ex rel. Utils. Comm'n v. North Carolina Elec. Membership Corp., 105 N.C. App. 136, 412 S.E.2d 166 (1992); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).


§ 62-73.1. Complaints against providers of telephone services.

  1. A local exchange company or competing local provider that is unable to resolve a customer complaint shall (i) provide notice to the consumer of the consumer's right to contact the Public Staff of the Commission and (ii) provide to the consumer, in writing, contact information for the Public Staff, including both a toll-free telephone number and an electronic mail address.
  2. The Public Staff shall keep a record of all complaints received pertaining to the provider, including the nature of each complaint and the resolution thereof. If the Public Staff determines that it cannot reasonably resolve the matter, the matter shall be referred to the Commission. The standard for review by both the Public Staff and the Commission shall be whether the action or inaction of the provider is reasonable and appropriate.

History

(2009-238, s. 5.)

Editor's Note. - The preamble to Session Laws 2009-238, provides: "Whereas, the technology used to provide communications services has evolved and continues to evolve at an ever-increasing pace; and

"Whereas, the resulting competition between traditional telephone service providers, cable companies offering communications services, Voice-over Internet Protocol (VoIP) providers, wireless communications service providers, and other communications service providers promotes and continues to promote additional consumer choices for these services; and

"Whereas, traditional telephone service providers remain subject to certain antiquated statutory and regulatory restrictions that do not apply to other communications service providers; and

"Whereas, this disparity may deprive consumers of traditional telephone companies of the full range of timely and competitive options and offerings that otherwise would be available to them; and

"Whereas, the General Assembly finds that relaxing certain restrictions for traditional telephone companies will relieve consumers of unnecessary costs and burdens, encourage investment, and promote timely deployment of more innovative offerings at more competitive prices for customers; and

"Whereas, in order to make the full range of competitive options and offerings available to consumers of communications services while maintaining inflation-based price controls for those existing customers who currently receive and wish to continue receiving only stand-alone basic residential lines from traditional telephone companies, the General Assembly hereby enacts the 'Consumer Choice and Investment Act of 2009'; Now, therefore,"

§ 62-74. Complaints by public utilities.

Any public utility shall have the right to file a complaint against any other public utility or any person on any of the grounds upon which complaints are allowed to be filed by other parties, and the same procedure shall be adopted and followed as in other cases, except that the complaint and notice of hearing shall be served by the Commission upon such interested persons as it may designate.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 2021-23, s. 8.)

Effect of Amendments. - Session Laws 2021-23, s. 8, effective May 17, 2021, substituted "file a complaint against any other public utility or any person” for "complain.”

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 93 N.C. App. 260, 377 S.E.2d 772 (1989).


§ 62-75. Burden of proof.

Except as otherwise limited in this Chapter, in all proceedings instituted by the Commission for the purpose of investigating any rate, service, classification, rule, regulation or practice, the burden of proof shall be upon the public utility whose rate, service, classification, rule, regulation or practice is under investigation to show that the same is just and reasonable. In all other proceedings the burden of proof shall be upon the complainant.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1985, c. 676, s. 8.)

CASE NOTES

Burden upon Party Seeking Rate Increase. - The burden of proof is upon the utility seeking a rate increase to show the proposed rates are just and reasonable. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 24 N.C. App. 327, 210 S.E.2d 543 (1975), vacated and appeal dismissed, 289 N.C. 286, 221 S.E.2d 322 (1976).

The burden is upon carriers asking for an increase in rates to prove justification for the increase and that the proposed rate is just and reasonable. State ex rel. N.C. Utils. Comm'n v. Southern Ry., 267 N.C. 317, 148 S.E.2d 210, modified, 268 N.C. 204, 150 S.E.2d 337 (1966).

Burden Not upon Shippers or Customers. - At a hearing on a proposed increase in charges for railroad services, the shippers and customers of the railroads have no burden of proving anything; the previous rates are presumed to be fair and reasonable and so are the orders of the Commission. State ex rel. N.C. Utils. Comm'n v. Southern Ry., 267 N.C. 317, 148 S.E.2d 210, modified, 268 N.C. 204, 150 S.E.2d 337 (1966).

The burden of proving that dedicated service rate is discriminatory and preferential lies with protestants, the complaining parties. State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).

The burden of proof is upon an applicant for a certificate of public convenience and necessity to show there is a public convenience and necessity for its proposed service. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Burden of Proof as to Counterclaim. - Where the challenge to the rate of return arose from protestants' counterclaim, the protestants were therefore complainants, and the burden was upon them. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Legality of Rule Placing Burden upon All Carriers as to All Rates. - This section uses the word "carrier" or "utility" in the singular. Therefore, when the Commission initiates an investigation of the entire rate structure of motor carriers, and places upon the carriers the burden of showing that the old rates, which have been in effect for a number of years with the approval of the Commission, are just and reasonable, a question arises as to whether the Commission has exceeded its legislative authority. See State ex rel. Utils. Comm'n v. North Carolina Motor Carriers Ass'n, 253 N.C. 432, 117 S.E.2d 271 (1960).

Plaintiff Must Prove Facts Essential to Relief. - This section imposes upon plaintiff the burden of proving the facts essential to its right to relief from the relationship of which it complains. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

Applied in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972); State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234 (1980); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982).

Cited in State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966); State ex rel. Utils. Comm'n v. Central Tel. Co., 60 N.C. App. 393, 299 S.E.2d 264 (1983).


§ 62-76. Hearings by Commission, panel of three commissioners, single commissioner, or examiner.

  1. Except as otherwise provided in this Chapter, any matter requiring a hearing shall be heard and decided by the Commission or shall be referred to a panel of three commissioners or one of the commissioners or a qualified member of the Commission staff as examiner for hearing, report and recommendation of an appropriate order or decision thereon. Subject to the limitations prescribed in this Article, a panel of three commissioners, hearing commissioner or examiner to whom a hearing has been referred by order of the chairman shall have all the rights, duties, powers and jurisdiction conferred by this Chapter upon the Commission. The chairman, in his discretion, may direct any hearing by the Commission or any panel, commissioner or examiner to be held in such place or places within the State as he may determine to be in the public interest and as will best serve the convenience of interested parties. Before any member of the Commission staff enters upon the performance of duties as an examiner, he shall first take, subscribe to and file with the Commission an oath similar to the oath required of members of the Commission.
  2. Repealed by Session Laws 1975, c. 243, s. 5.
  3. In all cases in which a pending proceeding shall be assigned to a hearing commissioner, such commissioner shall hear and determine the proceedings and submit his recommended order, but, in the event of a petition to the full Commission to review such recommended order, the hearing commissioner shall take no part in such review, either in hearing oral argument or in consideration of the Commission's decision, but his vote shall be counted in such decision to affirm his original order.

History

(1949, c. 989, s. 1; 1959, c. 639, s. 3; 1963, c. 1165, s. 1; 1975, c. 243, ss. 5, 9, 10.)

CASE NOTES

This section supports the holding that three commissioners concurring in order of Commission must have heard evidence. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 21 N.C. App. 251, 204 S.E.2d 181 (1974).

Resignation of Commissioner. - The North Carolina Utilities Commission's order requiring the carrier to pay for those calls at intrastate rates did not contravene G.S. 62-76 just because one of the members of a three-member panel that heard the complaint resigned before the panel issued its findings; the Commission's order requiring the carrier to pay a telecommunications company $1,898,685 because it paid for intrastate calls using interstate rates was not an illegal award of damages and was supported by the record. State ex rel. Utils. Comm'n v. Thrifty Call, Inc., 154 N.C. App. 58, 571 S.E.2d 622 (2002), cert. denied, appeal dismissed, 357 N.C. 66, 579 S.E.2d 575 (2003).


§ 62-77. Recommended decision of panel of three commissioners, single commissioner or examiner.

Any report, order or decision made or recommended by a panel of three commissioners, commissioner or examiner with respect to any matter referred for hearing shall be in writing and shall set forth separately findings of fact and conclusions of law and shall be filed with the Commission. A copy of such recommended order, report and findings shall be served upon the parties who have appeared in the proceeding.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1975, c. 243, s. 9.)

§ 62-78. Proposed findings, briefs, exceptions, orders, expediting cases, and other procedure.

  1. Prior to each decision or order by the Commission in a proceeding initially heard by it and prior to any recommended decision or order of a panel of three commissioners, commissioner or examiner, the parties shall be afforded an opportunity to submit, within the time prescribed by order entered in the cause, unless further extended by order of the Commission, for the consideration of the Commission, panel, commissioner or examiner, as the case may be, proposed findings of fact and conclusions of law and briefs or, in its discretion, oral arguments in lieu thereof.
  2. Within the time prescribed by the panel of three commissioners, commissioner, or examiner, the parties shall be afforded an opportunity to file exceptions to the recommended decision or order and a brief in support thereof, provided the time so fixed shall be not less than 15 days from the date of such recommended decision or order. The record shall show the ruling upon each requested finding and conclusion or exception.
  3. In all proceedings in which a panel of three commissioners, commissioner or examiner has filed a report, recommended decision or order to which exceptions have been filed, the Commission, before making its final decision or order, shall afford the party or parties an opportunity for oral argument. When no exceptions are filed within the time specified to a recommended decision or order, such recommended decision or order shall become the order of the Commission and shall immediately become effective unless the order is stayed or postponed by the Commission; provided, the Commission may, on its own motion, review any such matter and take action thereon as if exceptions thereto had been filed.
  4. When exceptions are filed, as herein provided, it shall be the duty of the Commission to consider the same and if sufficient reason appears therefor, to grant such review or make such order or hold or authorize such further hearing or proceeding as may be necessary or proper to carry out the purposes of this Chapter. The Commission, after review, upon the whole record, or as supplemented by a further hearing, shall decide the matter in controversy and make appropriate order or decision thereon.
  5. The Commission may expedite the hearing and decision of any case if the public interest so requires by the use of pretrial conferences, daily transcripts of evidence, trial briefs, and prompt oral argument, and by granting priority to the hearing and decision of such case.

History

(1949, c. 989, s. 1; 1959, c. 639, s. 4; 1963, c. 1165, s. 1; 1975, c. 243, ss. 9, 10; c. 867, s. 5.)

CASE NOTES

Ordinarily, the procedure before the Commission is more or less informal and is not as strict as in superior court, nor is it confined by technical rules; substance and not form is controlling. State ex rel. Utils. Comm'n v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890 (1963).

This section requires the Commission to find all facts essential to a determination of the question at issue. Having found the facts, it may then make factual conclusions. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

The reason for compelling adequate factual findings is to permit proper judicial review. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

The duty imposed is similar to that duty imposed on a judge of the superior court by former G.S. 1-185 when a jury trial is waived, and on the Industrial Commission by G.S. 97-84 before it can award or deny compensation. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

Power to Alter or Amend Orders. - Whatever the effect of subsection (c) of this section on an order filed by a panel of three Commissioners, this does not affect the power of the Utilities Commission to act pursuant to G.S. 62-80. G.S. 62-80 provides the Utilities Commission may "alter or amend" an order after a hearing. By using the words "alter or amend" the legislature intended that the Commission may change an order in some respects without considering all factors that must be considered in a general rate case. The statute does not limit changes in orders to those that have not become final. State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982).

Failure to Make Findings Necessitates Remand. - A failure by the Commission to find facts essential to a determination of the rights of the parties necessitates a remand to the Commission to make necessary findings on which it may base its order. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

Improper Appeal. - To allow an appeal from a recommended order to which no exception has been taken and which has become the final order of the full Commission by operation of the statute would allow a party, in effect, to "bypass" the full Commission, usurping the administrative agency's authority. State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994).

Applied in State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959).

Cited in State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).


§ 62-79. Final orders and decisions; findings; service; compliance.

  1. All final orders and decisions of the Commission shall be sufficient in detail to enable the court on appeal to determine the controverted questions presented in the proceedings and shall include:
    1. Findings and conclusions and the reasons or bases therefor upon all the material issues of fact, law, or discretion presented in the record, and
    2. The appropriate rule, order, sanction, relief or statement of denial thereof.
  2. A copy of every final order or decision under the seal of the Commission shall be served in the manner prescribed by the Commission upon the person against whom it runs or his attorney and notice thereof shall be given to the other parties to the proceeding or their attorney. Such order shall take effect and become operative when issued unless otherwise designated therein and shall continue in force either for a period which may be designated therein or until changed or revoked by the Commission. If an order cannot, in the judgment of the Commission, be complied with within the time designated therein, the Commission may grant and prescribe such additional time as in its judgment is reasonably necessary to comply with the order, and may, on application and for good cause shown, extend the time for compliance fixed in its order.

History

(1949, c. 989, s. 1; 1957, c. 1152, s. 4; 1959, c. 639, s. 4; 1961, c. 472, s. 1; 1963, c. 1165, s. 1; 1981, c. 193, s. 2; 2021-23, s. 9.)

Effect of Amendments. - Session Laws 2021-23, s. 9, effective May 17, 2021, substituted "in the manner prescribed by the Commission” for "by registered or certified mail” in the first sentence of subsection (b).

CASE NOTES

The Commission is required by this section to find all facts essential to a determination of the question at issue. State ex rel. Utils. Comm'n v. Queen City Coach Co., 4 N.C. App. 116, 166 S.E.2d 441 (1969).

Subsection (a) of this section requires the Commission to find all facts which are essential to a determination of the issues before it, in order that the reviewing court may have sufficient information to determine whether an adequate basis exists, in law and in fact, to support the Commission's resolution of the controverted issues. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

This section requires the commission to find all facts essential to a determination of the question at issue. The commission, however, is not required to comment on every single fact or item of evidence presented by the parties. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

The purpose of the findings required by subsection (a) is to provide the reviewing court with sufficient information to allow it to determine the controverted questions presented in the proceedings. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

The purpose of the required detail as to findings, conclusions, and reasons as mandated by subsection (a) is to provide the appellate court with sufficient information with which to determine under the scope of review the questions at issue in the proceedings. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).

Commission Need Not Comment on Every Fact Presented. - Although the Utilities Commission must consider and determine controverted questions by making findings of fact and conclusions of law, and must set forth the reasons and bases therefor "upon all the material issues of fact, law, or discretion," it need not comment upon every single fact or item of evidence presented by the parties. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

This section does not require that an order of the Commission contain a summary of the appellant's argument if the order taken as a whole is sufficient in detail to enable the court on appeal to determine the controverted questions presented in the proceedings and contains the necessary findings of fact and conclusions of law. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Commission's mislabeling of its findings and conclusions will not be fatal to its order if certain procedural requirements are met. As long as each link in the chain of reasoning appears in the commission's order, mislabeling is merely an inconvenience to the courts. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

The Commission has the duty to enter final orders that are sufficient in detail to enable the Supreme Court on appeal to determine the controverted issues. State ex rel. Utils. Comm'n v. AT & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

Findings Under G.S. 62-133(d). - The "other material facts of record" considered by the Commission under G.S. 62-133(d) in fixing reasonable and just rates must be found and set forth in its order so that the reviewing court may see what these elements are. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

The Commission is required to set forth factors it considers in fixing reasonable and just rates which are not enumerated in G.S. 62-133. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Questions of Original and Replacement Costs as "Material Issues of Fact". - When the record before the Commission presents questions of the original cost, less depreciation and the replacement cost, less depreciation, these are "material issues of fact," upon each of which the Commission must make its finding. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

Determination of "Fair Value". - Having made properly supported findings, it is for the Commission, not the reviewing court, to determine, in its expert discretion and by the use of "balanced scales," the relative weights to be given these several factors in ascertaining the ultimate fact of "fair value." State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

While the Commission has the duty to weigh evidence of "fair value" fairly and in "balanced scales," the reviewing court may not set aside the Commission's determination of "fair value" merely because the court would have given the respective elements different weights and would, therefore, have arrived at a different "fair value." State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

Failure to include all necessary findings of fact is an error of law and a basis for remand under G.S. 62-94(b)(4) because it frustrates appellate review. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

The Commission's order must be sufficient within itself to comply with the statute. Failure to include all necessary findings of fact and details is an error of law and a basis for remand under G.S. 62-94(b)(4) because it frustrates appellate review. State ex rel. Utils. Comm'n v. AT & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

The Commission was required to make specific findings showing what effect, if any, it gave to financing costs or down market protection, or both, in arriving at its common equity rate of return decision. Failure to do so constituted an error of law requiring a remand for further proceedings. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Findings Must Be Supported by Competent Evidence. - Since the Commission is required to render its decisions upon questions of law and of fact in the same manner as a court of record, its findings must, as a matter of law, be supported by competent evidence. State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979).

Findings Held Sufficient. - Where its final order showed that the Commission arrayed factors suggesting a higher rate of return against those suggesting a lower rate, and appellant's evidence was given substantial weight in the Commission's ultimate conclusion, the Commission's order was sufficiently detailed, and its findings in support of its conclusion were adequate to comply with this section. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

Utilities Commission's decision to accept an expert's recommendation of an 11.4% return on equity, based on the credibility and objectivity of his company-specific "discounted cash flow" analysis, was independently reached and supported by competent, material, and substantial evidence. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Commission's order was sufficient to allow the appellate court to determine the issues of jurisdiction, i.e., violation of the commerce clause, supremacy of federal law, and statutory authorization. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 174 N.C. App. 681, 622 S.E.2d 169 (2005).

Reversal and remand of that portion of a North Carolina Utilities Commission's order in which it authorized a 10.2 percent return on equity for a utility company was appropriate because the order did not contain sufficient findings of fact regarding the impact of changing economic conditions on customers. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 430, 758 S.E.2d 635 (2014).

North Carolina Utilities Commission did not err by approving a utility company's adjustments to a study of the costs of providing retail electric service to a large industrial customer because there was substantial evidence in the record, including the testimony of three expert witnesses, to support the Commission's findings. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 430, 758 S.E.2d 635 (2014).

Order of the North Carolina Utilities Commission, authorizing a percentage of return on equity for a utility company, was appropriate because the order contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 644, 766 S.E.2d 827 (2014).

North Carolina Utilities Commission's findings of fact demonstrated that the Commission considered the impact of changing economic conditions upon customers and specified how this influenced the Commission's decision to authorize a 10.2 percent return on equity; the findings were supported by the evidence, including public witness testimony, expert testimony, and the parties' stipulation, and thus the Commission made sufficient findings regarding the impact of changing economic conditions upon customers and these findings were supported by substantial evidence. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

North Carolina Utilities Commission properly concluded it was in the public interest to allow a public utility to utilize a rate adjustment mechanism because its determination was supported by substantial evidence; the Commission thoroughly explained how the utility's use of a rate adjustment mechanism would benefit its customers and took meaningful steps to ensure that problems were addressed and that customers were charged after the utility made improvements to its service. State ex rel. Utils. Comm'n v. Cooper, 368 N.C. 216, 775 S.E.2d 809 (2015).

Reasons for Rejecting Uncontradicted Opinion Testimony. - The Commission is not, as a matter of law, required to set forth in its order its reasons for rejecting uncontradicted opinion testimony; however, it is the better practice for the Commission to do so. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

In a complaint proceeding to determine the reasonableness of proposed increased intrastate rates for the shipment of crude earth by rail, the Utilities Commission was not required to make a specific finding that an emergency or change of circumstances not affecting the entire rate structure had occurred in order to allow a change in the rates. State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234, cert. denied, 301 N.C. 531, 273 S.E.2d 461 (1980).

Different Reasons Given by Concurring Commissioners Not Grounds for Reversal. - When G.S. 62-60 and subsection (a) of this section are construed together, as they must be, it is apparent that the General Assembly did not intend that an order of the Commission concurred in by the majority of its members, based upon findings of fact concurred in by a majority of its members, might be reversed solely because the members of the concurring majority chose different rules, or supposed rules, of law as support for their decision and order. The diversity of the reasons given by the three commissioners who join in an ultimate decision and order are not a sufficient ground for its reversal. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Order prescribing different Private Line Service rates for AT&T's nonreseller (end user) customers and its reseller customers upon its face was discriminatory, and absent legally adequate reasons in the order why it was not unjustly discriminatory within the meaning of G.S. 62-2(4), the order would be vacated and the cause remanded to the Commission for further proceedings. State ex rel. Utils. Comm'n v. AT & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

Order Setting Return on Common Equity Improper. - North Carolina Utilities Commission's (Commission) order approving a 10.5 percent return on common equity was not supported by substantial evidence under G.S. 62-94(b) and did not comply with G.S. 62-79(a) where: (1) although the 10.5 percent return on common equity agreed to in a non-unanimous stipulation fell within the range of returns on common equity recommended by the witnesses, no witness specifically recommended an return on common equity of 10.5 percent; (2) the Commission did not weigh any testimony presented, but merely recited the witnesses' testimony; (3) the Commission did not discuss why one witness's testimony was more credible than another's or which methodology was afforded the greatest weight; (4) the Commission adopted the stipulated return on common equity wholesale, as opposed to considering it as one piece of evidence to be weighed in making an otherwise independent determination based on the G.S. 62-133 factors; and (5) the Commission failed to make findings of fact regarding the impact of changing economic conditions on customers. State ex rel. Utils. Comm'n v. Cooper, 366 N.C. 484, 739 S.E.2d 541 (2013).

Applied in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

Cited in State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972); State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838 (1980); State ex rel. Utils. Comm'n v. Conservation Council, 64 N.C. App. 266, 307 S.E.2d 375 (1983); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988); State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 337 N.C. 236, 446 S.E.2d 348 (1994); In re Petition of Utils., Inc., 147 N.C. App. 182, 555 S.E.2d 333 (2001); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014); In re Cube Yadkin Generation, LLC v. Duke Energy Progress, LLC, - N.C. App. - , 837 S.E.2d 144 (2019).


§ 62-80. Powers of Commission to rescind, alter or amend prior order or decision.

The Commission may at any time upon notice to the public utility and to the other parties of record affected, and after opportunity to be heard as provided in the case of complaints, rescind, alter or amend any order or decision made by it. Any order rescinding, altering or amending a prior order or decision shall, when served upon the public utility affected, have the same effect as is herein provided for original orders or decisions.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

CASE NOTES

Procedure to Be Informal. - Since the regulation of public utilities is a continuing and continuous process as to each utility, procedure before the Commission must be more or less informal and not confined by technical rules, in order that regulation may be consistent with changing conditions. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

This section does not require a motion by the public utility, or other party, as a condition precedent to the authority of the Utilities Commission to amend a previously issued order. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977).

Reconsideration Does Not Require New and Independent Proceeding. - The Utilities Commission has the authority, upon its own motion or upon motion by any party, to reconsider its previously issued order, upon proper notice and hearing, and upon the record already compiled, without requiring institution of a new and independent proceeding by complaint or otherwise. State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999).

Authority to Rescind, Alter or Amend Is Discretionary. - The statutory authority of the Utilities Commission to rescind, alter or amend any order or decision made by it, upon proper notice to parties and after opportunity for hearing, is obviously discretionary. State ex rel. Utils. Comm'n v. Services Unlimited, Inc., 9 N.C. App. 590, 176 S.E.2d 870 (1970).

General Rate Hearing Not Required for Amendment. - This section requires that the procedures of complaint hearings shall be used before amending an order but it does not require a general rate hearing before an order may be amended. State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982).

Effect of G.S. 62-78(c) on Power to Alter or Amend. - Whatever the effect of G.S. 62-78(c) on an order filed by a panel of three Commissioners, this does not affect the power of the Utilities Commission to act pursuant to this section. This section provides that the Utilities Commission may "alter or amend" an order after a hearing. By using the words "alter or amend" the legislature intended that the Commission may change an order in some respects without considering all factors that must be considered in a general rate case. The statute does not limit changes in orders to those that have not become final. State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982).

Reconsideration Until Order Is Final. - At least until an order becomes final by expiration of the time allowed for appeal, this section authorizes the Commission, upon its own motion or upon the motion of any party, to reconsider a previously issued order, upon proper notice and hearing, upon the record already compiled, without requiring the institution of a new and independent proceeding by complaint or otherwise. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977).

Modification, etc., Based on Prior Misapprehension of Facts. - This section is broad enough to permit the Commission to modify and amend its order, even substantially, where, upon further consideration of the record before it, the Commission comes to the opinion that its order was due to the Commission's misapprehension of the facts, or disregard of facts, shown by the evidence received at the original hearing. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977).

The Commission may not arbitrarily or capriciously rescind its order approving a contract between utilities. It must appear that such rescission is made because of a change of circumstances requiring it in the public interest. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

In the absence of statutory authority, and in the absence of any additional evidence or a change in conditions, the Commission has no power to reopen a proceeding and modify or set aside an order theretofore made by it, where the order was made in pursuance of an agreement entered into by the parties to the proceeding. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Circumstances Justifying Rescission of Prior Order Approving Agreement Between Carriers. - The improvement and construction of highways between two municipalities making feasible a new and quicker bus route between them was a sufficient change of condition to empower the Utilities Commission to modify or rescind a prior order entered by it approving an agreement between two carriers in regard to their respective services to the public between the two municipalities along the older routes. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Revocation of Prior Order Reversed. - An order of the Utilities Commission revoking its prior order approving an agreement between carriers in regard to their respective services along the route in question and substituting in lieu thereof an order of the Commission having the same effect as the agreement, was reversed, there being no evidence to support the Commission's conclusion that the new order would promote harmony among the carriers, and there being no showing of a change of condition requiring a revision of the prior order in the public interest. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

"Complaint Proceeding" Distinguished from General Rate Case. - A hearing pursuant to the provisions of this section and G.S. 62-136 which involves a single rate or small part of a rate structure of a public utility is called a "complaint proceeding." It differs from a general rate case in that it deals with an emergency or change of circumstances which does not affect the entire rate structure of a utility and may be resolved without involving the procedure outlined in G.S. 62-133. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959).

An appeal does not lie from the denial of a petition to rehear. State ex rel. Utils. Comm'n v. Services Unlimited, Inc., 9 N.C. App. 590, 176 S.E.2d 870 (1970).

Running of Appeal Time Tolled. - The running of the time for appeal of an order of the Utilities Commission is tolled during the period between the filing of a petition for reconsideration and the order denying the motion. State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999).

Applied in State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994).

Cited in State ex rel. Utils. Comm'n v. North Carolina Gas Serv., 128 N.C. App. 288, 494 S.E.2d 621 (1998); State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 142 N.C. App. 127, 542 S.E.2d 247 (2001).


§ 62-81. Special procedure in hearing and deciding rate cases.

  1. All cases or proceedings, declared to be or properly classified as general rate cases under G.S. 62-137, or any proceedings which will substantially affect any utility's overall level of earnings or rate of return, shall be set for trial or hearing by the Commission, which trial or hearing shall be set to commence within 180 days of the institution or filing thereof. All such cases or proceedings shall be subject to the time frame established under G.S. 62-134(b). All such cases or proceedings shall be tried or heard and decided in accordance with the ratemaking procedure set forth in G.S. 62-133 and such cases shall be given priority over all other cases or proceedings pending before the Commission. In all such cases the Commission shall make a transcript of the evidence and testimony presented and received by it and shall furnish a copy thereof to any party so requesting by the third business day after the taking of such evidence and testimony.
  2. Any public utility filing or applying for an increase in rates for electric, telephone, natural gas, water, or sewer service shall notify its customers proposed to be affected by such increase of such filing by regular mail, by newspaper publications, or by electronic means, as directed by the Commission, within 30 days of such filing, which notice shall state that the Commission shall set and shall conduct a trial or hearing with respect to such filing or application within 180 days of said filing date. All other public utilities shall give such notice in such manner as shall be prescribed by the Commission.
  3. In cases or proceedings filed with and pending before the Commission, where either (i) the total annual revenue requested, or (ii) where the total annual revenue increase requested, is less than two million dollars ($2,000,000), even though all or a substantial portion of the rate structure is being initially established or is under review, the chairman of the Commission may refer the proceeding to a panel of three commissioners or to a hearing commissioner or to a hearing examiner for hearing.
  4. In all proceedings for an increase in rates and all other proceedings declared to be general rate cases under G.S. 62-137, the Commission shall conduct the hearing or portions of the hearing within the area of the State served by the public utility whose rates are under consideration, provided this subsection shall not apply to proceedings held pursuant to G.S. 62-133.2 and G.S. 62-133.4.
  5. Repealed by Session Laws 2021-23, s. 10, effective May 17, 2021.
  6. Notwithstanding the provisions of this section, or other provisions of this Chapter which would otherwise require a hearing, where there is no significant public protest received within 30 days of the publication of notice of a proposed rate change for a water or sewer utility, the Commission may decide the proceeding based on the record without a trial or hearing, provided said utility and all other parties of record have waived their right to any such hearing. Any decision made pursuant to this subsection shall be made in accordance with the provisions of G.S. 62-133 or 62-133.1.

History

(1963, c. 1165, s. 1; 1973, c. 1074; 1975, c. 45; c. 243, ss. 6, 9; c. 867, s. 6; 1977, c. 468, s. 15; 1981, c. 193, s. 3; c. 439; 2021-23, ss. 10, 25.)

Editor's Note. - G.S. 62-133(f), referred to in subsection (d) of this section, was repealed by Session Laws 1991, c. 598, s. 7.

G.S. 62-134(e), referred to in subsections (d) and (e) of this section, was repealed by Session Laws 1981 (Regular Session, 1982), c. 1197, s. 2.

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (a).

Effect of Amendments. - Session Laws 2021-23, s. 10, effective May 17, 2021, rewrote the section.

CASE NOTES

Applied in State ex rel. Utils. Comm'n v. Thornburg, 324 N.C. 478, 380 S.E.2d 112 (1989).

Cited in State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976); State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).


§ 62-82. Special procedure on application for certificate for generating facility; appeal from award order.

  1. Notice of Application for Certificate for Generating Facility; Hearing; Briefs and Oral Arguments. - Whenever there is filed with the Commission an application for a certificate of public convenience and necessity for the construction of a facility for the generation of electricity under G.S. 62-110.1, the Commission shall require the applicant to publish a notice thereof once a week for four successive weeks in a newspaper of general circulation in the county where such facility is proposed to be constructed and thereafter the Commission upon complaint shall, or upon its own initiative may, upon reasonable notice, enter upon a hearing to determine whether such certificate shall be awarded. Any such hearing must be commenced by the Commission not later than three months after the filing of such application, and the procedure for rendering decisions therein shall be given priority over all other cases on the Commission's calendar of hearings and decisions, except rate proceedings referred to in G.S. 62-81. Such applications shall be heard as provided in G.S. 62-60.1, and the Commission shall, upon request of the applicant, furnish a transcript of evidence and testimony submitted by the end of the second business day after the taking of each day of testimony. The Commission or panel shall require that briefs and oral arguments in such cases be submitted within 30 days after the conclusion of the hearing, and the Commission or panel shall render its decision in such cases within 60 days after submission of such briefs and arguments. If the Commission or panel does not, upon its own initiative, order a hearing and does not receive a complaint within 10 days after the last day of publication of the notice, the Commission or panel shall enter an order awarding the certificate.
  2. Compensation for Damages Sustained by Appeal from Award of Certificate under G.S. 62-110.1; Bond Prerequisite to Appeal. - Any party or parties opposing, and appealing from, an order of the Commission which awards a certificate under G.S. 62-110.1 shall be obligated to recompense the party to whom the certificate is awarded, if such award is affirmed upon appeal, for the damages, if any, which such party sustains by reason of the delay in beginning the construction of the facility which is occasioned by the appeal, such damages to be measured by the increase in the cost of such generating facility (excluding legal fees, court costs, and other expenses incurred in connection with the appeal). No appeal from any order of the Commission which awards any such certificate may be taken by any party opposing such award unless, within the time limit for filing notice of appeal as provided for in G.S. 62-90, such party shall have filed with the Commission a bond with sureties approved by the Commission, or an undertaking approved by the Commission, in such amount as the Commission determines will be reasonably sufficient to discharge the obligation hereinabove imposed upon such appealing party. The Commission may, when there are two or more such appealing parties, permit them to file a joint bond or undertaking. If the award order of the Commission is affirmed on appeal, the Commission shall determine the amount, if any, of damages sustained by the party to whom the certificate was awarded, and shall issue appropriate orders to assure that such damages be paid and, if necessary, that the bond or undertaking be enforced.

History

(1965, c. 287, s. 3; 1975, c. 243, s. 7; 2004-199, s. 23; 2013-410, s. 29; 2021-23, s. 11.)

Effect of Amendments. - Session Laws 2004-199, s. 23, effective August 17, 2004, added the last sentence in subsection (a).

Session Laws 2013-410, s. 29, effective August 23, 2013, deleted "daily" preceding "newspaper" in the first sentence of subsection (a).

Session Laws 2021-23, s. 11, effective May 17, 2021, in subsection (a), substituted "shall, upon request of the applicant" for "shall" in the third sentence and deleted the former last sentence, which read: "Notwithstanding this section, applicants for a certificate for solar photovoltaic facilities of 10 kilowatts or less are exempt from the requirement to publish public notice in newspapers."

Local Modification. - Buncombe: 2015-110, s. 1 (as to construction of generating facility at site of Asheville Steam Electric Generating Plant).

CASE NOTES

Scope of Commission's Authority and Jurisdiction. - North Carolina Utilities Commission's dismissal of petitioner independent power producer's application and its establishment of minimum filing requirements did not constitute an impermissible deviation from the process specifically provided in this section and G.S. 62-110.1, and some deviation from these sections was not beyond the Commission's authority and jurisdiction. State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993), cert. denied, 335 N.C. 564, 441 S.E.2d 125 (1994).

Cited in Commissioner of Labor v. House of Raeford Farms, Inc., 124 N.C. App. 349, 477 S.E.2d 230 (1996).


§§ 62-83 through 62-89: Reserved for future codification purposes.

ARTICLE 5. Review and Enforcement of Orders.

Sec.

§ 62-90. Right of appeal; filing of exceptions.

  1. Any party to a proceeding before the Commission may appeal from any final order or decision of the Commission within 30 days after the entry of such final order or decision, or within such time thereafter as may be fixed by the Commission, not to exceed 30 additional days, and by order made within 30 days, if the party aggrieved by such decision or order shall file with the Commission notice of appeal and exceptions which shall set forth specifically the ground or grounds on which the aggrieved party considers said decisions or order to be unlawful, unjust, unreasonable or unwarranted, and including errors alleged to have been committed by the Commission.
  2. Any party may appeal from all or any portion of any final order or decision of the Commission in the manner herein provided. Copy of the notice of appeal shall be mailed by the appealing party at the time of filing with the Commission, to each party to the proceeding to the addresses as they appear in the files of the Commission in the proceeding. The failure of any party, other than the Commission, to be served with or to receive a copy of the notice of appeal shall not affect the validity or regularity of the appeal.
  3. The Commission may on motion of any party to the proceeding or on its own motion set the exceptions to the final order upon which such appeal is based for further hearing before the Commission.
  4. The appeal shall lie to the appellate division of the General Court of Justice as provided in G.S. 7A-29. The procedure for the appeal shall be as provided by the rules of appellate procedure.
  5. ,  (f) Repealed by Session Laws 1975, c. 391, s. 12.
  6. Repealed by Session Laws 1983, c. 526, s. 5.

All other parties may give notice of cross appeal and set out exceptions which shall set forth specifically the grounds on which the said party considers said decision or order to be unlawful, unjust, unreasonable or unwarranted, and including errors alleged to have been committed by the Commission. Such notice of cross appeal and exceptions shall be filed with the Commission within 20 days after the first notice of appeal and exceptions has been filed, or within such time thereafter as may be fixed by the Commission, not to exceed 20 additional days by order made within 20 days of the first filed notice of appeal and exceptions.

History

(1949, c. 989, s. 1; 1955, c. 1207, s. 1; 1959, c. 639, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 1; 1975, c. 391, s. 12; 1983, c. 526, ss. 4, 5; c. 572.)

Cross References. - As to jurisdiction of the Supreme Court to review, when authorized by law, direct appeals from a final order or decision of the North Carolina Utilities Commission, see N.C. Const., Art. IV, § 12(1).

CASE NOTES

I. IN GENERAL.

Necessity for Timely Filing. - An affected party must file exceptions to the determination or decision within 10 (now 30) days after notice of the determination or decision. In re Housing Auth., 233 N.C. 649, 65 S.E.2d 761 (1961).

The Court of Appeals is without jurisdiction to review an original order of the Utilities Commission where no appeal has been taken from the order and the time for giving notice and perfecting appeal has expired. State ex rel. Utils. Comm'n v. Services Unlimited, Inc., 9 N.C. App. 590, 176 S.E.2d 870 (1970).

Who May Appeal. - An appeal from the Utilities Commission is limited to parties to the proceeding; a party is not affected by a ruling of the Utilities Commission unless the decision affects or purports to affect some right or interest of a party to the controversy and is in some way determinative of some material question involved. In re Housing Auth., 233 N.C. 649, 65 S.E.2d 761 (1961).

In order to have standing to appeal under this section, a party must not only file notice of appeal within 30 days, but must also be aggrieved. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 104 N.C. App. 216, 408 S.E.2d 876 (1991), cert. denied, 330 N.C. 618, 412 S.E.2d 95 (1992).

City had no standing to appeal an order of the North Carolina Public Utilities Commission (Commission) approving a merger of electric utilities because, (1) despite having been allowed to intervene before the Commission, a different standard governed standing, and (2) the city was not "aggrieved," under G.S. 62-90(a), since the city was not currently in the market to purchase power from the utilities. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

G.S. 62-137 Inapplicable to Proceedings Under Subsection (c) of This Section. - G.S. 62-137 is inapplicable to proceedings conducted under subsection (c) of this section, since their scope is limited by statute to the exceptions on which the particular appeal of a final order or decision is based, leaving the Commission without authority to declare the hearings a general rate case or complaint proceeding. The Commission may consider only the grounds upon which the applicant asserts that the Commission's order or decision is unlawful, unjust, unreasonable or unwarranted, including alleged errors committed by the Commission. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Utility customers association was not an aggrieved party entitled to appeal an order of the Utilities Commission adopting a rate making formula which authorized a natural gas company to adjust its rates when it purchased gas from nontraditional sources. Contention that association was an aggrieved party because the order would allow gas company to increase its rates in the future to the extent necessary to offset previous reductions under the order was without merit. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 104 N.C. App. 216, 408 S.E.2d 876 (1991), cert. denied, 330 N.C. 618, 412 S.E.2d 95 (1992).

Because the Utilities Commission's order regarding funding for a non-profit research organization did not impact rates and because any rate increases would have been effectuated at subsequent rate cases, intervenor-utility customers association was not an "aggrieved party" within the meaning of this section and, thus, lacked standing to appeal. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 142 N.C. App. 127, 542 S.E.2d 247 (2001).

Appellate Court Had No Jurisdiction to Review Commission's Interlocutory Order - Water and sewer processing facilities part-owner's appeal of interlocutory orders of the North Carolina Utilities Commission holding that the part-owner was a public utility under G.S. 62-3(23)a.2 and was subject to the Commission's jurisdiction was dismissed as the absence of any exceptions to G.S. 62-90 or G.S. 7A-29, allowing review of interlocutory orders of the Commission, required the appellate court to conclude that it had no jurisdiction to consider appeals of interlocutory orders of the Commission; further, the appellate court did not have authority under G.S. 7A-32(c) to review the part-owner's issues as there was no final order of the Commission. State ex rel. Utils. Comm'n v. Buck Island, Inc., 158 N.C. App. 536, 581 S.E.2d 122 (2003).

Appeals from Final Orders of North Carolina Utilities Commission - G.S. 62-90(a) and (d) provide for appeals of final orders of the North Carolina Utilities Commission; G.S. 7A-29(a) and (b) provide for appeals of right from certain administrative agencies, and G.S. 7A-27(d) provides for appeals of right from certain interlocutory orders of the superior or district courts. State ex rel. Utils. Comm'n v. Buck Island, Inc., 158 N.C. App. 536, 581 S.E.2d 122 (2003).

Because parties did not file a notice of appeal with the North Carolina Utilities Commission, the appellate court was without jurisdiction to consider their arguments. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 644, 766 S.E.2d 827 (2014).

Construing Notice of Appeal. - Notices of appeal would be considered to be appeals from the original order of the Utilities Commission, even though joint appellants' notices stated that they were appealing from denial of their petition for reconsideration, a non-appealable order, where it could be fairly inferred that they intended to appeal from the original orders and the appellee was not misled. State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999).

Federal Jurisdiction over Disputes Arising Under This Statute. - The district court erred in asserting federal jurisdiction under 47 U.S.C. § 252(e)(6) over disputes involving contract administration, interpretation and enforcement; the interconnection agreements at the core of those disputes were submitted to the NCUC and approved by it, and no judicial review was sought from these State commission determinations pursuant to this section. BellSouth Telecomms. v. North Carolina Utils. Comm'n, 240 F.3d 270 (4th Cir. 2001).

Dismissal of Appeal. - Utilities Commission's order dismissing a proposed intervenor's first appeal was void ab initio, and the appellate court treated the first appeal as properly before it. In re Investigation of Duke Energy Corp. & Progress Energy, Inc., 234 N.C. App. 20, 760 S.E.2d 740 (2014).

Applied in State ex rel. Utils. Comm'n v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890 (1963); State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973); State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 258, 224 S.E.2d 219 (1976); State ex rel. Utils. Comm'n v. Seaboard C.L.R.R., 62 N.C. App. 631, 303 S.E.2d 549 (1983); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 111 N.C. App. 251, 431 S.E.2d 880 (1993); State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 644, 766 S.E.2d 827 (2014).

Cited in State ex rel. Utils. Comm'n v. General Tel. Co., 17 N.C. App. 727, 195 S.E.2d 311 (1973); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 289 N.C. 286, 221 S.E.2d 322 (1976); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986); State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 92 N.C. App. 545, 375 S.E.2d 515 (1989); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 484, 385 S.E.2d 463 (1989); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 106 N.C. App. 218, 415 S.E.2d 758 (1992); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998); State ex rel. Utils. Comm'n v. Cooper, 366 N.C. 484, 739 S.E.2d 541 (2013); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014); State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015); In re Cube Yadkin Generation, LLC v. Duke Energy Progress, LLC, - N.C. App. - , 837 S.E.2d 144 (2019).

II. CASES DECIDED PRIOR TO 1949 REVISION OF PROCEDURAL SECTIONS.

Editor's Note. - All of the cases below were decided before the 1949 revision of the statute relating to procedure before the Utilities Commission and appeals therefrom, and construe former G.S. 62-19 and G.S. 62-20, to which this section corresponds.

Powers and Jurisdiction of Commission. - Under this Chapter as it stood prior to the revision of 1949, it was held that, for the purpose of making investigations and conducting hearings, the legislature had constituted the North Carolina Utilities Commission a court of record, with all the powers and jurisdiction of a court of general jurisdiction as to all subjects embraced within the purview of the statute, for which procedure was prescribed and authorized, with the right in "any party affected thereby" to appeal "from all decisions or determinations made by the Utilities Commission." State ex rel. N.C. Utils. Comm'n v. Atlantic Greyhound Corp., 224 N.C. 293, 29 S.E.2d 909 (1944); Utilities Comm'n v. Atlantic Greyhound Corp., 224 N.C. 672, 32 S.E.2d 23 (1944).

Orders of Commission Need No Confirmation. - The Utilities Commission is a State administrative agency of original and final jurisdiction, and its orders require no confirmation by any court to be effective. State ex rel. Utils. Comm'n v. Carolina Scenic Coach Co., 218 N.C. 233, 10 S.E.2d 824 (1940).

Injunctive Relief Against Exercise of Rights Granted by Commission Refused. - Where plaintiffs instituted action against a competing carrier to restrain it from exercising rights given it by orders of the Utilities Commission amending its franchise, the orders having been entered in proceedings to which plaintiffs were parties, it was held that plaintiffs had an adequate remedy for the protection of their rights by appeal under former G.S. 62-19 and 62-20, and judgment sustaining defendant's demurrer in the independent action was proper. Atlantic Greyhound Corp. v. North Carolina Utils. Comm'n, 229 N.C. 31, 47 S.E.2d 473 (1948).

Right of Appeal Confined to Parties. - Former G.S. 62-20 distinctly confined the right of appeal to a party to the proceeding. North Carolina Corp. Comm'n v. Winston-Salem Southbound Ry., 170 N.C. 560, 87 S.E. 785 (1916).

Former statute, providing that "from all decisions or determinations made by the Corporation Commission any party affected thereby shall be entitled to an appeal," necessarily meant from a decision which affected or purported to affect some right or interest of a party to the controversy and was in some way determinative of some material question involved. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908).

Under the provisions of former G.S. 62-20, "any party affected" by the order of the Commission as to rates or charges for passengers by a street railway company, etc., was given the right of appeal to the court from such order. In re Southern Pub. Utils. Co., 179 N.C. 151, 101 S.E. 619 (1919).

The right of appeal conferred by former G.S. 62-20 was limited to a party to the proceeding. For purposes of appeal, those who had no property or proprietary rights which were or might be affected by orders of the Commission were not such parties. An appeal by persons who were not parties to the proceeding would be dismissed by the superior court for the reason that said court acquired no jurisdiction by such appeal. State ex rel. Corp. Comm'n v. Southern Ry., 196 N.C. 190, 145 S.E. 19 (1928); State ex rel. N.C. Utils. Comm'n v. City of Kinston, 221 N.C. 359, 20 S.E.2d 322 (1942).

Municipality Entitled to Appeal. - It is the duty of a municipality granting a charter to a corporation to operate a streetcar system therein, which, by contract, has limited the fares to be charged passengers within a certain amount, to represent the public in proceedings upon a petition filed by the railway company before the Commission requesting that it be permitted to raise the fares beyond those limited in the contract, and thus the municipality might appeal through the courts as former G.S. 62-20 prescribed, when the order was adverse to it or the interest it represented, as a "party affected by the decision and determination of the Commission," expressly provided for by the statute. Southern Pub. Utils. Co. v. City of Charlotte, 179 N.C. 151, 101 S.E. 619 (1919).

Citizens seeking to have a railway station moved could not appeal from the Commission's decision, under former G.S. 62-20, because they were not parties. North Carolina Corp. Comm'n v. Winston-Salem Southbound Ry., 170 N.C. 560, 87 S.E. 785 (1916).

Notice Mandatory. - Under former G.S. 62-20, the statutory notice of an appeal by a railroad company from an order of the Commission was mandatory, and could not be extended by the consent of the parties of record. State ex rel. Corp. Comm'n v. Southern Ry., 185 N.C. 435, 117 S.E. 563 (1923); State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 224 N.C. 762, 32 S.E.2d 346 (1944).

Notice to Complaining Party Under Former G.S. 62-20. - When notice of appeal to the superior court was given to the Commission by a railroad company, and other requirements of former G.S. 62-20 relating thereto were met by the company, this was sufficient, without giving notice of the appeal to the complaining party in the proceedings had before the Commission, as upon this appeal the statute made the Commission the party plaintiff. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 151 N.C. 447, 66 S.E. 427 (1909).

Removal to Federal Courts. - Assuming that an order of the Commission made to compel a carrier to change the location and conditions of its depot to promote the convenience, security and accommodation of the public would be an invasion of interstate commerce, this would not transform the proceedings in which the order was made into "a suit at law or in equity," and, as such, removable from the superior court of the State to an inferior federal tribunal, upon the ground of diverse citizenship. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 151 N.C. 447, 66 S.E. 427 (1909).

In proceedings for the removal of a cause from the State to the federal courts upon the question of diversity of citizenship under the applicable federal statute, the State court is not bound to surrender its jurisdiction until a case has been made which, on the face of the petition, shows the petitioner has a right to the transfer of the cause to the federal courts. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 151 N.C. 447, 66 S.E. 427 (1909).

Final Process. - Under this Article as it stood before the 1949 revision, the Commission had no power to enforce its orders and decrees by final process issuing directly therefrom, and for such purpose resort had to be had to ordinary courts, either by independent proceedings or in proper instances by process issued in cases carried before such courts on appeal. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908). See G.S. 62-97, 62-98.

Removal of Franchise Restriction as to Carriage of Passengers by Motor Carrier. - Former G.S. 62-20 authorized a petitioner to appeal to the superior court from an adverse ruling of the Utilities Commission on its petition for the removal from its franchise of a restriction in regard to the carriage of passengers, and the contention that no appeal would lie from such order because the right of appeal was governed by the motor carrier laws authorizing an appeal from an order affecting franchise only when entered for violation of law was untenable. State ex rel. Utils. Comm'n v. Carolina Scenic Coach Co., 216 N.C. 325, 4 S.E.2d 897 (1939).

Petitioner had the right to appeal to the superior court from the denial of its petition for the removal from its franchise of a restriction prohibiting it from transporting passengers between two cities along its route in purely local traffic between such cities. State ex rel. Utils. Comm'n v. Carolina Scenic Coach Co., 218 N.C. 233, 10 S.E.2d 824 (1940).


§ 62-91. Appeal docketed; title on appeal; priorities on appeal.

Unless otherwise provided by the rules of appellate procedure, the cause on appeal from the Utilities Commission shall be entitled "State of North Carolina ex rel. Utilities Commission (here add any additional parties in support of the Commission Order and their capacity before the Commission), Appellee(s) v. (here insert name of appellant and his capacity before the Commission), Appellant." Appeals from the Utilities Commission pending in the superior courts on September 30, 1967, shall remain on the civil issue docket of such superior court and shall have priority over other civil actions.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 6; 1975, c. 391, s. 13; 1983, c. 526, s. 6.)

Cross References. - As to jurisdiction of the Supreme Court to review, when authorized by law, direct appeals from a final order or decision of the North Carolina Utilities Commission, see N.C. Const., Art. IV, § 12(1).

CASE NOTES

Utilities Commission as Party. - When the Utilities Commission sits as a court of record to determine the rights of rival claimants to a valuable franchise, it is somewhat anomalous to find it appearing in the Supreme Court to uphold its order from which one or the other party has appealed. However, this procedure seems to have been authorized by the General Assembly. State ex rel. Utils. Comm'n v. City Coach Co., 234 N.C. 489, 67 S.E.2d 629 (1951).


§ 62-92. Parties on appeal.

In any appeal to the appellate division of the General Court of Justice, the complainant in the original complaint before the Commission shall be a party to the record and each of the parties to the proceeding before the Commission shall have a right to appear and participate in said appeal.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 2; 1983, c. 526, s. 7.)

Cross References. - As to jurisdiction of the Supreme Court to review, when authorized by law, direct appeals from a final order or decision of the North Carolina Utilities Commission, see N.C. Const., Art. IV, § 12(1).

CASE NOTES

The Utilities Commission is a party of record in a proceeding before it, and upon appeal the Commission becomes the party plaintiff. State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 224 N.C. 762, 32 S.E.2d 346 (1944).

As to standing of manufacturer and distributor of plastic telephone directory covers to complain and appeal, see State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).


§ 62-93. No evidence admitted on appeal; remission for further evidence.

No evidence shall be received at the hearing on appeal but if any party shall satisfy the court that evidence has been discovered since the hearing before the Commission that could not have been obtained for use at that hearing by the exercise of reasonable diligence, and will materially affect the merits of the case, the court may, in its discretion, remand the record and proceedings to the Commission with directions to take such subsequently discovered evidence, and after consideration thereof, to make such order as the Commission may deem proper, from which order an appeal shall lie as in the case of any other final order from which an appeal may be taken as provided in G.S. 62-90.

History

(1949, c. 989, s. 1; 1955, c. 1207, s. 2; 1963, c. 1165, s. 1.)

CASE NOTES

The validity of the Commission's findings and conclusions must be determined in light of the evidence that was presented to it. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

No Basis for Remand. - Where nothing in the record indicates that any party made a motion to remand, that any party desired to offer further evidence, or that newly discovered evidence was available, there is no basis for the court, in its discretion, to remand the cause. State ex rel. Utils. Comm'n v. Maybelle Transp. Co., 252 N.C. 776, 114 S.E.2d 768 (1960).

Cited in State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986).


§ 62-94. Record on appeal; extent of review.

  1. On appeal the court shall review the record and the exceptions and assignments of error in accordance with the rules of appellate procedure, and any alleged irregularities in procedures before the Commission, not shown in the record, shall be considered under the rules of appellate procedure.
  2. So far as necessary to the decision and where presented, the court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning and applicability of the terms of any Commission action. The court may affirm or reverse the decision of the Commission, declare the same null and void, or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the appellants have been prejudiced because the Commission's findings, inferences, conclusions or decisions are:
    1. In violation of constitutional provisions, or
    2. In excess of statutory authority or jurisdiction of the Commission, or
    3. Made upon unlawful proceedings, or
    4. Affected by other errors of law, or
    5. Unsupported by competent, material and substantial evidence in view of the entire record as submitted, or
    6. Arbitrary or capricious.
  3. In making the foregoing determinations, the court shall review the whole record or such portions thereof as may be cited by any party and due account shall be taken of the rule of prejudicial error. The appellant shall not be permitted to rely upon any grounds for relief on appeal which were not set forth specifically in his notice of appeal filed with the Commission.
  4. The court shall also compel action of the Commission unlawfully withheld or unlawfully or unreasonably delayed.
  5. Upon any appeal, the rates fixed or any rule, regulation, finding, determination, or order made by the Commission under the provisions of this Chapter shall be prima facie just and reasonable.

History

(1949, c. 989, s. 1; 1955, c. 1207, s. 3; 1963, c. 1165, s. 1; 1969, c. 614; 1975, c. 391, s. 14.)

Legal Periodicals. - For case law survey as to judicial review of decisions of administrative agencies, see 45 N.C.L. Rev. 816 (1967).

For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

CASE NOTES

I. IN GENERAL.

The Utilities Commission is a creature of the legislature and may exercise jurisdiction and regulatory authority only as defined by Chapter 62. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 93 N.C. App. 260, 377 S.E.2d 772 (1989), rev'd on other grounds, 326 N.C. 522, 391 S.E.2d 487 (1990).

G.S. 62-133.6(e) simply allows the legislature to preempt the North Carolina Utilities Commission's ability to compel a general rate case by freezing rates until 31 December 2007; the North Carolina Utilities Commission properly dismissed a complaint regarding rates and a petition to initiate a general rate proceeding filed against an energy corporation by a customers association. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 163 N.C. App. 46, 592 S.E.2d 221 (2004), cert. denied, 358 N.C. 739, 602 S.E.2d 683 (2004), cert. dismissed, 358 N.C. 739, 602 S.E.2d 682 (2004).

Discretion of Utilities Commission. - In deciding complaints, the Utilities Commission is allowed discretion in fashioning a remedy; the Commission could transfer service of one cooperative to electric utility rather than all complainants, as long as its action was not capricious or arbitrary. Dennis v. Duke Power Co., 341 N.C. 91, 459 S.E.2d 707 (1995).

Subsection (b) States Authority of Court. - The authority of the court to which an appeal is taken from an order of the Utilities Commission is stated in subsection (b) of this section. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Subsection (b) gives the Supreme Court ample basis for ordering refunds to ratepayers who have been charged unlawfully high rates. Therefore, the Supreme Court is authorized to order refunds when the Commission has made an error of law in its rate making procedures. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Appellate review of an order of the North Carolina Utilities Commission is governed by subsections (b) and (c). State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 123 N.C. App. 43, 472 S.E.2d 193 (1996).

Questions on appeal from the Commission must be determined from the record certified by it. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

The Commission has the duty to enter final orders that are sufficient in detail to enable the Supreme Court on appeal to determine the controverted issues. State ex rel. Utils. Comm'n v. AT & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

Unless Facts Are in Record, Commission's Expert Knowledge Cannot Be Considered. - The Commission's knowledge, however expert, cannot be considered by the Supreme Court on appeal unless the facts embraced within that knowledge are in the record. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

Attorney General Not Prejudiced by Failure to Hold Hearing. - The Attorney General was not prejudiced by the action of the Commission in allowing an exploration tracking rate increase to go into effect without a hearing, since a refund could be sought under this section. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Contents of Order Remanding Cause. - If a cause is remanded under this section, the order should specify the ground on which it is based and thereby indicate to the Commission the nature of its further proceedings. State ex rel. Utils. Comm'n v. Maybelle Transp. Co., 252 N.C. 776, 114 S.E.2d 768 (1960).

Doctrine of Res Judicata. - Where an administrative determination has been reviewed by the courts, the res judicata effect, if any, attaches to the court's judgment rather than to the administrative decision. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Adjustments to Cost Study. - North Carolina Utilities Commission did not err by approving a utility company's adjustments to a study of the costs of providing retail electric service to a large industrial customer because there was substantial evidence in the record, including the testimony of three expert witnesses, to support the Commission's findings. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 430, 758 S.E.2d 635 (2014).

Applied in State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963); State ex rel. N.C. Utils. Comm'n v. Southern Ry., 267 N.C. 317, 148 S.E.2d 210 (1966); State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977); In re Duke Power Co., 37 N.C. App. 138, 245 S.E.2d 787 (1978); State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234 (1980); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 309 N.C. 195, 306 S.E.2d 435 (1983); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988); State ex rel. Utils. Comm'n v. North Carolina Natural Gas Corp., 323 N.C. 630, 375 S.E.2d 147 (1989); State ex rel. Utils. Comm'n v. Thornburg, 324 N.C. 478, 380 S.E.2d 112 (1989); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 484, 385 S.E.2d 463 (1989); State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990); State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 328 N.C. 37, 399 S.E.2d 98 (1991); Dunnagan v. Ndikom, 139 N.C. App. 246, 533 S.E.2d 494 (2000); Union Transfer & Storage Co. v. Lefeber, 139 N.C. App. 280, 533 S.E.2d 550 (2000); State ex rel. Utils. Comm'n v. NUI Corp., 154 N.C. App. 258, 572 S.E.2d 176 (2002); State ex rel. Utils. Comm'n v. EDF, 214 N.C. App. 364, 716 S.E.2d 370 (2011); In re Cube Yadkin Generation, LLC v. Duke Energy Progress, LLC, - N.C. App. - , 837 S.E.2d 144 (2019).

Cited in State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966); State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968); State ex rel. Utils. Comm'n v. Public Serv. Co., 35 N.C. App. 156, 241 S.E.2d 79 (1978); In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979); State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 61 N.C. App. 42, 300 S.E.2d 395 (1983); State ex rel. Utils. Comm'n v. Central Tel. Co., 60 N.C. App. 493, 299 S.E.2d 264 (1983); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983); State ex rel. Utils. Comm'n v. Conservation Council, 64 N.C. App. 266, 307 S.E.2d 375 (1983); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986); State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987); Blue Ridge Textile Printers, Inc. v. Public Serv. Co., 99 N.C. App. 193, 392 S.E.2d 401 (1990); State ex rel. Utils. Comm'n v. Water Serv., Inc., 328 N.C. 299, 401 S.E.2d 353 (1991); State ex rel. Utilities Comm'n v. Centel Cellular Co., 103 N.C. App. 731, 407 S.E.2d 257 (1991); State ex rel. Utils. Comm'n v. North Carolina Cellular Ass'n, 111 N.C. App. 801, 433 S.E.2d 785 (1993); State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998); In re Petition of Utils., Inc., 147 N.C. App. 182, 555 S.E.2d 333 (2001); State ex rel. Utils. Comm'n v. Thrifty Call, Inc., 154 N.C. App. 58, 571 S.E.2d 622 (2002), cert. denied, appeal dismissed, 357 N.C. 66, 579 S.E.2d 575 (2003); In re Town of Smithfield, 230 N.C. App. 252, 749 S.E.2d 293 (2013); In re Investigation of Duke Energy Corp. & Progress Energy, Inc., 234 N.C. App. 20, 760 S.E.2d 740 (2014).

II. STANDARD OF REVIEW.

Standard that governs appellate review of Commission orders is statutorily articulated by subsections (b) and (c) of this section. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Commission's Decision Will Be Upheld Unless Assailable Under Subsection (b). - The decision of the Commission with regard to rates for public utilities will be upheld by the Court of Appeals on appeal unless it is assailable on one of the grounds enumerated in subsection (b) of this section. State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

Judicial reversal of an order of the Utilities Commission is a serious matter for the reviewing court which can be properly addressed only by strict application of the six criteria of this section which circumscribe judicial review. State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).

A decision of the Utilities Commission will be upheld on appeal unless the appellate court finds error based on one of the enumerated grounds of this section. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Absence of proper findings is an error of law and basis for remand under subdivision (b)(4) of this section because it frustrates appellate review. State ex rel. Utils. Comm'n v. Conservation Council, 66 N.C. App. 456, 311 S.E.2d 617, rev'd in part, 312 N.C. 59, 320 S.E.2d 679 (1984); State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Scope of Review. - Grounds for relief not specifically set forth in the notice of appeal filed with the Commission may not be relied upon in the appellate courts; however, even when specific grounds are set forth, the applicable scope of review may be determined only from an examination of the issues brought forward by the appealing party and the nature of the supporting contentions. Dennis v Duke Power Co., 114 N.C. App. 272, 442 S.E.2d 104 (1994), modified, 341 N.C. 91, 459 S.E.2d 707 (1995).

In reviewing a decision of the Utilities Commission, the appellate court's role is to determine whether the entire record supports the Commission's decision, and where there are two reasonably conflicting views of the evidence, the appellate court may not substitute its judgment for that of the Commission. State ex rel. Utils. Comm'n v. Carolina Indus. Group For Fair Util. Rates, 130 N.C. App. 636, 503 S.E.2d 697 (1998), cert. denied, 349 N.C. 377 (1998).

Test on Review. - The test applied by a reviewing court involves a determination of whether, after viewing the entire record, the Utilities Commission's findings and conclusions are supported by substantial, competent, and material evidence. State ex rel. Utils. Comm'n v. North Carolina Gas Serv., 128 N.C. App. 288, 494 S.E.2d 621 (1998).

The failure to include all the necessary findings of fact is an error of law and a basis for remand under subdivision (b)(4) of this section, because it frustrates appellate review. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

The Commission's order must be sufficient within itself to comply with the statute. Failure to include all necessary findings of fact and details is an error of law and a basis for remand under subdivision (b)(4) of this section, because it frustrates appellate review. State ex rel. Utils. Comm'n v. AT & T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

The Commission was required to make specific finds showing what effect, if any, it gave to financing costs or down market protection, or both, in arriving at its common equity rate of return decision. Failure to do so constituted an error of law requiring a remand for further proceedings. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Function of Court on Review. - The Court of Appeals looks to the findings of fact and conclusions of the Commission and determines whether the Commission has considered the factors required by law and whether its findings are supported by competent, substantial and material evidence in view of the whole record. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

The test upon appeal from a determination of the Utilities Commission is whether the Commission's findings of fact are supported by competent, material and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

The Supreme Court's statutory function is not to determine whether there is evidence to support a position the Commission did not adopt. The court asks instead, whether there is substantial evidence, in view of the entire record, to support the position which the Commission adopted. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Appellate court's statutory function is to assess whether the North Carolina Utilities Commission's order is affected by errors of law and to determine whether there is substantial evidence, in view of the entire record, to support the position adopted. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

The reviewing court should see if, in view of the entire record, the Utilities Commission's findings and conclusions are supported by substantial, competent and material evidence. State ex rel. Utils. Comm'n v. Piedmont Natural Gas Co., 346 N.C. 558, 488 S.E.2d 591 (1997).

Utilities Commission order issuing a Certificate of Environmental Compatibility and Public Convenience and Necessity to a utility to construct a transmission line along a proposed route was affirmed because under G.S. 62-94 and the standard of review, the reviewing court could not weigh the credibility of the evidence and draw the ultimate conclusion; the Commission, after considering evidence from both the utility and the citizens who intervened to object to the proposed route, concluded that the utility demonstrated that the proposed transmission line was necessary for an adequate and reliable supply of electric energy. State ex rel. Utils. Comm'n v. Wardlaw, 179 N.C. App. 582, 634 S.E.2d 898 (2006).

Substantial Evidence Defined. - Substantial evidence is defined as "more than a scintilla or a permissible inference." It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).

Commission may agree with single witness, if the evidence supports his position, no matter how many opposing witnesses might come forward. The court is then required to determine whether the Commission's decision is supported by competent, material and substantial evidence in view of the entire record as submitted. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Evidence of Reasonableness of Practice. - Where the Commission's order required the defendants to do no more than they did voluntarily and without objection for 30 years or more, preceding the last six or eight years, this would seem to be "strong evidence" of the reasonableness of the practice. State ex rel. Utils. Comm'n v. Southern Ry., 256 N.C. 359, 124 S.E.2d 510 (1962).

Findings, inferences, conclusions or decision of Utilities Commission which are arbitrary or capricious and which prejudice substantial rights of appellants are not binding on reviewing court. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Subsection (c) requires the reviewing court to take due note of the rule of prejudicial error. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Due account shall be taken of the rule of prejudicial error in the consideration of an appeal. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

Standard Deemed Satisfied. - Where witnesses testified according to a private agreement that was not unanimous, the Utilities Commission was not subjected to a heightened standard of review but satisfied the requirements of this chapter by independently considering and analyzing relevant evidence and facts presented by all the parties. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Substantial evidence supported the North Carolina Utilities Commission's approval of electric utilities' merger because ratepayers' benefits showed the merger met G.S. 62-111(a). In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Substantial evidence showed public benefits would result from a merger of electric utilities approved by the North Carolina Utilities Commission because there were significant guaranteed fuel-cost savings and possible non-fuel-cost savings, as well as commitments to support the community, job development, and low income energy assistance. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Order of the North Carolina Utilities Commission, authorizing a percentage of return on equity for a utility company, was appropriate because the order contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 644, 766 S.E.2d 827 (2014).

North Carolina Utilities Commission's findings of fact demonstrated that the Commission considered the impact of changing economic conditions upon customers and specified how this influenced the Commission's decision to authorize a 10.2 percent return on equity; the findings were supported by the evidence, including public witness testimony, expert testimony, and the parties' stipulation, and thus the Commission made sufficient findings regarding the impact of changing economic conditions upon customers and these findings were supported by substantial evidence. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

Record contained conflicting evidence concerning whether the use of the single coincident peak cost of service methodology was reasonable and fair to customers, and the Commission considered all the evidence presented, explained the weight given to the evidence, and found that the methodology was reasonable; there was substantial evidence in the record to support the Commission's finding that the use of the methodology in question allocated costs equitably, and it was not shown that the use of the methodology here resulted in unreasonable or unjust discrimination. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

Commission's findings were supported by substantial evidence, including the testimony of witnesses acknowledging that errors occurred and explaining that corrective steps were taken to resolve the errors, and it was not shown that the Commission allowed the company to recover any improper costs from ratepayers. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

North Carolina Utilities Commission properly concluded it was in the public interest to allow a public utility to utilize a rate adjustment mechanism because its determination was supported by substantial evidence; the Commission thoroughly explained how the utility's use of a rate adjustment mechanism would benefit its customers and took meaningful steps to ensure that problems were addressed and that customers were charged after the utility made improvements to its service. State ex rel. Utils. Comm'n v. Cooper, 368 N.C. 216, 775 S.E.2d 809 (2015).

Decision Not Supported by Substantial Evidence. - North Carolina Utilities Commission's (Commission) order approving a 10.5 percent return on common equity was not supported by substantial evidence under G.S. 62-94(b) and did not comply with G.S. 62-79(a) where: (1) although the 10.5 percent return on common equity agreed to in a non-unanimous stipulation fell within the range of returns on common equity recommended by the witnesses, no witness specifically recommended an return on common equity of 10.5 percent; (2) the Commission did not weigh any testimony presented, but merely recited the witnesses' testimony; (3) the Commission did not discuss why one witness's testimony was more credible than another's or which methodology was afforded the greatest weight; (4) the Commission adopted the stipulated return on common equity wholesale, as opposed to considering it as one piece of evidence to be weighed in making an otherwise independent determination based on the G.S. 62-133 factors; and (5) the Commission failed to make findings of fact regarding the impact of changing economic conditions on customers. State ex rel. Utils. Comm'n v. Cooper, 366 N.C. 484, 739 S.E.2d 541 (2013).

Abuse of Commission's Discretion Found. - Decision of the North Carolina Utilities Commission to recognize a utility customers association and a customer as interveners in a settlement proceeding resulting from an investigation that was conducted, pursuant to G.S. 62-37, of accounting irregularities in the way in which a utility reported its regulated income to the Commission was an abuse of the Commission's discretion; the association and the customer were not parties affected by the Commission's order approving the settlement, within the meaning of G.S. 62-37, and as such had no standing to appeal the Commission's approval of the settlement agreement. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 163 N.C. App. 1, 592 S.E.2d 277 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 683 (2004), appeal dismissed sub nom. Utils. Comm. v. Carolina Util., - N.C. - , 602 S.E.2d 684 (2004), cert. denied, appeal dismissed, 358 N.C. 739, 602 S.E.2d 683 (2004), cert. dismissed, 358 N.C. 739, 602 S.E.2d 684, 602 S.E.2d 685 (2004).

III. LIMITATIONS ON REVIEW.

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A. IN GENERAL.

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Justiciable Controversy Must Be Shown. - While the Utilities Commission authorized itself to review a contract between water service and developers, there was no evidence of any justiciable controversy which would have warranted review of the contracts by the Commission; thus, the Commission did not have jurisdiction to review the contract provisions. State ex rel. Utils. Comm'n v. Carolina Water Serv., 149 N.C. App. 656, 562 S.E.2d 60 (2002), cert. granted, 355 N.C. 757, 566 S.E.2d 481, cert. granted, 356 N.C. 176, 567 S.E.2d 145 (2002).

Limitation on Authority to Review. - The authority of the Court of Appeals and of the Supreme Court in reviewing an order of the Utilities Commission is limited to that conferred by this section. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), aff'd on rehearing, 278 N.C. 235, 179 S.E.2d 419 (1971).

Upon appeal, the authority of the reviewing court to reverse or modify the order of the Commission, or to remand the matter to the Commission for further proceedings, is limited to that specified in this section. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Courts do not ordinarily review or reverse the exercise of discretionary power by an administrative agency such as the Utilities Commission, except on showing of capricious, unreasonable or arbitrary action or disregard of law. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

On review of orders from the Commission, the Court of Appeals' action is guided by this section, and where the Commission's actions do not violate the Constitution or exceed statutory authority, appellate review is limited to errors of law, arbitrary action, or decisions unsupported by competent, material and substantial evidence. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

The authority of an appellate court to reverse or modify an order of the Utilities Commission, or to remand the matter to the Commission for further proceedings, is limited to that specified in this section, which includes the authority to reverse or modify such order on the ground that it violates a constitutional provision. State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 33 N.C. App. 433, 235 S.E.2d 396, cert. denied, 293 N.C. 258, 237 S.E.2d 539 (1977).

Under applicable standards of appellate review, the Court of Appeals is not at liberty to substitute its judgment for that of the Commission. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982), modified, 307 N.C. 541, 299 S.E.2d 763 (1983).

Court's Power to Reverse, Modify or Nullify Substantially Circumscribed. - The court's power to affirm or remand is not specifically circumscribed by this section. However, the power of the court to reverse or modify and, a fortiori, to declare null and void, is substantially circumscribed. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Appellate review of Commission orders is limited to the record as certified. State ex rel. Utils Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Appeals Are Confined to Questions of Law Specifically Set Forth. - Appeals from the Utilities Commission are confined to questions of law upon grounds specifically set forth in appellant's petition for rehearing by the Commission. State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951). See also State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).

As to necessity for raising grounds for relief before Commission, see State ex rel. Utils. Comm'n v. State, 250 N.C. 410, 109 S.E.2d 368 (1959).

B. WEIGHING OF EVIDENCE.

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Weighing of Evidence and Exercise of Judgment Thereon Are Matters for Commission. - The decisions of the Utilities Commission must be within the authority conferred by statute; however, the weighing of the evidence and the exercise of judgment thereon as to transportation problems within the scope of its powers are matters for the Commission. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Commission Without Discretionary Power Where No Evidence to Weigh. - The weighing of the evidence and the exercise of judgment thereon within the scope of its authority are matters for the Commission; even so, the Commission has no discretionary power, where its function is to weigh the evidence and make judgment thereon, if there is no evidence to weigh. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

Minimal Consideration of Competent Evidence Correctable on Appeal. - Although it is not for an appellate court to dictate to the Commission what weight it should give to material facts before it, a summary disposition which indicates that the Commission accorded only minimal consideration to competent evidence constitutes error at law and is correctable on appeal. State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Comments on Evidence. - The Commission is not required to set forth comments regarding every single fact or item of evidence presented by the parties. Dennis v Duke Power Co., 114 N.C. App. 272, 442 S.E.2d 104 (1994), modified, 341 N.C. 91, 459 S.E.2d 707 (1995).

Presumption That Commission Considered All Competent Evidence. - In the absence of an express statement by the Commission to the contrary, some record evidence to the contrary, or a summary disposition which indicates to the contrary, the court would presume that the Commission gave proper consideration to all competent evidence presented. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 324 S.E.2d 28 (1986).

The credibility of testimony and the weight to be given it are for the Commission, not for the reviewing court. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972); State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 33 N.C. App. 433, 235 S.E.2d 398, cert. denied, 293 N.C. 258, 237 S.E.2d 539 (1977).

The credibility of testimony was for the determination of the Commission. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

It is a well-established rule that it is for administrative body, in an adjudicatory proceeding, to determine weight and sufficiency of evidence and the credibility of the witnesses, to draw inferences from the facts, and to appraise conflicting and circumstantial evidence. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

The credibility of testimony and the weight to be accorded it are matters to be determined by the Commission. However, a summary disposition which indicates that the Commission accorded only minimal consideration to competent evidence constitutes error at law and is correctable on appeal. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

IV. PRIMA FACIE JUST AND REASONABLE.

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A. IN GENERAL.

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Commission's Decision Is Prima Facie Just and Reasonable. - This section provides that on an appeal, the Commission's decision is considered "prima facie just and reasonable," and it should be affirmed if supported by substantial evidence. State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).

On appeal, a rate decision, rule, regulation, finding, determination, or order made by the North Carolina Utilities Commission is deemed prima facie just and reasonable. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 123 N.C. App. 43, 472 S.E.2d 193 (1996).

Burden Is on Appellant to Show Error of Law in Proceedings. - The law imposes the duty upon the Utilities Commission and not the courts to fix rates, and the burden is upon appellant from an order of the Commission to show an error of law in the proceeding before the Commission. State ex rel. Utils. Comm'n v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890 (1963).

The burden of showing the impropriety of rates established by the Commission lies with the party alleging such error. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983); State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

The party attacking rates established by the Commission bears the burden of proving their impropriety. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

But Appellant May Show That Order Was Unsupported by Evidence. - Upon appeal the orders made by the Utilities Commission "shall be prima facie just and reasonable," but this does not preclude the appellant from showing that the evidence offered rebuts the prima facie effect of the order, and that the order was unsupported by competent, material and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 235 N.C. 273, 69 S.E.2d 502 (1952); State ex rel. Utils. Comm'n v. Gulf-Atlantic Towing Corp., 251 N.C. 105, 110 S.E.2d 886 (1959).

An order of the Commission requiring a transportation company to maintain public service facilities must be considered prima facie reasonable and just, but this does not preclude the transportation company affected from showing that the order was unsupported by competent, material and substantial evidence. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 238 N.C. 701, 78 S.E.2d 780 (1953); State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

While the determination of a petition by a carrier to be allowed to discontinue an established service rests in large measure in the sound judgment and discretion of the Utilities Commission, and its order in regard thereto is prima facie just and reasonable, such order is reviewable to ascertain whether it is arbitrary or capricious or if the essential findings of fact on which it is based are supported by competent, material and substantial evidence. State ex rel. Utils. Comm'n v. Southern Ry., 254 N.C. 73, 118 S.E.2d 21 (1961).

B. RATES.

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Rates Are Deemed Prima Facie Just and Reasonable. - Upon appeal, rates fixed by the Commission shall be deemed prima facie just and reasonable. State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Rates fixed by the Commission are deemed prima facie just and reasonable. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Legitimate Justification for Industrial and City Rates of Return. - The North Carolina Utilities Commission drew legitimate distinctions which justified its decision to maintain industrial and cities' rates of return at a higher level than residential and commercial and small industrial rates. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Rates of Return Reasonable and Not Discriminatory. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable and did not unreasonably discriminate among the various classes of North Carolina Natural Gas Corporation customers and were supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

North Carolina Utilities Commission's order authorizing a 102 percent return on equity for an electric company was supported by competent, material, and substantial evidence since the order appropriately considered changing economic conditions upon customers, the Commission gave great weight to testimony concerning the state's unemployment rate, and certain costs were excluded from the rate base for one year in order to serve customer interests. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014).

Order prescribing different Private Line Service rates for AT&T's nonreseller (end user) customers and its reseller customers upon its face was discriminatory, and absent legally adequate reasons in the order why the order was not unjustly discriminatory within the meaning of G.S. 62-2(4), the order was vacated and the cause is remanded to the Commission for further proceedings. State ex rel. Utils. Comm'n v. AT&T Communications of S. States, Inc., 321 N.C. 586, 364 S.E.2d 386 (1988).

Determining a Utility's Capital Structure for Rate Making Purposes. - The Commission is not required, as a matter of law, to reduce the common equity component of a utility's capital structure by an amount equal to its investment in its nonregulated subsidiaries in determining the appropriate capital structure for rate making purposes. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Distribution of Gain From Sale of Water and Sewage Facilities. - North Carolina Utilities Commission's assigning a portion of the gain on sale from a municipal utility's purchase of the existing water and sewer facilities of a publicly franchised utility to the publicly franchised utility's remaining ratepayers, instead of assigning all of the gain on sale to the publicly franchised utility's shareholders, was approved on review pursuant to G.S. 62-94 because the Commission did not violate the Commission's authority under G.S. 62-2 and G.S. 62-23 and did not violate N.C. Const. Art. I, § 19. State ex rel. Utils. Comm'n v. Carolina Water Serv., 225 N.C. App. 120, 738 S.E.2d 187 (2013).

C. FINDINGS.

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Findings of fact made by the Commission are prima facie just and reasonable on appeal. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Court May Not Find Facts or Regulate Utilities. - Although in reviewing an order of the Commission, a court might, upon the same facts, have reached a different result, it is not for the court to find the facts or to regulate utilities. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

When an appeal to the superior court (now to the Court of Appeals) is taken from an order entered by the North Carolina Utilities Commission, the review is limited to the record as certified and to the questions of law presented therein. There is no provision for additional findings of fact by the judge for the purpose of determining the validity of the order entered by the Commission. State ex rel. Utils. Comm'n v. Fox, 236 N.C. 553, 73 S.E.2d 464 (1952); State v. Ray, 236 N.C. 692, 73 S.E.2d 870 (1953). See State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).

Findings supported by competent, material and substantial evidence in view of the entire record are binding upon the reviewing court. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Carolina Coach Co., 269 N.C. 717, 153 S.E.2d 461 (1967); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 43 N.C. App. 662, 259 S.E.2d 791 (1979); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 47 N.C. App. 418, 267 S.E.2d 488 (1980); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 48 N.C. App. 115, 268 S.E.2d 851 (1980). See also, State ex rel. Utils. Comm'n v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890 (1963); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

All findings of fact made by the Commission, which are supported by competent, material and substantial evidence, are conclusive. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972); State ex rel. Utils. Comm'n v. Public Staff, 52 N.C. App. 275, 278 S.E.2d 599 (1981); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985); State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

When the Commission's findings are supported by competent, material and substantial evidence, they are binding upon the appellate court. State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 33 N.C. App. 433, 235 S.E.2d 398, cert. denied, 293 N.C. 258, 237 S.E.2d 539 (1977).

The Commission's findings and conclusions, where supported by competent, material, and substantial evidence, considering the whole record, and taking into account any contradictory evidence or evidence from which conflicting inferences could be drawn, must be affirmed. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 57 N.C. App. 489, 291 S.E.2d 789 (1982), modified, 307 N.C. 541, 299 S.E.2d 763 (1983).

The Commission's order will not be disturbed if upon consideration of the entire record the court finds that the decision is not affected by error of law and the facts found by the Commission are supported by competent, material and substantial evidence, taking into account any contradictory evidence or evidence from which conflicting inferences could be drawn. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Even Though Reviewing Court Might Have Reached Different Conclusion. - Neither findings of fact nor the Commission's determination of what rates are reasonable may be reversed or modified by a reviewing court merely because the court would have reached a different finding or determination upon the evidence. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

If the rates are reasonable upon an application of the whole record test, the Court of Appeals is bound by the findings of fact establishing them and may not reach a different finding merely because it could have reached another determination upon the evidence. State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).

When the record, considered as a whole, contains substantial evidence supporting the subjective judgment of the Commission on any of the factors in the fixing of reasonable rates under G.S. 62-133, the conclusion reached by the Commission may not be disturbed by a reviewing court merely because the court's subjective judgment is different from that of the Commission, nor is the Commission required to accept as conclusive the subjective judgment of a witness, even though the record contains no expression of a contrary opinion by another witness. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

The authority to determine the adequacy of a utility's service and the rates to be charged lies with the Commission, and a reviewing court may not modify or reverse its determination merely because the court would have reached a different finding based on the evidence. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 317 N.C. 26, 343 S.E.2d 898 (1986); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 91 N.C. 107, 370 S.E.2d 567 (1988).

Any finding of fact made by the Commission, if supported by competent, material and substantial evidence is conclusive, even if the reviewing court would have reached a different result on the same evidence. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Finding Held Error of Law. - Finding of the Commission that legal fees which were incurred by utility in contesting the amount of an administrative penalty imposed as a result of its failure to provide adequate water service were recoverable as part of its operating expenses, in that they were "a reasonable and necessary expenditure" which was associated with its water service to its customers, constituted an error of law under subdivision (b)(4) of this section. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Where the individualized nature of a shuttle operation precluded performance by a common carrier, the Utilities Commission erred as a matter of law in finding that performance of the shuttle contract constituted common carriage. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

Findings Concerning Company's Debt Ratio. - Conclusion of the Utilities Commission that a natural gas company's capital structure should include a short-term debt ratio of 4.02%, based on a short-term debt equal to stored gas inventory rather than "the daily average balance amount of short-term debt for the most recent twelve month period," was supported by substantial evidence. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Formula Did Not Unreasonably Discriminate. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the Industrial Sales Tracker Formula did not unreasonably discriminate between North Carolina Natural Gas Corporation's customer classes and these findings were supported by substantial evidence in light of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

D. DETERMINATIONS.

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Determination by Commission Is Prima Facie Just and Reasonable. - A determination by the Commission is not simply prima facie evidence of its validity, but is prima facie just and reasonable. State ex rel. Utils. Comm'n v. Ray, 236 N.C. 692, 73 S.E.2d 870 (1953); State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955); State ex rel. N.C. Utils. Comm'n v. Casey, 245 N.C. 297, 96 S.E.2d 8 (1957); State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

The Commission, not the reviewing court, is to make determination of fair value of the properties. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

While the Commission has the duty to weigh evidences of "fair value" fairly and in "balanced scales," the reviewing court may not set aside the Commission's determination of "fair value" merely because the court would have given the respective elements different weights and would, therefore, have arrived at a different "fair value." State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

The Supreme Court may not reverse an order of the Commission because of its weighting of the respective indicators of "fair value," unless it finds such weighting to have been arbitrary and lacking support in the evidence, in view of the entire record, or otherwise affected by error of law. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

The question of whether a case "is to be a general rate case" under the terms of G.S. 62-137 is a mixed question of law and fact. As to such questions, courts should be hesitant to disturb the Commission's expert determination with regard to the nature of the case presented, particularly when its determination is made prior to hearing and for the initial purpose of setting the scope of the hearing and the resulting amount of information which the public utility will be required to furnish. Even at that stage, however, the Commission's determination must be supported by "competent, material and substantial evidence in view of the entire record as submitted." State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979).

What constitutes public convenience and necessity is primarily an administrative question with a number of imponderables to be taken into consideration, e.g., whether there is a substantial public need for the service, whether the existing carriers can reasonably meet this need, and whether the service would endanger or impair the operations of existing carriers contrary to the public interest. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

E. ORDERS.

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Order of Commission Is Prima Facie Just and Reasonable. - By this section an order of the Commission is prima facie just and reasonable. This applies to orders approving contracts of public utilities. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

When Order Will Be Affirmed. - Where the order of the Utilities Commission granting petitioner an increase in rates in a general rate case is justified by the findings of fact which are supported by plenary evidence, the order of the Commission will be affirmed. State ex rel. Utils. Comm'n v. Tidewater Natural Gas Co., 259 N.C. 558, 131 S.E.2d 303 (1963).

The rate order of the Commission will be affirmed if upon consideration of the whole record the appellate court finds that the Commission's decision is not affected by error of law and the facts found by the Commission are supported by competent, material and substantial evidence, taking into account any contradictory evidence or evidence from which conflicting inferences could be drawn. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

When Order Remanded to Commission for Further Hearing. - An order of the Commission based on an erroneous interpretation of law should be remanded to the Commission for further hearing and not be terminated by the court where the Commission has the duty to make a positive determination, such as the fixing of rates, and because of some error of law the determination is in suspense, and the utility is entitled to have the determination made. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

Inadequate Order. - Order which set forth specific complaints from some customers, but did not state what to do to make the service adequate, and did not indicate in what manner the company violated the Commission's standards, nor what those standards were, was inadequate. State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994).

V. CASES DECIDED PRIOR TO 1949 REVISION OF PROCEDURAL SECTIONS.

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Editor's Note. - All of the cases below were decided before the 1949 revision of the procedural provisions of this Chapter, and construe former G.S. 62-20 and G.S. 62-21, corresponding to G.S. 62-90 and this section. It should be noted that the 1949 revision made many changes in procedure, and especially in the extent of review.

Appeal to Superior Court Under Former Law Was Trial De Novo. - Upon appeal under the former statute by a party to a proceeding before the Corporation Commission from an order made therein under former G.S. 62-42 and 62-43, the superior court had jurisdiction to try and determine both issues of law and issues of fact, duly presented by assignments of error based upon exceptions duly taken by the appellant during the hearing before the Commission. The trial of such issues by the superior court was de novo. State ex rel. Corp. Comm'n v. Southern Ry., 196 N.C. 190, 145 S.E. 19 (1928). See also State ex rel. Corp. Comm'n v. Seaboard Air Line & S. Ry., 161 N.C. 270, 76 S.E. 554 (1912).

A provision of former G.S. 62-21 that on appeal the trial should be "under the same rules and regulations as are prescribed for the trial of other civil causes" meant that the trial should be de novo. State ex rel. Utils. Comm'n v. Great S. Trucking Co., 223 N.C. 687, 28 S.E.2d 201 (1943). See also North Carolina Corp. Comm'n v. Winston-Salem Southbound Ry., 170 N.C. 560, 87 S.E. 785 (1916).

Under this Chapter as it stood before the 1949 revision, the trial in the superior court was de novo, and from thence only would a further appeal lie to the Supreme Court, governed by the rule that such an appeal should not be fragmentary, but should be from a final judgment or one final in its nature. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

Rules Applicable on Appeal to Superior Court. - Prior to the 1949 revision, on appeal to the superior court the trial was under the same rules and regulations applicable in other civil causes, save and except the prima facie effect to be given the decision or determination of the Commission. State ex rel. Utils. Comm'n v. Great S. Trucking Co., 223 N.C. 687, 28 S.E.2d 201 (1943).

Appeals from the Utilities Commissioner were analogous to appeals from a justice of the peace rather than appeals from a referee; hence, since the trial in the superior court was de novo upon issues of fact raised by the exceptions, the superior court properly refused to pass upon appellant's exceptions to the findings of fact seriatim. State ex rel. Utils. Comm'n v. Carolina Scenic Coach Co., 218 N.C. 233, 10 S.E.2d 824 (1940).

Decision of Commission "Prima Facie Just and Reasonable". - While on appeal from the Utilities Commission to the superior court the provision of former G.S. 62-21 was interpreted to mean that the trial should be de novo, the section also provided that the decision or determination of the Commission "shall be prima facie just and reasonable." State ex rel. Utils. Comm'n v. Great S. Trucking Co., 223 N.C. 687, 28 S.E.2d 201 (1943).

Findings of Fact Not Conclusive. - Former G.S. 62-20 and G.S. 62-21 did not contain any provision that the findings of fact by the Utilities Commission should be conclusive on appeal. State ex rel. Unemployment Comp. Comm'n v. J.M. Willis Barber & Beauty Shop, 219 N.C. 709, 15 S.E.2d 4 (1941).

What Evidence Admissible. - On appeal from an order of the Commission under former G.S. 62-21 the trial was de novo, tried under the same rules and regulations as are prescribed for the trial of other civil causes; and any relevant evidence could be there introduced, whether it had theretofore been introduced before the Commission or not. State ex rel. Corp. Comm'n v. Seaboard Air Line Ry., 161 N.C. 270, 76 S.E. 554 (1912).

Admission of Evidence Held Reversible Error. - Where a union passenger depot had been ordered by the Commission, it was reversible error in the superior court, on appeal from the Commission, for the trial judge to admit evidence as to the effect the relocation would have on property values in a nearby town where the present station of one of the roads was located. State ex rel. Corp. Comm'n v. Seaboard Air Line Ry., 161 N.C. 270, 76 S.E. 554 (1912).

When Appellee Entitled to Affirmance of Decision. - Under former G.S. 62-21, in the absence of a showing that the decision of the Utilities Commission was clearly unreasonable and unjust, appellee, on appeal to the superior court, was entitled to an affirmance of the decision of the Commission. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 224 N.C. 390, 30 S.E.2d 328 (1944).

In an application for a certificate of public convenience and necessity, the Utilities Commission must act within the authority conferred by the statute; however, the findings from the evidence and the exercise of judgment thereon within the scope of its powers are matters for the Commission, and its order will not be disturbed when sustained by the findings upon competent, material and substantial evidence. State ex rel. Utils. Comm'n v. Fredrickson Motor Express, 232 N.C. 180, 59 S.E.2d 582 (1950).


§ 62-95. Relief pending review on appeal.

Pending judicial review, the Commission is authorized, where it finds that justice so requires, to postpone the effective date of any action taken by it. Upon such conditions as may be required and to the extent necessary to prevent irreparable injury, a judge of the appellate court with jurisdiction over the case on appeal is authorized to issue all necessary and appropriate process to postpone the effective date of any action by the Commission or take such action as may be necessary to preserve status or rights of any of the parties pending conclusion of the proceedings on appeal. The court may require the applicant for such stay to post adequate bond as required by the court.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 8; 1983, c. 526, s. 8.)

Cross References. - As to jurisdiction of the Supreme Court to review, when authorized by law, direct appeals from a final order or decision of the North Carolina Utilities Commission, see N.C. Const., Art. IV, § 12(1).

§ 62-96. Appeal to Supreme Court.

Appeals of final orders of the Utilities Commission to the Supreme Court are governed by Article 5 of General Statutes Chapter 7A. In all appeals filed in the Court of Appeals, any party may file a motion for discretionary review in the Supreme Court pursuant to G.S. 7A-31. If the Commission is the appealing party, it is not required to give any undertaking or make any deposit to assure payment of the cost of the appeal, and the court may advance the cause on its docket.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 3; 1983, c. 526, s. 9.)

Cross References. - As to jurisdiction of the Supreme Court to review, when authorized by law, direct appeals from a final order or decision of the North Carolina Utilities Commission, see N.C. Const., Art. IV, § 12(1).

CASE NOTES

An appeal does not lie directly from the Commission to the Supreme Court. State ex rel. Bd. of R.R. Comm'rs v. Wilmington & W. R.R., 122 N.C. 877, 29 S.E. 334 (1898); North Carolina Corp. Comm'n v. Winston-Salem Southbound Ry., 170 N.C. 560, 87 S.E. 785 (1916).

Scope of Review. - Where the evidence is sufficient to permit and sustain the Commission's findings of fact, conclusions and the decision based thereon, the Supreme Court will consider the proceedings before the Commission only to the extent necessary to determine whether the Court of Appeals committed an error of law. State ex rel. Utils. Comm'n v. J.D. McCotter, Inc., 283 N.C. 104, 194 S.E.2d 859 (1973).

When Supreme Court May Affirm Judgment Reversing Commission. - Upon an appeal to the Supreme Court from a judgment of the superior court (now the Court of Appeals) reversing a decision of the Commission and remanding the matter for further proceedings, the Supreme Court may affirm the judgment of the superior court if the record discloses one or more of the statutory grounds for such judgment and if such ground therefor is set forth specifically in the notice of appeal from the Commission to the superior court. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

In order to affirm a judgment of the superior court (now the Court of Appeals) reversing and remanding a decision of the Commission, it is not required that the Supreme Court concur in the ruling by the superior court upon every ground for relief set forth in the notice of appeal from the Commission to the superior court. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

As to standing of manufacturer and distributor of plastic telephone directory covers to complain and appeal, see State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

Applied in State ex rel. N.C. Utils. Comm'n v. Old Fort Finishing Plant, 264 N.C. 416, 142 S.E.2d 8 (1965).

Cited in State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).


§ 62-97. Judgment on appeal enforced by mandamus.

In all cases in which, upon appeal, an order or decision of the Commission is affirmed, in whole or in part, the appellate court shall include in its decree a mandamus to the appropriate party to put said order in force, or so much thereof as shall be affirmed, or the appellate court may make such other order as it deems appropriate.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1.)

CASE NOTES

Mandamus Under Former G.S. 62-25. - Under former G.S. 62-25, the court could compel performance only by resort to the high prerogative writ of mandamus, and that by authority of the statute. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 151 N.C. 447, 66 S.E. 427 (1909).

Under former G.S. 62-25, the right to a mandamus to enforce a valid order was given in causes which had been carried to the superior court by appeal. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908).


§ 62-98. Peremptory mandamus to enforce order, when no appeal.

  1. If no appeal is taken from an order or decision of the Commission within the time prescribed by law and the person to which the order or decision is directed fails to put the same in operation, as therein required, the Commission may apply to a superior court judge who has jurisdiction pursuant to G.S. 7A-47.1 or G.S. 7A-48 in Wake County or in the district or set of districts as defined in G.S. 7A-41.1 in which the business is conducted, upon 10 days' notice, for a peremptory mandamus upon said person for the putting in force of said order or decision; and if said judge shall find that the order of said Commission was valid and within the scope of its powers, he shall issue such peremptory mandamus.
  2. An appeal shall lie to the Court of Appeals in behalf of the Commission, or the defendant, from the refusal or the granting of such peremptory mandamus. The remedy prescribed in this section for enforcement of orders of the Commission is in addition to other remedies prescribed by law.

History

(1949, c. 989, s. 1; 1963, c. 1165, s. 1; 1967, c. 1190, s. 4; 1987 (Reg. Sess., 1988), c. 1037, s. 92.)

CASE NOTES

As to enforcement of order by mandamus where no appeal was taken, under former law, see State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908).

Where the Commission had ordered two railroad companies to erect a union depot at a junction after a hearing upon the petition of the citizens of the town, and the railroads had lost or waived their statutory right to appeal, such order was regarded as a final judgment, and mandamus proceedings to compel the enforcement of the final order upon failure of the railroads to except and appeal therefrom was the remedy authorized by statute. State ex rel. Corp. Comm'n v. Southern Ry., 185 N.C. 435, 117 S.E. 563 (1923).


§ 62-99: Repealed by Session Laws 1967, c. 1190, s. 5.

ARTICLE 5A. Siting of Transmission Lines.

Sec.

§ 62-100. Definitions.

As used in this Article:

  1. The term "begin to construct" includes any clearing of land, excavation, or other action that would adversely affect the natural environment of the route of a transmission line; but that term does not include land surveys, boring to ascertain geological conditions, or similar preliminary work undertaken to determine the suitability of proposed routes for a transmission line that results in temporary changes to the land.
  2. The word "county" means any one of the counties listed in G.S. 153A-10.
  3. The word "land" means any real estate or any estate or interest in real estate, including water and riparian rights, regardless of the use to which it is devoted.
  4. The word "lines" means distribution lines and transmission lines collectively.
  5. The word "municipality" means any incorporated community, whether designated as a city, town, or village and any area over which it exercises any of the powers granted by Article 19 of Chapter 160A of the General Statutes.
  6. The term "public utility" means any of the following:
    1. A public utility, as defined in G.S. 62-3(23).
    2. An electric membership corporation.
    3. A joint municipal power agency.
    4. A city or county that is engaged in producing, generating, transmitting, delivering, or furnishing electricity for private or public use.
  7. The term "transmission line" means an electric line designed with a capacity of at least 161 kilovolts.

History

(1991, c. 189, s. 1; 2013-232, s. 1.)

Editor's Note. - Session Laws 1991, c. 189, s. 3, made this Article effective December 1, 1991, but provides that the Article shall not apply to any transmission line that the public utility or other person has begun to construct before that date.

Effect of Amendments. - Session Laws 2013-232, s. 1, effective July 3, 2013, added "any of the following" in subdivision (6); added sub-subdivisions (6)a. through (6)c.; redesignated former subdivision (6) as present subdivision (6) and sub-subdivision (6)d.; rewrote sub-subdivision (6)d., which formerly read "a person, whether organized under the laws of this State or under the laws of any other state or county; engaged in producing, generating, transmitting, delivering, or furnishing electricity for private or public use, including counties, municipalities, joint municipal power agencies, electric membership corporations, and public and private corporations; and"; and made minor punctuation changes throughout the section. For applicability, see editor's note.

CASE NOTES

Relationship With Other Laws. - There was no conflict between G.S. 62-106 and G.S. 62-42 because they served different purposes and were reconcilable; the provisions of G.S. 62-100 through G.S. 62-107 dealt with the siting of certain large transmission lines and were not applicable to the case, and G.S. 62-42 was much broader in scope, dealing with compelling any type of needed improvement to a public utility system. The siting of lines of at least 161 kV was often controversial and the legislature's decision to require specialized procedures for the siting of these lines was logical. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).

Issuance of Certificate. - Utilities Commission order issuing a Certificate of Environmental Compatibility and Public Convenience and Necessity to a utility to construct a transmission line along a proposed route was affirmed because, under G.S. 62-94 and the standard of review, the reviewing court could not weigh the credibility of the evidence and draw the ultimate conclusion; further, the Commission did not improperly shift the burden of proof to the citizens rather than to the utility under G.S. 62-105(a). State ex rel. Utils. Comm'n v. Wardlaw, 179 N.C. App. 582, 634 S.E.2d 898 (2006).

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992).


§ 62-101. Certificate to construct transmission line.

  1. No public utility or any other person may begin to construct a new transmission line without first obtaining from the Commission a certificate of environmental compatibility and public convenience and necessity. Only a public utility as defined in this Article may obtain a certificate to construct a new transmission line, except an entity may obtain a certificate to construct a new transmission line solely for the purpose of providing interconnection of an electric generation facility.
  2. A transmission line for which a certificate is required shall be constructed, operated, and maintained in conformity with the certificate.  A certificate may be amended or transferred with the approval of the Commission.
  3. A certificate is not required for construction of the following lines:
    1. A line designed to carry less than 161 kilovolts;
    2. The replacement or expansion of an existing line with a similar line in substantially the same location, or the rebuilding, upgrading, modifying, modernizing, or reconstructing of an existing line for the purpose of increasing capacity or widening an existing right-of-way;
    3. A transmission line over which the Federal Energy Regulatory Commission has licensing jurisdiction, if the Commission determines that agency has conducted a proceeding substantially equivalent to the proceeding required by this Article;
    4. Any transmission line for which, before March 6, 1989, a public utility or other person has surveyed a proposed route and, based on that route, has acquired rights-of-way for it by voluntary conveyances or has filed condemnation proceedings for acquiring those rights-of-way which, together, involve twenty-five percent (25%) or more of the total length of the proposed route;
    5. An electric membership corporation owned transmission line for which the construction or upgrading has had a proceeding conducted which the Commission determines is substantially equivalent to the proceeding required by this Article;
    6. Any line owned by a municipality to be constructed wholly within the corporate limits of that municipality.
  4. The Commission may waive the notice and hearing requirements of this Article and issue a certificate or amend an existing certificate under either of the following circumstances:
    1. When the Commission finds that the owners of land to be crossed by the proposed transmission line segment do not object to such a waiver and either:
      1. The transmission line will be less than one mile long; or
      2. The transmission line is for the purpose of relocating an existing transmission line segment to resolve a highway or other public project conflict; to accommodate a commercial, industrial, or other private development conflict; or to connect an existing transmission line to a substation, to another public utility, or to a public utility customer when any of these is in proximity to the existing transmission line.
    2. If the urgency of providing electric service requires the immediate construction of the transmission line, provided that the Commission shall give notice to those parties listed in G.S. 62-102(b) before issuing a certificate or approving an amendment.
  5. When justified by the public convenience and necessity and a showing that circumstances require immediate action, the Commission may permit an applicant for a certificate to proceed with initial clearing, excavation, and construction before receiving the certificate required by this section.  In so proceeding, however, the applicant acts at its own risk, and by granting such permission, the Commission does not commit to ultimately grant a certificate for the transmission line.
  6. Nothing in this section restricts or impairs the Commission's jurisdiction pursuant to G.S. 62-73 to hear or make complaints.

History

(1991, c. 189, s. 1; 2013-232, s. 2.)

Effect of Amendments. - Session Laws 2013-232, s. 2, effective July 3, 2013, added the second sentence in subsection (a). For applicability, see Editor's note.

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992); State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).


§ 62-102. Application for certificate.

  1. An applicant for the certificate described in G.S. 62-101 shall file an application with the Commission containing the following information:
    1. The reasons the transmission line is needed;
    2. A description of the proposed location of the transmission line;
    3. A description of the proposed transmission line;
    4. An environmental report setting forth:
      1. The environmental impact of the proposed action;
      2. Any proposed mitigating measures that may minimize the environmental impact; and
      3. Alternatives to the proposed action.
    5. A list of all necessary approvals that the applicant must obtain before it may begin to construct the transmission line; and
    6. Any other information the Commission requires.
  2. Within 10 days of filing the application, the applicant shall serve a copy of it on each of the following in the manner provided in G.S. 1A-1, Rule 4:
    1. The Public Staff;
    2. The Attorney General;
    3. The Department of Environmental Quality;
    4. The Department of Commerce;
    5. The Department of Transportation;
    6. The Department of Agriculture and Consumer Services;
    7. The Department of Natural and Cultural Resources;
    8. Each county through which the applicant proposes to construct the transmission line;
    9. Each municipality through whose jurisdiction the applicant proposes to construct the transmission line; and
    10. Any other party that the Commission orders the applicant to serve.
  3. Within 10 days of the filing of the application, the applicant shall give public notice to persons residing in each county and municipality in which the transmission line is to be located by publishing a summary of the application in newspapers of general circulation so as to substantially inform those persons of the filing of the application.  This notice shall thereafter be published in those newspapers a minimum of three additional times before the time for parties to intervene has expired.  The summary shall also be sent to the North Carolina State Clearinghouse.  The summary shall be subject to prior approval of the Commission and shall contain at a minimum the following:
    1. A summary of the proposed action;
    2. A description of the location of the proposed transmission line written in a readable style;
    3. The date on which the application was filed; and
    4. The date by which an interested person must intervene.
  4. Inadvertent failure of service on or notice to any municipality, county, governmental agency, or other person described in this section may be cured by an order of the Commission designed to give that person adequate notice to enable effective participation in the proceeding.
  5. An application for an amendment of a certificate shall be in a form approved by and shall contain any information required by the Commission.  Notice of such an application shall be in the same manner as for a certificate.

The copy of the application served on each shall be accompanied by a notice specifying the date on which the application was filed.

History

(1991, c. 189, s. 1; 1991 (Reg. Sess., 1992), c. 959, s. 18; 1997-261, s. 3; 1997-443, s. 11A.119(a); 2015-241, s. 14.30(s), (u).)

Effect of Amendments. - Session Laws 2015-241, s. 14.30(s), effective July 1, 2015, substituted "Department of Natural and Cultural Resources" for "Department of Cultural Resources" in subdivision (b)(7).

Session Laws 2015-241, s. 14.30(u), effective July 1, 2015, substituted "Department of Environmental Quality" for "Department of Environment and Natural Resources" in subdivision (b)(3).

§ 62-103. Parties.

  1. The following persons shall be parties to a certification proceeding under this Article:
    1. The applicant;
    2. The Public Staff.
  2. The following persons may intervene in a certification proceeding under this Article if a petition to intervene is filed with the Commission within 100 days of the filing of the application and the petition is subsequently granted:
    1. Any State department, municipality, or county entitled to notice under G.S. 62-102(b);
    2. Any person whose land will be crossed by the proposed line;
    3. Any other person who can show a substantial interest in the certification proceeding.

History

(1991, c. 189, s. 1.)

§ 62-104. Hearings.

  1. The Commission shall schedule a hearing upon each application filed under this Article not more than 120 days after the filing and shall conclude the proceeding as expeditiously as possible.  The Commission may, however, extend this time period for substantial cause.
  2. If, after proper notice of the application has been given, no significant protests are filed with the Commission, the Commission may cancel the hearing and decide the case on the basis of the filed record.
  3. The Commission shall issue an order on each application filed under this Article within 60 days of the conclusion of the hearing.  The Commission may extend this time period for substantial cause.

History

(1991, c. 189, s. 1.)

§ 62-105. Burden of proof; decision.

  1. The burden of proof is on the applicant in all cases under this Article, except that any party proposing an alternative location for the proposed transmission line shall have the burden of proof in sustaining its position.  The Commission may consider any factors that it finds are relevant and material to its decision.  The Commission shall grant a certificate for the construction, operation, and maintenance of the proposed transmission line if it finds:
    1. That the proposed transmission line is necessary to satisfy the reasonable needs of the public for an adequate and reliable supply of electric energy;
    2. That, when compared with reasonable alternative courses of action, construction of the transmission line in the proposed location is reasonable, preferred, and in the public interest;
    3. That the costs associated with the proposed transmission line are reasonable;
    4. That the impact the proposed transmission line will have on the environment is justified considering the state of available technology, the nature and economics of the various alternatives, and other material considerations; and
    5. That the environmental compatibility, public convenience, and necessity require the transmission line.
  2. If the Commission determines that the location of the proposed transmission line should be modified, it may condition its certificate upon modifications it finds necessary to make the findings and determinations set forth in subsection (a) of this section.

History

(1991, c. 189, s. 1.)

Legal Periodicals. - For article, "Wind Over North Carolina Waters: The State's Preparedness to Address Offshore and Coastal Water-Based Wind Energy Projects," see 87 N.C.L. Rev. 1819 (2009).

CASE NOTES

Burden of Proof. - Utilities Commission order issuing a Certificate of Environmental Compatibility and Public Convenience and Necessity to a utility to construct a transmission line along a proposed route was affirmed because the Commission did not improperly shift the burden of proof to the citizens rather than to the utility under G.S. 62-105(a); the Commission properly assigned to the utility the initial burden of proving it had examined alternative routes and that its preferred route was reasonable and in the public interest. State ex rel. Utils. Comm'n v. Wardlaw, 179 N.C. App. 582, 634 S.E.2d 898 (2006).


§ 62-106. Effect of local ordinances.

Within 30 days after receipt of notice of an application as provided by G.S. 62-102, a municipality or county shall file with the Commission and serve on the applicant the provisions of an ordinance that may affect the construction, operation, or maintenance of the proposed transmission line in the manner provided by the rules of the Commission. If the municipality or county does not serve notice as provided above of any such ordinance provisions, the provisions of such ordinance may not be enforced by the municipality or county. If the applicant proposes not to comply with any part of the ordinance, the applicant may move the Commission for an order preempting that part of the ordinance. Service of the motion on the municipality or county by the applicant shall make the municipality or county a party to the proceeding. If the Commission finds that the greater public interest requires it, the Commission may include in a certificate issued under this Article an order preempting any part of such county or municipal ordinance with respect to the construction, operation or maintenance of the proposed transmission line.

History

(1991, c. 189, s. 1.)

CASE NOTES

Relationship With Other Laws. - There was no conflict between G.S. 62-106 and G.S. 62-42 because they served different purposes and were reconcilable; the provisions of G.S. 62-100 through G.S. 62-107 dealt with the siting of certain large transmission lines and were not applicable to the case, and G.S. 62-42 was much broader in scope, dealing with compelling any type of needed improvement to a public utility system. The siting of lines of at least 161 kV was often controversial and the legislature's decision to require specialized procedures for the siting of these lines was logical. State ex rel. Utils. Comm'n v. Town of Kill Devil Hills, 194 N.C. App. 561, 670 S.E.2d 341 (2009), aff'd, 363 N.C. 739, 686 S.E.2d 151 (2009).


§ 62-107. Rules.

Pursuant to G.S. 62-31, the Commission may adopt rules to carry out the purposes of this Article. In addition, the Commission shall adopt rules requiring public utilities to file periodic reports stating their short-term and long-term plans for construction of transmission lines in this State.

History

(1991, c. 189, s. 1.)

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992).


§§ 62-108, 62-109: Reserved for future codification purposes.

ARTICLE 6. The Utility Franchise.

Sec.

§ 62-110. Certificate of convenience and necessity.

  1. Except as provided for bus companies in Article 12 of this Chapter, no public utility shall hereafter begin the construction or operation of any public utility plant or system or acquire ownership or control thereof, either directly or indirectly, without first obtaining from the Commission a certificate that public convenience and necessity requires, or will require, such construction, acquisition, or operation: Provided, that this section shall not apply to construction into territory contiguous to that already occupied and not receiving similar service from another public utility, nor to construction in the ordinary conduct of business.
  2. The Commission shall be authorized to issue a certificate to any person applying to the Commission to offer long distance services as a public utility as defined in G.S. 62-3(23)a.6., provided that such person is found to be fit, capable, and financially able to render such service, and that such additional service is required to serve the public interest effectively and adequately; provided further, that in such cases the Commission shall consider the impact on the local exchange customers and only permit such additional service if the Commission finds that it will not jeopardize reasonably affordable local exchange service.
  3. The Commission shall be authorized, consistent with the public interest, to adopt procedures for the issuance of a special certificate to any person for the limited purpose of offering telephone service to the public by means of coin, coinless, or key-operated pay telephone instruments. This service may be in addition to or in competition with public telephone services offered by the certificated telephone company in the service area. The access line from the pay instrument to the network may be obtained from the local exchange telephone company in the service area where the pay instrument is located, from any certificated competitive local provider, or any other provider authorized by the Commission. The Commission shall promulgate rules to implement the service authorized by this section, recognizing the competitive nature of the offerings and, notwithstanding any other provision of law, the Commission shall determine the extent to which such services shall be regulated and to the extent necessary to protect the public interest regulate the terms, conditions, and rates for such service and the terms and conditions for interconnection to the local exchange network.
  4. The Commission shall be authorized, consistent with the public interest and notwithstanding any other provision of law, to adopt procedures for the purpose of allowing shared use and/or resale of any telephone service provided to persons who occupy the same contiguous premises (as such term shall be defined by the Commission); provided, however, that there shall be no "networking" of any services authorized under this subsection whereby two or more premises where such services are provided are connected, and provided further that any certificated local provider or any other provider authorized by the Commission may provide access lines or trunks connecting such authorized service to the telephone network, and that the local service rates permitted or approved by the Commission for local exchange lines or trunks being shared or resold shall be on a measured usage basis where facilities are available or on a message rate basis otherwise. Provided however, the Commission may permit or approve flat rates, measured rates, message rates, or some combination of those rates for shared or resold services whenever the service is offered to patrons of hotels or motels, occupants of timeshare or condominium complexes serving primarily transient occupants, to patrons of hospitals, nursing homes, rest homes, or licensed retirement centers, or to members of clubs or students living in quarters furnished by educational institutions, or to persons temporarily subleasing residential premises. The Commission shall issue rules to implement the service authorized by this subsection, considering the competitive nature of the offerings and, notwithstanding any other provision of law, the Commission shall determine the extent to which such services shall be regulated and, to the extent necessary to protect the public interest, regulate the terms, conditions, and rates charged for such services and the terms and conditions for interconnection to the local exchange network. The Commission shall require any person offering telephone service under this subsection by means of a Private Branch Exchange ("PBX") or key system to secure adequate local exchange trunks from any certificated local provider or any other provider authorized by the Commission so as to assure a quality of service equal to the quality of service generally found acceptable by the Commission. Unless otherwise ordered by the Commission for good cause shown by the company, the right and obligation of the certificated local provider or any other provider authorized by the Commission to provide local service directly to any person located within its certificated service area shall continue to apply to premises where shared or resold telephone service is available, provided however, the Commission shall be authorized to establish the terms and conditions under which such services should be provided.
  5. Notwithstanding subsection (d) of this section, the Commission may authorize any telephone services provided to a nonprofit college or university, and its affiliated medical centers, which is qualified under Sections 501 and 170 of the United States Internal Revenue Code of 1986 or which is a State-owned institution, to be shared or resold by that institution on both contiguous campus premises owned or leased by the institution and noncontiguous premises owned or leased exclusively by the institution, provided these services are offered to students or guests housed in quarters furnished by the institution, patrons of hospitals or medical centers of the institution, or persons or businesses providing educational, research, professional, consulting, food, or other support services directly to or for the institution, its students, or guests. The services of a certificated local provider or any other provider authorized by the Commission, when provided to said colleges, universities, and affiliated medical centers shall be rated in the same way as those provided for shared service offered to patrons of hospitals, nursing homes, rest homes, licensed retirement centers, members of clubs or students living in quarters furnished by educational institutions as provided for in subsection (d) of this section. The institutions regulated pursuant to this subsection shall not be prohibited from electing optional services from the certificated local provider or any other provider authorized by the Commission which include measured or message rate services. There shall be no "networking" of any services authorized under this subsection whereby two or more different institutions where such services are provided are interconnected. Any certificated local provider or any other provider authorized by the Commission may provide access lines or trunks connecting such authorized services to the telephone network. The Commission shall require such institutions to secure adequate local exchange trunks from the certificated local provider or any other provider authorized by the Commission to assure a quality of service equal to the quality of service generally found acceptable by the Commission. Unless otherwise ordered by the Commission for good cause shown by the certificated local provider or any other provider authorized by the Commission, the right and obligation of that provider to provide local service directly to any person located within its certificated service area shall continue to apply to premises where shared or resold telephone service is available under this subsection, provided however, the Commission shall be authorized to establish the terms and conditions under which such service should be provided. The Commission shall issue rules to implement the services authorized by this subsection.
  6. Reserved.
  7. Except as provided in subsection (f2) of this section, the Commission is authorized, following notice and an opportunity for interested parties to be heard, to issue a certificate to any person applying to provide local exchange or exchange access services as a public utility as defined in G.S. 62-3(23)a.6., without regard to whether local telephone service is already being provided in the territory for which the certificate is sought, provided that the person seeking to provide the service makes a satisfactory showing to the Commission that (i) the person is fit, capable, and financially able to render such service; (ii) the service to be provided will reasonably meet the service standards that the Commission may adopt; (iii) the provision of the service will not adversely impact the availability of reasonably affordable local exchange service; (iv) the person, to the extent it may be required to do so by the Commission, will participate in the support of universally available telephone service at affordable rates; and (v) the provision of the service does not otherwise adversely impact the public interest. In its application for certification, the person seeking to provide the service shall set forth with particularity the proposed geographic territory to be served and the types of local exchange and exchange access services to be provided. Except as provided in G.S. 62-133.5(f), any person receiving a certificate under this section shall, until otherwise determined by the Commission, file and maintain with the Commission a complete list of the local exchange and exchange access services to be provided and the prices charged for those services, and shall be subject to such reporting requirements as the Commission may require.
  8. The provisions of subsection (f1) of this section shall not be applicable to franchised areas within the State that are being served by local exchange companies with 200,000 access lines or less located within the State, and it is further provided that such local exchange company providing service to 200,000 access lines or less shall not be subject to the regulatory reform procedures outlined under the terms of G.S. 62-133.5(a) or permitted to compete in territory outside of its franchised area for local exchange and exchange access services until such time as the franchised area is opened to competing local providers as provided for in this subsection. Upon the filing of an application by a local exchange company with 200,000 access lines or less for regulation under the provisions of G.S. 62-133.5(a), the Commission shall apply the provisions of that section to such local exchange company, but only upon the condition that the provisions of subsection (f1) of this section are to be applicable to the franchised area and local exchange and exchange access services offered by such a local exchange company.
  9. The provisions of subsection (f1) of this section shall not be applicable to areas served by telephone membership corporations formed and existing under Article 4 of Chapter 117 of the General Statutes and exempt from regulation as public utilities, pursuant to G.S. 62-3(23)d. and G.S. 117-35. To the extent a telephone membership corporation has carrier of last resort obligations, it may fulfill those obligations using any available technology.
  10. When any telecommunications service provider: (i) enters into an agreement to provide local exchange service for a subdivision or other area where access to right-of-way for the provision of local exchange service by other telecommunications service providers has not been granted coincident with any other grant of access by the property owner; or (ii) enters into an agreement after July 1, 2008, to provide communications service that otherwise precludes the local exchange company from providing communications service for the subdivision or other area, the local exchange company is not obligated to provide basic local exchange telephone service or any other communications service to customers in the subdivision or other area. In each of the foregoing instances, the telecommunications service provider shall be the provider in the subdivision or other area under the terms of the agreement and applicable law. The local exchange company for the franchise area or territory in which the subdivision or other area is located shall be relieved of any universal service provider obligation for that subdivision or other area. In that case, the local exchange company and all other telecommunications service providers shall retain the option, but not the obligation, to serve customers in the subdivision or other area. The local exchange company shall provide written notification to the appropriate State agency that the local exchange company is no longer the universal service provider for the subdivision or other area. The appropriate State agency shall retain the right to redesignate a local exchange company or telecommunications service provider as the universal service provider in accordance with the provisions of subsection (f5) of this section. Any person that enters into an agreement with a telecommunications service provider to provide local exchange service for a subdivision or other area as described in this subsection shall notify a purchaser of real property within the subdivision or other area of the agreement.
    1. Providing service in the subdivision or area would be inequitable or unduly burdensome.
    2. One or more alternative providers of local exchange service exist.
    3. Granting the waiver is in the public interest.
  11. If the appropriate State agency finds, upon hearing, that the telecommunications service provider serving the subdivision or other area pursuant to subsection (f4) of this section, or its successor in interest, is no longer willing or no longer able to provide adequate services to the subdivision or other area, the appropriate State agency may redesignate the local exchange company for the franchise area or territory in which the subdivision or other area is located, or another telecommunications service provider, to be the universal service provider for the subdivision or other area. If the redesignated local exchange company is subject to price regulation or other alternative regulation under G.S. 62-133.5, it may treat the costs incurred in extending its facilities into the subdivision or other area as exogenous to that form of regulation and may, subject to providing written notice to the Commission, adjust its rates to recover these costs on an equitable basis from its customers whose rates are subject to regulation under G.S. 62-133.5. Any such action shall be subject to review by the Commission in a complaint proceeding initiated by any interested party pursuant to G.S. 62-73. If the redesignated local exchange company is not subject to price regulation or other alternative regulation under G.S. 62-133.5, it may recover the costs incurred in extending its facilities into the subdivision or other area in the form of a surcharge, subject to Commission approval, spread equitably among all of its customers in a proceeding under G.S. 62-136(a), without having to file a general rate case proceeding. During the period that a telecommunications service provider is serving as a universal service provider and prior to the redesignation of a local exchange company as the universal service provider as provided for herein, for the purposes of the appropriate State agency's periodic certification to the Federal Communications Commission in matters regarding eligible telecommunications carrier status, a local company's status shall not be deemed to affect its eligibility to be an eligible telecommunications carrier, and the appropriate State agency shall so certify.
  12. For purposes of subsections (f4) and (f5) of this section, the following definitions are applicable:
    1. "Appropriate State agency" means the Commission for purposes of any subdivision or other area within the franchise area of a local exchange company, and the Rural Electrification Authority for the purposes of any subdivision or other area within the franchise area or territory of a telephone membership corporation.
    2. "Communications service" means either voice, video, or data service through any technology.
    3. "Local exchange company" means a local exchange company subject to price regulation, or other alternative regulation or rate base regulation by the Commission or a telephone membership corporation organized under G.S. 117-30.
    4. "Telecommunications service provider" means a competing local provider, or any other person providing local exchange service by means of voice-over-Internet protocol, wireless, power line, satellite, or other nontraditional means, whether or not regulated by the Commission, but the term shall not include local exchange companies or telephone membership corporations.
  13. In addition to the authority to issue a certificate of public convenience and necessity and establish rates otherwise granted in this Chapter, for the purpose of encouraging water conservation, the Commission may, consistent with the public interest, adopt procedures that allow a lessor to charge for the costs of providing water or sewer service to persons who occupy the leased premises. The following provisions shall apply:
    1. All charges for water or sewer service shall be based on the user's metered consumption of water, which shall be determined by metered measurement of all water consumed. The rate charged by the lessor shall not exceed the unit consumption rate charged by the supplier of the service.
    2. If the leased premises are contiguous dwelling units built prior to 1989, and the lessor determines that the measurement of the lessee's total water usage is impractical or not economical, the lessor may allocate the cost for water and sewer service to the lessee using equipment that measures the lessee's hot water usage. In that case, each lessee shall be billed a percentage of the lessor's water and sewer costs for water usage in the dwelling units based upon the hot water used in the lessee's dwelling unit. The percentage of total water usage allocated for each dwelling unit shall be equal to that dwelling unit's individually submetered hot water usage divided by all submetered hot water usage in all dwelling units. The following conditions apply to billing for water and sewer service under this subdivision:
      1. A lessor shall not utilize a ratio utility billing system or other allocation billing system that does not rely on individually submetered hot water usage to determine the allocation of water and sewer costs.
      2. The lessor shall not include in a lessee's bill the cost of water and sewer service used in common areas or water loss due to leaks in the lessor's water mains. A lessor shall not bill or attempt to collect for excess water usage resulting from a plumbing malfunction or other condition that is not known to the lessee or that has been reported to the lessor.
      3. All equipment used to measure water usage shall comply with guidelines promulgated by the American Water Works Association.
      4. The lessor shall maintain records for a minimum of 12 months that demonstrate how each lessee's allocated costs were calculated for water and sewer service. Upon advanced written notice to the lessor, a lessee may inspect the records during reasonable business hours.
      5. Bills for water and sewer service sent by the lessor to the lessee shall contain all the following information:
        1. The amount of water and sewer services allocated to the lessee during the billing period.
        2. The method used to determine the amount of water and sewer services allocated to the lessee.
        3. Beginning and ending dates for the billing period.
        4. The past-due date, which shall not be less than 25 days after the bill is mailed.
        5. A local or toll-free telephone number and address that the lessee can use to obtain more information about the bill.
    3. Notwithstanding the provisions of subdivisions (1) and (1a) of this subsection, if the Commission approves a flat rate to be charged by a water or sewer utility for the provision of water or sewer services to contiguous dwelling units, the lessor may pass through and charge the tenants of the contiguous dwelling units the same flat rate for water or sewer services, rather than a rate based on metered consumption, and an administrative fee as authorized in subdivision (2) of this subsection. Bills for water and sewer service sent by the lessor to the lessee shall contain all the information required by sub-sub-subdivisions e.2. through e.5. of subdivision (1a) of this subsection.
    4. The lessor may charge a reasonable administrative fee for providing water or sewer service not to exceed the maximum administrative fee authorized by the Commission.
    5. The Commission shall adopt rules to implement this subsection.
    6. The Commission shall develop an application that lessors must submit for authority to charge for water or sewer service. The form shall include all of the following:
      1. A description of the applicant and the property to be served.
      2. A description of the proposed billing method and billing statements.
      3. The schedule of rates charged to the applicant by the supplier.
      4. The schedule of rates the applicant proposes to charge the applicant's customers.
      5. The administrative fee proposed to be charged by the applicant.
      6. The name of and contact information for the applicant and its agents.
      7. The name of and contact information for the supplying water or sewer system.
      8. Any additional information that the Commission may require.
    7. The Commission shall develop an application that lessors must submit for authority to charge for water or sewer service at single-family dwellings that allows the applicant to serve multiple dwellings in the State, subject to an approval by the Commission. The form shall include all of the following:
      1. A description of the applicant and a listing of the address of all the properties to be served. An updated listing of addresses served by the applicant shall be provided to the Commission annually.
      2. A description of the proposed billing method and billing statements.
      3. The administrative fee proposed to be charged by the applicant.
      4. The name and contact information for the applicant and its agents.
      5. Any additional information the Commission may require.
    8. The Commission shall approve or disapprove an application within 30 days of the filing of a completed application with the Commission. If the Commission has not issued an order disapproving a completed application within 30 days, the application shall be deemed approved.
    9. A provider of water or sewer service under this subsection may increase the rate for service so long as the rate does not exceed the unit consumption rate charged by the supplier of the service. A provider of water or sewer service under this subsection may change the administrative fee so long as the administrative fee does not exceed the maximum administrative fee authorized by the Commission. In order to change the rate or administrative fee, the provider shall file a notice of revised schedule of rates and fees with the Commission. The Commission may prescribe the form by which the provider files a notice of a revised schedule of rates and fees under this subsection. The form shall include all of the following:
      1. The current schedule of the unit consumption rates charged by the provider.
      2. The schedule of rates charged by the supplier to the provider that the provider proposes to pass through to the provider's customers.
      3. The schedule of the unit consumption rates proposed to be charged by the provider.
      4. The current administrative fee charged by the provider, if applicable.
      5. The administrative fee proposed to be charged by the provider.
    10. A notification of revised schedule of rates and fees shall be presumed valid and shall be allowed to become effective upon 14 days notice to the Commission, unless otherwise suspended or disapproved by order issued within 14 days after filing.
    11. Notwithstanding any other provision of this Chapter, the Commission shall determine the extent to which the services shall be regulated and, to the extent necessary to protect the public interest, regulate the terms, conditions, and rates that may be charged for the services. Nothing in this subsection shall be construed to alter the rights, obligations, or remedies of persons providing water or sewer services and their customers under any other provision of law.
    12. A provider of water or sewer service under this subsection shall not be required to file annual reports pursuant to G.S. 62-36 or to furnish a bond pursuant to G.S. 62-110.3.
  14. In addition to the authority to issue a certificate of public convenience and necessity and establish rates otherwise granted in this Chapter, the Commission may, consistent with the public interest, adopt procedures that allow a lessor of a single-family dwelling, residential building, or multiunit apartment complex that has individually metered units for electric service in the lessor's name to charge for the actual costs of providing electric service to each lessee. The following provisions shall apply to the charges authorized under this subsection:
    1. The lessor shall equally divide the actual amount of the individual electric service bill for a unit among all the lessees in the unit and shall send one bill to each lessee. The amount charged shall be prorated when a lessee has not leased the unit for the same number of days as the other lessees in the unit during the billing period. Each bill may include an administrative fee up to the amount of the then-current administrative fee authorized by the Commission in Rule 18-6 for water service and, when applicable, a late fee in an amount determined by the Commission. The lessor shall not charge the cost of electricity from any other unit or common area in a lessee's bill. The lessor may, at the lessor's option, pay any portion of any bill sent to a lessee.
    2. A lessor who charges for electric service under this subsection is solely responsible for the prompt payment of all bills rendered by the electric utility providing service to the leased premises and is the customer of the electric utility subject to all rules, regulations, tariffs, riders, and service regulations associated with the provision of electric service to retail customers of the utility.
    3. The lessor shall maintain records for a minimum of 36 months that demonstrate how each lessee's allocated costs were calculated for electric service. A lessee may inspect these records, including the actual per unit public utility billings, during reasonable business hours and may obtain copies of the records for a reasonable copying fee.
    4. Bills for electric service sent by the lessor to the lessee shall contain all of the following information:
      1. When the lessor of a residential building or multiunit apartment complex has a separate lease for each bedroom in the unit, the bill charged by the electric supplier for the unit as a whole and the amount of charges allocated to the lessee during the billing period.
      2. The name of the electric power supplier providing electric service to the leased premises.
      3. Beginning and ending dates for the usage period and, if provided by the electric supplier, the date the meter was read for that usage period.
      4. The past-due date, which shall not be less than 25 days after the bill is mailed to the lessee.
      5. A local or toll-free telephone number and address of the lessor that the lessee can use to obtain more information about the bill.
      6. The amount of any administrative fee and late fee approved by the Commission and included in the bill.
      7. A statement of the lessee's right to address questions about the bill to the lessor and the lessee's right to file a complaint with, or otherwise seek recourse from, the Commission if the lessee cannot resolve an electric service billing dispute with the lessor.
    5. The Commission shall develop an application that lessors must submit for Commission approval to charge for electric service as provided in this section. The form shall include all of the following:
      1. A description of the lessor and the property to be served.
      2. A description of the proposed billing method and billing statements.
      3. The administrative fee and late payment fee, if any, proposed to be charged by the lessor.
      4. The name of and contact information for the lessor and the lessor's agents.
      5. The name of and contact information for the supplier of electric service to the lessor's rental property.
      6. A copy of the lease forms used by the lessor for lessees who are billed for electric service pursuant to this subsection.
      7. Any additional information that the Commission may require.
    6. The Commission shall approve or disapprove an application within 60 days of the filing of a completed application with the Commission. If the Commission has not issued an order disapproving a completed application within 60 days, the application shall be deemed approved.
    7. A lessor who charges for electric service under this subsection shall not be required to file annual reports pursuant to G.S. 62-36.
    8. An applicant may submit for authority to charge for electric service for more than one property in a single application. Information relating to all properties covered by the application need only be provided once in the application.
    9. The Commission shall adopt rules to implement the provisions of this subsection.
  15. In addition to the authority to issue a certificate of public convenience and necessity and establish rates otherwise granted in this Chapter, the Commission may, consistent with the public interest, adopt procedures that allow a lessor of single-family dwelling, a residential building, or multiunit apartment complex that has individually metered units for natural gas service in the lessor's name to charge for the actual costs of providing natural gas service to each lessee. The following provisions shall apply to the charges authorized under this subsection:
    1. The lessor shall equally divide the actual amount of the individual natural gas service bill for a unit among all the lessees in the unit and shall send one bill to each lessee. The amount charged shall be prorated when a lessee has not leased the unit for the same number of days as the other lessees in the unit during the billing period. Each bill may include an administrative fee up to the amount of the then-current administrative fee authorized by the Commission in Rule 18-6 for water service and, when applicable, a late fee in an amount determined by the Commission. The lessor shall not charge the cost of natural gas service from any other unit or common area in a lessee's bill. The lessor may, at the lessor's option, pay any portion of any bill sent to a lessee.
    2. A lessor who charges for natural gas service under this subsection is solely responsible for the prompt payment of all bills rendered by the natural gas utility providing service to the leased premises and is the customer of the natural gas utility subject to all rules, regulations, tariffs, riders, and service regulations associated with the provision of natural gas service to retail customers of the utility.
    3. The lessor shall maintain records for a minimum of 36 months that demonstrate how each lessee's allocated costs were calculated for natural gas service. A lessee may inspect these records, including the actual per unit public utility billings, during reasonable business hours and may obtain copies of the records for a reasonable copying fee.
    4. Bills for natural gas service sent by the lessor to the lessee shall contain all of the following information:
      1. When the lessor of a residential building or multiunit apartment complex has a separate lease for each bedroom in the unit, the bill charged by the natural gas supplier for the unit as a whole and the amount of charges allocated to the lessee during the billing period.
      2. The name of the natural gas supplier providing natural gas service to the leased premises.
      3. Beginning and ending dates for the usage period and, if provided by the natural gas supplier, the date the meter was read for that usage period.
      4. The past-due date, which shall not be less than 25 days after the bill is mailed to the lessee.
      5. A local or toll-free telephone number and address that the lessee can use to obtain more information about the bill.
      6. The amount of any administrative fee and late fee approved by the Commission and included in the bill.
      7. A statement of the lessee's right to address questions about the bill to the lessor and the lessee's right to file a complaint with, or otherwise seek recourse from, the Commission if the lessee cannot resolve a natural gas service billing dispute with the lessor.
    5. The Commission shall develop an application that lessors must submit for Commission approval to charge for natural gas service as provided in this section. The form shall include all of the following:
      1. A description of the lessor and the property to be served.
      2. A description of the proposed billing method and billing statements.
      3. The administrative fee and late payment fee, if any, proposed to be charged by the lessor.
      4. The name of and contact information for the lessor and the lessor's agents.
      5. The name of and contact information for the supplier of natural gas service to the lessor's rental property.
      6. A copy of the lease forms used by the lessor for lessees who are billed for natural gas service pursuant to this subsection.
      7. Any additional information that the Commission may require.
    6. The Commission shall approve or disapprove an application within 60 days of the filing of a completed application with the Commission. If the Commission has not issued an order disapproving a completed application within 60 days, the application shall be deemed approved.
    7. A lessor who charges for natural gas service under this subsection shall not be required to file annual reports pursuant to G.S. 62-36.
    8. An applicant may submit for authority to charge for natural gas service for more than one property in a single application. Information relating to all properties covered by the application need only be provided once in the application.
    9. The Commission shall adopt rules to implement the provisions of this subsection.
  16. In addition to the authority to issue a certificate of public convenience and necessity and establish rates otherwise granted in this Chapter, the Commission may, consistent with the public interest, allow a lessor of a multiunit apartment building who has obtained the approval of the Commission for the use of a master meter pursuant to G.S. 143-151.42 to charge each tenant for the electricity or natural gas used by a central system based on each tenant's metered or measured share of the electricity or natural gas used by the central system. In the case of electricity used by a central system, the provisions of subdivisions (2) through (8) of subsection (h) of this section shall apply. In the case of natural gas used by a central system, the provisions of subdivisions (2) through (8) of subsection (i) of this section shall apply.

Notwithstanding any other provision of law, the terms, conditions, rates, and interconnections for long distance services offered on a competitive basis shall be regulated by the Commission in accordance with the public interest. In promulgating rules necessary to implement this provision, the Commission shall consider whether uniform or nonuniform application of such rules is consistent with the public interest. Provided further that the Commission shall consider whether the charges for the provision of interconnections should be uniform.

For purposes of this section, long distance services shall include the transmission of messages or other communications between two or more central offices wherein such central offices are not connected on July 1, 1983, by any extended area service, local measured service, or other local calling arrangement.

Any certificate issued by the Commission pursuant to this subsection shall not permit the provision of local exchange or exchange access service until July 1, 1996, unless the Commission shall have approved a price regulation plan pursuant to G.S. 62-133.5(a) for a local exchange company with an effective date prior to July 1, 1996. In the event a price regulation plan becomes effective prior to July 1, 1996, the Commission is authorized to permit the provision of local exchange or exchange access service by a competing local provider in the franchised area of such local exchange company.

The Commission is authorized to adopt rules it finds necessary (i) to provide for the reasonable interconnection of facilities between all providers of telecommunications services; (ii) to determine when necessary the rates for such interconnection; (iii) to provide for the reasonable unbundling of essential facilities where technically and economically feasible; (iv) to provide for the transfer of telephone numbers between providers in a manner that is technically and economically reasonable; (v) to provide for the continued development and encouragement of universally available telephone service at reasonably affordable rates; and (vi) to carry out the provisions of this subsection in a manner consistent with the public interest, which will include a consideration of whether and to what extent resale should be permitted. In adopting rules to establish an appropriate definition of universal service, the Commission shall consider evolving trends in telecommunications services and the need for consumers to have access to high-speed communications networks, the Internet, and other services to the extent that those services provide social benefits to the public at a reasonable cost.

Local exchange companies and competing local providers shall negotiate the rates for local interconnection. In the event that the parties are unable to agree within 90 days of a bona fide request for interconnection on appropriate rates for interconnection, either party may petition the Commission for determination of the appropriate rates for interconnection. The Commission shall determine the appropriate rates for interconnection within 180 days from the filing of the petition.

Except as provided in subsections (f4) and (f5) of this section, each local exchange company shall be the universal service provider (carrier of last resort) in the area in which it is certificated to operate on July 1, 1995. Each local exchange company or telecommunications service provider with carrier of last resort responsibility may satisfy its carrier of last resort obligation by using any available technology. In continuing this State's commitment to universal service, the Commission shall, by December 31, 1996, adopt interim rules that designate the person that should be the universal service provider and to determine whether universal service should be funded through interconnection rates or through some other funding mechanism. At a time determined by the Commission to be in the public interest, the Commission shall conduct an investigation for the purpose of adopting final rules concerning the provision of universal services, and whether universal service should be funded through interconnection rates or through some other funding mechanism, and, consistent with the provisions of subsections (f4) and (f5) of this section, the person that should be the universal service provider. A local exchange company that has elected to be subject to alternative regulation under G.S. 62-133.5(m) does not have any carrier of last resort obligations.

The Commission shall make the determination required pursuant to this subsection in a manner that furthers this State's policy favoring universally available telephone service at reasonable rates.

For any circumstance not described in this subsection, a local exchange company may be granted a waiver of its carrier of last resort obligation in a subdivision or other area by the appropriate State agency based upon a showing by the local exchange company of all of the following:

History

(1931, c. 455; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1983 (Reg. Sess., 1984), c. 1043, s. 2; 1985, c. 676, s. 9; c. 680; 1987, c. 445, s. 1; 1989, c. 451, ss. 1, 2; 1995, c. 27, s. 4; 1995 (Reg. Sess., 1996), c. 753, s. 1; 1997-207, s. 1; 1998-180, ss. 1, 2; 1998-212, s. 15.8B; 1999-112, s. 1; 2001-252, s. 1; 2001-502, s. 1; 2002-14, s. 1; 2003-99, s. 1; 2003-173, s. 1; 2004-143, s. 7; 2005-385, ss. 1, 2; 2009-202, s. 1; 2009-279, s. 1; 2011-52, s. 1; 2011-252, s. 4; 2017-10, s. 2.2(b); 2017-172, s. 2; 2019-56, s. 1; 2021-23, s. 27(b).)

Cross References. - As to necessity for certificate of convenience and necessity for housing projects, see G.S. 157-28.

Editor's Note. - This section, as amended by Session Laws 1995, c. 27, s. 4, which added subsections (f1), (f2), and (f3), does not contain a subsection (f).

Session Laws 2003-173, which, in s. 1, inserted the fourth sentence in subsection (g), in s. 2 provides: "In enacting Section 1 of this act, it is the intent of the General Assembly to promote water conservation while protecting public health, safety, welfare, and the environment and avoiding unduly burdensome requirements on consecutive water systems. Section 1 of this act shall not be construed to impose any requirement on a supplying water system other than the requirements that apply to the water system on the date this act becomes effective and that would apply to the supplying water system if a consecutive water system had not been authorized."

The definition for "Communications service" as enacted by Session Laws 2009-202, s. 1, was originally designated as subdivision (f6)(4), and was redesignated as subdivision (f6)(1a) at the direction of the Revisor of Statutes to maintain alphabetical order.

Effect of Amendments. - Session Laws 2004-143, s. 7, effective August 1, 2004, rewrote subsection (g).

Session Laws 2005-385, ss. 1 and 2, effective September 13, 2005, in the last paragraph of subsection (f1), substituted "Except as provided ... July 1, 1995." for "Each local exchange company shall be the universal service provider in the area in which it is certificated to operate on July 1, 1995, until otherwise determined by the Commission." in the first sentence, deleted "the person that should be the universal service provider" following "provision of universal" in the third sentence, and added "and, consistent with ... service provider." at the end of the last sentence; added subsections (f4) through (f6); and made minor punctuation changes. For applicability, see the Editor's Notes.

Session Laws 2009-202, s. 1, effective June 26, 2009, rewrote subsection (f1); added the last sentence in subsection (f3); rewrote subsection (f4); in subsection (f5), substituted "serving the subdivision or other area pursuant to subsection (f4) of this section" for "that entered into the agreement"' in the first sentence; and in subsection (f6), added the definition of "Communications service."

Session Laws 2011-52, s. 1, effective April 26, 2011, added the last sentence in the next-to-last paragraph of subsection (f1).

Session Laws 2011-252, s. 4, effective October 1, 2011, and applicable to leases entered into on or after that date, added subsection (h).

Session Laws 2017-10, s. 2.2(b), effective May 4, 2017, substituted "leased premises" for "same contiguous premises" in subsection (g); substituted "leased premises are contiguous dwelling units built" for "contiguous premises were built" in subdivision (g)(1a); rewrote subsection (g)(3), which read: "The Commission shall issue rules to define contiguous premises and to implement this subsection. In issuing the rule to define contiguous premises, the Commission shall consider contiguous premises where manufactured homes, as defined in G.S. 143-145(7), or spaces for manufactured homes are rented"; added subsection (g)(4a); and made punctuation changes.

Session Laws 2017-172, s. 2, effective July 21, 2017, substituted "lessee" or variants for "tenant" or variants throughout subsection (g); substituted "lessor's" for "landlord's" in the second sentence of subdivision (g)(1a); in subdivision (g)(4a) substituted "dwellings" for "homes" twice, made a minor punctuation change, and substituted "an approval by the Commission" for "single Commission approval."; in subdivision (g)(4a)a, substituted "served." for "served, which shall be updated annually with the Commission.", and added the second sentence; in subsection (h), substituted "single-family dwelling, residential building, or multiunit apartment" for "residential building" and substituted "providing electric service to each lessee." for "providing electric service to each tenant when the lessor has a separate lease for each bedroom in the unit."; substituted "leased premises" for "residential building or complex" in subdivision (h)(2); inserted "When the lessor of a residential building or multiunit apartment complex has a separate lease for each bedroom in the unit," at the beginning of subdivision (h)(4)a; substituted "leased premises" for "unit" in subdivision (h)(4)b; added subdivision (h)(7a); and added subsection (i).

Session Laws 2019-56, s. 1, effective June 26, 2019, added subdivision (g)(1b).

Session Laws 2021-23, s. 27(b), effective October 1, 2021, added subsection (j).

Legal Periodicals. - See legislative survey, 21 Campbell L. Rev. 323 (1999).

For article, "Franchise Territories; A Community Standard," see 45 Wake Forest L. Rev. 779 (2010).

CASE NOTES

I. IN GENERAL.

The basis for the requirement of a certificate of public convenience and necessity, as a prerequisite to the right to serve, is the adoption, by the General Assembly, of the policy that, nothing else appearing, the public is better served by a regulated monopoly than by competing suppliers of the service. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

Requirement Curtails Competition. - Regarding public utilities, competition, deemed unnecessary, is curtailed by the requirement that one desiring to engage in such business procure from the Utilities Commission a certificate of public convenience and necessity. In re Certificate of Need for Aston Park Hosp., 282 N.C. 542, 193 S.E.2d 729 (1973).

By this section the State has granted to the utility company a legal monopoly upon a service vital to the economic well-being and the domestic life of the people of a large territory. This franchise is a property right of great value. Normally, when the grantee sells its business to another company, the monopolistic franchise command a substantial price, over and above the exchange value of the physical properties transferred with it. Thus, the value of the franchise enters into and affects the market price of the utility's stock. It does not, however, enter into the computation of the utility's rate base. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

This State has adopted the policy of granting a telephone company a monopoly upon the rendering of telephone service within its service area. State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

But nothing in this Chapter confers upon a telephone company a monopoly upon advertising by its business subscribers. State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

Standing to Contest Application for Certificate. - Plaintiff utilities which, by virtue of their contiguity to subdivision were in a superior position to any other utility in the area to provide service to the development since no other competitor would be able to provide for subdivision without first obtaining a certificate, and in the event that another company sought a certificate, plaintiffs would be afforded the opportunity to contest the application, had a legitimate expectation of entitlement sufficient to give them a protectible interest so as to challenge city's provision of water to the subdivision. Quality Water Supply, Inc. v. City of Wilmington, 97 N.C. App. 400, 388 S.E.2d 608, cert. denied, 326 N.C. 597, 393 S.E.2d 881, 393 S.E.2d 882 (1990).

Access Charge Tariff Within Authority of Commission. - Considering the evidence supporting the view that access charge tariff was calculated to reimburse local exchange companies (LECs) for having to provide additional connection facilities to local networks, payments could not be viewed as mere increased revenues for the LECs, but to provide funds to set off those expenditures that the LECs were required to make to provide additional facilities to handle additional carrier access. The imposition of the access charge tariff was within the authority granted to the Commission by the 1984 amendments to this section. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Plan for Compensation to Local Exchange Companies for Lost Revenues During Transition - Not Invalid. - Plan requiring compensation to local exchange companies for lost revenues during transition period did not violate the equal protection clause or the commerce clause, nor conflict with federal antitrust and communications objectives. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Same - Not a Penalty or Damages. - Plan requiring compensation to local exchange companies for lost revenues during transition period did not impose a "penalty" or constitute money damages, and could more appropriately be considered as a prerequisite to receiving a certificate. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Same - Statutorily Authorized. - Plan requiring compensation to local exchange companies for lost revenues during transition period was reasonably calculated to provide protection for the local exchange customers, and was a proper "term" or "condition" of certification which was consistent with the public interest. The plan was therefore statutorily authorized. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

Water Company "Occupies" Through Presence of Water Lines. - Subsection (a) of this section requires only that a company "occupy" an area not being served by another utility. A water company "occupies" through the presence of its water lines in the territory. Quality Water Supply, Inc. v. City of Wilmington, 97 N.C. App. 400, 388 S.E.2d 608, cert. denied, 326 N.C. 597, 393 S.E.2d 881, 393 S.E.2d 882 (1990).

Order for Cellular Carriers to Pay Access Charges Held Proper. - The Utilities Commission did not err by ordering cellular carriers to pay access charges to local exchange companies when providing wide area call reception to their cellular customers. State ex rel. Utilities Comm'n v. Centel Cellular Co., 103 N.C. App. 731, 407 S.E.2d 257 (1991).

In adjudication between two competing certificate applicants, it is for the Utilities Commission to weigh and balance a myriad of factors in an effort to protect the interests and welfare of the general public. State ex rel. Utils. Comm'n v. Piedmont Natural Gas Co., 346 N.C. 558, 488 S.E.2d 591 (1997).

Applied in State ex rel. Utils. Comm'n v. Town of Pineville, 17 N.C. App. 522, 195 S.E.2d 76 (1973); State ex rel. Utils. Comm'n v. General Tel. Co., 17 N.C. App. 727, 195 S.E.2d 311 (1973); State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Cited in State ex rel. Utils. Comm'n v. Town of Pineville, 13 N.C. App. 663, 187 S.E.2d 473 (1972); Secretary of Revenue v. Carolina Tel. & Tel. Co., 81 N.C. App. 240, 344 S.E.2d 46 (1986); State ex rel. Utils. Comm'n v. North Carolina Elec. Membership Corp., 105 N.C. App. 136, 412 S.E.2d 166 (1992); State ex rel. Utilities Comm'n v. MCI Telecommunications Corp., 132 N.C. App. 625, 514 S.E.2d 276 (1999); Neil v. Kuester Real Estate Servs., 237 N.C. App. 132, 764 S.E.2d 498 (2014).

II. APPLICABILITY.

This section does not apply to municipal corporations. Town of Grimesland v. City of Washington, 234 N.C. 117, 66 S.E.2d 794 (1951).

A municipal corporation in the operation of a municipally owned electric power plant with transmission lines extended to supply consumers beyond its corporate limits is not required under this section to obtain from the Utilities Commission a certificate of public convenience and necessity before it can lawfully operate. Town of Grimesland v. City of Washington, 234 N.C. 117, 66 S.E.2d 794 (1951); Pee Dee Elec. Membership Corp. v. Carolina Power & Light Co., 253 N.C. 610, 117 S.E.2d 764 (1961).

This section is not applicable to an electric membership corporation organized under the provisions of G.S. 117-6 to 117-26. Carolina Power & Light Co. v. Johnston County Elec. Membership Corp., 211 N.C. 717, 192 S.E. 105 (1937); Pitt & Greene Elec. Membership Corp. v. Carolina Power & Light Co., 255 N.C. 258, 120 S.E.2d 749 (1961).

Certificate Not Required for Business Other Than Public Utility. - One does not need a certificate of public convenience and necessity in order to engage in a business which is not that of a "public utility" as defined in G.S. 62-3(23). State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part and rev'd in part on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

Nor Before City Issues Franchise. - Even if a television cable company is a "public utility" as defined in G.S. 62-3, it is not required to obtain from the Utilities Commission a certificate of public convenience and necessity before a franchise is issued by a city to it. Shaw v. City of Asheville, 269 N.C. 90, 152 S.E.2d 139 (1967).

But Certificate Is Required Before Utility Commences Construction or Operation. - A certificate of public convenience and necessity from the Utilities Commission is required by this section before a public utility may commence construction of its plant or operation of its business. Shaw v. City of Asheville, 269 N.C. 90, 152 S.E.2d 139 (1967).

III. PUBLIC UTILITY.

.

The status of an entity as a public utility, entitled to the rights conferred by statute and subject to the jurisdiction of the Commission, does not depend upon whether it has secured a certificate of public convenience and necessity, pursuant to this section, but is determined instead according to whether it is, in fact, operating a business defined by the legislature as a public utility. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

If an entity is, in fact, operating as a public utility, it is subject to the regulatory powers of the Commission, notwithstanding the fact that it has failed to comply with this section before beginning its operation. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1967).

Issuance of Certificate a Nullity If Applicant Is Not Public Utility. - If an applicant's proposed service is not within the definition of "public utility" contained in G.S. 62-3(23), the issuance of a certificate of public convenience and necessity by the Commission to the applicant would be a nullity. It would not supply a basis for a further order conferring upon the applicant a right which may be granted only to a public utility. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

And in Excess of Commission Authority. - To grant a certificate of public convenience and necessity to conduct a business which is not a public utility, within the definition of the statute, would be both arbitrary and in excess of the statutory authority of the Commission. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

And Would Not Transform Ordinary Business into Public Utility. - The issuance of a certificate of public convenience and necessity by the Commission does not transform an ordinary business into a public utility, so as to entitle its operator to the rights of a public utility, or so as to impose upon him the duties and limitations of a public utility. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Definition of Public Utility Cannot Be Extended. - Neither the Commission nor the Supreme Court has authority to add to the types of business defined by the legislature as public utilities. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Neither a telephone answering nor a message relaying service is a public utility within the purview of G.S. 62-3(23). State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

IV. CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

.

Finding of Both Convenience and Public Need Is Required. - A finding by the Commission that the rendering of the proposed service by an applicant would be a convenience to the public, even if supported by competent and substantial evidence, is not an adequate basis for an order granting the applicant a certificate of public convenience and necessity. To entitle the applicant to such a certificate it is, of course, not necessary for him to show, and the Commission to find, that the proposed service is necessary in the sense of being indispensable. Nevertheless, a mere showing of convenience is not sufficient. There must be an element of public need for the proposed service by the applicant in the area. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Public Convenience and Necessity Must Require Proposed Operation. - The Commission is authorized to issue a certificate of public convenience and necessity if, but only if, the Commission has made findings of fact, supported by competent, material, and substantial evidence, which findings, in turn, support the conclusion that public convenience and necessity "require or will require" the proposed operation by the applicant. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966).

Evidence Held to Show Convenience and Necessity of Services. - Evidence before the Commission indicating that a number of the residences served by applicant's water and sewer systems were situated on quarter-acre lots, which were of insufficient size to support both a well and septic system, and that the occupants of these residences, who were currently among appellant's customers, had no alternative means of water supply or sewage disposal other than the service provided by appellant, clearly supported the conclusion not only that appellant's services constituted a convenience to that segment of the public who used them, but also that such services were necessary to the safety and health of the public. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Commission's order that appellant apply for a certificate of public convenience and necessity was unnecessary where the Commission had already concluded that appellant's application to abandon service should be denied. Instead, in such a case, the Commission should proceed to establish the territory to be served by appellant, issue the certificate (franchise), establish the rates to be charged for the services, and, if necessary, exercise its statutory powers and authority to compel compliance with its lawful orders. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

The power of eminent domain is inherent in the certificate of public convenience and necessity. State ex rel. Utils. Comm'n v. Edmisten, 40 N.C. App. 109, 252 S.E.2d 516 (1979), aff'd in part and rev'd in part on other grounds, 299 N.C. 432, 263 S.E.2d 583 (1980).

A certificate of public convenience and necessity to render telephone service grants the right to adopt new methods of telephonic communications, including a mobile radio telephone service. State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

A certificate of public convenience and necessity, which authorizes its holder to render "telephone service" does not limit the holder to the practice of the art of telephony as it was known and practiced on the date the certificate was issued, nor to the use therein of devices, equipment and methods then in use. Obviously, it is the intent of such a certificate to authorize the holder to improve its service by adopting and using new and improved devices and methods for telephonic communication. State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

Order Held Not to Create a Vested Property Right to Provide Service. - The order of the Commission relating to the provision of intraLATA service by MCI via its own facilities after January 1, 1987, did not give MCI a vested property right of which it was unconstitutionally deprived by the Commission's failure to allow facilities-based intraLATA competition on January 1, 1987. Before MCI could have the right to provide intraLATA service via its own facilities, the Commission would have to issue a certificate of authority to MCI, and the Commission could not issue this certificate without making the requisite findings of fact pursuant to subsection (b) of this section. State ex rel. Utils. Comm'n v. Public Staff, 89 N.C. App. 319, 365 S.E.2d 638 (1988).

V. DUPLICATE SERVICES.

.

Services Need Not Be Identical to Give Utility Serving Area Prior Right. - Two services need not be identical in every respect in order to give the utility already serving the area the prior right. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 367 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

G.S. 62-42 must be construed in connection with this section, which requires the issuance of a certificate of public convenience and necessity to construct new facilities except where such construction is into territory contiguous to that already occupied and not receiving similar service from another public utility. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

Commission Is Without Authority to Compel Duplicate Telephone Service. - A reading of G.S. 62-42 in pari materia with this section results in the determination that the Commission does not have the authority to compel a public utility to provide local exchange service to an area which is already receiving such service from another public utility. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

To order a telephone company to render service to an area already occupied by another telephone company would foster duplication, wastefulness, and unwarranted competition, all of which are repugnant to the avowed policy of the public utility law. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 21 N.C. App. 182, 204 S.E.2d 27, cert. denied, 285 N.C. 596, 205 S.E.2d 726 (1974).

Finding Necessary for Granting Certificate to Competitor. - The requirement of a certificate of public convenience and necessity is not an absolute prohibition of competition between public utilities rendering the same service. There is, however, inherent in this requirement the concept that, once a certificate is granted which authorizes the holder to render the proposed service within the geographic area in question, a certificate will not be granted to a competitor in the absence of a showing that the utility already in the field is not rendering and cannot or will not render the specific service in question. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).

Commission Should Have Denied Application Where Proposal to Render Substantially Same Service. - Where a public utility had a certificate of convenience and necessity for telephone service in a certain area and was ready and able to provide such area a mobile radio service, the Utilities Commission should have denied an application for a certificate of public convenience and necessity to an applicant who proposed to render substantially the same mobile radio service in the area; the fact that the applicant proposed to offer an electronic personal paging service as an auxiliary to its mobile radio service was not a sufficient difference to justify the issuance of the certificate, when it appeared that the Commission could compel the established utility to install such a service when the public convenience so required. State ex rel. Utils. Comm'n v. Two Way Radio Serv., Inc., 272 N.C. 591, 158 S.E.2d 855 (1968).


§ 62-110.1. Certificate for construction of generating facility; analysis of long-range needs for expansion of facilities; ongoing review of construction costs; inclusion of approved construction costs in rates.

  1. Notwithstanding the proviso in G.S. 62-110, no public utility or other person shall begin the construction of any steam, water, or other facility for the generation of electricity to be directly or indirectly used for the furnishing of public utility service, even though the facility be for furnishing the service already being rendered, without first obtaining from the Commission a certificate that public convenience and necessity requires, or will require, such construction.
  2. For the purpose of subsections (a) and (d) of this section, "public utility" shall include any electric membership corporation operating within this State, and the term "public utility service" shall include the service rendered by any such electric membership corporation.
  3. The Commission shall develop, publicize, and keep current an analysis of the long-range needs for expansion of facilities for the generation of electricity in North Carolina, including its estimate of the probable future growth of the use of electricity, the probable needed generating reserves, the extent, size, mix and general location of generating plants and arrangements for pooling power to the extent not regulated by the Federal Energy Regulatory Commission and other arrangements with other utilities and energy suppliers to achieve maximum efficiencies for the benefit of the people of North Carolina, and shall consider such analysis in acting upon any petition by any utility for construction. In developing such analysis, the Commission shall, as it deems necessary, confer and consult with the public utilities in North Carolina, the utilities commissions or comparable agencies of neighboring states, the Federal Energy Regulatory Commission and other agencies having relevant information and may participate as it deems useful in any joint boards investigating generating plant sites or the probable need for future generating facilities. In addition to such reports as public utilities may be required by statute or rule of the Commission to file with the Commission, any such utility in North Carolina may submit to the Commission its proposals as to the future needs for electricity to serve the people of the State or the area served by such utility, and insofar as practicable, each such utility, the Public Staff, intervenors, and the Attorney General may attend or be represented at any formal conference conducted by the Commission in developing a plan for the future requirements of electricity for North Carolina or this region. In the course of making the analysis and developing the plan, the Commission shall conduct a public hearing on such plan in the year a biennial integrated resource plan is filed and may hold a public hearing on such plan in a year that an annual update of an integrated resource plan is filed. Each year, the Commission shall submit to the Governor and to the appropriate committees of the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources a report of its analysis and plan, the progress to date in carrying out such plan, and the program of the Commission for the ensuing year in connection with such plan.
  4. In acting upon any petition for the construction of any facility for the generation of electricity, the Commission shall take into account the applicant's arrangements with other electric utilities for interchange of power, pooling of plant, purchase of power and other methods for providing reliable, efficient, and economical electric service.
  5. As a condition for receiving a certificate, the applicant shall file an estimate of construction costs in such detail as the Commission may require. The Commission shall hold a public hearing on each application and no certificate shall be granted unless the Commission has approved the estimated construction costs and made a finding that construction will be consistent with the Commission's plan for expansion of electric generating capacity. A certificate for the construction of a coal or nuclear facility shall be granted only if the applicant demonstrates and the Commission finds that energy efficiency measures; demand-side management; renewable energy resource generation; combined heat and power generation; or any combination thereof, would not establish or maintain a more cost-effective and reliable generation system and that the construction and operation of the facility is in the public interest. In making its determination, the Commission shall consider resource and fuel diversity and reasonably anticipated future operating costs. Once the Commission grants a certificate, no public utility shall cancel construction of a generating unit or facility without approval from the Commission based upon a finding that the construction is no longer in the public interest.
  6. Upon the request of the public utility or upon its own motion, the Commission may review the certificate to determine whether changes in the probable future growth of the use of electricity indicate that the public convenience and necessity require modification or revocation of the certificate. If the Commission finds that completion of the generating facility is no longer in the public interest, the Commission may modify or revoke the certificate.
  7. The public utility shall submit a progress report and any revision in the cost estimate for the construction approved under subsection (e) of this section during each year of construction. Upon the request of the public utility or upon its own motion, the Commission may conduct an ongoing review of construction of the facility as the construction proceeds. If the Commission approves any revised construction cost estimate and finds that incurrence of the cost of that portion of the construction of the facility under review was reasonable and prudent, the certificate shall remain in effect. If the Commission disapproves any part of the revised cost estimate or finds that the incurrence of the cost of that portion of the construction of the facility then under review was unreasonable or imprudent, the Commission may modify or revoke the certificate.
  8. The public utility shall recover through rates in a general rate case conducted pursuant to G.S. 62-133 the actual costs it has incurred in constructing a generating facility in reliance on a certificate issued under this section as provided in this subsection, unless new evidence is discovered (i) that could not have been discovered by due diligence at an earlier time and (ii) that reasonably tends to show that a previous determination by the Commission that a material item of cost was just and reasonable and prudently incurred was erroneous. If the Commission determines that evidence has been submitted that meets the requirements of this subsection, the public utility shall have the burden of proof to demonstrate that the material item of cost was in fact just and reasonable and prudently incurred.
    1. When a facility has been completed, and the construction of the facility has been subject to ongoing review under subsection (f) of this section, the reasonable and prudent costs of construction approved by the Commission during the ongoing review shall be included in the public utility's rate base without further review by the Commission.
    2. If a facility has not been completed, and the construction of the facility has been subject to ongoing review under subsection (f) of this section, the reasonable and prudent costs of construction approved by the Commission during the ongoing review shall be included in the public utility's rate base without further review by the Commission.
    3. If a facility is under construction or has been completed and the construction of the facility has not been subject to ongoing review under subsection (f) of this section, the costs of construction shall be included in the public utility's rate base if the Commission finds that the incurrence of these costs is reasonable and prudent.
  9. If the construction of a facility is cancelled, including cancellation as a result of modification or revocation of the certificate under subsection (e1) of this section, and the construction of the facility has been subject to ongoing review under subsection (f), absent newly discovered evidence (i) that could not have been discovered by due diligence at an earlier time and (ii) that reasonably tends to show that a previous determination by the Commission that a material item of cost was just and reasonable and prudently incurred was erroneous, the public utility shall recover through rates in a general rate case conducted pursuant to G.S. 62-133 the costs of construction approved by the Commission during the ongoing review that were actually incurred prior to cancellation, amortized over a reasonable time as determined by the Commission. In the general rate case, the Commission shall make any adjustment that may be required because costs of construction previously added to the utility's rate base pursuant to subsection (f1) of this section are removed from the rate base and recovered in accordance with this subsection. Any costs of construction actually incurred, but not previously approved by the Commission, shall be recovered only if they are found by the Commission to be reasonable and prudent. If the Commission determines that evidence has been submitted that meets the requirements of this subsection, the public utility shall have the burden of proof to demonstrate that the material item of cost was just and reasonable and prudently incurred.
  10. If the construction of a facility is cancelled, including cancellation as a result of the modification or revocation of the certificate under subsection (e1) of this section, and the construction of the facility has not been subject to ongoing review under subsection (f) of this section, the public utility shall recover through rates in a general rate case conducted pursuant to G.S. 62-133 the costs of construction that were actually incurred prior to the cancellation and are found by the Commission to be reasonable and prudent, amortized over a reasonable time as determined by the Commission. In the general rate case, the Commission shall make any adjustment that may be required because costs of construction previously added to the utility's rate base pursuant to subsection (f1) of this section are removed from the rate base and recovered in accordance with this subsection.
  11. The certification requirements of this section shall not apply to (i) a nonutility-owned generating facility fueled by renewable energy resources under two megawatts in capacity; (ii) to persons who construct an electric generating facility primarily for that person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation; or (iii) a solar energy facility or a community solar energy facility, as provided by and subject to the limitations of Article 6B of this Chapter. However, such persons shall be required to report the proposed construction of the facility and the completion of the facility to the Commission and the interconnecting public utility. Such reports shall be for informational purposes only and shall not require action by the Commission or the Public Staff.
  12. Expired pursuant to its own terms, effective January 1, 2011.

History

(1965, c. 287, s. 2; 1975, c. 780, s. 1; 1979, c. 652, s. 2; 2007-397, s. 6; 2009-390, s. 1(b); 2013-187, s. 2; 2015-241, s. 14.30(u); 2015-264, s. 11; 2017-57, s. 14.1(o); 2017-192, s. 6(c); 2021-23, s. 12.)

Local Modification. - Buncombe: 2015-110, s. 1 (as to construction of generating facility at site of Asheville Steam Electric Generating Plant).

Editor's Note. - Session Laws 2009-390, s. 1(a), provides: "The General Assembly makes the following findings:

"(1) In 2002, North Carolina enacted S.L. 2002-4, the Clean Smokestacks Act, with the goal of improving air quality in the State.

"(2) With the enactment of the Clean Smokestacks Act, North Carolina became a national leader in multipollutant air emissions reduction strategies and has experienced significant reductions in oxides of nitrogen (NOx) and sulfur dioxide (SO2), and, as a co-benefit, mercury.

"(3) Duke Energy and Progress Energy, the investor-owned public utilities governed by the Clean Smokestacks Act, actively participated in the negotiations that led to the enactment of the Clean Smokestacks Act and recommended substantial emissions reductions requirements and an aggressive timeline for achieving compliance with those requirements.

"(4) Both Duke Energy and Progress Energy have produced emissions reductions greater than and sooner than required by the Clean Smokestacks Act.

"(5) The retirement of coal-fired generating units and installation of generating units that use natural gas as the primary fuel will reduce emissions of oxides of nitrogen (NOx) and sulfur dioxide (SO2) more than would the installation of sulfur dioxide (SO2) emissions controls on the coal-fired generating units.

"(6) The retirement of coal-fired generating units and installation of generating units that use natural gas as the primary fuel will reduce emissions of carbon dioxide (CO2) and mercury (Hg) significantly more than would the installation of sulfur dioxide (SO2) emissions controls on the coal-fired generating units.

"(7) The retirement of coal-fired generating units that are owned and operated by Progress Energy and located in eastern North Carolina and the installation of generating units that use natural gas as their primary fuel to replace them will reduce emissions of oxides of nitrogen (NOx), sulfur dioxide (SO2), carbon dioxide (CO2), and mercury (Hg) more than would the installation of sulfur dioxide (SO2) emissions controls on the older coal-fired generating units."

Effect of Amendments. - Session Laws 2007-397, s. 6, effective January 1, 2008, substituted "facilities; ongoing review of construction costs; inclusion of approved construction costs in rates" for "facilities" in the section catchline; inserted "of subsections (a), (c), and (d)" at the beginning of subsection (b); substituted "Federal Energy Reulatory Commission" for "Federal Power Commission" throughout subsection (c); in subsection (e), substituted "a certificate" for "such certificate" in the first sentence, deleted "such" twice in the second sentence, and added the last three sentences; added subsection (e1); substituted the present provisions of subsection (f) for the former provisions which read: "The Commission shall maintain an ongoing review of such construction as it proceeds and the applicant shall submit each year during construction a progress report and any revisions in the cost estimates for the construction."; added subsections (f1) through (f3); inserted "to a nonutility-owned generating facility fueled by renewable energy resources under two megawatts in capacity or" in the first sentence of subsection (g); and made minor stylistic changes.

Session Laws 2009-390, s. 1(b), effective July 31, 2009, added subsection (h).

Session Laws 2013-187, s. 2, effective July 1, 2013, in subsection (b), deleted "(c)" and made a minor punctuation change.

Session Laws 2015-264, s. 11, effective October 1, 2015, deleted "the Southern Growth Policies Board" following "the Federal Energy Regulatory Commission" in the second sentence of subsection (c).

Session Laws 2017-57, s. 14.1(o), effective July 1, 2017, substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "General Assembly" in subsection (c).

Session Laws 2017-192, s. 6(c), effective July 27, 2017, in subsection (g), inserted "(i)", substituted "capacity; (ii)" for "capacity or", and substituted "or (iii) a solar energy facility or a community solar energy facility, as provided by and subject to the limitations of Article 6B of this Chapter. However, such persons shall be required to report the proposed construction of the facility and the completion of the facility to the Commission and the interconnecting public utility. Such reports shall be for informational purposes only and shall not require action by the Commission or the Public Staff." for "provided, however, that such persons shall, nevertheless, be required to report to the Utilities Commission the proposed construction of such a facility before beginning construction thereof."

Session Laws 2021-23, s. 12, effective May 17, 2021, in subsection (c), inserted "as it deems necessary" near the beginning of the second sentence, and, in the third sentence, inserted "the Public Staff, intervenors" near the middle and substituted "conduct a public hearing on such plan in the year a biennial integrated resource plan is filed and may hold a public hearing on such plan in a year that an annual update of an integrated resource plan is filed" for "conduct one or more public hearings" at the end.

Legal Periodicals. - For article, "Seeing Green: North Carolina's Clean Energy Plan, the Social Cost of Carbon, and a Way Forward Under a Least-Cost Framework," see 99 N.C. L. Rev. Addendum 59 (2020).

CASE NOTES

This section was enacted to help curb overexpansion of generating facilities beyond the needs of the service area. To this end, the General Assembly used the term "public convenience and necessity" to define the standard to be applied by the Utilities Commission to proposed facilities. State ex rel. Utils. Comm'n v. High Rock Lake Ass'n, 37 N.C. App. 138, 245 S.E.2d 787, cert. denied, 295 N.C. 646, 248 S.E.2d 257 (1978).

The purpose of requiring a certificate of public convenience and necessity before a generating facility can be built is to prevent costly overbuilding. Environmental concerns were generally left to other regulatory agencies, except as they affect the cost and efficiency of the proposed generating facility. State ex rel. Utils. Comm'n v. High Rock Lake Ass'n, 37 N.C. App. 138, 245 S.E.2d 787, cert. denied, 295 N.C. 646, 248 S.E.2d 257 (1978).

Advance Certification of Facilities in Other States Not Contemplated. - This section does not appear to contemplate advance certification by the North Carolina Utils. Commission of facilities built in other states. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Public convenience and necessity is based on an element of public need for the proposed service. State ex rel. Utils. Comm'n v. High Rock Lake Ass'n, 37 N.C. App. 138, 245 S.E.2d 787, cert. denied, 295 N.C. 646, 248 S.E.2d 257 (1978).

Subdivision (b)(1) of G.S. 62-133 does not require the Commission to make new findings on the need for the construction. Before any public utility begins the construction of a facility for generating electricity for use by the public it must first obtain from the Commission a certificate stating that public convenience and necessity requires, or will require such construction. Before such a certificate can be granted the applicant must file an estimate of construction costs and the Commission must hold public hearings. This procedure satisfies the argument that the construction must be necessary. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Subsection (c) of this section makes it clear that the only purpose of a least-cost planning proceeding is to assist the Utilities Commission in developing, publicizing, and keeping current an analysis of the long-range needs for expansion of facilities for the generation of electricity in North Carolina. Nowhere is it suggested in subsection (c) that the purpose of the proceeding is to issue directives which fundamentally alter a given utility's operations. State ex rel. Utils. Comm'n v. North Carolina Elec. Membership Corp., 105 N.C. App. 136, 412 S.E.2d 166 (1992).

Scope of Commission's Authority and Jurisdiction. - North Carolina Utilities Commission's dismissal of petitioner independent power producer's application and its establishment of minimum filing requirements did not constitute an impermissible deviation from the process specifically provided in this section and G.S. 62-82, and some deviation from these sections was not beyond the Commission's authority and jurisdiction. State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993), cert. denied, 335 N.C. 564, 441 S.E.2d 125 (1994).

Because the North Carolina Utilities Commission had authority to conduct a pre-sale review of proposed contracts involving sales of electricity by a utility to wholesale customers in interstate commerce under G.S. 62-110.1(a), (c), (d), its actions were not preempted by 16 U.S.C.S. §§ 824(a), (b)(1), 824e(a), (d), 824d(a), (c). State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 359 N.C. 516, 614 S.E.2d 281 (2005).

Inclusion of Facility in Another State Absent North Carolina Certificate of Necessity. - The Commission acted within the limits of its authority when it included Catawba Unit 1, located in South Carolina, in power company's rate base, even though no North Carolina certificate of necessity had been obtained prior to beginning construction thereof. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

The furnishing of electric service to an area subsequently annexed must be carried out pursuant to the 1965 Electric Act. State ex rel. Utils. Comm'n v. VEPCO, 310 N.C. 302, 311 S.E.2d 586 (1984).

The 1965 Electric Act, G.S. 160A-331 to 160A-338 and 62-110.1 to 62-110.2, does not empower or restrict municipalities in the operation of their electric systems outside their corporate limits. State ex rel. Utils. Comm'n v. VEPCO, 310 N.C. 302, 311 S.E.2d 586 (1984).

Review of Grant of Certificate. - On appeal from a decision of the Commission granting a certificate under this section, the court must look to the findings of fact and conclusions of the Commission and determine if the Commission has considered the factors required by law and if the findings of fact necessary to support granting of the certificate are supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. High Rock Lake Ass'n, 37 N.C. App. 138, 245 S.E.2d 787, cert. denied, 295 N.C. 646, 248 S.E.2d 257 (1978).

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992); In re Cube Yadkin Generation, LLC v. Duke Energy Progress, LLC, - N.C. App. - , 837 S.E.2d 144 (2019).

Opinions of Attorney General

Municipalities and counties are subject to the provisions of this section which require public utilities and other persons to obtain a certificate of public convenience and necessity prior to construction of any facility for generation of electricity. See opinion of Attorney General to Mr. Robert H. Bennink, Jr., General Counsel and Hearing Examiner, North Carolina Utilities Commission, 55 N.C.A.G. 18 (1985).

§ 62-110.2. Electric service areas outside of municipalities.

  1. As used in this section, unless the context otherwise requires, the term:
    1. "Premises" means the building, structure, or facility to which electricity is being or is to be furnished; provided, that two or more buildings, structures, or facilities which are located on one tract or contiguous tracts of land and are utilized by one electric consumer for commercial, industrial, institutional, or governmental purposes, shall together constitute one "premises," except that any such building, structure, or facility shall not, together with any other building, structure, or facility, constitute one "premises" if the electric service to it is separately metered and the charges for such service are calculated independently of charges for service to any other building, structure, or facility; and
    2. "Line" means any conductor for the distribution or transmission of electricity, other than
      1. In the case of overhead construction, a conductor from the pole nearest the premises of a consumer to such premises, or a conductor from a line tap to such premises, and
      2. In the case of underground construction, a conductor from the transformer (or junction point, if there be one) nearest the premises of a consumer to such premises.
    3. "Electric supplier" means any public utility furnishing electric service or any electric membership corporation.
  2. In areas outside of municipalities, electric suppliers shall have rights and be subject to restrictions as follows:
    1. Every electric supplier shall have the right to serve all premises being served by it, or to which any of its facilities for service are attached, on April 20, 1965.
    2. Every electric supplier shall have the right, subject to subdivision (4) of this subsection, to serve all premises initially requiring electric service after April 20, 1965, which are located wholly within 300 feet of such electric supplier's lines as such lines exist on April 20, 1965, except premises which, on said date, are being served by another electric supplier or to which any of another electric supplier's facilities for service are attached.
    3. Every electric supplier shall have the right, subject to subdivision (4) of this subsection, to serve all premises initially requiring electric service after April 20, 1965, which are located wholly within 300 feet of lines that such electric supplier constructs after April 20, 1965, to serve consumers that it has the right to serve, except premises located wholly within a service area assigned to another electric supplier pursuant to subsection (c) hereof.
    4. Any premises initially requiring electric service after April 20, 1965, which are located wholly or partially within 300 feet of the lines of one electric supplier and also wholly or partially within 300 feet of the lines of another electric supplier, as each of such supplier's lines exist on April 20, 1965, or as extended to serve consumers that the supplier has the right to serve, may be served by such one of said electric suppliers which the consumer chooses, and any electric supplier not so chosen by the consumer shall not thereafter furnish service to such premises.
    5. Any premises initially requiring electric service after April 20, 1965, which are not located wholly within 300 feet of the lines of any electric supplier and are not located partially within 300 feet of the lines of two or more electric suppliers may be served by any electric supplier which the consumer chooses, unless such premises are located wholly or partially within an area assigned to an electric supplier pursuant to subsection (c) hereof, and any electric supplier not so chosen by the consumer shall not thereafter furnish service to such premises.
    6. Any premises initially requiring electric service after April 20, 1965, which are located partially within a service area assigned to one electric supplier and partially within a service area assigned to another electric supplier pursuant to subsection (c) hereof, or are located partially within a service area assigned to one electric supplier pursuant to subsection (c) hereof and partially within 300 feet of the lines of another electric supplier, as such lines exist on April 20, 1965, or as extended to serve consumers it has the right to serve, may be served by such one of said electric suppliers which the consumer chooses, and the electric supplier not so chosen shall not thereafter furnish service to such premises.
    7. Any premises initially requiring electric service after April 20, 1965, which are located only partially within a service area assigned to one electric supplier pursuant to subsection (c) hereof and are located wholly outside the service areas assigned to other electric suppliers and are located wholly more than 300 feet from other electric suppliers' lines, may be served by any electric supplier which the consumer chooses, and any electric supplier not so chosen by the consumer shall not thereafter furnish service to such premises.
    8. Every electric supplier shall have the right to serve all premises located wholly within the service area assigned to it pursuant to subsection (c) hereof.
    9. No electric supplier shall furnish temporary electric service for the construction of premises which it would not have the right to serve under this subsection if such premises were already constructed. The construction of lines for, and the furnishing of, temporary service for the construction of premises which any other electric supplier, if chosen by the consumer, would have the right to serve if such premises were already constructed, shall not impair the right of such other electric supplier to furnish service to such premises after the construction thereof, if then chosen by the consumer; nor, unless the consumer chooses to have such premises served by the supplier which furnished the temporary service, shall the furnishing of such temporary service or the construction of a line therefor impair the right of any other electric supplier to furnish service to any other premises which, without regard to the construction of such temporary service line, it has the right to serve.
    10. No electric supplier shall furnish electric service to any premises in this State outside the limits of any incorporated city or town except as permitted by this section; provided, that nothing in this section shall restrict the right of an electric supplier to furnish electric service to itself or to exchange or interchange electric energy with, purchase electric energy from or sell electric energy to any other electric supplier.
    1. In order to avoid unnecessary duplication of electric facilities, the Commission is authorized and directed to assign, as soon as practicable after January 1, 1966, to electric suppliers all areas, by adequately defined boundaries, that are outside the corporate limits of municipalities and that are more than 300 feet from the lines of all electric suppliers as such lines exist on the dates of the assignments; provided, that the Commission may leave unassigned any area in which the Commission, in its discretion, determines that the existing lines of two or more electric suppliers are in such close proximity that no substantial avoidance of duplication of facilities would be accomplished by assignment of such area. The Commission shall make assignments of areas in accordance with public convenience and necessity, considering, among other things, the location of existing lines and facilities of electric suppliers and the adequacy and dependability of the service of electric suppliers, but not considering rate differentials among electric suppliers. (c) (1)  In order to avoid unnecessary duplication of electric facilities, the Commission is authorized and directed to assign, as soon as practicable after January 1, 1966, to electric suppliers all areas, by adequately defined boundaries, that are outside the corporate limits of municipalities and that are more than 300 feet from the lines of all electric suppliers as such lines exist on the dates of the assignments; provided, that the Commission may leave unassigned any area in which the Commission, in its discretion, determines that the existing lines of two or more electric suppliers are in such close proximity that no substantial avoidance of duplication of facilities would be accomplished by assignment of such area. The Commission shall make assignments of areas in accordance with public convenience and necessity, considering, among other things, the location of existing lines and facilities of electric suppliers and the adequacy and dependability of the service of electric suppliers, but not considering rate differentials among electric suppliers.
    2. The Commission, upon agreement of the affected electric suppliers, is authorized to reassign to one electric supplier any area or portion thereof theretofore assigned to another; and the Commission, notwithstanding the lack of such agreement, is authorized to reassign to one electric supplier any area or portion thereof theretofore assigned to another, except premises being served by the other electric supplier or to which any of its facilities for service are attached and except such portions of such area as are within 300 feet of the other electric supplier's lines, upon finding that such reassignment is required by public convenience and necessity. In determining whether public convenience and necessity requires such reassignment, the Commission shall consider, among other things, the adequacy and dependability of the service of the affected electric suppliers, but shall not consider rate differentials between such electric suppliers.
  3. Notwithstanding the provisions of subsections (b) and (c) of this section:
    1. Any electric supplier may furnish electric service to any consumer who desires service from such electric supplier at any premises being served by another electric supplier, or at premises which another electric supplier has the right to serve pursuant to other provisions of this section, upon agreement of the affected electric suppliers; and
    2. The Commission shall have the authority and jurisdiction, after notice to all affected electric suppliers and after hearing, if a hearing is requested by any affected electric supplier or any other interested party, to order any electric supplier which may reasonably do so to furnish electric service to any consumer who desires service from such electric supplier at any premises being served by another electric supplier, or at premises which another electric supplier has the right to serve pursuant to other provisions of this section, and to order such other electric supplier to cease and desist from furnishing electric service to such premises, upon finding that service to such consumer by the electric supplier which is then furnishing service, or which has the right to furnish service, to such premises, is or will be inadequate or undependable, or that the rates, conditions of service or service regulations, applied to such consumer, are unreasonably discriminatory.
  4. The furnishing of electric service in any area which becomes a part of any municipality after April 20, 1965, either by annexation or incorporation, (whether or not such area, or any portion thereof, shall have been assigned pursuant to subsection (c) of this section) shall be subject to the provisions of Part 2, Article 16 of Chapter 160A of the General Statutes, and any provisions of this section inconsistent with said Article shall not be applicable within such area after the effective date of such annexation or incorporation.

History

(1965, c. 287, s. 5; 1989 (Reg. Sess., 1990), c. 1024, s. 14.)

Legal Periodicals. - For 1984 survey of commercial law, "Utilities - Extension of Electric Service: The Municipalities' Power Play," see 63 N.C.L. Rev. 1095 (1985).

CASE NOTES

I. IN GENERAL.

Purpose. - One of the purposes of this Chapter is to vest the Utilities Commission with authority and responsibility to assign territory to electric suppliers. State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968).

Another purpose of this Chapter, and particularly subsection (b) of this section, is to declare certain rights of electric suppliers in areas outside of municipalities pending the assignment of territory. State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968).

A principal purpose of this section is to provide an orderly method for allocation of service areas as among competing suppliers of electricity and thereby to eliminate unnecessary duplication of electric line facilities. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 3 N.C. App. 318, 164 S.E.2d 895 (1968), aff'd, 275 N.C. 250, 166 S.E.2d 663 (1969).

The overriding purpose of this section is to promote the public interest, not the business of the electric membership cooperative or that of the investor-owned utility. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

The former absence of statutory provisions restricting competition between electric membership corporations and public utility suppliers of electric power gave rise to many contracts between these two types of suppliers designed to fix their respective territorial rights, which contracts, in turn, gave rise to much litigation. In the hope of putting an end to or reducing this turmoil, the 1965 legislature enacted this section, the language of which was the result of collaboration and agreement between the two types of suppliers. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

The clear purpose of Session Laws 1965, c. 287, is to prevent wasteful duplication of competing facilities, and thereby serve the public interest. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 20 N.C. App. 347, 201 S.E.2d 508, aff'd on other grounds, 285 N.C. 135, 203 S.E.2d 838 (1974).

The Territorial Assignment Act of 1965, as codified at this section and G.S. 160A-331 through 160A-338, represents an attempt to eliminate the uneconomic duplication of transmission and distribution systems bred of unbridled competition between public utilities, electric membership corporations and municipalities by designating the various competitors' rights. Morgan v. Town of Hertford, 70 N.C. App. 725, 321 S.E.2d 170 (1984).

Discretion of Utilities Commission. - In deciding complaints, the Utilities Commission is allowed discretion in fashioning a remedy; the Commission could transfer only service of one cooperative to electric utility rather than all complainants, as long as its action was not capricious or arbitrary. Dennis v. Duke Power Co., 341 N.C. 91, 459 S.E.2d 707 (1995).

Prior to the enactment of this section in 1965, there was no restraint upon competition in rural areas between electric membership corporations and public utility suppliers of electric power, except as established by contract. State ex rel. Utils. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Prior to enactment of this section, electric membership cooperatives and investor-owned public utility companies were free to compete in the rural portions of this State, in the absence of contractual restrictions upon such right, irrespective of the fact that such competition resulted in substantial duplication of power lines and facilities. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

The common-law doctrine of abandonment does not apply to the 1965 Electric Act. Duke Power Co. v. City of Morganton, 90 N.C. App. 755, 370 S.E.2d 54 (1988).

Section Passed Together with G.S. 160A-331 Through 160A-338. - This section applying to rural areas, and G.S. 160A-331 through 160A-338, applying to municipalities, were part of the same act, and both sought to eliminate the wasteful duplication of power lines by assigning territories to specific suppliers of electricity. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 20 N.C. App. 347, 201 S.E.2d 508, aff'd on other grounds, 285 N.C. 135, 203 S.E.2d 838 (1974).

Considered together, the sections cover the entire State and reflect interests of municipalities, utility companies and cooperatives. They form a unified plan for eliminating duplication of electric facilities by assigning territories to particular suppliers. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 20 N.C. App. 347, 201 S.E.2d 508, aff'd on other grounds, 285 N.C. 135, 203 S.E.2d 838 (1974).

This section controls over G.S. 160A-312 in case of a dispute regarding electrical services. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 20 N.C. App. 347, 201 S.E.2d 508, aff'd on other grounds, 285 N.C. 135, 203 S.E.2d 838 (1974).

Legislature Determines What Policy Is in Public Interest. - It is for the legislature, not for the Supreme Court or the Utilities Commission, to determine whether the policy of free competition between the suppliers of electric power, or the policy of territorial monopoly, or an intermediate policy is in the public interest. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Neither Supreme Court Nor Utilities Commission May Forbid Service Permitted by Legislature. - If the legislature has enacted a statute declaring the right of a supplier of electricity to serve, notwithstanding the availability of the service of another supplier closer to the customer, neither the Supreme Court nor the Utilities Commission may forbid service by such supplier merely because it will necessitate an uneconomic or unsightly duplication of transmission or distribution lines. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

The Commission cannot arbitrarily attach conditions to a franchise, for it must exercise its discretion in good faith in the light of existing facts and circumstances. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 5 N.C. App. 663, 169 S.E.2d 214 (1969), rev'd on other grounds, 276 N.C. 108, 171 S.E.2d 406 (1970).

Authority of Utilities Commission to Restrict Competition. - The Utilities Commission is a creature of the legislature and has no authority to restrict competition between suppliers of electricity, except insofar as that authority has been conferred upon it by statute. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Competitive Rights as to Areas Outside City Limits Not Altered. - Session Laws 1965, c. 287, including this section, did not, without more, alter the competitive rights of municipalities, investor-owned utilities and electric membership corporations to compete for patronage in areas outside the corporate limits of municipalities. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974).

An electric membership corporation and a public utility corporation are free to compete in rural areas unless forbidden by some provision of this section. State ex rel. Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968).

Except as restricted by contract, electric membership corporations and public utility companies supplying electricity are free to compete in the rural areas of this State, notwithstanding the fact that such competition may result in substantial duplication of electric power lines and other facilities. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

No Territorial Monopoly. - In the absence of a valid grant of such right by statute, or by an administrative order issued pursuant to statutory authority, and in the absence of a valid contract with its competitor or with the person to be served, a supplier of electric power or other public utility service has no territorial monopoly or other right to prevent its competitor from serving anyone who desires the competitor to do so. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Manufacturing Plant But Not Tract as "Premises". - "Premises," as that word is defined in subsection (a)(1), embraces the manufacturing plant of an electric consumer and not the tract upon which it is located; consequently, public membership corporation had no right under subsection (b)(1) to provide electric service to a plant on the ground that it had served a residence and electric signs previously located on the tract. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Power to Transfer Discretionary. - Under subsection (d)(2), once the Utilities Commission has made appropriate findings which would justify a transfer, the power of the Commission to order a transfer is discretionary. Dennis v Duke Power Co., 114 N.C. App. 272, 442 S.E.2d 104 (1994), modified, 341 N.C. 91, 459 S.E.2d 707 (1995).

Applied in State ex rel. Utils. Comm'n v. VEPCO, 310 N.C. 302, 311 S.E.2d 586 (1984).

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992).

II. MUNICIPALITY.

A municipality is not an "electric supplier," as that term is used in this section. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974); State ex rel. Utils. Comm'n v. VEPCO, 62 N.C. App. 262, 302 S.E.2d 642 (1983), rev'd on other grounds, 310 N.C. 302, 311 S.E.2d 586 (1984).

Nor Is a Municipally Owned System. - Electric power companies and electric membership corporations are defined by statute as "electric suppliers"; municipally owned systems are not so defined. State ex rel. Utils. v. Woodstock Elec. Membership Corp., 5 N.C. App. 663, 169 S.E.2d 214 (1969), rev'd on other grounds, 276 N.C. 108, 171 S.E.2d 406 (1970).

Designation of Municipality as "Electrical Supplier" Is Legislative Function. - It is for the Legislature, and not the court, to define "electric supplier" further than presently set out in subdivision (a)(3) of this section, if it intends that municipalities be so designated. State ex rel. Utils. Comm'n v. VEPCO, 62 N.C. App. 262, 302 S.E.2d 642 (1983), rev'd on other grounds, 310 N.C. 302, 311 S.E.2d 586 (1984).

Municipality Not Prohibited from Serving Customers Outside City. - Since a city is neither a "public utility" nor an electric membership corporation and therefore is not an "electric supplier," it is not prohibited from serving customers outside the city. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974).

Authority for Furnishing Service Outside Corporate Limits. - The 1965 Electric Act, appearing in G.S. 160A-331 through 160A-338 and this section, does not empower or authorize municipalities to operate electric systems outside corporate limits, nor does it restrict such service. Insofar as the General Statutes are concerned, the sole authority for, and the only restriction upon municipalities furnishing electric service outside corporate limits is found in G.S. 160A-312. Lumbee River Elec. Membership Corp. v. City of Fayetteville, 309 N.C. 726, 309 S.E.2d 209 (1983); State ex rel Utils. Comm'n v. VEPCO, 310 N.C. 302, 311 S.E.2d 586 (1984).

Concerns of Municipal Electrical System and Utility Company or Cooperative Distinguished. - The primary purpose of a municipal electrical system is to serve customers within the boundaries of the municipality, while a utility company or cooperative is chiefly concerned with customers outside the city limits. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 20 N.C. App. 347, 201 S.E.2d 508 (1967), aff'd on other grounds, 285 N.C. 135, 203 S.E.2d 838 (1974).

Only Limit on City as Supplier of Electric Service Is "Reasonable Limits" in G.S. 160A-312. - Since a municipality is not an "electric supplier" as that term is used in this section its public works commission is not prohibited from supplying electric service to a customer outside city's limits, so long as its extension of service is within "reasonable limitations," as provided for in G.S. 160A-312. South River Elec. Membership Corp. v. City of Fayetteville, 113 N.C. App. 401, 438 S.E.2d 464, cert. denied, 336 N.C. 74, 445 S.E.2d 38 (1994).

For case holding extension of city's electric system across its city limits beyond its authority, see Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974).

III. RIGHTS AND RESTRICTIONS.

.

Rights Conferred on Electric Suppliers by Subsection (b). - Subsection (b) of this section confers upon each electric supplier in the State the right, in territories outside of municipalities, to serve all "premises" being served by it on April 20, 1965, and the right to serve "premises" initially requiring service after that date, located within 300 feet of a line of such supplier and not in a territory assigned by the Utilities Commission to a different supplier pursuant to subsection (c) of this section. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

Any "premises" in territories lying outside of a municipality and more than 300 feet from the line of any electric supplier can be served, prior to an assignment of such territory by the Utilities Commission, by any electric supplier chosen by the user, and service of such premises by any other supplier is prohibited. State ex rel Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

The language of subsection (b)(5) is clear and unambiguous and presents no problem of construction. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 3 N.C. App. 318, 164 S.E.2d 895 (1968), aff'd, 275 N.C. 250, 166 S.E.2d 663 (1969).

One seeking electric service should not be denied the right to choose between vendors unless compelled by some cogent reason. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Right of Electric Supplier Chosen Under Subsection (b) to Deny Service. - Conclusion of the Utilities Commission that a consumer has the unrestricted choice of an electric supplier under subsection (b) of this section is subject to the right of the chosen electric supplier to deny the service unless required otherwise by the utilities Commission. State ex rel Utils. Comm'n v. Union Elec. Membership Corp., 3 N.C. App. 309, 164 S.E.2d 889 (1968).

Validity of Requiring Certificate of Convenience and Necessity for Extension of Facilities. - The police power of the State is broad enough to include a statute providing that a public utility company, desiring to serve a new area, must obtain from the Utilities Commission a certificate that public convenience and necessity requires the proposed extension of its distribution facilities. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Choice of Electric Supplier. - Utility department had a statutory right under this section to choose its electric supplier where the buildings and structures of the utility department facility were located on one tract or contiguous tracts of land and thus constituted one premises under subdivision (a)(1). Crescent Elec. Membership Corp. v. Duke Power Co., 126 N.C. App. 344, 485 S.E.2d 312 (1997), cert. denied, 346 N.C. 545, 488 S.E.2d 798 (1997).

IV. ASSIGNMENT.

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Construction. - Where provisions of this section relating to assignment of electric service territory in rural areas are clear and understandable on their face, the Supreme Court is not required to construe this statute in connection with other provisions of this Chapter relating to powers of the Utilities Commission to regulate public utilities. State ex rel. Utils. Comm'n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969).

Subsection (c) contemplates the assignment of a territory to a single supplier for all classes of users of electric power, nothing else appearing. However, the statutory direction that the Commission assign service areas "by adequately defined boundaries" does not compel the conclusions that the intent of the legislature was to require the Commission to choose between (1) jeopardizing the industrial development of a geographic area by assigning it exclusively to an electric membership cooperative, or (2) boxing the cooperative into the narrow strips bordering its existing lines by assigning the territory outside those strips to an investor-owned utility for all types of electric service. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

One Area May Be Assigned Jointly to Two Electric Suppliers. - The Utilities Commission did not exceed its authority under this section in assigning the same areas jointly to two electric suppliers, subject to consumers reasonable choice of supplier, since under appropriate circumstances and appropriate findings by the Commission, public convenience and necessity may require such an assignment. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 5 N.C. App. 663, 169 S.E.2d 214 (1969), rev'd on other grounds, 276 N.C. 108, 171 S.E.2d 406 (1970).

Under appropriate circumstances and appropriate findings by the Commission, public convenience and necessity may determine that some areas be assigned to two or more electric suppliers with later determination of the circumstances under which a particular electric supplier may properly extend service to a particular consumer. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 5 N.C. App. 663, 169 S.E.2d 214 (1969), rev'd on other grounds, 276 N.C. 108, 171 S.E.2d 406 (1970).

The Commission did not exceed its statutory authority in making an assignment of an area jointly to two electric suppliers. State ex rel. Utils. Comm'n v. Edgecombe-Martin County Elec. Membership Corp., 5 N.C. App. 680, 169 S.E.2d 225 (1969).

Division May Be Made on Basis of Users' Demand Level. - It is within the statutory authority of the Commission, when the public convenience and necessity so requires, to assign a territory to one supplier of electricity for service below a specified level of demand and to another supplier for service above that level of demand. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

Reassignment to Serve User Whose Demand Is Above Division Line. - Subsection (c) of this section authorizes the Commission, having determined, upon sufficient and competent evidence, that the public convenience and necessity would best be promoted by dividing the geographic area into two service areas on the basis of the users' demand levels, to permit, on the basis of public convenience and necessity, an electric membership cooperative, to which the area of the smaller demands has been assigned, to serve a user whose demand is above the division line, if that user desires to become a member of the cooperative and thus to use its service. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

Considerations in Assigning Areas to Electric Suppliers. - Subsection (c) of this section declares the purpose for which the authority to assign "areas" is conferred upon the Commission. That purpose is "to avoid unnecessary duplication of electric facilities." To accomplish this objective, the statute directs the Commission to make assignments "in accordance with public convenience and necessity." In determining whether an assignment is in accord with "public convenience and necessity," the Commission is directed to consider the "adequacy and dependability of the service of electric suppliers." It is also directed to consider "other things." State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

In assigning rural service areas to electric suppliers pursuant to this section, the Utilities Commission may consider, in addition to development of natural resources and employment opportunities, (1) the past history of service to residential, agricultural, and small commercial users in adjacent territories, (2) the capital required for supplying electric power to large users in the territory and the past experience of a supplier in serving such users, and (3) the demonstrated preference of a substantial class of potential users for one supplier over another. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

The attraction of industry to a sparsely settled rural territory, which will develop its natural resources and provide opportunity of employment to its residents, is one of the "other things" to be considered by the Commission in determining what assignment of territory to electrical suppliers will be in accord with public convenience and necessity. State ex rel. Utils. Comm'n v. Woodstock Elec. Membership Corp., 276 N.C. 108, 171 S.E.2d 406 (1970).

Right to Serve Not Exclusive. - While an electric supplier has the right to serve all premises in its assigned area, the mere grant of a right to serve is not the grant of an exclusive right to do so. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974).

The assignment of an area to an electric supplier by the Utilities Commission does not automatically preclude a city from extending its service lines into the area. Domestic Elec. Serv., Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E.2d 838 (1974).


§ 62-110.3. Bond required for water and sewer companies.

  1. No franchise may be granted to any water or sewer utility company until the applicant furnishes a bond, secured with sufficient surety as approved by the Commission, in an amount not less than ten thousand dollars ($10,000). The bond shall be conditioned upon providing adequate and sufficient service within all the applicant's service areas, including those for which franchises have previously been granted, shall be payable to the Commission, and shall be in a form acceptable to the Commission. In setting the amount of a bond, the Commission shall consider and make appropriate findings as to the following:
    1. Whether the applicant holds other water or sewer franchises in this State, and if so its record of operation,
    2. The number of customers the applicant now serves and proposes to serve,
    3. The likelihood of future expansion needs of the service,
    4. If the applicant is acquiring an existing company, the age, condition, and type of the equipment, and
    5. Any other relevant factors, including the design of the system.
  2. Notwithstanding the provisions of G.S. 62-110(a) and subsection (a) of this section, no water or sewer utility shall extend service into territory contiguous to that already occupied without first having advised the Commission of such proposed extension. Upon notification, the Commission shall require the utility to furnish an appropriate bond, taking into consideration both the original service area and the proposed extension. This subsection shall apply to all service areas of water and sewer utilities without regard to the date of the issuance of the franchise.
  3. The utility, the Public Staff, the Attorney General, and any other party may, at any time after the amount of a bond is set, apply to the Commission to raise or lower the amount based on changed circumstances.
  4. The appointment of an emergency operator, either by the superior court in accordance with G.S. 62-118(b) or by the Commission with the consent of the owner or operator, operates to forfeit the bond required by this section. The court or Commission, as appropriate, shall determine the amount of money needed to alleviate the emergency and shall order that amount of the bond to be paid to the Commission as trustee for the water or sewer system.
  5. If the person who operated the system before the emergency was declared desires to resume operation of the system upon a finding that the emergency no longer exists, the Commission shall require him to post a new bond, the amount of which may be different from the previous bond.

Any interest earned on a bond shall be payable to the water or sewer company that posted the bond.

History

(1987, c. 490, s. 2; 1995, c. 28, s. 1.)

§ 62-110.4. Alternative operator services.

The Commission shall not issue a certificate of public convenience and necessity pursuant to G.S. 62-110(b) to any interexchange carrier which the Commission has determined to have the characteristics of an alternative operator service unless the Commission shall have determined that class of interexchange carriers to be in the public interest and shall have promulgated rules to protect the public interest and to require, at a minimum, that any such interexchange carrier assure appropriate disclosure to end-users of its identity, services, rates, charges, and fees. In order to effectuate notice to end-users, the Commission may, notwithstanding any other provision of law, require that any person owning or operating a facility for the use of the travelling or transient public which has contracted with such an interexchange carrier prominently display an end-user notice provided for in the Commission's rules.

History

(1989, c. 366, s. 1.)

§ 62-110.5. Commission may exempt certain nonprofit and consumer-owned water or sewer utilities.

The Commission may exempt any water or sewer utilities owned by nonprofit membership or consumer-owned corporations from regulation under this Chapter, subject to those conditions the Commission deems appropriate, if:

  1. The members or consumer-owners of the corporation elect the governing board of the corporation pursuant to the corporation's articles of incorporation and bylaws; and
  2. The Commission finds that the organization and the quality of service of the utility are adequate to protect the public interest to the extent that additional regulation is not required by the public convenience and necessity.

History

(1997-437, s. 2.)

§ 62-110.6. Rate recovery for construction costs of out-of-state electric generating facilities.

  1. The Commission shall, upon petition of a public utility, determine the need for and, if need is established, approve an estimate of the construction costs and construction schedule for an electric generating facility in another state that is intended to serve retail customers in this State.
  2. The petition may be filed at any time after an application for a certificate or license for the construction of the facility has been filed in the state in which the facility will be sited. The petition shall contain a showing of need for the facility, an estimate of the construction costs, and the proposed construction schedule for the facility.
  3. The Commission shall conduct a public hearing to consider and determine the need for the facility and the reasonableness of the construction cost estimate and proposed construction schedule. If the Commission finds that the construction will be needed to assure the provision of adequate public utility service within North Carolina, the Commission shall approve a construction cost estimate and a construction schedule for the facility. In making its determinations under this section, the Commission may consider whether the state in which the facility will be sited has issued a certificate or license for construction of the facility and approved a construction cost estimate and construction schedule for the facility. The Commission shall issue its order not later than 180 days after the public utility files its petition.
  4. G.S. 62-110.1(f) shall apply to the construction cost estimate determined by the Commission to be appropriate, and the actual costs the public utility incurs in constructing the facility shall be recoverable through rates in a general rate case pursuant to G.S. 62-133 as provided in G.S. 62-110.1(f1).
  5. If the construction of a facility is cancelled, the public utility shall recover through rates in a general rate case conducted pursuant to G.S. 62-133 the costs of construction that were actually incurred prior to the cancellation and are found by the Commission to be reasonable and prudent, as provided in subsections (f2) and (f3) of G.S. 62-110.1.

History

(2007-397, s. 7.)

§ 62-110.7. Project development cost review for a nuclear facility.

  1. For purposes of this section, "project development costs" mean all capital costs associated with a potential nuclear electric generating facility incurred before (i) issuance of a certificate under G.S. 62-110.1 for a facility located in North Carolina or (ii) issuance of a certificate by the host state for an out-of-state facility to serve North Carolina retail customers, including, without limitation, the costs of evaluation, design, engineering, environmental analysis and permitting, early site permitting, combined operating license permitting, initial site preparation costs, and allowance for funds used during construction associated with such costs.
  2. At any time prior to the filing of an application for a certificate to construct a potential nuclear electric generating facility, either under G.S. 62-110.1 or in another state for a facility to serve North Carolina retail customers, a public utility may request that the Commission review the public utility's decision to incur project development costs. The public utility shall include with its request such information and documentation as is necessary to support approval of the decision to incur proposed project development costs. The Commission shall hold a hearing regarding the request. The Commission shall issue an order within 180 days after the public utility files its request. The Commission shall approve the public utility's decision to incur project development costs if the public utility demonstrates by a preponderance of evidence that the decision to incur project development costs is reasonable and prudent; provided, however, the Commission shall not rule on the reasonableness or prudence of specific project development activities or recoverability of specific items of cost.
  3. All reasonable and prudent project development costs, as determined by the Commission, incurred for the potential nuclear electric generating facility shall be included in the public utility's rate base and shall be fully recoverable through rates in a general rate case proceeding pursuant to G.S. 62-133.
  4. If the public utility is allowed to cancel the project, the Commission shall permit the public utility to recover all reasonable and prudently incurred project development costs in a general rate case proceeding pursuant to G.S. 62-133 amortized over a period equal to the period during which the costs were incurred, or five years, whichever is greater.

History

(2007-397, s. 7.)

§ 62-110.8. Competitive procurement of renewable energy.

  1. Each electric public utility shall file for Commission approval a program for the competitive procurement of energy and capacity from renewable energy facilities with the purpose of adding renewable energy to the State's generation portfolio in a manner that allows the State's electric public utilities to continue to reliably and cost-effectively serve customers' future energy needs. Renewable energy facilities eligible to participate in the competitive procurement shall include those facilities that use renewable energy resources identified in G.S. 62-133.8(a)(8) but shall be limited to facilities with a nameplate capacity rating of 80 megawatts (MW) or less that are placed in service after the date of the electric public utility's initial competitive procurement. Subject to the limitations set forth in subsections (b) and (c) of this section, the electric public utilities shall issue requests for proposals to procure and shall procure, energy and capacity from renewable energy facilities in the aggregate amount of 2,660 megawatts (MW), and the total amount shall be reasonably allocated over a term of 45 months beginning when the Commission approves the program. The Commission shall require the additional competitive procurement of renewable energy capacity by the electric public utilities in an amount that includes all of the following: (i) any unawarded portion of the initial competitive procurement required by this subsection; (ii) any deficit in renewable energy capacity identified pursuant to subdivision (1) of subsection (b) of this section; and (iii) any capacity reallocated pursuant to G.S. 62-159.2. In addition, at the termination of the initial competitive procurement period of 45 months, the offering of a new renewable energy resources competitive procurement and the amount to be procured shall be determined by the Commission, based on a showing of need evidenced by the electric public utility's most recent biennial integrated resource plan or annual update approved by the Commission pursuant to G.S. 62-110.1(c).
  2. Electric public utilities may jointly or individually implement the aggregate competitive procurement requirements set forth in subsection (a) of this section and may satisfy such requirements for the procurement of renewable energy capacity to be supplied by renewable energy facilities through any of the following: (i) renewable energy facilities to be acquired from third parties and subsequently owned and operated by the soliciting public utility or utilities; (ii) renewable energy facilities to be constructed, owned, and operated by the soliciting public utility or utilities subject to the limitations of subdivision (4) of this subsection; or (iii) the purchase of renewable energy, capacity, and environmental and renewable attributes from renewable energy facilities owned and operated by third parties that commit to allow the procuring public utility rights to dispatch, operate, and control the solicited renewable energy facilities in the same manner as the utility's own generating resources. Procured renewable energy capacity, as provided for in this section, shall be subject to the following limitations:
    1. If prior to the end of the initial 45-month competitive procurement period the public utilities subject to this section have executed power purchase agreements and interconnection agreements for renewable energy capacity within their balancing authority areas that are not subject to economic dispatch or curtailment and were not procured pursuant to G.S. 62-159.2 having an aggregate capacity in excess of 3,500 megawatts (MW), the Commission shall reduce the competitive procurement aggregate amount by the amount of such exceedance. If the aggregate capacity of such renewable energy facilities is less than 3,500 megawatts (MW) at the end of the initial 45-month competitive procurement period, the Commission shall require the electric public utilities to conduct an additional competitive procurement in the amount of such deficit.
    2. To ensure the cost-effectiveness of procured new renewable energy resources, each public utility's procurement obligation shall be capped by the public utility's current forecast of its avoided cost calculated over the term of the power purchase agreement. The public utility's current forecast of its avoided cost shall be consistent with the Commission-approved avoided cost methodology.
    3. Each public utility shall submit to the Commission for approval and make publicly available at 30 days prior to each competitive procurement solicitation a pro forma contract to be utilized for the purpose of informing market participants of terms and conditions of the competitive procurement. Each pro forma contract shall define limits and compensation for resource dispatch and curtailments. The pro forma contract shall be for a term of 20 years; provided, however, the Commission may approve a contract term of a different duration if the Commission determines that it is in the public interest to do so.
    4. No more than thirty percent (30%) of an electric public utility's competitive procurement requirement may be satisfied through the utility's own development of renewable energy facilities offered by the electric public utility or any subsidiary of the electric public utility that is located within the electric public utility's service territory. This limitation shall not apply to any renewable energy facilities acquired by an electric public utility that are selected through the competitive procurement and are located within the electric public utility's service territory.
  3. Subject to the aggregate competitive procurement requirements established by this section, the electric public utilities shall have the authority to determine the location and allocated amount of the competitive procurement within their respective balancing authority areas, whether located inside or outside the geographic boundaries of the State, taking into consideration (i) the State's desire to foster diversification of siting of renewable energy resources throughout the State; (ii) the efficiency and reliability impacts of siting of additional renewable energy facilities in each public utility's service territory; and (iii) the potential for increased delivered cost to a public utility's customers as a result of siting additional renewable energy facilities in a public utility's service territory, including additional costs of ancillary services that may be imposed due to the operational or locational characteristics of a specific renewable energy resource technology, such as nondispatchability, unreliability of availability, and creation or exacerbation of system congestion that may increase redispatch costs.
  4. The competitive procurement of renewable energy capacity established pursuant to this section shall be independently administered by a third-party entity to be approved by the Commission. The third-party entity shall develop and publish the methodology used to evaluate responses received pursuant to a competitive procurement solicitation and to ensure that all responses are treated equitably. All reasonable and prudent administrative and related expenses incurred to implement this subsection shall be recovered from market participants through administrative fees levied upon those that participate in the competitive bidding process, as approved by the Commission.
  5. An electric public utility may participate in any competitive procurement process, but shall only participate within its own assigned service territory. If the public utility uses nonpublicly available information concerning its own distribution or transmission system in preparing a proposal to a competitive procurement, the public utility shall make such information available to third parties that have notified the public utility of their intention to submit a proposal to the same request for proposals.
  6. For purposes of this section, the term "balancing authority" means the entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a balancing authority area, and supports interconnection frequency in real time, and the term "balancing authority area" means the collection of generation, transmission, and loads within the metered boundaries of the balancing authority, and the balancing authority maintains load-resource balance within this area.
  7. An electric public utility shall be authorized to recover the costs of all purchases of energy, capacity, and environmental and renewable attributes from third-party renewable energy facilities and to recover the authorized revenue of any utility-owned assets that are procured pursuant to this section through an annual rider approved by the Commission and reviewed annually. Provided it is in the public interest, the authorized revenue for any renewable energy facilities owned by an electric public utility may be calculated on a market basis in lieu of cost-of-service based recovery, using data from the applicable competitive procurement to determine the market price in accordance with the methodology established by the Commission pursuant to subsection (h) of this section. The annual increase in the aggregate amount of these costs that are recoverable by an electric public utility pursuant to this subsection shall not exceed one percent (1%) of the electric public utility's total North Carolina retail jurisdictional gross revenues for the preceding calendar year.
  8. The Commission shall adopt rules to implement the requirements of this section, as follows:
    1. Oversight of the competitive procurement program.
    2. To provide for a waiver of regulatory conditions or code of conduct requirements that would unreasonably restrict a public utility or its affiliates from participating in the competitive procurement process, unless the Commission finds that such a waiver would not hold the public utility's customers harmless.
    3. Establishment of a procedure for expedited review and approval of certificates of public convenience and necessity, or the transfer thereof, for renewable energy facilities owned by the public utility and procured pursuant to this section. The Commission shall issue an order not later than 30 days after a petition for a certificate is filed by the public utility.
    4. Establishment of a methodology to allow an electric public utility to recover its costs pursuant to subsection (g) of this section.
    5. Establishment of a procedure for the Commission to modify or delay implementation of the provisions of this section in whole or in part if the Commission determines that it is in the public interest to do so.
  9. The requirements of this section shall not apply to an electric public utility serving fewer than 150,000 North Carolina retail jurisdictional customers as of January 1, 2017.

History

(2017-192, s. 2(a).)

Editor's Note. - Session Laws 2017-192, s. 2(c) made this section effective July 27, 2017, and further provides: "The program required to be filed with the Utilities Commission pursuant to G.S. 62-110.8(a), as enacted by subsection (a) of this section, shall be filed by the electric public utility no later than 120 days after the effective date of this section, and the Commission shall issue an order to approve, modify, or deny the program no later than 90 days after the submission of the program by the electric public utility."

Session Laws 2017-192, s. 14(a), contains a severability clause.

Legal Periodicals. - For article, "Seeing Green: North Carolina's Clean Energy Plan, the Social Cost of Carbon, and a Way Forward Under a Least-Cost Framework,” see 99 N.C. L. Rev. Addendum 59 (2020).

§ 62-111. Transfers of franchises; mergers, consolidations and combinations of public utilities.

  1. No franchise now existing or hereafter issued under the provisions of this Chapter other than a franchise for motor carriers of passengers shall be sold, assigned, pledged or transferred, nor shall control thereof be changed through stock transfer or otherwise, or any rights thereunder leased, nor shall any merger or combination affecting any public utility be made through acquisition of control by stock purchase or otherwise, except after application to and written approval by the Commission, which approval shall be given if justified by the public convenience and necessity. Provided, that the above provisions shall not apply to regular trading in listed securities on recognized markets.
  2. No certificates issued under the provisions of this Chapter for motor carriers of passengers shall be sold, assigned, pledged, transferred, or control changed through stock transfer or otherwise, or any rights thereunder leased, nor shall any merger or combination affecting any motor carrier of passengers be made through acquisition of control by stock purchases or otherwise, except after application to and written approval by the Commission as in this section provided, provided that the above provisions shall not apply to regular trading in listing securities on recognized markets. The applicant shall give not less than 10 days' written notice of such application by registered mail or by certified mail to all connecting and competing carriers. When the Commission is of the opinion that the transaction is consistent with the purposes of this Chapter the Commission may, in the exercise of its discretion, grant its approval, provided, however, that when such transaction will result in a substantial change in the service and operations of any motor carrier of passengers party to the transaction, or will substantially affect the operations and services of any other motor carrier, the Commission shall not grant its approval except upon notice and hearing as required in G.S. 62-262.1 for bus companies upon an application for an original certificate. In all cases arising under the subsection it shall be the duty of the Commission to require the successor carrier to satisfy the Commission that the operating debts and obligations of the seller, assignor, pledgor, lessor or transferor, including taxes due the State of North Carolina or any political subdivision thereof are paid or the payment thereof is adequately secured. The Commission may attach to its approval of any transaction arising under the section such other conditions as the Commission may determine are necessary to effectuate the purposes of this Article.
  3. No sale of a franchise for a motor carrier of household goods shall be approved by the Commission until the seller shall have filed with the Commission a statement under oath of all debts and claims against the seller, of which such seller has any knowledge or notice, (i) for gross receipts, use or privilege taxes due or to become due the State, as provided in the Revenue Act, (ii) for wages due employees of the seller, other than salaries of officers and in the case of motor carriers, (iii) for unremitted C.O.D. collections due shippers, (iv) for loss of or damage to goods transported, or received for transportation, (v) for overcharges on property transported, and, (vi) for interline accounts due other carriers, together with a bond, if required by the Commission, payable to the State, executed by a surety company authorized to do business in the State, in an amount double the aggregate of all such debts and claims conditioned upon the payment of the same within the amount of such bond as the amounts and validity of such debts and claims are established by agreement of the parties, or by judgment. This subsection shall not be applicable to sales by personal representatives of deceased or incompetent persons, receivers or trustees in bankruptcy under court order.
  4. No person shall obtain a franchise or certificate for the purpose of transferring the same to another, and an offer of such transfer within one year after the same was obtained shall be prima facie evidence that such franchise or certificate was obtained for the purpose of sale.
  5. The Commission shall approve applications for transfer of motor carrier franchises made under this section upon finding that said sale, assignment, pledge, transfer, change of control, lease, merger, or combination is in the public interest, will not adversely affect the service to the public under said franchise, will not unlawfully affect the service to the public by other public utilities, that the person acquiring said franchise or control thereof is fit, willing and able to perform such service to the public under said franchise, and that service under said franchise has been continuously offered to the public up to the time of filing said application or in lieu thereof that any suspension of service exceeding 30 days has been approved by the Commission as provided in G.S. 62-112(b)(5). Provided, however, the Commission shall approve, without imposing conditions or limitations, applications for the transfer of a bus company franchise made under this section upon finding that the person acquiring the franchise or control of the franchise is fit, willing and able to perform services to the public under that franchise.

History

(1947, c. 1008, s. 22; 1949, c. 1132, s. 20; 1953, c. 1140, s. 3; 1957, c. 1152, s. 10; 1961, c. 472, ss. 6, 7; 1963, c. 1165, s. 1; 1967, c. 1202; 1985, c. 676, ss. 10, 11; 1995, c. 523, s. 2; 2021-23, s. 13.)

Effect of Amendments. - Session Laws 2021-23, s. 13, effective May 17, 2021, inserted "or certificate” prior to "for the purpose” and "franchise or” prior to "certificate was obtained” in subsection (d).

CASE NOTES

Showing of Public Need Not Required. - The showing of public need which G.S. 62-262(e)(1) requires of an application for a new authority is not applicable in a transfer proceeding under this section and was not written into it by subsection (a) of this section. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Subsection (e) of this section does not indicate a policy change toward protecting existing certificate holders from lawful competition. Moreover, like the test of "public convenience and necessity" in subsection (a), the requirement that the Commission find the transfer "in the public interest" does not write into the transfer approval procedure the new certificate test of public need required by G.S. 62-262(e)(1). State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Where the issue of dormancy under G.S. 62-112(c) has been raised, if the Commission finds that the franchise is not dormant, it must then determine if the criteria required by this section for approval of the transfer have been met. If the Commission finds that the franchise is dormant under G.S. 62-112(c), the application for transfer must be denied, because approval would in effect constitute the granting of a new franchise without satisfying the new authority test and other requirements of G.S. 62-262(e). State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

Test for "Public Convenience and Necessity". - The requirement of "public convenience and necessity" referred to in subsection (a) of this section is satisfied by a showing that the authority has been and is being actively applied in satisfaction of the public need which was shown to exist when the authority was originally acquired. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

The criteria "if justified by the public convenience and necessity" in subsection (a) of this section has been interpreted as a statutory basis for the test of dormancy. Where the authority has been abandoned or "dormant," the Commission has denied applications for transfer because approval would in effect be the granting of a new authority without satisfying the new authority test of public need set out in G.S. 62-262(e). Where the authority has been actively operated, the applicants for sale and transfer of motor freight carrier rights are under no burden to show through shipper witnesses that a demand and need exist. The rationale is that public convenience and necessity was shown to exist when the authority was granted or acquired, and the rebuttable presumption of law is that it continues. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Merger of electric utilities approved by the North Carolina Utilities Commission (Commission) was not contrary to public convenience and necessity because (1) testimony and G.S 62-133.8(b) and G.S. 62-133.9(b) supported the Commission's monopsony analysis, (2) the Commission considered job losses, and (3) low-income families were not harmed. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Public Convenience and Necessity for Proposed Transfers of Water and Sewer Franchises. - When the commission is adjudging public convenience and necessity in the context of proposed transfers of water and sewer franchises under subsection (a) of this section, it must inquire into all aspects of anticipated service and rates occasioned and engendered by the proposed transfer, and then determine whether the transfer will serve the public convenience and necessity. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Utility commission did not err in approving acquisition of utility's certificate of public convenience and necessity, denying inclusion of acquired utility's purchase price in the base rate, and reducing connection fees. In re Petition of Utils., Inc., 147 N.C. App. 182, 555 S.E.2d 333 (2001).

State Policy Favors Transfers of Actively Operated Motor Freight Carrier Certificates. - The policy of the State, as declared in the Public Utilities Act of 1963, clearly favors transfers of actively operated motor freight carrier certificates without unreasonable restraint. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970); State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 99, 234 S.E.2d 628 (1977).

Transfer to a More Competitive Carrier Not Prohibited. - The possibility that a transfer of authority to a more competitive carrier will adversely affect existing carriers does not make such a transfer contrary to the public interest as a matter of law. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970); State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 99, 234 S.E.2d 628 (1977).

Requirement of subsection (e) of this section that the Commission find that the proposed transfer "will not adversely affect the service to the public under said franchise" is satisfied by a determination that the proposed transferee of the franchise is capable of rendering service equal to that of the proposed transferor, and does not prohibit approval where transfer of the franchise to a more competitive hauler would have an adverse effect on existing carriers. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Bond as Condition Precedent to Commission's Approval. - This section requires as a condition precedent to the Commission's approval of the sale of a motor carrier's franchise a bond from the seller conditioned for the payment of (1) taxes, (2) wages due employees of the seller, (3) unremitted C.O.D. collections due seller, (4) "for loss or damage of goods transported or received for transportation," (5) overcharge on property transported, and (6) for interline accounts to other carriers. American Nat'l Fire Ins. Co. v. Gibbs, 260 N.C. 681, 133 S.E.2d 669 (1963), decided under this section as it stood prior to the 1963 amendment.

Question of Whether Purchaser of Water or Sewer Franchise Can Provide Better Service. - The question of whether another potential purchaser of a water or sewer franchise can provide better service is plainly relevant under the broad public convenience and necessity test of subsection (a) of this section. But such a showing would not of itself be dispositive of the issue of whether approval should be granted. When weighing the broad aspects and implications of public convenience and necessity, the Commission is cloaked with wide discretion and is not required to reject an application for transfer merely because another potential purchaser produces evidence that it might be able to do a better job. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Transfers of Utility Franchises Cannot Be Made Contingent upon Commission Approval. - Lawful transfers of ownership and control of utility franchises cannot be made contingent upon or subject to commission approval; however, in emergency situations, the Commission can issue temporary or interim orders giving conditional or temporary approval of operational control. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

This section does not permit the completion of transfers contingent upon or subject to Commission approval; the legislature, by the unambiguous terms of the statute, clearly intended to prohibit de facto transfers of franchises before the Commission has had the opportunity to pass upon the merits of the transfer under the public convenience and necessity test. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Certificate Holder Not Released from Liability for Nonperformance of Duties. - This section does not confer upon the Utilities Commission the power to release the holder of a certificate of convenience and necessity from liability for the nonperformance of public duties incident to the certificate, and the Commission possesses no such power in the absence of a delegation thereof by the legislature. Hough-Wylie Co. v. Lucas, 236 N.C. 90, 72 S.E.2d 11 (1952).

A lease of intrastate motor vehicle common carrier operating rights, approved by the Utilities Commission, does not release lessor, the holder of the certificate of convenience and necessity, from liability for nonperformance of franchise duties or torts incident to operation, and a shipper may hold lessor liable for lessee's failure to make prompt remittance of C.O.D. collections as required by G.S. 62-273. Hough-Wylie Co. v. Lucas, 236 N.C. 90, 72 S.E.2d 11 (1952).

Duty of Transferee to Render Services Called for. - Approval by the Commission of the transfer of a carrier's certificate of authority implies a duty on the part of the transferee to render the service called for in the certificate, which it must perform in a substantial manner. State ex rel. Utils. Comm'n v. Colter, 259 N.C. 269, 130 S.E.2d 385 (1963).

Right to Combine Purchased Route Authority and Original Route Authority of Purchasing Carrier. - Where an irregular carrier acquired the certificate of another irregular carrier with the authority of the Utilities Commission, the purchasing carrier had the legal right to combine or "tack" the irregular route authority purchased by it and its original irregular route authority, as there were no conditions or restrictions imposed by statute or any rule or regulation of the Commission in effect at the time of the purchase. State ex rel. Utils. Comm'n v. Forbes Transf. Co., 259 N.C. 688, 131 S.E.2d 452 (1963).

"Fit, Willing, and Able" Condition of Approval Is Relevant Under Subsection (a). - The "fit, willing, and able" condition of approval set forth in subsection (e) pertaining to transfers of motor carrier franchises is also a relevant question under the separate public convenience and necessity test of subsection (a). State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Findings Held to Obviate Application of Subsection (d). - In a proceeding to obtain approval of the Utilities Commission for the transfer of all the capital stock of a franchise carrier from one holding corporation to another, findings of the Commission, supported by substantial evidence, to the effect that the franchise carrier did not in fact obtain its franchise for the purpose of transferring it to another obviated the application of subsection (d) of this section. State ex rel. Utils. Comm'n v. Carolina Coach Co., 269 N.C. 717, 153 S.E.2d 461 (1967).

Subsection (e) Operates as Separate Test. - The plain language of subsection (e) of this section unambiguously indicates the intent of the legislature for that section to operate as a separate and distinct test, applying only to transfers of motor carrier franchises; that the broader public convenience and necessity test necessarily subsumes under it some of the same elements does not alter this fact. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Subsection (e) is inapplicable to transfer approval proceedings involving water and sewer franchises. State ex rel. Utils. Comm'n v. Village of Pinehurst, 99 N.C. App. 224, 393 S.E.2d 111 (1990), aff'd, 331 N.C. 278, 415 S.E.2d 199 (1992).

Findings Held to Support Conclusion That Transfer of Stock Was Justified. - In a proceeding to obtain approval of the Utilities Commission for the transfer of all the capital stock of a franchise carrier from one holding corporation to another, findings, supported by evidence, that the franchise carrier was conducting active operations under the franchise and that its ability to render service to the public within the limits of its franchise rights would not be adversely affected by the proposed transfer of its stock supported conclusion that the proposed sale of its stock was justified by the public convenience and necessity within the meaning of this section. State ex rel. Utils. Comm'n v. Carolina Coach Co., 269 N.C. 717, 153 S.E.2d 461 (1967).

Contract to Pay Claims Under Section as Surety Contract. - That portion of a contract under which a company obligates itself to pay any shipper or consignee claims for which the assured would be liable by the provision of this section, with stipulation that the assured should reimburse the company for any such payment, is a surety contract. American Nat'l Fire Ins. Co. v. Gibbs, 260 N.C. 681, 133 S.E.2d 669 (1963).

Electric Utility Merger Approved. - Substantial evidence supported the North Carolina Utilities Commission's approval of electric utilities' merger because ratepayers' benefits showed the merger met G.S. 62-111(a). In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Substantial evidence showed public benefits would result from a merger of electric utilities approved by the North Carolina Utilities Commission because there were significant guaranteed fuel-cost savings and possible non-fuel-cost savings, as well as commitments to support the community, job development, and low income energy assistance. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Applied in State ex rel. Utils. Comm'n v. United Tank Lines, 34 N.C. App. 543, 239 S.E.2d 266 (1977).


§ 62-112. Effective date, suspension and revocation of franchises; dormant motor carrier franchises.

  1. Franchises shall be effective from the date issued unless otherwise specified therein, and shall remain in effect until terminated under the terms thereof, or until suspended or revoked as herein provided.
  2. Any franchise may be suspended or revoked, in whole or in part, in the discretion of the Commission, upon application of the holder thereof; or, after notice and hearing, may be suspended or revoked, in whole or in part, upon complaint, or upon the Commission's own initiative, for wilful failure to comply with any provision of this Chapter, or with any lawful order, rule, or regulation of the Commission promulgated thereunder, or with any term, condition or limitation of such franchise; provided, however, that any such franchise may be suspended by the Commission upon notice to the holder or lessee thereof without a hearing for any one or more of the following causes:
    1. For failure to provide and keep in force at all times security, bond, insurance or self-insurance for the protection of the public as required in G.S. 62-268 of this Chapter.
    2. For failure to file and keep on file with the Commission applicable tariffs or schedules of rates as required in this Chapter.
    3. For failure to pay any gross receipts, use or privilege taxes due the State of North Carolina within 30 days after demand in writing from the agency of the State authorized by law to collect the same; provided, that this subdivision shall not apply to instances in which there is a bona fide controversy as to tax liability.
    4. For failure for a period of 60 days after execution to pay any final judgment rendered by a court of competent jurisdiction against any holder or lessee of a franchise for any debt or claim specified in G.S. 62-111(b) and (c).
    5. For failure to begin operations as authorized by the Commission within the time specified by order of the Commission, or for suspension of authorized operations for a period of 30 days without the written consent of the Commission, save in the case of involuntary failure or suspension brought about by compulsion upon the franchise holder or lessee.
  3. The failure of a common carrier of passengers or household goods by motor vehicles to perform any transportation for compensation under the authority of its certificate for a period of 30 consecutive days shall be prima facie evidence that said franchise is dormant and the public convenience and necessity is no longer served by such common carrier certificate. Upon finding after notice and hearing that no such service has been performed for a period of 30 days the Commission is authorized to find that the franchise is dormant and to cancel the certificate of such common carrier. The Commission in its discretion may give consideration in such finding to other factors affecting the performance of such service, including seasonal requirements of the passengers or commodities authorized to be transported, the efforts of the carrier to make its services known to the public, the equipment and other facilities maintained by the carrier for performance of such service, and the means by which such carrier holds itself out to perform such service. A proceeding may be brought under this section by the Commission on its own motion or upon the complaint of any shipper or any other carrier. The franchise of a motor carrier may be canceled under the provisions of this section in any proceeding to sell or transfer or otherwise change control of said franchise brought under the provisions of G.S. 62-111, upon finding of dormancy as provided in this section. Any motor carrier who has obtained authority to suspend operations under the provisions of G.S. 62-112(b)(5) and the rules of the Utilities Commission issued thereunder shall not be subject to cancellation of its franchise under this section during the time such suspension of operations is authorized. In determining whether such carrier has made reasonable efforts to perform service under said franchise the Commission may in its discretion give consideration to disabilities of the carrier including death of the owner and physical disabilities.
  4. This section shall be applicable to bus companies.

History

(1947, c. 1008, s. 23; 1949, c. 1132, s. 21; 1963, c. 1165, s. 1; 1967, c. 1201; 1985, c. 676, s. 12; 1995, c. 523, s. 3.)

Legal Periodicals. - For survey of 1977 law on common carriers, see 56 N.C.L. Rev. 853 (1978).

CASE NOTES

Evidence Justifying a Finding of Dormancy. - Under subsection (c) the failure to perform any transportation for compensation under the authority of the franchise for a period of 30 days is prima facie evidence that the franchise is dormant. Such evidence is sufficient to justify but not to compel a finding that the franchise is dormant. State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

Upon a prima facie showing of dormancy under subsection (c) the Commission in its discretion may then consider other factors affecting the performance of such services, the subsection listing factors which may be considered. If the Commission in its discretion considers other factors, it may find that the evidence relating to one or more of these factors rebuts the prima facie evidence of dormancy and that the franchise is not dormant. And if the evidence relating to one or more of these factors, as found by the Commission, is competent, material and substantial, the finding will not be disturbed on appeal under G.S. 62-94(b)(5). State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

Evidence Sufficient to Rebut Dormancy Case. - Evidence that transferor continuously advertised its services, that it was ready, willing and able to haul both exempt and nonexempt commodities under its franchise, and that it charged published tariff rates in hauling both exempt and nonexempt commodities, was competent, material and substantial, and was sufficient to rebut the prima facie evidence of dormancy and to support the consideration by the Commission of one or more of the "other factors" listed in subsection (c). State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

Effect on Transfer of Dormancy Finding. - Where the issue of dormancy under subsection (c) has been raised, if the Commission finds that the franchise is not dormant, it must then determine if the criteria required by G.S. 62-111 for approval of the transfer have been met. If the Commission finds that the franchise is dormant under subsection (c), the application for transfer must be denied, because approval would in effect constitute the granting of a new franchise without satisfying the new authority test and other requirements of G.S. 62-262(e). State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

When the irregular route operating authority portion of applicant's franchise certificate was suspended, any service provided under this part of the certificate naturally was suspended, so that the Commission did not err in concluding that the portion of the franchise certificate providing for irregular route authority was suspended. State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 99, 234 S.E.2d 628 (1977).

Applied in Jones v. State Farm Mut. Auto. Ins. Co., 270 N.C. 454, 155 S.E.2d 118 (1967); State ex rel. Utils. Comm'n v. United Tank Lines, 34 N.C. App. 543, 239 S.E.2d 266 (1977).

Cited in State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).


§ 62-113. Terms and conditions of franchises.

  1. Each franchise shall specify the service to be rendered and the routes over which, the fixed termini, if any, between which, and the intermediate and off-route points, if any, at which, and in case of operations not over specified routes or between fixed termini, the territory within which, a motor carrier or other public utility is authorized to operate: and there shall, at the time of issuance and from time to time thereafter, be attached to the privileges granted by the franchise such reasonable terms, conditions, and limitations as the public convenience and necessity may from time to time require, including terms, conditions, and limitations as to the extension of the route or routes of a carrier, and such terms and conditions as are necessary to carry out, with respect to the operations of a carrier or other public utility, the requirements established by the Commission under this Chapter; provided, however, that no terms, conditions, or limitations shall restrict the right of a motor carrier of household goods only to add to its equipment and facilities over the routes, between the termini, or within the territory specified in the franchises, as the development of the business and the demands of the public shall require. This subsection shall not be applicable to bus companies or their franchises.
  2. Each bus company franchise shall specify the fixed routes over which, and the fixed termini, if any, between which the bus company may operate. A franchise for bus companies engaged in charter operations may provide for fixed routes or statewide operating authority.
  3. Any broadband service provider that provides voice grade communication services within a defined service territory or franchise area, and elects to provide broadband service in areas contiguous to its service territory or franchise area, may provide such voice grade service as an incident to such broadband service to a customer when the incumbent telecommunications or cable provider is not currently providing broadband service to the customer, without violating its service territory restrictions or franchise agreement.

History

(1947, c. 1008, s. 12; 1949, c. 1132, s. 11; 1963, c. 1165, s. 1; 1985, c. 676, s. 13; 1995, c. 523, s. 4; 2009-80, s. 1.)

Effect of Amendments. - Session Laws 2009-80, s. 1, effective June 11, 2009, added subsection (c).

CASE NOTES

The Commission need not approve or reject an application as submitted. It may attach to the certificate granted such reasonable terms, conditions and limitations as the public convenience and necessity may require. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Obligations Inherent in Acceptance of Certificate. - Inherent in the acceptance of a certificate and the exercise of the rights and privileges evidenced thereby is the correlative obligation to serve the shipping public faithfully, in accordance with reasonable rules and regulations prescribed by the Utilities Commission and in conformity with the requirements of the statute prescribing duties to be performed by the carrier for the protection of the shipping public. Hough-Wylie Co. v. Lucas, 236 N.C. 90, 72 S.E.2d 11 (1952).


§ 62-114: Repealed by Session Laws 1995, c. 523, s. 5.

§ 62-115. Issuance of partnership franchises.

No franchise shall be issued under this Article to two or more persons until the persons have executed a partnership agreement, filed a copy of the agreement with the Commission, and indicated to the Commission, in writing, that they have complied with Article 14A of Chapter 66 of the General Statutes relating to engaging in business under an assumed business name.

History

(1947, c. 1008, s. 14; 1949, c. 1132, s. 14; 1961, c. 472, s. 5; 1963, c. 1165, s. 1; 2016-100, s. 8.)

Editor's Note. - Session Laws 2016-100, s. 12 provides, in part: "Sections 1 through 9 of this act become effective July 1, 2017, and do not affect a civil action or proceeding commenced or a right accrued before July 1, 2017. Sections 1 through 9 of this act become effective only if funds are appropriated by the 2015 General Assembly, 2016 Regular Session, to implement the provisions of G.S. 66-71.9, as enacted by Section 2 of this act." The appropriation was made.

Effect of Amendments. - Session Laws 2016-100, s. 8, effective July 1, 2017, in the section, substituted "Article 14A" for "Article 14," added "of the General Statutes" following "of Chapter 66," added "business" preceding "name" at the end and made stylistic changes. For contingent effective date, see Editor's note.


§ 62-116. Issuance of temporary or emergency authority.

  1. Upon the filing of an application in good faith for a franchise, the Commission may in its discretion, after notice by regular mail to all persons holding franchises authorizing similar services within the same territory and upon a finding that no other adequate existing service is available, pending its final decision on the application, issue to the applicant appropriate temporary authority to operate under such just and reasonable conditions and limitations as the Commission deems necessary or desirable to impose in the public interest; provided, however, that pending such final decision on the application, the applicant shall comply with all the provisions of this Chapter, and with the lawful orders, rules and regulations of the Commission promulgated thereunder, applicable to holders of franchises, and upon failure of an applicant so to do, after reasonable notice from the Commission requiring compliance therewith in the particulars set out in the notice, and after hearing, the application may be dismissed by the Commission without further proceedings, and temporary authority issued to such applicant may be revoked. The authority granted under this section shall not create any presumption nor be considered in the action on the permanent authority application.
  2. Upon its own initiative, or upon written request by any customer or by any representative of a local or State government agency, and after issuance of notice to the owner and operator and after hearing in accordance with G.S. 1A-1, Rule 65(b), the Commission may grant emergency operating authority to any person to furnish water or sewer utility service to meet an emergency to the extent necessary to relieve the emergency; provided, that the Commission shall find from such request, or from its own knowledge, that a real emergency exists and that the relief authorized is immediate, pressing and necessary in the public interest, and that the person so authorized has the necessary ability and is willing to perform the prescribed emergency service. Upon termination of the emergency, the emergency operating authority so granted shall expire upon order of the Commission. An emergency is defined herein as the imminent danger of losing adequate water or sewer utility service or the actual loss thereof.

History

(1947, c. 1008, s. 10; 1949, c. 1132, s. 9; 1963, c. 1165, s. 1; 1973, c. 1108.)

§ 62-117. Same or similar names prohibited.

No public utility holding or operating under a franchise issued under this Chapter shall adopt or use a name used by any other public utility, or any name so similar to a name of another public utility as to mislead or confuse the public, and the Commission may, upon complaint, or upon its own initiative, in any such case require the public utility to discontinue the use of such name, preference being given to the public utility first adopting and using such name.

History

(1947, c. 1008, s. 15; 1949, c. 1132, s. 15; 1963, c. 1165, s. 1.)

§ 62-118. Abandonment and reduction of service.

  1. Upon finding that public convenience and necessity are no longer served, or that there is no reasonable probability of a public utility realizing sufficient revenue from a service to meet its expenses, the Commission shall have power, after petition and notice, to authorize by order any public utility to abandon or reduce such service. Upon request from any party having an interest in said utility service, the Commission shall hold a public hearing on such petition, and may on its own motion hold a public hearing on such petition. Provided, however, that abandonment or reduction of service of motor carriers shall not be subject to this section, but shall be authorized only under the provisions of G.S. 62-262(k) and G.S. 62-262.2.
  2. If any person or corporation furnishing water or sewer utility service under this Chapter shall abandon such service without the prior consent of the Commission, and the Commission subsequently finds that such abandonment of service causes an emergency to exist, the Commission may, unless the owner or operator of the affected system consents, apply in accordance with G.S. 1A-1, Rule 65, to a superior court judge who has jurisdiction pursuant to G.S. 7A-47.1 or 7A-48 in the district or set of districts as defined in G.S. 7A-41.1 in which the person or corporation so operates, for an order restricting the lands, facilities and rights-of-way used in furnishing said water or sewer utility service to continued use in furnishing said service during the period of the emergency. An emergency is defined herein as the imminent danger of losing adequate water or sewer utility service or the actual loss thereof. The court shall have jurisdiction to restrict the lands, facilities, and rights-of-way to continued use in furnishing said water or sewer utility service by appropriate order restraining their being placed to other use, or restraining their being prevented from continued use in furnishing said water or sewer utility service, by any person, corporation, or their representatives. The court may, in its discretion, appoint an emergency operator to assure the continued operation of such water or sewer utility service. The court shall have jurisdiction to require that reasonable compensation be paid to the owner, operator or other party entitled thereto for the use of any lands, facilities, and rights-of-way which are so restricted to continued use for furnishing water or sewer utility service during the period of the emergency, and it may require the emergency operator of said lands, facilities, and rights-of-way to post bond in an amount required by the court. In no event shall such compensation, for each month awarded, exceed the net average monthly income of the utility for the 12-month period immediately preceding the order restricting use.
  3. Whenever the Commission, upon complaint or investigation upon its own motion, finds that the facilities being used to furnish water or sewer utility service are inadequate to such an extent that an emergency (as defined in G.S. 62-118(b) above) exists, and further finds that there is no reasonable probability of the owner or operator of such utility obtaining the capital necessary to improve or replace the facilities from sources other than the customers, the Commission shall have the power, after notice and hearing, to authorize by order that such service be abandoned or reduced to those customers who are unwilling or unable to advance their fair share of the capital necessary for such improvements. The amount of capital to be advanced by each customer shall be subject to approval by the Commission, and shall be advanced under such conditions as will enable each customer to retain a proprietary interest in the system to the extent of the capital so advanced. The remedy prescribed in this subsection is in addition to other remedies prescribed by law.

History

(1933, c. 307, s. 32; 1963, c. 1165, s. 1; 1971, c. 552, s. 1; 1973, c. 1393; 1985, c. 676, s. 14; 1987 (Reg. Sess., 1988), c. 1037, s. 93; 1989 (Reg. Sess., 1990), c. 1024, s. 15.)

CASE NOTES

Paramount Right of State to Regulate Public Utilities. - The power of a municipality to grant franchises to public utilities for the use of its streets and to provide service to its citizens must yield to the paramount right of the State to regulate public utilities through the Utilities Commission, even when they are operated within the corporate boundaries of a municipality. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).

Utility Owes Duty of Continuous Operation. - While a public utility retains its franchise, it owes to the State and the public the duty of continuous operation. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

Consent of Customer or Commission Necessary Before Abandonment of Service. - A power company may not abandon service to any customer, subject to the customer's paying his bill, without the consent of the customer or authorization of the Utilities Commission. Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774, cert. denied, 285 N.C. 661, 207 S.E.2d 752 (1974).

Customer Entitled to Restoration of Service Absent Contrary Order. - Where a power company discontinued its service for nonpayment of charges, the customer, upon payment of the charges, was entitled to restoration of the service where the company did not obtain an order from the Commission. Sweetheart Lake, Inc. v. Carolina Power & Light Co., 211 N.C. 269, 189 S.E. 785 (1937).

Discretionary Power of Commission to Authorize Discontinuance. - The General Assembly intended that the Utilities Commission exercise the power conferred upon it to authorize a discontinuance of an established service in large measure according to its judgment and discretion. State ex rel. Utils. Comm'n v. Southern Ry., 254 N.C. 73, 118 S.E.2d 21 (1961).

The power of the Commission to authorize an abandonment of service is, in large measure, discretionary. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

The Commission's power to require a utility to continue a service is not unlimited. To require a utility, particularly a small operation, to continue an unprofitable operation would violate constitutional guarantees against the taking of property without just compensation. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Propriety of Order Requiring Continued Operation. - An order of the Commission, based upon proper findings and conclusions, requiring appellant to continue operation of her utilities would not violate constitutional prohibitions against involuntary servitude. Appellant voluntarily put her land and equipment to a public use and collected compensation for the services which she provided, and having done so, the Commission may require that she continue to use it in the service to which she voluntarily dedicated it so long as she is justly compensated for such service. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

Showing Required for Abandonment. - When a public utility seeks to abandon service, it must establish that the public no longer needs the service which it was created to render, or that there is no reasonable probability of its being able to realize sufficient revenue by the rendition of such service to meet its expenses. State ex rel. Utils. Comm'n v. Haywood Elec. Membership Corp., 260 N.C. 59, 131 S.E.2d 865 (1963).

Where a utility seeks authorization to abandon service, the ultimate issue for resolution is whether the operation of the system can produce sufficient revenues to meet the expenses of operation. To resolve this issue, there must be findings of fact as to the reasonable expenses of operation and the revenues which the system may be reasonably expected to produce. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

The burden is on the utility seeking authorization to abandon service to establish that there is no reasonable probability of its being able to realize sufficient revenue by the rendition of such service to meet its expenses. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).

The doctrine of convenience and necessity is a relative or elastic theory rather than an abstract or absolute rule. The facts in each case must be separately considered, and from those facts it must be determined whether or not public convenience and necessity require a given service to be performed or dispensed with. The convenience and necessity required are those of the public and not of an individual or individuals. State ex rel. Utils. Comm'n v. Southern Ry., 254 N.C. 73, 118 S.E.2d 21 (1961).

Waste of a utility's manpower or other resources, with no substantial resulting benefit to the public, is not in the public interest and is not required. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

A railroad may not be denied the right to curtail or abandon a service for which there is no substantial public need, even though, upon its entire business, the company is earning a fair rate of return. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

Though prosperous, a railroad or other utility company may not be denied the right to effect economies in its operation, so as to increase its earnings, unless it may reasonably be found, upon the evidence before the Commission, that the public convenience and necessity requires the continuation of the service in question. An occasional inconvenience to a shipper, which is trivial in comparison with the saving to the railroad from the elimination of the service, will not suffice to show such public convenience and necessity. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

Railroad May Be Required to Retain Station Required by Public Convenience and Necessity. - A railroad may be required to keep a station open, with an agent in attendance, if the public convenience and necessity requires such service, even though this can be done only at a loss to the railroad, provided such loss is not so great as to be unreasonable in comparison with the public's benefit from the service. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

Railroad May Not Substantially Reduce Hours Station Is Open Without Commission's Order. - A liberal construction of G.S. 62-2, 62-32, 62-131 and 62-247 and this section, so as to effectuate the policy of the State as therein declared, compels the conclusion that when a railroad corporation has established and maintained a freight depot or passenger station pursuant to the order of the Commission, or has established and maintained for a year or more such depot or station on its own initiative, it may not, without first obtaining an order from the Commission authorizing it to do so, substantially reduce the number of hours per day during which such station shall be kept open and attended by an agent of the railroad for the service of the public. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

But Commission May Not Withhold Approval of Reduction Unreasonably. - When a railroad company applies for an order authorizing it to substantially reduce the number of hours per day during which a depot or station shall be kept open and attended by an agent, the Commission may not withhold its approval unreasonably and arbitrarily. It may deny such permission only after a hearing and only if it finds and concludes, upon competent, material and substantial evidence, in view of the entire record, both that the public convenience and necessity requires the station or depot to be so kept open for a greater portion of the day, and that the railroad, by so doing, will not incur costs out of proportion to any benefit to the public. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

As to power of Commission under former G.S. 62-39 to require transportation and transmission companies to maintain facilities, see State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 233 N.C. 365, 64 S.E.2d 272 (1951); State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 235 N.C. 273, 69 S.E.2d 502 (1952); State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 238 N.C. 701, 78 S.E.2d 780 (1953).

Evidence Held to Show Convenience and Necessity. - Evidence before the Commission indicating that a number of the residences served by applicant's water and sewer systems were situated on quarter-acre lots, which were of insufficient size to support both a well and septic system, and that the occupants of these residences, who were currently among appellant's customers, had no alternative means of water supply or sewage disposal other than the service provided by appellant, clearly supported the conclusion not only that appellant's services constituted a convenience to that segment of the public who used them, but also that such services were necessary to the safety and health of the public. State ex rel. Utils. Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888 (1986), modified and aff'd, 318 N.C. 686, 351 S.E.2d 289 (1987).


ARTICLE 6A. Radio Common Carriers.

§§ 62-119 through 62-125: Repealed by Session Laws 1995, c. 523, s. 31.

§ 62-126: Reserved for future codification purposes.

ARTICLE 6B. Distributed Resources Access Act.

Sec.

§ 62-126.1. Title.

This Article may be cited as the "Distributed Resources Access Act."

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 6(d) made this Article effective July 27, 2017.

Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.2. Declaration of policy.

The General Assembly of North Carolina finds that as a matter of public policy it is in the interest of the State to encourage the leasing of solar energy facilities for retail customers and subscription to shared community solar energy facilities. The General Assembly further finds and declares that in encouraging the leasing of and subscription to solar energy facilities pursuant to this act, cross-subsidization should be avoided by holding harmless electric public utilities' customers that do not participate in such arrangements.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.3. Definitions.

For purposes of this Article, the following definitions apply:

  1. Affiliate. - Any entity directly or indirectly controlling or controlled by or under direct or indirect common control with an electric power supplier.
  2. Commission. - The North Carolina Utilities Commission.
  3. Community solar energy facility. - A solar energy facility whose output is shared through subscriptions.
  4. Customer generator lessee. - A lessee of a solar energy facility.
  5. Electric generator lessor. - The owner of solar energy facility that leases the facility to a customer generator lessee, including any agents who act on behalf of the electric generator lessor. For purposes of this Article, an electric generator lessor shall not be considered a public utility under G.S. 62-3(23).
  6. Electric power supplier. - A public utility, an electric membership corporation, or a municipality that sells electric power to retail electric customers in the State.
  7. Electric public utility. - A public utility as defined by G.S. 62-3(23) that sells electric power to retail electric customers in the State.
  8. Maximum annual peak demand. - The maximum single hour of electric demand actually occurring or estimated to occur at a premises.
  9. Net metering. - To use electrical metering equipment to measure the difference between the electrical energy supplied to a retail electric customer by an electric power supplier and the electrical energy supplied by the retail electric customer to the electric power supplier over the applicable billing period.
  10. Offering utility. - Any electric public utility as defined in G.S. 62-3(23) serving at least 150,000 North Carolina retail jurisdictional customers as of January 1, 2017. The term shall not include any other electric public utility, electric membership corporation, or municipal electric supplier authorized to provide retail electric service within the State. An offering utility's participation in this Article as an electric generator lessor shall not otherwise alter its status as a public utility with respect to any other provision of this Chapter. An offering utility's participation in this Article shall be regulated pursuant to the provisions of this Article.
  11. Person. - The same meaning as provided by G.S. 62-3(21).
  12. Premises. - The building, structure, farm, or facility to which electricity is being or is to be furnished. Two or more buildings, structures, farms, or facilities that are located on one tract or contiguous tracts of land and that are utilized by one electric customer for commercial, industrial, institutional, or governmental purposes shall constitute one "premises," unless the electric service to the building, structures, farms, or facilities are separately metered and charged.
  13. Property. - The tract of land on which the premises is located, together with all the adjacent contiguous tracts of land utilized by the same retail electric customer.
  14. Solar energy facility. - A electric generating facility leased to a customer generator lessee that meets the following requirements:
    1. Generates electricity from a solar photovoltaic system and related equipment that uses solar energy to generate electricity.
    2. Is limited to a capacity of (i) not more than the lesser of 1,000 kilowatts (kW) or one hundred percent (100%) of contract demand if a nonresidential customer or (ii) not more than 20 kilowatts (kW) or one hundred percent (100%) of estimated electrical demand if a residential customer.
    3. Is located on a premises owned, operated, leased, or otherwise controlled by the customer generator lessee that is also the premises served by the solar energy facility.
    4. Is interconnected and operates in parallel phase and synchronization with an offering utility authorized by the Commission to provide retail electric service to the premises and has been approved for interconnection and parallel operation by that public utility.
    5. Is intended only to offset no more than one hundred percent (100%) of the customer generator lessee's own retail electrical energy consumption at the premises.
    6. Meets all applicable safety, performance, interconnection, and reliability standards established by the Commission, the public utility, the National Electrical Code, the National Electrical Safety Code, the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, the Federal Energy Regulatory Commission, and any local governing authorities.
  15. Subscription. - A contract between a subscriber and the owner of a community solar energy facility that allows a subscriber to receive a bill credit for the electricity generated by a community solar energy facility in proportion to the electricity generated.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.4. Commission to establish net metering rates.

  1. Each electric public utility shall file for Commission approval revised net metering rates for electric customers that (i) own a renewable energy facility for that person's own primary use or (ii) are customer generator lessees.
  2. The rates shall be nondiscriminatory and established only after an investigation of the costs and benefits of customer-sited generation. The Commission shall establish net metering rates under all tariff designs that ensure that the net metering retail customer pays its full fixed cost of service. Such rates may include fixed monthly energy and demand charges.
  3. Until the rates have been approved by the Commission as required by this section, the rate shall be the applicable net metering rate in place at the time the facility interconnects. Retail customers that own and install an on-site renewable energy facility and interconnect to the grid prior to the date the Commission approves new metering rates may elect to continue net metering under the net metering rate in effect at the time of interconnection until January 1, 2027.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.5. Scope of leasing program in offering utilities' service areas.

  1. An offering utility and its affiliates may be deemed to be electric generator lessors and may offer leases to solar energy facilities only within the offering utility's own assigned service area or, in the case of an affiliate, the service area assigned to an affiliated offering utility. The costs an offering public utility incurs in marketing, installing, owning, or maintaining leases through its own leasing programs as a lessor shall not be recovered from other nonparticipating utility customers through rates, and the Commission shall not have any jurisdiction over the financial terms of such leases. An offering utility, and the customer generator lessees that lease facilities from it, may participate on an equal basis with other lessors and lessees and in any approved incentive program offered by the utility to its customers.
  2. An electric generator lessor that owns a solar energy facility within the assigned service area of an offering utility and that is located on a premises owned or leased by a customer generator lessee shall be permitted to lease such facility exclusively to a customer generator lessee under a lease, provided that the electric generator lessor complies with the terms, conditions, and restrictions set forth within this section and holds a valid certificate issued by the Commission pursuant to G.S. 62-126.7. An electric generator lessor shall not be considered a "public utility" under G.S. 62-3(23) if the solar energy facility is only made available to a customer generator lessee under a lease that conforms to the requirements of G.S. 62-126.6 for the customer generator lessee's use on its premises where the solar energy facility is located to serve the electric energy requirements of that particular premises, including to enable the customer generator lessee to obtain a credit for the electricity generated under an applicable net metering tariff or to engage in the sale of excess energy from the solar energy facility to an offering utility.
  3. Any lease of a solar energy facility not entered into pursuant to this section is prohibited and any electric generator lessor that enters into a lease outside of an offering utility's program implemented pursuant to this section or otherwise enters into a contract or agreement where payments are based upon the electric output of a solar energy facility shall be considered a "public utility" under G.S. 62-3(23) and be in violation of the franchised service rights of the offering utility or any other electric power supplier authorized to provide retail electric service in the State. This section does not authorize the sale of electricity from solar energy facilities directly to any customer of an offering utility or other electric power supplier by the owner of a solar energy facility. The electrical output from any solar energy facility leased pursuant to this program shall be the sole and exclusive property of the customer generator lessee.
  4. The total installed capacity of all solar energy facilities on an offering utility's system that are leased pursuant to this section shall not exceed one percent (1%) of the previous five-year average of the North Carolina retail contribution to the offering utility's coincident retail peak demand. The offering utility may refuse to interconnect customers that would result in this limitation being exceeded. Each offering utility shall establish a program for new installations of leased equipment to permit the reservation of capacity by customer generator lessees, whether participating in a public utility or nonutility lessor's leasing program, on its system, including provisions to prevent or discourage abuse of such programs. Such programs must provide that only prospective individual customer generator lessees may apply for, receive, and hold reservations to participate in the offering utility's leasing program. Each reservation shall be for a single customer premises only and may not be sold, exchanged, traded, or assigned except as part of the sale of the underlying premises.
  5. To comply with the terms of this section, each customer generator lessor's solar energy facility shall serve only one premises and shall not serve multiple customer generator lessees or multiple premises. The customer generator lessee must enroll in the applicable rate schedule made available by the interconnecting offering utility, subject to the participation limitations set forth in subsection (a) of this section.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.6. Electric customer generator leasing requirements; disclosures; records.

  1. A lease agreement offered by an electric generator lessor must meet the following requirements:
    1. Be signed and dated by the retail electric customer. Any agreement that contains blank spaces when signed by the retail electric customer is voidable at the option of the retail electric customer until the solar energy facility is installed.
    2. Be in at least 12-point type.
    3. Include a provision granting the retail electric customer the right to rescind the agreement for a period of not less than three business days after the agreement is signed by the retail electric customer.
    4. Provide a description of the solar energy facility, including the make and model of the solar energy facility's major components, and a guarantee concerning energy production output that the solar energy facility will provide over the expected life of the agreement.
    5. Separately set forth the following items, as applicable:
      1. The total cost to the retail electric customer under the lease agreement for the solar energy facility over the life of the agreement.
      2. Any interest, installation fees, document preparation fees, service fees, or other costs to be paid by the retail electric customer.
      3. The total number of payments, including the interest, the payment frequency, the estimated amount of the payment expressed in dollars, and the payment due date over the leased term.
    6. Identify any State or federal tax incentives that are included in the calculation of lease payments.
    7. Disclose whether the warranty or maintenance obligations related to the solar energy facility may be sold or transferred to a third party.
    8. Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer, if a transfer of the lease agreement is subject to any restrictions pursuant to the agreement on the retail electric customer's ability to modify or transfer ownership of a solar energy facility, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the solar energy facility is subject to review or approval by a third party, the agreement must identify the name, address, and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.
    9. Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer, if a modification or transfer of ownership of the real property to which the solar energy facility is or will be affixed is subject to any restrictions pursuant to the agreement on the retail electric customer's ability to modify or transfer ownership of the real property to which the solar energy facility is installed or affixed, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the real property to which the solar energy facility is affixed or installed is subject to review or approval by a third party, the agreement must identify the name, address, and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.
    10. Provide a full and accurate summary of the total costs under the agreement for maintaining and operating the solar energy facility over the life of the solar energy facility, including financing, maintenance, and construction costs related to the solar energy facility.
    11. If the agreement contains an estimate of the retail electric customer's future utility charges based on projected utility rates after the installation of a solar energy facility, provide an estimate of the retail electric customer's estimated utility charges during the same period as impacted by potential utility rate changes ranging from at least a five percent (5%) annual decrease to at least a five percent (5%) annual increase from current utility costs. The comparative estimates must be calculated based on the same utility rates.
    12. Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer that states: "Utility rates and utility rate structures are subject to change. These changes cannot be accurately predicted and projected savings from your solar energy facility are therefore subject to change. Tax incentives are subject to change or termination by executive, legislative, or regulatory action."
  2. Before the maintenance or warranty obligations of a solar energy facility under an existing lease agreement are transferred, the person who is currently obligated to maintain or warrant the solar energy facility must disclose the name, address, and telephone number of the person who will be assuming the maintenance or warranty of the solar energy facility.
  3. If the electric generator lessor's marketing materials contain an estimate of the retail electric customer's future utility charges based on projected utility rates after the installation of a solar energy facility, the marketing materials must contain an estimate of the retail electric customer's estimated utility charges during the same period as impacted by potential utility rate changes ranging from at least a five percent (5%) annual decrease to at least a five percent (5%) annual increase from current utility costs.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.7. Commission authority over electric generator lessors.

  1. No person shall engage in the leasing of a solar energy facility without having applied for and obtained a certificate authorizing those operations from the Commission. The application for a certificate of authority to engage in business as an electric generator lessor shall be made in a form prescribed by the Commission and accompanied by the fee required pursuant to G.S. 62-300(a)(16).
  2. In acting upon the application for a certificate of authority to engage in business as an electric generator lessor, the Commission shall take into account the State's interest in encouraging the leasing of solar electric generation facilities and avoidance of cross-subsidization as declared by the policy objectives of this Article as provided in G.S. 62-126.2, as well as the policy of the State, as provided in G.S. 62-2(a). The Commission shall issue a certificate of authority to engage in business as an electric generator lessor if the Commission finds that the applicant is fit, willing, and able to conduct that business in accordance with the provisions of this Article. The certificate shall be effective from the date issued unless otherwise specified therein and shall remain in effect until terminated under the terms thereof, or until suspended or revoked as herein provided.
  3. As a condition for issuance and continuation of a certificate of authority for an electric generator lessor, the applicant shall certify to the Commission all of the following:
    1. The applicant will register with the Commission each solar energy facility that the applicant leases to a customer generator lessee.
    2. That each lease of a solar energy facility that the applicant offers or accepts will comply with the provisions of this Article.
    3. The applicant will consent to the auditing of its books and records by the Public Staff insofar as those records relate to transactions with an offering utility or a customer generator lessee that is located in the State.
    4. That the applicant will conduct its business in substantial compliance with all federal and State laws, regulations, and rules for the protection of the environment and conservation of natural resources, the provision of electric service, and the protection of consumers.
  4. Upon the request of an electric public utility, an electric membership corporation, the Public Staff, a customer generator lessee, or person having an interest in the electric generator lessor's conduct of its business, the Commission may review the certificate to determine whether the electric generator lessor is conducting business in compliance with this Article. After notice to the electric generator lessor, the Commission may suspend the certificate and enter upon a hearing to determine whether the certificate should be revoked. After the hearing, and for good cause shown, the Commission may, in its discretion, reinstate a suspended certificate, continue a suspension of a certificate, or revoke a certificate.
  5. It shall be a violation of law punishable by a civil penalty of not more than ten thousand dollars ($10,000) per occurrence for any person to either directly or indirectly do any of the following:
    1. Solicit business as a lessor of solar energy facilities without a valid certificate issued under this section or otherwise in violation of the terms of this Article.
    2. Engage in any unfair or deceptive practice in the leasing of solar energy facilities or otherwise violate the requirements of G.S. 62-126.6.
    3. Operate in violation of the terms of the certificate issued by this Article.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.8. Community solar energy facilities.

  1. Each offering utility shall file a plan with the Commission to offer a community solar energy facility program for participation by its retail customers. The community solar energy facility program shall be designed so that each community solar energy facility offsets the energy use of not less than five subscribers and no single subscriber has more than a forty percent (40%) interest. The offering utility shall make its community solar energy facility program available on a first-come, first-served basis until the total nameplate generating capacity of those facilities equals 20 megawatts (MW).
  2. A community solar energy facility shall have a nameplate capacity of no more than five megawatts (MW). Each subscription shall be sized to represent at least 200 watts (W) of the community solar energy facility's generating capacity and to supply no more than one hundred percent (100%) of the maximum annual peak demand of electricity of each subscriber at the subscriber's premises.
  3. A community solar energy facility must be located in the service territory of the offering utility filing the plan. Subscribers shall be located in the State of North Carolina and the same county or a county contiguous to where the facility is located. The electric public utility may file a request for Commission approval for an exemption from the location requirement of this subsection and the Commission may approve the request for a facility located up to 75 miles from the county of the subscribers, if the Commission deems the exemption to be in the public interest.
  4. The offering utility shall credit the subscribers to its community solar energy facility for all subscribed shares of energy generated by the facility at the avoided cost rate.
  5. The Commission may approve, disapprove, or modify a community solar energy facility program. The program shall meet all of the following requirements:
    1. Establish uniform standards and processes for the community solar energy facilities that allow the electric public utility to recover reasonable interconnection costs, administrative costs, fixed costs, and variable costs associated with each community solar energy facility, including purchase expenses if a power purchase agreement is elected as the method of energy procurement by the offering utility.
    2. Be consistent with the public interest.
    3. Identify the information that must be provided to potential subscribers to ensure fair disclosure of future costs and benefits of subscriptions.
    4. Include a program implementation schedule.
    5. Identify all proposed rules and charges.
    6. Describe how the program will be promoted.
    7. Hold harmless customers of the electric public utility who do not subscribe to a community solar energy facility.
    8. Allow subscribers to have the option to own the renewable energy certificates produced by the community solar energy facility.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 6(d) made this section effective July 27, 2017, and further provides: "The plan required to be filed with the Utilities Commission pursuant to G.S. 62-126.8(a), as enacted by subsection (a) of this section, shall be filed by the electric public utility no later than 180 days after the effective date of this section."

Session Laws 2017-192, s. 14(a), contains a severability clause.

Legal Periodicals. - For article, "Solar Energy for the People of North Carolina: Net Metering After the competitive Energy Solutions Act of 2017,” see 12 Elon L. Rev. 175 (2020).

§ 62-126.9. Scope of leasing program by municipalities.

  1. A municipality that sells electric power to retail customers in the State may elect, by action of its governing council or commission, to be deemed to be an electric generator lessor and may offer leases to solar energy facilities located within the municipality's service territory. The costs a municipality incurs in marketing, installing, owning, or maintaining leases through its own leasing programs as a lessor shall not be recovered from other nonparticipating municipality retail customers through rates.
  2. Provided the municipality has elected to offer a leasing program, an electric generator lessor that owns a solar energy facility within a municipality's service territory and that is located on a premises owned or leased by a customer generator lessee shall be permitted to lease such facility exclusively to a customer generator lessee pursuant to a lease under terms and conditions approved by the municipality and holds a valid certificate issued by the Commission pursuant to G.S. 62-126.7. Notwithstanding this subsection, a municipality acting as an electric generator lessor shall not be required to comply with G.S. 62-126.7.
  3. An electric generator lessor, including a municipality acting as an electric generator lessor, shall not be considered a "public utility" under G.S. 62-3(23) if the solar energy facilities are only made available to a customer generator lessee under a lease that conforms to the requirements of G.S. 62-126.6 for the customer generator lessee's use of the customer generator lessee's premises where the solar energy facility is located to serve the electric energy requirements of that particular premises, including to enable the customer generator lessee to obtain a credit under an applicable net metering tariff or to engage in the sale of excess energy from the solar energy facility to the municipality; provided, however, that the provisions of G.S. 62-126.4 shall not apply to a municipality or other electric generator lessor that offers leases to solar energy facilities located within the municipality's service territory pursuant to this section. Any net metering tariffs adopted by such municipality shall be adopted by its governing council or commission in accordance with the rate-setting procedures set forth in Article 16 of Chapter 160A of the General Statutes.
  4. Any lease of a solar energy facility in a municipal electric service area not entered into pursuant to this section is prohibited. This section does not authorize the sale of electricity from solar energy facilities directly to any customer of a municipality by the owner of a solar energy facility. The electrical output from any eligible renewable electric generation facility leased pursuant to this section shall be the sole and exclusive property of the customer generator lessee.
  5. Each eligible solar energy facility shall serve only one premises and shall not serve multiple customer generator lessees or multiple premises. The customer generator lessee must enroll in the applicable rate schedule made available by the municipality, subject to the participation limitations set forth in subsection (a) of this section.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§ 62-126.10. Rules.

The Commission shall adopt rules to implement the provisions of this Article.

History

(2017-192, s. 6(a).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

§§ 62-127 through 62-129: Reserved for future codification purposes.

ARTICLE 7. Rates of Public Utilities.

Sec.

§ 62-130. Commission to make rates for public utilities.

  1. The Commission shall make, fix, establish or allow just and reasonable rates for all public utilities subject to its jurisdiction. A rate is made, fixed, established or allowed when it becomes effective pursuant to the provisions of this Chapter.
  2. Repealed by Session Laws 1985, c. 676, s. 15.
  3. Repealed by Session Laws 2021-23, s. 14, effective May 17, 2021.
  4. The Commission shall from time to time as often as circumstances may require, change and revise or cause to be changed or revised any rates fixed by the Commission, or allowed to be charged by any public utility.
  5. In all cases where the Commission requires or orders a public utility to refund moneys to its customers which were advanced by or overcollected from its customers, the Commission shall require or order the utility to add to said refund an amount of interest at such rate as the Commission may determine to be just and reasonable; provided, however, that such rate of interest applicable to said refund shall not exceed ten percent (10%) per annum.

History

(1899, c. 164, ss. 2, 7, 14; 1903, c. 683; Rev., ss. 1096, 1099, 1106; 1907, c. 469, s. 4; Ex. Sess. 1908, c. 144, s. 1; 1913, c. 127, s. 2; 1917, c. 194; C.S., ss. 1066, 1071, 3489; Ex. Sess. 1920, c. 51, s. 1; 1925, c. 37; 1929, cc. 82, 91; 1933, c. 134, s. 8; 1941, c. 97; 1953, c. 170; 1963, c. 1165, s. 1; 1981, c. 461, s. 1; 1985, c. 676, s. 15(1); 2021-23, s. 14.)

Effect of Amendments. - Session Laws 2021-23, s. 14, effective May 17, 2021, deleted subsection (c).

Legal Periodicals. - For article on electric rates, see 12 N.C.L. Rev. 289 (1934).

CASE NOTES

Purpose of Regulation. - With public utilities the State has undertaken to protect the public from the customary consequences of monopoly, by making the rates and services of the certificate holder subject to regulation and control by the Utilities Commission. In re Certificate of Need for Aston Park Hosp., 282 N.C. 542, 193 S.E.2d 729 (1973).

An uncontrolled legal monopoly in an essential service leads, normally and naturally, to poor service and exorbitant charges. To prevent such result, the legislature has conferred upon the Utilities Commission the power to police the operations of the utility company, so as to require it to render service of good quality at charges which are reasonable. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Article Not in Conflict with Chapter 75. - The provisions of this Article as to rate regulation are not in conflict with Chapter 75, Monopolies and Trusts. Bennett v. Southern Ry., 211 N.C. 474, 191 S.E. 240 (1937).

The rates of public utilities under the jurisdiction of the Utilities Commission are not subject to attack on the basis that they violate the antitrust laws. Challenges to rates are limited by the legal theories provided by the Public Utilities Act. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

Rate Making Within Police Power of State. - The authority conferred upon the Commission to establish reasonable and just rates for charges by a public service corporation for furnishing electrical power to its customers comes within the police powers of the State, and contracts previously made are subordinate to the public interest that such rates be reasonable and just, and afford the corporation supplying the service a safe return upon its investments, having proper regard to the public interest that plants of this character should be properly run and maintained. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

The Commission is given general supervision over railways, street railways, and like companies of the State, and is empowered to fix such notes, charges and tariffs as may be reasonable and just, having in view the value of the property, the cost of improvements and maintenance, the probable earning capacity under the proposed rates, the sums required to meet operating expenses, and other specific matters pertinent to such an inquiry; these are police powers, delegated to the Commission, and governmental so far as they extend. Southern Pub. Utils. Co. v. City of Charlotte, 179 N.C. 151, 101 S.E. 619 (1919).

Power to Establish Rates Delegated to Commission. - The General Assembly has delegated to the Commission, and not to the courts, the duty and power to establish rates for public utilities. State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966).

This section, in general terms, directs the Commission to establish just and reasonable rates for all utilities. Southern Bell Tel. & Tel. Co. v. Clayton, 266 N.C. 687, 147 S.E.2d 195 (1966).

Commission is given broad and general powers to make rates for freight and passenger service. Tilley v. Norfolk & W. Ry., 162 N.C. 37, 77 S.E. 994 (1913).

Authority of the Utilities Commission to set different rates is not unbridled. There must be substantial differences in service or conditions to justify difference in rates. There must be no unreasonable discrimination between those receiving the same kind and degree of service. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

Duty to Fix Just and Reasonable Rates. - When the Commission is called upon by either a corporation or those to whom the services are rendered under its franchise to exercise its rate fixing power and authority, it is its duty to fix and establish just and reasonable rates to be charged for such services. Corporation Comm'n v. Henderson Water Co., 190 N.C. 70, 128 S.E. 465 (1925).

Classification Must Not Be Arbitrary. - The mere fact of classification in rate regulating is not sufficient to relieve a statute from the reach of the equality clause of the Fourteenth Amendment, and in all cases it must appear, not merely that a classification has been made, but also that it is based upon some reasonable ground, something which bears a just and proper relation to the attempted classification and is not a mere arbitrary selection. Gulf, C. & S.F. Ry. v. Ellis, 165 U.S. 150, 17 S. Ct. 255, 41 L. Ed. 666 (1897); Efland v. Southern Ry., 146 N.C. 135, 59 S.E. 355 (1907).

Unreasonable Application of Same Rates May Be Discriminatory. - Where substantial differences in services or conditions exist, unreasonable application of the same rates may be discriminatory and thus improper. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

The burden of showing the impropriety of rates established by the Commission lies with the party alleging such discrimination. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

Rates Set by Commission Supersede Contrary Private Contract Provisions. - Rates for public utility service fixed by an order of the Commission, otherwise lawful, supersede contrary provisions in private contracts concerning rates for such service. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

The rates of transportation allowed carriers of freight are established by the Interstate Commerce Commission and the State Corporation Commission (now the Utilities Commission), and may not be affected by any agreement to the contrary between the carriers or their agents or employees and the shipper; notwithstanding any such agreement, the carrier may demand and enforce the rates established by law. Southern Ry. v. Latham, 176 N.C. 417, 97 S.E. 234 (1918).

A public service railway corporation operating in various localities may not by contract fix its passenger fares and thus prevent the Commission, under the authority conferred by statute, from determining what rates are, under the circumstances, just and reasonable, for such would authorize such companies to discriminate, unlawfully, among its patrons. Southern Pub. Utils. Co. v. City of Charlotte, 179 N.C. 151, 101 S.E. 619 (1919); City of Winston-Salem v. Winston-Salem City Coach Lines, 245 N.C. 179, 95 S.E.2d 510 (1956).

Enforcement of Such Rates Does Not Impair Obligations of Contract. - The enforcement of an order of the Commission superseding rates set by contract does not constitute an impairment of the obligation of such contract, since contracts of public utilities, fixing rates for service, are subject to the police power of the State. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

The consumer has no vested right in existing rates and the Commission may change the rates as circumstances dictate. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

The Commission has plenary authority to modify an application by a utility when its modification is based on competent evidence, findings and conclusions showing it to be just and reasonable. The Commission is not limited by the utility's application in the entry of its final order based on evidence adduced at the hearings. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 361, 230 S.E.2d 671 (1976).

And to Correct Rate Schedules. - In the unlikely event that other costs of the utility should decline, the Commission, either on its own motion or that of another interested party, has plenary authority to intervene and make corrections in the utility's rate schedules including, if circumstances should require it, the abrogation of the fuel clause. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

North Carolina rates may not be structured by external system usage. Such action is outside the intended scope of the Commission's authority under G.S. 62-2. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

Rates Must Be Fixed Prospectively. - The Utilities Commission exceeded its statutory authority in requiring a manufacturer to pay a surcharge for emergency natural gas used by the manufacturer prior to the date that the tariff including the surcharge became effective, even though the supplier did not bill the manufacturer for such gas until after the tariff became effective. A rate is fixed or allowed when it becomes effective pursuant to subsection (a) of this section, and rates must be fixed prospectively from their effective date. G.S. 62-136(a) provides that the Commission shall determine rates to be thereafter observed and in force. The Commission may not fix rates retroactively so as to make them collectible for past services. State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 42 N.C. App. 606, 257 S.E.2d 439 (1979), cert. denied, 299 N.C. 124, 261 S.E.2d 926 (1980).

"Tariff" and "Rates" Synonymous. - The word "tariff," used in connection with the rates of a common carrier, did not have any special legal significance that would differentiate it in effect from the word "rates," used in former G.S. 62-148 in connection with a contract carrier. State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

An annual "true up" of the curtailment tracking rate of a natural gas company was not a change in the general fixed rate, since the curtailment tracking rate merely creates an estimated rate based on projected gas availability. Therefore, the "true up" of the CTR is a correction of an estimated rate, and does not constitute retroactive general rate making. State ex rel. Utils. Comm'n v. CF Indus., Inc., 299 N.C. 504, 263 S.E.2d 559 (1980).

Fuel adjustment clause formula used by power company qualified as a valid part of a rate or rate schedule within the meaning of this section. State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975), aff'd, 291 N.C. 361, 230 S.E.2d 671 (1976).

Testing Reasonableness of Affiliated Company Expenses. - The Commission has the authority and the right at all times to test the reasonableness of expenses paid to affiliated companies (or allocated by them) and to cause the petitioning utility to offer affirmative evidence of their reasonableness or risk their disapproval. The Commission has the obligation to test the reasonableness of such expenses whenever they are properly challenged. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

The Commission must always determine that expenses paid to affiliated companies are reasonable, and the burden of persuasion on that issue always rests with the utility. The Commission, of course, has the right to test the reasonableness of such expenses. If there is an absence of data and information from which either the propriety of incurring the expense or the reasonableness of the cost can readily be determined, the Commission may require the utility to prove their propriety and reasonableness by affirmative evidence. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Although it always has the authority to do so, in the absence of contradiction or challenge by affirmative evidence offered by any party to the proceeding, the Commission has no affirmative duty to make further inquiry or investigation into the reasonableness of charges or fees paid to affiliated companies. While affiliation calls for close scrutiny, affiliation alone does not impose an additional burden of proof or require the presentation of additional evidence of reasonableness. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 707 (1982).

Reasonableness of affiliated company expenses may be tested on the basis of (1) the cost of the same services on the open market, (2) the cost similar utilities pay to their service companies, or (3) the reasonableness of the expenses incurred by the affiliated company in generating the service. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Rates of Return Reasonable and Did Not Discriminate. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable and did not unreasonably discriminate among the various classes of North Carolina Natural Gas Corporation customers and were supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Formula Not Unreasonably Discriminatory. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the Industrial Sales Tracker Formula did not unreasonably discriminate between North Carolina Natural Gas Corporation's customer classes and these findings were supported by substantial evidence in light of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Evidence Not Sufficient for Proceeding. - The Utilities Commission's failure to initiate a ratemaking or complaint proceeding concerning a utility's rate of return was not arbitrary and capricious where the Commission found that the rate exceeded that authorized in only three of the preceding 32 quarters. State ex rel. Utils. Comm'n v. Carolina Indus. Group For Fair Util. Rates, 130 N.C. App. 636, 503 S.E.2d 697 (1998), cert. denied, 349 N.C. 377 (1998).

Legitimate Justification to Maintain Industrial and City Rates of Returns. - The North Carolina Utilities Commission drew legitimate distinctions which justified its decision to maintain industrial and city rates of return at a higher level than residential and commercial and small industrial rates. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Power to Ascertain Corporation in Control. - The Commission has the incidental power (subject to the right of appeal) to ascertain what particular corporation is in the control of or operates any telegraph line in this State, in order that it may exercise its authority to fix rates, as well as to know against whom to proceed for a violation of its regulations. State ex rel. R.R. Comm'rs v. Western Union Tel. Co., 113 N.C. 213, 18 S.E. 389 (1893), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897).

Fees and Charges Made by Municipality for Sewerage Connections. - The Utilities Commission has no jurisdiction to fix or supervise the fees and charges to be made by a municipality for connections with a city sewerage system, either within or without its corporate limits. Atlantic Constr. Co. v. City of Raleigh, 230 N.C. 365, 53 S.E.2d 165 (1949).

Commission has authority to fix city bus fares. State ex rel. Utils. Comm'n v. City of Greensboro, 244 N.C. 247, 93 S.E.2d 151 (1956). See G.S. 62-260.

An intracity carrier, holding a certificate of exemption issued by the Commission and a franchise from the city or town in which it operates, is exempt from control of the Commission except as to rates and controversies with respect to extensions and services. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

When Fares of Street Railway May Be Raised. - A public service street railway company, operating under a city charter and under a contract with the city restricting the passenger fare authorized to be charged its patrons, may be authorized by the Commission to raise charges to its passengers when, in the opinion of the Commission, such is necessary for it to properly maintain its system, allowing a reasonable profit, to meet the requirements of the public for adequate, safe, and convenient service. Southern Pub. Utils. Co. v. City of Charlotte, 179 N.C. 151, 101 S.E. 619 (1919).

Joint Rate Between Lumber Railroad and Connecting Carrier. - When a lumber railroad is of standard gauge and of sufficient equipment and extensiveness to affect the interest of the public, the Commission may make a valid order establishing a joint rate of transportation in the same cars between it and a connecting common carrier by rail to points beyond the initial road. Corporation Comm'n ex rel. Raleigh Granite Co. v. Atlantic C.L.R.R., 187 N.C. 424, 121 S.E. 767 (1924).

Electric Power Rates Coextensive with State's Jurisdiction. - When the Commission has finally established, under the provisions of the statute, rates to be charged by a public service corporation for furnishing electrical power, the rates are coextensive with the State's jurisdiction and territory, and conclusively bind all corporations, companies, or persons who are parties to the suit and have been afforded an opportunity to be heard. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

Sale of Electricity Generated in Another State. - While the generation of electricity in another state, when transported to purchasers in this State, may be regarded as interstate commerce, its distribution and sale here is local to the State, permitting the Commission to establish a just and reasonable rate of charge in conformity with the statutory powers, there being no interfering act of Congress relating to the subject. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

Telephone Company Must Not Discriminate. - A telephone company is subject to public regulation and reasonable control, and is required to afford its service at uniform and reasonable rates and without discrimination among its subscribers and patrons for like service under the same or substantially similar conditions. Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 159 N.C. 9, 74 S.E. 636 (1912). See also Godwin v. Telephone Co., 136 N.C. 258, 48 S.E. 636 (1904); Walls v. Strickland, 174 N.C. 298, 93 S.E. 857 (1917).

Telegram Transmitted over Lines of Another Company. - Where a telegraph company had a continuous line between two points in this State, the fact that, in transmitting a message, it sent the message over the lines of another company, did not excuse its violation of the rate prescribed by the Railroad Commission (now Utilities Commission). Leavell v. Western Union Tel. Co., 116 N.C. 211, 21 S.E. 391 (1895), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897).

Telegraphic Messages Traversing Another State. - Telegraphic messages transmitted by a company from and to points in this State, although traversing another state in the route, are subject to the tariff regulations of the Railroad Commission (now Utilities Commission). State ex rel. R.R. Comm'rs v. Western Union Tel. Co., 113 N.C. 213, 18 S.E. 389 (1893), appeal dismissed, 17 S. Ct. 1002, 41 L. Ed. 1187 (1897).

When the Utilities Commission found that natural gas corporation had received payments in lieu of what it would have received under a service contract and that the customers of the company were bearing the company's contract costs, it was within the power of the Commission under G.S. 62-32(b) and subsections (a) and (d) of this section to take these payments into account in setting a reasonable rate. State ex rel. Utils. Comm'n v. North Carolina Natural Gas Corp., 76 N.C. App. 330, 332 S.E.2d 755, cert. denied, 314 N.C. 675, 336 S.E.2d 405 (1985).

Authority to Allow Use of Availability Charge in Rate Schedule for Recreational Subdivision. - The Utilities Commission has jurisdiction and authority to allow the use of an availability charge in a rate schedule for a recreational subdivision, should any be deserved. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Landowners in a recreational subdivision who pay availability charges are "consumers" or stand in a consumer-like relationship to the utility providing water service. State ex rel. Utils. Comm'n v. Carolina Forest Utils., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Mandamus to Remedy Discrimination. - Where a public service corporation has discriminated among its patrons in its charges for electricity, mandamus will lie to compel it to charge a uniform or undiscriminating rate, for the question does not require the courts to fix a rate or pass upon its reasonableness. North Carolina Pub. Serv. Co. v. Southern Power Co., 179 N.C. 18, 101 S.E. 593 (1919), rehearing dismissed, 179 N.C. 330, 102 S.E. 625 (1920).

Applied in State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984); State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 328 N.C. 37, 399 S.E.2d 98 (1991).

Cited in State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98 (1973); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 289 N.C. 286, 221 S.E.2d 322 (1976); State ex rel. N.C. Utils. Comm'n v. Transylvania Util. Co., 30 N.C. App. 336, 226 S.E.2d 824 (1976); State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838 (1980); State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); ALCOA v. Utilities Comm'n, 713 F.2d 1024 (4th Cir. 1983); State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).


§ 62-131. Rates must be just and reasonable; service efficient.

  1. Every rate made, demanded or received by any public utility, or by any two or more public utilities jointly, shall be just and reasonable.
  2. Every public utility shall furnish adequate, efficient and reasonable service.

History

(1933, c. 307, ss. 2, 3; 1963, c. 1165, s. 1.)

CASE NOTES

Purpose of Chapter. - The clear purpose of this Chapter is to confer upon the Utilities Commission the power and the duty to compel a public utility company to render adequate service and to fix therefor reasonable rates pursuant to the procedure prescribed in G.S. 62-133. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), aff'd on rehearing, 278 N.C. 235, 179 S.E.2d 419 (1971).

The word "rate" used in the Public Utilities Act refers not only to the monetary amount which each customer must ultimately pay, but also to the published method or schedule by which that amount is figured. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

The term "public utility" in subsection (b) includes a railroad corporation. State ex rel. Utils. Comm'n v. Atlantic C.L.R.R., 268 N.C. 242, 150 S.E.2d 386 (1966).

Duty and Authority of Commission. - The statutes confer upon the Commission, not upon the Supreme Court, the duty and authority to determine adequacy of service and reasonable rates therefor. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), aff'd or rehearing, 278 N.C. 235, 179 S.E.2d 419 (1971).

There is nothing in the applicable provisions of the Public Utilities Act which prohibits the use of a fossil fuel adjustment clause in the context of the factual circumstances which the utility and the Commission face in a given case. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Investor Risk and Rate of Return - Factors for Consideration. - The law permits the Commission to consider both size and management in assessing investor risk insofar as such risk may bear on an appropriate return on equity capital; a utility's small size may increase investor risk and justify a higher return. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

While efficient management should not justify a higher common equity rate of return, it is appropriate for the Commission to consider good management as a factor which reduces investor risk and militates in favor of a lower return on equity capital. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

Formula Did Not Unreasonably Discriminate. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the Industrial Sales Tracker Formula did not unreasonably discriminate between North Carolina Natural Gas Corporation's customer classes and these findings were supported by substantial evidence in light of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Rates of Return Reasonable and Not Discriminatory. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable and did not unreasonably discriminate among the various classes of North Carolina Natural Gas Corporation customers and were supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Legitimate Justification for Industrial and City Rates of Return. - The North Carolina Utilities Commission drew legitimate distinctions which justified its decision to maintain industrial and city rates of return at a higher level than residential and commercial and small industrial rates. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Testing Reasonableness of Affiliated Company Expenses. - The Commission has the authority and the right at all times to test the reasonableness of expenses paid to affiliated companies (or allocated by them) and to cause the petitioning utility to offer affirmative evidence of their reasonableness or risk their disapproval. The Commission has the obligation to test the reasonableness of such expenses whenever they are properly challenged. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

The Commission must always determine that expenses paid to affiliated companies are reasonable and the burden of persuasion on that issue always rests with the utility. The Commission, of course, has the right to test the reasonableness of such expenses. If there is an absence of data and information from which either the propriety of incurring the expense or the reasonableness of the cost can readily be determined, the Commission may require the utility to prove their propriety and reasonableness by affirmative evidence. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Although it always has the authority to do so, in the absence of contradiction or challenge by affirmative evidence offered by any party to the proceeding, the Commission has no affirmative duty to make further inquiry or investigation into the reasonableness of charges or fees paid to affiliated companies. While affiliation calls for close scrutiny, affiliation alone does not impose an additional burden of proof or require the presentation of additional evidence of reasonableness. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Reasonableness of affiliated company expenses may be tested on the basis of (1) the cost of the same services on the open market, (2) the cost similar utilities pay to their service companies, or (3) the reasonableness of the expenses incurred by the affiliated company in generating the service. State ex rel. Utils. Comm'n v. Intervenor Residents, 305 N.C. 62, 286 S.E.2d 770 (1982).

Duty of Utility to Render Adequate Service. - Having been granted a monopoly in its franchise area, the utility is under a duty to render reasonably adequate service. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), aff'd on rehearing, 278 N.C. 235, 179 S.E.2d 419 (1971).

Utility Must Accept Responsibility. - A public utility, which has been allowed to charge rates sufficient to enable it to maintain its properties, in addition to the earning of a fair return thereon, and which nevertheless permits its properties to fall into such a poor state of maintenance as to impair the quality of its service, must accept the responsibility for its resulting inability to render adequate service to its patrons. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), aff'd on rehearing, 278 N.C. 235, 179 S.E.2d 419 (1971).

Quality of Service to Be Considered in Fixing Rates. - It was not the intent of the legislature to require the Commission to fix rates without any regard to the quality of the service rendered by the utility and thus to assure a "complacent monopoly" a fair return upon the fair value of its properties while it persists in rendering mediocre service and turns a deaf ear both to customer complaints and to Commission orders for improvement. On the contrary, the quality of the service rendered is, necessarily, a factor to be considered in fixing the "just and reasonable" rate therefor. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Increase May Be Granted Notwithstanding Service Inadequacy. - It is not unlawful for the Commission, in the exercise of its discretion, to grant an increase in rates, notwithstanding existing service inadequacy, as an appropriate step in the improvement of the service. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Findings Showing Effect of Inadequacy of Service on Decision Fixing Rates. - If the Commission found the quality of a utility's service to fall short of the requirement in this section that it be adequate, efficient and reasonable, then the Commission should make specific findings showing the effect of any such inadequacy upon its decision under G.S. 62-133 fixing rates which are fair both to the public utility and to the consumer. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Deduction of Profit from Rate Increase Upheld. - Based on the evidence of utility's inadequate service record, the Commission's determination to penalize it by deleting its profit from rate increase was clearly proper. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Applied in State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 328 N.C. 37, 399 S.E.2d 98 (1991).

Cited in State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976); State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).


§ 62-132. Rates established under this Chapter deemed just and reasonable; remedy for collection of unjust or unreasonable rates.

The rates established under this Chapter by the Commission shall be deemed just and reasonable, and any rate charged by any public utility different from those so established shall be deemed unjust and unreasonable. Provided, however, that upon petition filed by any interested person, and a hearing thereon, if the Commission shall find the rates or charges collected to be other than the rates established by the Commission, and to be unjust, unreasonable, discriminatory or preferential, the Commission may enter an order awarding such petitioner and all other persons in the same class a sum equal to the difference between such unjust, unreasonable, discriminatory or preferential rates or charges and the rates or charges found by the Commission to be just and reasonable, nondiscriminatory and nonpreferential, to the extent that such rates or charges were collected within two years prior to the filing of such petition.

History

(1913, c. 127, s. 3; C.S., s. 1067; 1929, cc. 241, 342; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

Legal Periodicals. - For survey of 1976 case law dealing with administrative law, see 55 N.C.L. Rev. 898 (1977).

For survey of 1978 administrative law, see 57 N.C.L. Rev. 831 (1979).

CASE NOTES

There is in this Article a clear statutory dichotomy between rates which are made, fixed or established by the Commission on the one hand and those which are simply permitted or allowed to go into effect at the instance of the utility on the other. Rates which are established by the Commission, that is after a full hearing, findings, conclusion and a formal order, "shall be deemed just and reasonable, and any rate charged by any public utility different from those so established shall be deemed unjust and unreasonable." Rates which the Commission simply allows to go into effect by any of the methods described in G.S. 62-134 and G.S. 62-135 are subject to being challenged by interested parties or the Commission itself and after a "hearing thereon, if the Commission shall find the rates or charges collected to be other than the rates established by the Commission, and to be unjust, unreasonable, discriminatory or preferential, the Commission may" order refund pursuant to the provisions of this section. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Rates Fixed by Commission Are Prima Facie Valid, Just and Reasonable. - The rates fixed by the Commission are not only prima facie evidence of their validity, but also prima facie evidence that they are just and reasonable. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Until Modified on Appeal or by Commission. - Rates or charges fixed by an order of the Commission are to be considered just and reasonable unless and until they shall be changed or modified on appeal or by the further action of the Commission itself. In re Southern Pub. Utils. Co., 179 N.C. 151, 101 S.E. 619 (1919). See also State ex rel. N.C. Corp. Comm'n v. Seaboard Air Line Ry., 173 N.C. 413, 92 S.E. 150 (1917).

Rates Other Than Those Fixed Deemed Unjust. - The rates approved by the Commission shall be deemed to be just and reasonable, and any different rate shall be deemed unjust and unreasonable. State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 249 N.C. 477, 106 S.E.2d 681 (1959).

The Commission is authorized by statute to fix just and reasonable rates or charges, and when they are so fixed, other or lower rates are to be deemed as unjust and unreasonable. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

"Established" rates, unlike "permitted" or "allowed" rates, are determined by the Commission after a full hearing, findings, conclusions and a formal order. Blue Ridge Textile Printers, Inc. v. Public Serv. Co., 99 N.C. App. 193, 392 S.E.2d 401 (1990).

One claiming that rates or charges established by the Commission are unreasonable or excessive has the burden of proving his contention. Corporation Comm'n v. Henderson Water Co., 190 N.C. 70, 128 S.E. 465 (1925); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959).

The burden of showing the impropriety of rates established by the Commission lies with the party alleging such error. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Appropriate Claims for Relief May Exist Under G.S. 62-139 and G.S. 62-140. - An appropriate claim for relief where the disputed rates are "established" by the Commission may exist under G.S. 62-140 which prohibits unreasonable discrimination by public utilities, or under G.S. 62-139 which prohibits a utility from receiving more compensation for services than the amount prescribed by the Commission. Blue Ridge Textile Printers, Inc. v. Public Serv. Co., 99 N.C. App. 193, 392 S.E.2d 401 (1990).

A refund pursuant to this section may be ordered even absent a utility's agreement to provide one. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Attorney General Not Prejudiced Where Refund Could Be Sought. - The Attorney General was not prejudiced by the action of the Commission in allowing an exploration tracking rate increase to go into effect without a hearing since a refund could be sought under this section. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Notice of Possible Liability for Refund. - Where a corporation was held to be a public utility and made a party to a general rate case this was adequate notice that it might be held liable for a refund. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Where Utilities Commission after due notice and hearing established, rates for intrastate shipments of pulpwood which it found to be just and reasonable, and thereafter upon petition of defendant and other carriers for reconsideration, the rate so established was ordered "to remain in full force and effect," these rates so established would be deemed the only just and reasonable rates for this commodity over defendant's lines, rendering it unlawful for defendant to charge a greater amount. State ex rel. N.C. Utils. Comm'n v. Atlantic C.L.R.R., 224 N.C. 283, 29 S.E.2d 912 (1944).

In a proceeding to recover excessive freight charges collected because of an error in the tariff distance table filed with the Utilities Commission, the charges being in conformity with the tariff schedule for a greater distance than the correct distance between the termini, evidence offered by the carriers as to whether the higher rate was fair and reasonable for the shorter distance was properly excluded, since the carriers should not be permitted to change the rate by reason of a mistake in their tariff distance table, and petitioners were entitled to recover that part of the excess charged which was not barred by the limitation contained in the statute. State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 249 N.C. 477, 106 S.E.2d 681 (1959).

Applied in State ex rel. Utils. Comm'n v. State, 250 N.C. 410, 109 S.E.2d 368 (1959); State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984); Eaton Corp. v. Public Serv. Co., 99 N.C. App. 174, 392 S.E.2d 404 (1990).

Cited in State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).


§ 62-133. How rates fixed.

  1. In fixing the rates for any public utility subject to the provisions of this Chapter, other than bus companies, motor carriers and certain water and sewer utilities, the Commission shall fix such rates as shall be fair both to the public utilities and to the consumer.
  2. In fixing such rates, the Commission shall:
    1. Ascertain the reasonable original cost or the fair value under G.S. 62-133.1A of the public utility's property used and useful, or to be used and useful within a reasonable time after the test period, in providing the service rendered to the public within the State, less that portion of the cost that has been consumed by previous use recovered by depreciation expense. In addition, construction work in progress may be included in the cost of the public utility's property under any of the following circumstances:
      1. To the extent the Commission considers inclusion in the public interest and necessary to the financial stability of the utility in question, reasonable and prudent expenditures for construction work in progress may be included, subject to the provisions of subdivision (4a) of this subsection.
      2. For baseload electric generating facilities, reasonable and prudent expenditures shall be included pursuant to subdivisions (2) or (3) of G.S. 62-110.1(f1), whichever applies, subject to the provisions of subdivision (4a) of this subsection.
    2. Apply the rate of return established under subdivision (4) of this subsection to rights-of-way acquired through agreements with the Department of Transportation pursuant to G.S. 136-19.5(a) if acquisition is consistent with a definite plan to provide service within five years of the date of the agreement and if such right-of-way acquisition will result in benefits to the ratepayers. If a right-of-way is not used within a reasonable time after the expiration of the five-year period, it may be removed from the rate base by the Commission when rates for the public utility are next established under this section.
    3. Estimate such public utility's revenue under the present and proposed rates.
    4. Ascertain such public utility's reasonable operating expenses, including actual investment currently consumed through reasonable actual depreciation.
    5. Fix such rate of return on the cost of the property ascertained pursuant to subdivision (1) of this subsection as will enable the public utility by sound management to produce a fair return for its shareholders, considering changing economic conditions and other factors, including, but not limited to, the inclusion of construction work in progress in the utility's property under sub-subdivision b. of subdivision (1) of this subsection, as they then exist, to maintain its facilities and services in accordance with the reasonable requirements of its customers in the territory covered by its franchise, and to compete in the market for capital funds on terms that are reasonable and that are fair to its customers and to its existing investors.
    6. Require each public utility to discontinue capitalization of the composite carrying cost of capital funds used to finance construction (allowance for funds) on the construction work in progress included in its rate based upon the effective date of the first and each subsequent general rate order issued with respect to it after the effective date of this subsection; allowance for funds may be capitalized with respect to expenditures for construction work in progress not included in the utility's property upon which the rates were fixed. In determining net operating income for return, the Commission shall not include any capitalized allowance for funds used during construction on the construction work in progress included in the utility's rate base.
    7. Fix such rates to be charged by the public utility as will earn in addition to reasonable operating expenses ascertained pursuant to subdivision (3) of this subsection the rate of return fixed pursuant to subdivisions (4) and (4a) on the cost of the public utility's property ascertained pursuant to subdivisions (1) and (1a) of this subsection.
  3. The original cost of the public utility's property, including its construction work in progress, shall be determined as of the end of the test period used in the hearing and the probable future revenues and expenses shall be based on the plant and equipment in operation at that time. If the public utility elects to establish rate base using fair value, the fair value determination of the public utility's property shall be made as provided in G.S. 62-133.1A, and the probable future revenues and expenses shall be based on the plant and equipment in operation at the end of the test period. The test period shall consist of 12 months' historical operating experience prior to the date the rates are proposed to become effective, but the Commission shall consider such relevant, material and competent evidence as may be offered by any party to the proceeding tending to show actual changes in costs, revenues or the cost of the public utility's property used and useful, or to be used and useful within a reasonable time after the test period, in providing the service rendered to the public within this State, including its construction work in progress, which is based upon circumstances and events occurring up to the time the hearing is closed.
  4. The Commission shall consider all other material facts of record that will enable it to determine what are reasonable and just rates.
  5. The fixing of a rate of return shall not bar the fixing of a different rate of return in a subsequent proceeding.
  6. Repealed by Session Laws 1991, c. 598, s. 7.
  7. Reserved.
  8. Repealed by Session Laws 1998-128, s. 4, effective September 4, 1998.

History

(1899, c. 164, s. 2, subsec. 1; Rev., s. 1104; C.S., s. 1068; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1971, c. 1092; 1973, c. 956, s. 1; c. 1041, s. 1; 1975, c. 184, s. 2; 1977, c. 691, ss. 2, 3; 1981, c. 476; 1981 (Reg. Sess., 1982), c. 1197, s. 6; 1985, c. 676, s. 15(2); 1989 (Reg. Sess., 1990), c. 962, s. 4; 1991, c. 598, s. 7; 1998-128, s. 4; 2007-397, s. 8; 2018-51, s. 1.)

Cross References. - As to small water and sewer utility rates, see G.S. 62-133.1.

Editor's Note. - Session Laws 2007-397, s. 3, provides: "If the federal government imposes requirements similar to those set out in G.S. 62-133.8 on electric power suppliers in the State, the Utilities Commission shall determine the applicability of federal and State requirements so as to apply the more stringent requirements except to the extent that State requirements may be specifically preempted by federal law. The Commission shall adopt rules to establish a procedure as an alternative to the procedure set out in G.S. 62-133 to annually adjust the rates of electric public utilities to allow timely recovery of all reasonable costs of compliance with the federal and State requirements pursuant to G.S. 62-133.8(h), as enacted by Section 2 of this act. In adopting rules to establish the procedure, the Commission shall incorporate the provisions of this act in accordance with this section and the public interest."

Session Laws 2007-397, s. 15 contains a severability clause.

Effect of Amendments. - Session Laws 2007-397, s. 8, effective January 1, 2008, rewrote subdivision (b)(1); added subdivisions (b)(1)a. and b.; in subdivision (b)(4), inserted "of this subsection" following "pursuant to subdivision (1)", inserted language beginning "including, but not limited to, the inclusion of construction work" and ending "subdivision (1) of this subsection", and substituted "that" for "which" twice.

Session Laws 2018-51, s. 1, effective June 25, 2018, added "or the fair value under G.S. 62-133.1A" following "the reasonable original cost" in subdivision (b)(1); and added the second sentence in subsection (c).

Legal Periodicals. - For survey of 1972 case law on public utility rate regulation, see 51 N.C.L. Rev. 1140 (1973).

For survey of 1974 case law on public utilities, see 53 N.C.L. Rev. 1083 (1975).

For survey of 1976 case law dealing with administrative law, see 55 N.C.L. Rev. 898 (1977).

For survey of 1977 law on public utility rate regulation, see 56 N.C.L. Rev. 847 (1978).

For survey of 1978 administrative law, see 57 N.C.L. Rev. 831 (1979).

For survey of 1979 administrative law, see 58 N.C.L. Rev. 1185 (1980).

CASE NOTES

I. IN GENERAL.

Constitutionality. - The power to grant franchises to public service corporations and to fix their rates rests in the General Assembly, which power the General Assembly may delegate to an administrative agency, provided the General Assembly prescribes rules and standards to guide such agency in the exercise of the delegated authority. The statute delegating to the Utilities Commission this authority is constitutional in fixing adequate rules and standards. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Stimulation of the economy is an essential public and governmental purpose and the manner in which this purpose is to be accomplished is, within constitutional limits, exclusively a legislative decision. The authority to set rates to be charged by a public utility for its services rests in the legislature and is delegated by it to the Utilities Commission under sufficient rules and standards to guide the Commission in exercising this power. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Commerce Clause Not Violated. - The North Carolina Utilities Commission is authorized by Congress to act with regard to arrangements between cogenerators and power company, so that the commission's disallowance of the amount by which contracts exceeded the company's avoided costs was consistent with federal laws and regulations and constituted lawful retail ratemaking. The commission's actions did not violate the Commerce Clause. State ex rel. Utils. Comm'n v. North Carolina Power Comm'n, 338 N.C. 412, 450 S.E.2d 896 (1994), reh'g denied, 339 N.C. 743, 454 S.E.2d 269 (1995), cert. denied, 516 U.S. 1092, 116 S. Ct. 813, 133 L. Ed. 2d 758 (1996).

Requirement That Utility Prefile Testimony Prior to That of Intervenors Is Constitutional. - A utility's due process rights were not violated by requiring it to prefile its testimony prior to the prefiling of the intervenors' testimony and requiring it to file its brief concurrently with the intervenors, where it should have been forewarned of what the intervenors intended to show. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

This section merely codified the former statute as interpreted by Supreme Court. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

Purpose of Chapter. - The clear purpose of this Chapter is to confer upon the Utilities Commission the power and duty to compel a public utility company to render adequate service and to fix therefor reasonable rates pursuant to the procedure prescribed in this section. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

The primary purpose of this Chapter is not to guarantee to the stockholders of a public utility constant growth in the value of and in the dividend yield from their investment, but is to assure the public of adequate service at a reasonable charge. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

The provisions of this Chapter designed to assure the utility of adequate revenues are in the nature of corollaries to the basic proposition that the public is entitled to adequate service at reasonable rates and safeguards against administrative action which would violate constitutional protections by confiscation of the utility's property. Without such assurance, the owners of capital would not invest in the utility's bonds or stock and the utility could not provide the plant necessary for the rendering of adequate service. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

By adopting this section, the legislature intended to establish an overall scheme for fixing rates, and this section must be interpreted in its entirety in order to comply with the legislative intent. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Purpose of Former Subsection (f). - The purpose of former subsection (f) of this section was to allow the retailer to automatically pass on to the consumer changes in the wholesale cost of natural gas, over which neither the retailer nor the Utilities Commission had control, whenever the natural gas suppliers' price was revised upward or downward, thus avoiding costly and protracted rate proceedings. State ex rel. Utils. Comm'n v. CF Indus., Inc., 39 N.C. App. 477, 250 S.E.2d 716, cert. denied, 297 N.C. 180, 254 S.E.2d 39 (1979).

Former subsection (f) was a mechanism whereby a natural gas utility could pass on to its customers supplier increases or decreases without going through the costly and protracted procedures of a general rate case. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Former subsection (f) dealt only with rate changes while G.S. 62-136(c) specifically sets forth the criteria pursuant to which refunds should be distributed. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

G.S. 62-136(c) more specifically applies to supplier refunds received by natural gas distributing utilities than did former subsection (f) and is the proper statute to be applied in determining the appropriate distribution of these supplier refunds. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Proceeding Is General Rate Case Where Question Is Fair Return on Investment. - The Commission was correct in conducting the proceeding as a general rate case, where the primary question was what is a fair rate of return on the utility's investment so as to enable it by sound management to pay a fair profit to its stockholders and to maintain and expand its facilities and services in accordance with the reasonable requirement of its creditors. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Subdivision (b)(3) shall be read in conjunction with subsection (c) of this section, as must subdivision (b)(1). State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

It is a well-established rule that it is for the administrative body, in an adjudicatory proceeding, to determine the weight and sufficiency of the evidence and the credibility of the witnesses, to draw inferences from the facts, and to appraise conflicting and circumstantial evidence. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Sales Agreements Held Reasonable As Means of Financing Nuclear Station. - The Commission properly found that nuclear power plant sales agreements, as a whole, were reasonably and prudently entered into by power company as means of financing completion of the nuclear station. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Access Charge Tariff. - Considering the evidence supporting the view that access charge tariff was calculated to reimburse local exchange companies (LECs) for having to provide additional connection facilities to local networks, payments could not be viewed as mere increased revenues for the LECs, but to provide funds to set off those expenditures that the LECs were required to make to provide additional facilities to handle additional carrier access. The imposition of the access charge tariff was within the authority granted to the Commission by the 1984 amendments to G.S. 62-110. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

An order which indicates that the Utilities Commission accorded only minimal consideration to competent evidence constitutes error at law and is correctable on appeal. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Applied in City of High Point v. Duke Power Co., 34 F. Supp. 339 (M.D.N.C. 1940); State ex rel. Utils. Comm'n v. Martel Mills Corp., 232 N.C. 690, 62 S.E.2d 80 (1950); State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970); State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974); State ex rel. Utils. Comm'n v. VEPCO, 21 N.C. App. 45, 203 S.E.2d 418 (1974); State ex rel. Utils. Comm'n v. Carolina Forest Util., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974); State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975); State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980); State ex rel. Utils. Comm'n v. Duke Power Co., 51 N.C. App. 698, 277 S.E.2d 444 (1981); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 309 N.C. 238, 306 S.E.2d 113 (1983); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 309 N.C. 195, 306 S.E.2d 435 (1983); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 64 N.C. App. 609, 307 S.E.2d 803 (1983); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985); State ex rel. Utils. Comm'n v. Public Staff, 331 N.C. 215, 415 S.E.2d 354 (1992); State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 106 N.C. App. 491, 417 S.E.2d 75 (1992).

Cited in State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923); State ex rel. N.C. Utils. Comm'n v. Atlantic C.L.R.R., 224 N.C. 283, 29 S.E.2d 912 (1944); State ex rel. Utils. Comm'n v. State, 250 N.C. 410, 109 S.E.2d 368 (1959); State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962); In re North Carolina Fire Ins. Rating Bureau, 275 N.C. 15, 165 S.E.2d 207 (1969); State ex rel. Comm'r of Ins. v. State ex rel. Att'y Gen., 16 N.C. App. 724, 193 S.E.2d 432 (1972); State ex rel. N.C. Utils. Comm'n v. Transylvania Utils. Co., 30 N.C. App. 336, 226 S.E.2d 824 (1976); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 289 N.C. 286, 221 S.E.2d 322 (1976); State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979); State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234 (1980); State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980); State ex rel. Comm'r of Ins. v. North Carolina Rate Bureau, 300 N.C. 381, 269 S.E.2d 547 (1980); State ex rel. Utils. Comm'n v. Public Staff, 52 N.C. App. 275, 278 S.E.2d 599 (1981); State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).

II. POWERS AND DUTIES OF UTILITIES COMMISSION, GENERALLY.

Commission Exercises Function of Legislative Branch of Government. - In fixing rates to be charged by a public utility, the Commission is exercising a function of the legislative branch of the government. It may not, therefore, exceed the limitations imposed upon the legislature by the State and federal Constitutions. The Commission, however, does not have the full power of the legislature, but only that portion conferred upon it in this Chapter. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Commission Must Comply with Requirements of This Chapter. - In fixing the rates to be charged by a public utility for its service, the Commission must comply with the requirements of this Chapter. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The Utilities Commission acted in excess of its statutory authority when it permitted the North Carolina Natural Gas Corporation to pass on additional costs resulting solely from an increase in storage capacity without complying with the statutory procedures required for a general rate case. State ex rel. Utils. Comm'n v. CF Indus., Inc., 39 N.C. App. 477, 250 S.E.2d 716, cert. denied, 297 N.C. 180, 254 S.E.2d 39 (1979).

This section is a part of the rate-making power of the Commission. State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98, cert. denied, 284 N.C. 124, 199 S.E.2d 663 (1973).

Statute Controls Commission in Establishing Rates. - In establishing rates, the Commission is governed and controlled by the provisions of this section. Southern Ry. v. McNeill, 155 F. 756 (E.D.N.C. 1907).

The legislative mandate is that the Commission shall fix rates which will enable a well managed utility to earn a "fair rate of return" on the "fair value" if its properties are "used and useful" in rendering its service. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

The responsibility for fixing rates rests with the Utilities Commission and not the Supreme Court. However, there is nothing in the statutes that requires the Commission to accept the rate or rates proposed, or to reject them altogether. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

It is the prerogative of the Commission, and not the Court of Appeals, to decide the question as to what constitutes fair and reasonable rates that may be charged by a utility, as the Commission is an agency composed of men of special knowledge, observation, and experience in their field, and has at hand a staff trained for this type of work, and the law imposes upon it, not the Court of Appeals, the duty to fix the rates. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The statutes confer upon the Commission, not upon the Supreme Court, the duty and authority to determine adequacy of service and reasonable rates therefor. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

It is the Commission's duty to sift through the evidence and draw a conclusion therefrom as to a fair and reasonable rate of return. State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

Neither the Supreme Court nor the Court of Appeals is authorized to fix rates for a public utility. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

Court may not substitute its judgment, either with respect to factual disputes or policy disagreements, for that of the Commission. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Power and Duty to Compel Adequate Service and Fix Rates. - This Chapter confers upon the Utilities Commission the power and duty to compel a public utility to render adequate service, and also confers upon the Commission the duty to fix reasonable rates for the rendering of adequate service. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974); State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980).

Commission's Rate Making Powers Not Governed by Principles of Res Judicata. - Since the exercise of the Commission's rate making power is a legislative rather than a judicial function, such orders are not governed by the principles of res judicata, and are reviewable in later appeals of closely related matters. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Attorney General's appeal from Utilities Commission order was not barred by the doctrine of res judicata, where the prior Commission rulings relied on by appellee power company as a bar to appellant's position were all designated by the Commission as "general rate cases" in which appellee sought Commission authority to increase its electric rates and charges, and where in fixing the rates to be charged by the utility, the Commission was exercising a function delegated to it by the legislative branch of the government. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Tax Reform Benefits Passed on to Ratepayers by Rulemaking Rather Than Ratemaking Procedure. - Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 (TRA-86) through a rulemaking procedure rather than a ratemaking procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

Nowhere in subdivision (b)(1) is there a requirement that the Commission make findings as to the cost of each project and when it will be needed. To require such extensive evidence would put an undue burden on the utility and cause the rate-making process to be more time consuming and difficult of administration. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Subdivision (b)(1) does not require the Commission to make new findings on the need for construction. Before any public utility begins the construction of a facility for generating electricity for use by the public it must first obtain from the Commission a certificate stating that public convenience and necessity requires, or will require such construction. Before such a certificate can be granted the applicant must file an estimate of construction costs and the Commission must hold public hearings. This procedure satisfies the argument that the construction must be necessary. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Commission to Fix Rates as Low as Constitutionally Possible. - The origin of this section supports the inference that the legislature intended for the Commission to fix rates as low as may be reasonably consistent with the requirements of the due process clause of U.S. Const., Amend. XIV, those of N.C. Const., Art. I, § 19, being the same in this respect. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Specific and unambiguous factual findings by the Commission are necessary to enable a reviewing court to determine whether the duty imposed by G.S. 62-131 has been performed. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Findings as to Original and Replacement Cost Less Depreciation. - Where evidence of original cost, less depreciation, and of replacement cost, less depreciation, is introduced, the Commission must make, and set forth in its order, its findings as to both of these evidential facts, along with any "other facts" considered by it. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972). See also State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

Exercise of Subjective Judgment by Commission. - Under this section the weight to be given the respective indications of fair value, the determination of the total amount reasonably necessary for working capital and the determination of what constitutes a fair rate of return requires exercise of a subjective judgment by the Commission. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

The Commission is not required to accept as conclusive the subjective judgment of a witness, even though the record contains no expression of a contrary opinion by another witness. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

The findings of the Commission, when supported by competent evidence, are conclusive. State ex rel. Utils. Comm'n v. Duke Power Co., 21 N.C. App. 89, 203 S.E.2d 404, rev'd on other grounds, 285 N.C. 377, 206 S.E.2d 269 (1974).

If there is competent evidence to support the findings and conclusions of the Commission, they will be upheld by the reviewing court. State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

The Commission as factfinder, determines the credibility of the evidence, and its findings of fact which are supported by competent, material and substantial evidence, are conclusive, and the court is bound by them. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Determination of Credibility and Weight of Evidence. - As a general rule, it is for the Commission, not the reviewing court, to determine the credibility of and the weight to be given to all competent evidence. The rule is fully applicable when there is conflicting testimony by experts as to which method among those available to experts in their field is best suited for use in resolving a particular question they are asked to address as experts. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 320 N.C. 1, 358 S.E.2d 35 (1987).

And May Not Be Disturbed Merely Because Court Might Have Concluded Differently. - The Commission's findings, supported by substantial evidence, may not properly be set aside by the reviewing court merely because a different conclusion could have been reached upon the evidence. State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979); State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

When the record, considered as a whole, contains substantial evidence supporting the subjective judgment of the Commission on any of these factors in the fixing of reasonable rates, the conclusion reached by the Commission may not be disturbed by a reviewing court merely because the court's subjective judgment is different from that of the Commission. State ex rel. Utils. Comm'n v. VEPCO, 385 N.C. 398, 206 S.E.2d 283 (1974); State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

The Commission's determination, reached pursuant to the mandate of this section and to the statutory procedural requirements, may not be reversed by the Court of Appeals or by the Supreme Court merely because it would have reached a different conclusion upon the evidence, but it is otherwise if it does not appear from the order of the Commission that the statutory mandates have been obeyed. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Under this section the determination of what constitutes a fair rate of return requires the exercise of a subjective judgment by the Commission and its decision may not be disturbed by a reviewing court merely because the court's subjective judgment is different from that of the Commission. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

When a telephone company offered substantial evidence to show that there was no significant excess plant margin, this conflict of evidence presented a question of fact upon which the finding of the Commission was conclusive and could not be disturbed by the reviewing court, even though the court might have reached a different conclusion thereon. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

A reviewing court may neither retry such disputed questions of fact nor substitute its judgment for that of the Commission. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 320 N.C. 1, 358 S.E.2d 35 (1987).

Evidence Insufficient to Support Commission's Determination of Rate of Return. - Reversal and remand of that portion of a North Carolina Utilities Commission's order in which it authorized a 10.2 percent return on equity for a utility company was appropriate because the order did not contain sufficient findings of fact regarding the impact of changing economic conditions on customers. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 430, 758 S.E.2d 635 (2014).

Commission's Decision Will Be Upheld Unless Assailable Under G.S. 62-94(b). - The decision of the Commission with regard to rates for public utilities will be upheld by the Court of Appeals on appeal unless it is assailable on one of the grounds enumerated in G.S. 62-94(b). State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

Findings, inferences, conclusions or decisions of the Commission which are arbitrary or capricious and which prejudice substantial rights of appellants are not binding on a reviewing court. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

When Commission's Orders Affirmed. - The rate order of the Commission will be affirmed if upon consideration of the whole record the court finds that the Commission's decision is not affected by error of law and the facts found by the Commission are supported by competent, material and substantial evidence, taking into account any contradictory evidence or evidence from which conflicting inferences could be drawn. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Commission May Determine Nature of Proceeding. - It is within the province of the Commission to determine whether a hearing is a general rate case or a complaint proceeding. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

And Such Determination Must Be Made as to Every Hearing. - It is necessary as a matter of procedure that a determination as to whether a hearing is a general rate case or a complaint proceeding be made in every hearing involving the establishment, modification or revocation of rates. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Determination of Commission as to Nature of Case Not Disturbed Absent Showing of Prejudice. - The findings of the Commission on whether a hearing is a general rate case or a complaint proceeding will not be disturbed in any case in the absence of a clear showing that the right of the parties have been prejudiced. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

As to implementation of 30-day notice requirement by rule requiring written notification, see State ex rel. N.C. Utils. Comm'n v. Atlantic C.L.R.R., 224 N.C. 283, 29 S.E.2d 912 (1944).

Error to Accept Design Criteria of Division of Water Quality. - It was error for the Utilities Commission to arbitrarily or subserviently accept, in place of its own determination upon the evidence before it, design criteria of the Division of Environmental Management [now Division of Water Quality] as the actual plant capacity currently needed for service to existing customers - and the beginning point for determining the appropriate additional "capacity allowance" in the rate base of plant which was not presently in service to the public, but was held for future use. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 333 N.C. 195, 424 S.E.2d 133 (1993).

III. FIXING OF RATES, GENERALLY.

.

The word "rate," as used in the Public Utilities Act, refers not only to the monetary amount which each customer must ultimately pay, but also to the published method or schedule by which that amount is figured. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

"General Rate" Case. - Where the whole or a substantial portion of the rate structure of a public utility is being initially established or is under review, and where the required procedure under this section is being carried out, the hearing before the Commission to establish or revise the rates is referred to as a "general rate." State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

"Complaint Proceeding" - A hearing which involves a single rate or a small part of the rate structure is called a "complaint proceeding." It differs from a general rate case in that it deals with an emergency or change of circumstances which does not affect the entire rate structure and may be resolved without involving the procedure outlined in this section, and does not justify the expense and loss of time involved in such procedure. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

The "reasonable operating expenses," specified in subdivisions (b)(3) and (5) of this section, relate and must be directly connected to "the reasonable original cost of the public utility's property used and useful, or to be used and useful within a reasonable time after the test period," as specified in subsection (b)(1). State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 333 N.C. 195, 424 S.E.2d 133 (1993).

Fuel Clause Subject to This Chapter. - It is the fuel clause, a formula for figuring certain monetary additions or subtractions to a customer's bill, not the ultimate amount so figured, which constitutes that part of the utility's published schedule subject to the provisions of the Public Utilities Act. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Section Applicable in Fixing or Revising Rate Schedules and Rate Classifications. - In fixing rate schedules and rate classifications, or in revising said rates and classifications or a substantial part thereof, the procedure indicated by this section must be observed. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Section May Not Apply Where Only One or a Few Rates Are Involved. - This section may not apply where a public utility has many rate schedules applying to many different classes of service customers, and only one rate or a few rates are involved in a petition for amendment, modification or rescission. Ordinarily it is not required that the utility's property be valued and that the provisions of this section be observed in such case. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959); State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

Section prescribes formula which Commission is required to follow in fixing rates for service to be charged by a public utility. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Formula Under Section. - The formula of the mandate of this section is: A x B=C (fair rate of return multiplied by the fair value of the properties equals the fair return in dollars). State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Steps Which Commission Must Take Prescribed by Section. - In order to assure the utility of earnings sufficient to attract capital and also in order to limit its charges for service to levels sufficient for that purpose, the legislature has prescribed in this section the steps which the Commission must take in fixing such charges. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Fixing of "reasonable and just" rates involves a balancing of shareholder and consumer interests; the Utilities Commission must therefore set rates which will protect both the right of the public utility to earn a fair rate of return for its shareholders and ensure its financial integrity, while also protecting the right of the utility's intrastate customers to pay a retail rate which reasonably and fairly reflects the cost of service rendered on their behalf. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

The question of whether rates prescribed under this Chapter are so unreasonable and unjust to the company and its stockholders that they amount to an unconstitutional confiscation of a utility's property necessarily involves an inquiry as to what is reasonable and just for the public. The public cannot properly be subject to unreasonable rates in order simply that stockholders may earn dividends. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Burden of Proof. - The burden of showing the impropriety of rates established by the Commission lies with the party alleging such error. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Rates to Be Based on Domestic Business. - The reasonableness of the rates to be fixed by the State must be decided with reference exclusively to what is just and reasonable in respect of domestic business. Hence, when a company operates in two or more states, the operations are treated as separate businesses for the purpose of rate regulation. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

The Utilities Commission is empowered and directed to make reasonable and just rates as applied to the distribution and sale of power in this State and not otherwise, and such power cannot be directly controlled or weakened by conditions existent in other states, either from the action or nonaction of official bodies there or from dealings between private parties. To hold otherwise would, in its practical operation, be to withdraw or nullify the powers that this section professes to confer. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

But Net Return Earned in Other States May Be Considered. - In fixing intrastate rates for a telephone company operating in several states, the Utilities Commission should take into consideration the net return such utility earns on its properties in such other states to the extent of not requiring customers in North Carolina, in order to maintain the utility's financial condition, to pay a substantially higher rate than permitted in other states. A substantial differential might be considered some evidence that the rates charged in this State are unreasonable and unjust to the local public. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Commission Need Not Guarantee Return Requested. - While the Utilities Commission is to fix rates that will enable the utility by sound management to pay all of its costs of operation and to have left over a fair return upon the fair value of its properties, it is not required to guarantee the return requested by the utility where the facts and circumstances warrant otherwise. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Rate Increase Conforming with Interstate Rates Allowed by Interstate Commerce Commission. - An order of the Utilities Commission increasing intrastate rates of State carriers so that such rates would conform with an increase in interstate rates allowed by the Interstate Commerce Commission was invalid where such order was unsupported by proof of the fair value of the properties of the carriers used and useful in conducting their intrastate business, separate and apart from their interstate business. State ex rel. Utils. Comm'n v. State, 243 N.C. 12, 89 S.E.2d 727 (1955).

Objective of Rate Making. - The fixing of rates for service which will enable the utility to do the things enumerated in subsection (b)(4), and no more, is the ultimate objective of rate making. At best, the result of the complex rate making procedure is an approximation of this objective. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Rate making is, of necessity, a matter of estimate and prediction, since rates are set for the future. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

The ultimate question in determining appropriate rates is: What is a reasonable rate to be charged by the particular utility company for the service it proposes to render in the immediate future? The determination of this question is for the Commission, in accordance with the direction of this section. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

A rate must not only be fair, just and reasonable to the consumer, but fair, just and reasonable to the utility. State ex rel. Utils. Comm'n v. Carolinas Comm. for Indus. Power Rates & Area Dev., Inc., 257 N.C. 560, 126 S.E.2d 325 (1962).

The rates established by the Commission must be fair to both the utility and the customer. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

What is a "just and reasonable" rate which will produce a fair return on the investment depends on: (1) the value of the investment, usually referred to in rate-making cases as the rate base, which earns the return; (2) the gross income received by the applicant from its authorized operations; (3) the amount to be deducted for operating expenses, which must include the amount of capital investment currently consumed in rendering the service; and (4) what rate constitutes a just and reasonable rate of return on the predetermined rate base. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959); State ex rel. N.C. Utils. Comm'n v. Piedmont Natural Gas Co., 254 N.C. 536, 119 S.E.2d 469 (1961); State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965); State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966).

The Commission, in fixing a reasonable and just rate of charges for public service corporations, may make a fair estimated value of the property presently used, and in relation thereto consider the tax valuation of the plant. State ex rel. Corp. Comm'n v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178 (1923).

In finding essential, ultimate facts, the Commission must consider all factors particularized in the statute and "all other facts that will enable it to determine what are reasonable and just rates, charges and tariffs." It must then arrive at its own independent conclusion, without reference to any specific formula, as to: (1) what constitutes a fair value, for rate-making purposes, of applicant's investment used in rendering intrastate service, the rate base, and; (2) what rate of return on the predetermined rate base will constitute a rate that is just and reasonable both to the applicant and to the public. While both original cost and replacement value are to be considered, neither constitutes a proper rate base. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954); State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959); State ex rel. N.C. Utils. Comm'n v. Piedmont Natural Gas Co., 254 N.C. 536, 119 S.E.2d 469 (1961); State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966).

In setting rates, the Utilities Commission must consider not only those specific indicia of a utility's economic status set out in subsection (b) of this section, but also all other material facts of record which may have a significant bearing on the determination of reasonable and just rates. State ex rel. Utils. Comm'n v. Thornburg, 314 N.C. 509, 334 S.E.2d 772 (1985).

Calculation of Requisite Additional Gross Revenue When Essential Facts Established. - When essential ultimate facts are established by findings of the Commission, the amount of additional gross revenue required to produce the desired net return becomes a mere matter of calculation. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

The Commission must be given broad discretion with respect to the extent which it will hear evidence relating to a particular schedule when the basic question for consideration is: Does the utility need an increase in rates to function effectively or, conversely, can the utility continue to operate, provide efficient service to its customers, and make a fair return to the owners of its properties, or may it so function after a reduction in rates? State ex rel. Utils. Comm'n v. County of Harnett, 30 N.C. App. 24, 226 S.E.2d 515 (1976).

Additions for Used and Useful Plant. - Subsection (c) of this section only requires the Utilities Commission to consider post-test period changes in used and useful plant. It also requires the Commission to consider changes in costs and revenues. If the evidence does not show what changes there may be in matching costs and revenues, the Commission does not have to allow additions to the rate base for a used and useful plant. State ex rel. Utils. Comm'n v. Water Serv., Inc., 328 N.C. 299, 401 S.E.2d 353 (1991).

Rates charged by one telephone company do not, per se, constitute a standard by which to determine the reasonableness of those of another company, even when the territories served and operating conditions are similar. The probative value of such evidence is slight at best, but where there is evidence of substantial similarity of conditions, evidence of comparative rates may have some relevancy for use as a guide to the limits of the zone of reasonableness. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Subdivisions (b)(2) and (b)(3) and subsection (c) contemplate that the Commission will consider "probable future revenues and expenses" in setting rates for the future. Obviously, conditions do not remain static. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

The Commission can take into account the future effect of inflation by fixing rates slightly in excess of that which is necessary to meet the test of reasonableness. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Determining a Utility's Capital Structure for Rate Making Purposes. - The Commission is not required, as a matter of law, to reduce the common equity component of a utility's capital structure by an amount equal to its investment in its nonregulated subsidiaries in determining the appropriate capital structure for rate-making purposes. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Formula Not Unreasonably Discriminatory. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the Industrial Sales Tracker Formula did not unreasonably discriminate between North Carolina Natural Gas Corporation's customer classes and these findings were supported by substantial evidence in light of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Efficiency of Operation. - Heat rate and capacity factor furnish convenient measuring devices by which to evaluate the overall efficiency with which a particular electrical utility system is operated, and the Utilities Commission should take into account the efficiency of a company's operation in fixing its rates in a general rate case as provided in this section, although plant efficiency as it bears upon fuel cost is not a factor to be considered in the limited and expedited proceeding provided for by G.S. 62-134(e) (now repealed). State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657, cert. denied, 301 N.C. 531, 273 S.E.2d 462 (1980).

For present provisions as to increments based upon increase in cost of fuel, see G.S. 62-133.2.

Anticipated Tax Expense. - Rates for use of a utility's service are set at a level which will enable the company to pay, among other items, its anticipated tax expense. If, by virtue of some change in the tax law, it develops that the company did not incur the anticipated expense, for the payment of which it collected revenues in prior months, its rates for present and future service may not be cut, on that account, below what it otherwise would be entitled to charge for the present or future service. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

Fundamental Changes in Sources and Supply. - Where filings reflected decisions by natural gas company's management to make fundamental changes in its sources of supply of natural gas and to access substantial additional volumes of natural gas, the rate changes generated by these decisions were not of the nature of those to be allowed under former subsection (f) of this section but rather had to be considered and passed upon in a general rate case proceeding pursuant to subsections (a)-(e) of this section. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 106 N.C. App. 218, 415 S.E.2d 758 (1992), cert. denied, 332 N.C. 671, 424 S.E.2d 417 (1992).

Apportionment of Increases in Retail Natural Gas Rates. - Any increase in the retail rates attributable to charges by a wholesaler of natural gas for storage capacity must be apportioned in a general rate case pursuant to subsections (a) through (c) of this section. State ex rel. Utils. Comm'n v. CF Indus., Inc., 39 N.C. App. 477, 250 S.E.2d 716, cert. denied, 297 N.C. 180, 254 S.E.2d 39 (1979).

There is nothing in the applicable provisions of the Public Utilities Act which prohibits the use of a fossil fuel adjustment clause in the context of the factual circumstances which the utility and the Commission face in a given case. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

For a discussion of the operation of and the authorities supporting the use of fuel adjustment clauses, see State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

In considering whether fuel adjustment clause would ever operate to increase utility's rate of return, the Commission was entitled to act on the normal assumption in rate cases generally, there being no evidence to the contrary, that other costs of the utility would not decline but would probably increase or at least remain fairly constant. In the unlikely event that other costs of the utility should decline, the Commission, either on its own motion or that of another interested party, has plenary authority to intervene and make corrections in the utility's rate schedules including, if circumstances should require it, the abrogation of the fuel clause. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

As to the practice of rolling-together accounting data and allocating costs between jurisdictional and nonjurisdictional service, see State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Shifting of Onus to Parent Corporation. - In view of the Utilities Commission's determination that unsound or "absentee" management decisions on the part of a utility, and parental domination on the part of an aluminum producing company that was both parent and customer, left the utility with insufficient resources to meet its steadily increasing public load and lacking in contractual power supply arrangements tailored to meet its public service needs at reasonable prices, it was well within the Commission's rate making authority to shift the onus of those managerial shortcomings from the pockets of utility's retail rate payers to the corporate offices of the aluminum producing company. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Refund of Over-Collection. - The Commission erred by refunding utility's over-collection by deducting the amount of the deferred fuel account from the utility's annual rate increase, as this would, in effect, require the company to pay the refund annually for as long as the rates fixed in the case remained in effect. The Commission should have provided for a lump-sum refund (i.e., a onetime rate reduction) or a rate reduction over a period of time. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

A schedule of rates fixed by the Commission under the standard prescribed by the legislature is binding upon the interested parties and the courts, provided it is within the bounds of reason. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Rates which the Commission simply allows to go into effect may be challenged by interested parties or the Commission and after a hearing the Commission may order a refund if it finds the rates to be different from those established by the Commission and unjust or unreasonable. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Retroactive rate making occurs when a rate is set so as to permit collection in the future for expenses attributable to past services. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

It is not retroactive rate making for a corporation to be held responsible for a refund for the period prior to when it was declared a public utility. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Method Which Did Not Prefer State Customers over Foreign Customers Held Not to Violate Commerce Clause. - A provision in a Commission order that a "combined system's North Carolina public load has first call on the total electric energy output of the combined system, and to the extent that said output exceeds the requirements of the North Carolina public load, such excess will be available for sale and will be purchased by [the corporation of which the system was a wholly-owned subsidiary]" would violate the commerce clause. However, where the methodology used by the Commission allowed the combined system to recover the costs of the percentage of energy it used based on its percentage of the costs of the energy generated and purchased by the combined system, North Carolina customers would not be given a preference and no commerce clause violation would occur. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

Reduction of Future Rate Held Not Retroactive Rate Making. - An order which did not reduce revenue to compensate in the future for what may have been an excessive rate in the past, but reduced the future rate for what it found was a more realistic investment credit tax amortization, is not retroactive rate making. State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982).

Court-Ordered Refund Is Not Retroactive Rate Making. - The Supreme Court has the power to direct the Commission to order refunds from rates established by final order of the Commission. This would not constitute retroactive rate making prohibited under the North Carolina Statutes. Retroactive rate making occurs when the utility is required to refund revenues collected, pursuant to the then lawfully established rates, for such past use. A rate has not been lawfully established simply because the Commission has ordered it. If the Commission makes an error of law in its order from which there is a timely appeal the rates put into effect by that order have not been "lawfully established" until the appellate courts have made a final ruling on the matter. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Adjustment to Cost Study. - North Carolina Utilities Commission did not err by approving a utility company's adjustments to a study of the costs of providing retail electric service to a large industrial customer because there was substantial evidence in the record, including the testimony of three expert witnesses, to support the Commission's findings. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 430, 758 S.E.2d 635 (2014).

The North Carolina Utilities Commission reviewed the capacity rate set by an arbitrator and determined that he did not properly take into account other potential sources of power, thus his assessment of avoided costs was unreasonably high, and its exclusion of expenses for capacity payments was merely the disallowance of the amount by which the contract rate exceeded power company's avoided costs; therefore the commission properly disallowed expenses for unreasonably high payments in accordance with this section. State ex rel. Utils. Comm'n v. North Carolina Power Comm'n, 338 N.C. 412, 450 S.E.2d 896 (1994), reh'g denied, 339 N.C. 743, 454 S.E.2d 269 (1995), cert. denied, 516 U.S. 1092, 116 S. Ct. 813, 133 L. Ed. 2d 758 (1996).

Improper Costs. - Commission's findings were supported by substantial evidence, including the testimony of witnesses acknowledging that errors occurred and explaining that corrective steps were taken to resolve the errors, and it was not shown that the Commission allowed the company to recover any improper costs from ratepayers. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

Evidence Not Sufficient. - Because of the lack of evidence justifying increase and because the Commission did not consider the future revenue potential, the decision of the Commission was not supported by competent, material, and substantial evidence. State ex rel. Utils. Comm'n v. Carolina Water Serv., Inc., 335 N.C. 493, 439 S.E.2d 127 (1994).

IV. RATE BASE.

.

A. IN GENERAL.

.

Rate Base Defined. - The "rate base" is the cost of the utility's property which is used and useful in providing service to the public. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

The general doctrine is that the rate base is made up of values used in furnishing the service. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

There Is But One Rate Base. - It is incorrect to speak of "the original cost rate base" and the "trended original cost rate base." There is but one rate base, namely, the fair value of the public utility's property used and useful in providing the service rendered to the public within this State, which value the Commission must determine as of the end of the test period. The original cost of the properties is simply evidence to be considered in making this determination. The replacement cost, whether determined by use of trended cost indices or otherwise, is also but evidence of the fair value of the properties. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

It is the duty of the Commission to arrive at an independent rate base upon consideration of all factors, including cost, replacement and trended cost, and it is its duty to exercise its independent judgment in doing so. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

When Companies Considered as Single, Integrated System for Rate Making. - Where two companies traded all their generation to TVA and received in exchange for this entitlements of energy which they divided as they pleased, the Commission could conclude from these facts that the two companies constitute a single, integrated system for rate making purposes. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 65 N.C. App. 198, 309 S.E.2d 473 (1983), aff'd, 313 N.C. 614, 332 S.E.2d 397 (1985), rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

What Operating Expenses May Be Considered. - This section limits the property upon which North Carolina consumers are required to pay a return to the property used and useful in providing intrastate service; when the provisions of (b)(1), (b)(3) and (c) are read in pari materia, it is apparent that the only operating expenses which the Utilities Commission may consider in setting intrastate rates for North Carolina public utilities are those incurred in the provision of service to a utility's North Carolina consumers. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 313 N.C. 614, 332 S.E.2d 397, rev'd on other grounds, 476 U.S. 953, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986).

This section clearly provides that the rate base and allowable operating expenses of a utility are limited to those costs incurred in providing service to the company's North Carolina retail customers. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985).

Matching Revenues and Costs Required for Use of Post-Test Year Costs in Rate Base. - Where provider of water and sewer services asks that costs for post-test year use of plants be included in its rate base, the Utilities Commission may, under subsection (c) of this section, require the utility to show matching revenues and costs. State ex rel. Utils. Comm'n v. Water Serv., Inc., 328 N.C. 299, 401 S.E.2d 353 (1991).

What Property to Be Considered. - This section clearly contemplates that only that property of the utility which is devoted to the public use for which the utility has been granted a franchise is to be considered, both in arriving at the fair value rate base and in projecting probable future revenues and expenses. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

In a proceeding by a power company for an increase in the cash fares on its city bus system, the Commission was correct in considering the value only of the properties used and useful in connection with the operation of the bus system, without regard to the value of the electric properties of the power company. State ex rel. Utils. Comm'n v. City of Greensboro, 244 N.C. 247, 93 S.E.2d 151 (1956).

Question Whether Property Is "Used and Useful" Is One of Fact. - The question of whether specific property is presently "used and useful" in rendering service is one of fact, to be determined by the Commission upon competent and substantial evidence. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

"Excess" Facilities Not "Used and Useful" - If facilities are found to be excess, as a matter of law, they can not be considered "used and useful" as that term is used in subdivision (b)(1), and cannot be included in the rate base. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 484, 385 S.E.2d 463 (1989).

Property Not Presently Used to Its Full Capacity. - The fact that a transmission line, a building or a telephone company's central office equipment is not presently used to its full capacity does not necessarily justify the exclusion of any portion of it from the rate base on the theory that such portion is not presently "used and useful" in rendering service. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

While central office equipment might have provided at the end of the test period capacity in excess of the amount needed at that moment, there being no question raised that it was not in operation at that time, it was at that time property both used and useful by the utility in providing services to the public; therefore, the Commission had no authority to deduct any portion of its costs in arriving at the reasonable original cost of the property for consideration by it in making its ultimate determination of fair value. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

The question for determination in connection with an alleged overbuilding of a utility plant is whether the properties in question can be deemed "used and useful" in rendering the service, as of the end of the test period. If not, they may not properly be included in the rate base. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Property Held for Future Use. - A telephone company, with central office equipment sufficient to serve any reasonably anticipated increase in customers, may not properly add to its rate base additional units of central office equipment merely because, in the long future, it hopes to have customers who will use it. This is especially true where the supplier of such equipment is an affiliated corporation, controlled by the same holding company which controls the telephone company. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

There is no merit in the contention that exclusion from the rate base of the value of property held by a public utility for future use amounts to confiscation of its property. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

Classification as "Extraordinary Property Retirement" Held Error. - The classification of a physical plant that is not "used and useful" (and thus not includable in a rate base) as "extraordinary property retirement" and subject to recovery through amortization, has no legal basis. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 333 N.C. 195, 424 S.E.2d 133 (1993).

Where, after finding a sewer connection to be "no longer used and useful" and erroneously concluding thereupon that it should be treated as extraordinary property retirement and amortized over a six-year period, the Utilities Commission directed the "unamortized balance" to be "included in rate base", the Commission simultaneously treated the unused property as rate base and reasonable operating expenses in direct violation of the ratemaking process. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 333 N.C. 195, 424 S.E.2d 133 (1993).

Subdivision (b)(1) is designed to make utility customers finance reasonable construction costs arising after July 1, 1979, regardless of whether that construction becomes useful to the customers. State ex rel. Utils. Comm'n v. Conservation Council, 64 N.C. App. 266, 307 S.E.2d 375 (1983), modified on other grounds, 66 N.C. 456, 311 S.E.2d 617, rev'd in part, 312 N.C. 59, 320 S.E.2d 679 (1984).

The purpose of subdivision (b)(4a) is to prevent utility companies from obtaining a double recovery by capitalizing the allowance for funds used during construction after they have had construction work in progress expenses for the same construction included in the rate base. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

The Commission must include all reasonable construction work in progress expenditures in the rate base. The only matter left to the discretion of the Commission is whether such expenditures are reasonable and prudent. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Only Reasonable Construction Work in Progress Expenditures Included. - The legislature mandates that the only expenditures for construction work in progress which can properly be included in rate base are reasonable expenditures. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Under the "financial stability" requirement of subdivision (b)(1) of this section, construction work in progress may be included in a utility's rate base to the extent that the Commission determines that the inclusion is necessary to allow the utility to maintain a generally good overall financial status. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Subdivision (b)(1) clearly commits to the discretion of the Commission the determination of what amount of construction work in progress, if any, to include in the utility's rate base. This discretion is tempered, however, by the statute's requirement that the expenditures be reasonable and prudent and that the Commission find that the inclusion is in the public interest and necessary to the financial stability of the utility in question. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Including construction work in progress in rate base did not lessen rules and standards set by legislature. Reasonableness remains the standard. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Evidence as to Construction Work in Progress. - To require the utility company to introduce evidence with respect to every item comprising construction work in progress would be an exercise in futility. The burden of proof would be unduly and unnecessarily burdensome and the rate-making process would become even more time consuming and difficult of administration. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

Evidence that utility's bond rating was in jeopardy of falling from an A rating to a BAA rating and that the inclusion of the additional construction work in progress was necessary to "stabilize" the company at its A rating level, along with other evidence, supported the Commission's finding that the inclusion of additional construction work in progress was necessary to the utility's financial stability. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Evidence of whether the plant under construction will be completed within a reasonable time is pertinent to deciding if expenditures for such construction are reasonable and prudent. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

While it is the better practice for the Commission to specifically find that the construction will be completed within a reasonable time, the statute does not require it so long as there is evidence in the record that the plant would be completed within a reasonable time. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Inclusion of Facility in Another State Absent North Carolina Certificate of Authority. - The Commission acted within the limits of its authority when it included Catawba Unit 1, located in South Carolina, in power company's rate base, even though no North Carolina certificate of necessity had been obtained prior to beginning construction thereof. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Inclusion of Ownership Interest in All Common Plant of Nuclear Power Station Held Proper. - The Commission acted within its authority when it included in power company's rate base the company's ownership interest in all of common plant of nuclear power station, despite argument that only half of the common plant should be associated with operating Unit 1, and that the other half should be classified as construction work in progress consistent with the Commission's treatment of not yet operational Unit 2. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

Before 1977 amendment of subdivision (b)(1), utilities were not allowed to include construction work in progress (CWIP) in rate base. Instead, a utility would add together all of the costs incurred by a project each year and multiply that by the allowance for funds used during construction (AFUDC) rate. The AFUDC rate is a rate of interest which represents as nearly as possible the actual cost of money used for construction. The figure that results from multiplying the costs times the AFUDC rate is capitalized annually until the plant comes into service and is then recovered along with the original costs of the plant. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Exclusion of Plant Under Construction. - A generating plant of a power company, half-completed at the end of the test period, or a half-completed line of telephone wire, cannot be deemed property "used in providing the service" "as of the end of the test period used in the hearing." Neither can it be deemed property "useful" in rendering the service at that time. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971), decided prior to 1977 amendment.

It was error for the Commission to include in the rate base of a public utility the value of the plant under construction at the end of the test period, and to make a pro forma adjustment to revenues by adding to the actual revenue earned in the test period "interest charged to construction," since the plant under construction was not in operation at the end of the test period. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971), decided prior to 1977 amendment.

A telephone plant under construction at the end of the test period is not property "used and useful" within the meaning of this section and is not to be included in the rate base. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972), decided prior to 1977 amendment.

Contributions in aid of utility construction must be excluded from rate base. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975), decided prior to 1977 amendment.

The term "the public utility's property used and useful ... in providing the service" in subdivision (b)(1) was not intended by the legislature to include that portion of the utility plant in service represented by contributions made by the utility's patrons in aid of construction. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975), decided prior to 1977 amendment.

It makes no difference whether contributions to utility company were made initially by customers or by land development companies, or whether some of the latter were closely related to the utility company. The controlling factor is whether the utility company's customers ultimately bore the cost of such contributions. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975), decided prior to 1977 amendment.

"Contribution" Correctly Excluded. - The Utilities Commission did not err in excluding from the rate base of a water utility an amount representing the difference between the original cost of a water system constructed by the developers of a real estate subdivision and the price paid to such developers by the water utility, where the Commission found that such difference amounted to an indirect payment from the customers to the utility through the purchase of their lots, which allowed the original owners to sell the water system to the utility for less than the probable cost of installation. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975), decided prior to 1977 amendment.

The Commission was not required to include a contributed plant in applicant's fair value rate base. State ex rel. Utils. Comm'n v. Heater Util., Inc., 26 N.C. App. 404, 216 S.E.2d 487, aff'd, 288 N.C. 457, 219 S.E.2d 56 (1975), decided prior to 1977 amendment.

When Addition to Plant May Be Added to Rate Base. - When the addition to plant is completed and put into service, the entire cost of it, including the cost of capital incurred in construction, is added to the rate base of the company. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971), decided prior to 1977 amendment.

Unnecessary Additions. - A utility may not justify an increase in its rates for service to its present customers by evidence of its present intent to build additions to its plant not reasonably considered necessary for adequate service, including proper reserve capacity, by the end of the time needed for the completion of such additions. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Value of franchise does not enter into computation of the utility's rate base. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The rate base should include working capital supplied by the company. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The utility's own funds reasonably invested in such materials and supplies and its cash funds reasonably so held for payment of operating expenses, as they become payable, fall within the meaning of the term "property used and useful in providing the service," and are a proper addition to the rate base on which the utility must be permitted to earn a fair rate of return. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

But such rate base should not include funds supplied by customers. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

As funds collected from customers and used by utility as working capital are not "the public utility's property" within the meaning of subsection (b)(1). State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

The utility is not entitled to include in its rate base funds which it has not provided but which it has been permitted to collect from its customers for the purpose of paying expenses at some future time and which it actually uses as working capital in the meantime. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

Overcharge to Investment Does Not Directly Affect Rate Base. - Only those purchases for operating materials and supplies, including current maintenance, are chargeable to operating expense, and purchases for plant construction go into an account for investment in plant, not to operating expense, so that an overcharge, if any, to investment in plant does not affect the net operating income. While such overcharge would improperly add to the account for original cost of the plant, which is an item to be considered in computing the rate base, it actually would not affect the rate base directly, since the rate base is the fair value of the plant, not the cost of it. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Acceptance by Commission of "book value" or "cost less depreciation" as rate base is in conflict with the standard prescribed in the statute. The conclusion is inescapable that by accepting the book value as the rate base, it necessarily excluded consideration of present cost of replacement and all other factors from effective consideration. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Costs are presumed to be reasonable unless challenged. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Excess of Fair Value over Original Cost Less Depreciation to Be Included in Rate Base. - This section contemplates that the excess of "fair value," ascertained by the Commission, over and above the original cost, less depreciation, shall be included in the rate base of the utility, just as if it were a realized profit invested in additional property used and useful in rendering service to the public. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Excess of Fair Value over Total Capital of Company. - The excess of "fair value" over the actual total capital of the company (debt capital, plus capital stock, plus actual surplus) is to be added to the equity component of the capital structure for the purpose of fixing rates under this section. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The Commission may reduce a utility's rate base by increasing its accumulated depreciation account as an offset to a pro forma adjustment by the utility in the same amount to depreciation expense. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

B. FAIR VALUE.

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Commission Must Consider Requirements of Section in Arriving at Fair Value of Property. - In arriving at the fair value of a public utility's property used and useful in providing the service rendered to its customers, the Commission is charged with the duty to consider the requirements set forth in this section, as well as other relevant factors. State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966).

"Minimal Consideration" Inadequate. - The Commission may not brush aside one of the prescribed indicators of original cost and replacement cost by giving it "minimal consideration." State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Neither the Commission nor the Supreme Court may evade the mandate of this section by determining the number of dollars which would be a fair return on the original cost, depreciated, and then simply translating that amount into a percentage of "fair value." State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Meaning of "Value" - The term "value" in this section does not refer to the original or the replacement cost of the property or to the exchange or sales price it would command, as used or secondhand property, on the market. It has reference to the value of the property actually in use, serving its purpose as a part of a composite public utility, earning an income for its owner. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Value is not the price for which the property could be sold as used or secondhand property. It is not the sale or exchange value of the entire business as a going concern. It is not the same as the fair value to be awarded by a jury in a condemnation case. The concept of "fair value," as used with reference to a public utility's rate base, is unique to rate making. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Necessity for Determining Fair Value of Utility's Property. - The first step prescribed by subsection (b)(1), that of ascertaining the fair value of the public utility's property used and useful in providing the service rendered to the public within this State, becomes of critical importance in the rate-making process, for only after the determination of this rate base can judgment be intelligently exercised fixing the rate of return which the utility is entitled to receive on the fair value of its property and fixing rates to be charged by the utility which are fair both to the public utility and to the consumer. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Factors to Be Considered in Determining Fair Value. - This section contemplates a weighing of (1) the reasonable original cost, less depreciation, (2) the replacement cost, which may be determined by trending such reasonable depreciated cost to current cost levels or by any other reasonable method, and (3) any other relevant factor, by the Commission in the exercise of its own expert judgment in determining "fair value." State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

This section contemplates that, normally, the Commission will ascertain the "fair value" of the properties at a point somewhere between the original cost, less depreciation, and the cost of replacement new, less depreciation. The Commission has the duty to weigh these evidences of "fair value" and may not disregard either, or brush either aside. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Fair Value Not Ascertainable by Mathematical Formula. - "Replacement cost" and "fair value" are not synonymous. Nor is "fair value" an arithmetical average of original cost and replacement cost, less depreciation, nor is it to be ascertained by the application of any mathematical formula. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

Neither original cost, depreciated, nor replacement cost, depreciated is the measure of "fair value." They are indicators of "fair value" and their respective weights are to be determined by the Commission in its expert judgment. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

Balancing of Factors by Commission in Determining Fair Value. - Having made properly supported findings, it is for the Commission, not the reviewing court, to determine, in its expert discretion and by the use of "balanced scales," the relative weights to be given these several factors in ascertaining the ultimate fact of "fair value." State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

It is the clear intent of subsection (b)(1) that the Commission, in considering the indicators of "fair value" which themselves are supported by competent and substantial evidence, shall use its own expert judgment as to the credibility of the evidence in the record and as to the weight to be given to it. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Necessity That Commission Review Management Decisions. - Review of management decisions by the Utilities Commission in a general rate case is not only entirely appropriate but even necessary, for poorly maintained equipment justifies a subtraction from both the original cost and the reproduction cost of existing plant before weighing these factors in ascertaining the present "fair value" rate base of the utility's properties as required by this section. State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657, cert. denied, 301 N.C. 531, 273 S.E.2d 462 (1980).

Effect of Improper Plant Engineering and Maintenance. - Neither the original cost nor the reproduction cost may properly be taken as the present fair value of telephone properties which were improperly engineered, have not been properly maintained, and are consequently in need of extensive rehabilitation. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The fact that a plant or a unit thereof is not well adapted to, or is inappropriate for, its present and/or reasonably to be anticipated future use tends materially to reduce its value below its reproduction new cost. One of the forms of inappropriateness is inappropriate engineering layout. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

The fair value of a new addition, when completed and in service, would almost certainly be found to be its total cost and, thereafter, would be found by considering such cost and the reproduction, or trended, cost, including interest during construction. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Method of Taking Inflation and Rising Cost of Plant Additions into Account. - An accepted method of taking inflation and rising cost of plant additions into account in rate making is to fix rates for service sufficient, presently, to bring to the company a rate of return, on its present rate base, slightly in excess of that which is necessary to meet the test of reasonableness. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Weight of Trended Cost Evidence. - In times of increased construction costs and decreased dollar value, trended cost evidence deserves weight in proportion to the accuracy of the tests and their intelligent application. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965); State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Trended cost is useful only when it becomes necessary to fix the present value of facilities constructed when the cost was low and replacement has become expensive. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

Trended Cost Evidence Useful But Not Conclusive. - The trended cost takes into account the type of facility, its age, its original and replacement cost, terrain, location, its probable useful life, and other factors. Such evidence is not conclusive, but it does appear to be a useful guide in determining value of facilities. State ex. rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

"Fair value" does not cover money stupidly, extravagantly, or corruptly spent and if a utility has been seriously overbuilt, or its promoters have been seriously overpaid, the law does not intend that its customers shall be saddled with the payment of interest on money that was thrown away. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Utility may not inflate its rate base by extravagance in purchasing equipment or constructing its plant. In this connection, it is immaterial whether such extravagance is due to careless improvidence or willful payment of exorbitant prices to an affiliate. On the other hand, the management of the business of a public utility, including the fixing of the prices which it pays for the construction and equipment of its plant and for its maintenance and operation, rests with its board of directors in the absence of clear mismanagement or abuse of discretion. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Credibility and weight of evidence in determination of "fair value" is for the Commission, not for a court, to determine. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 398, 206 S.E.2d 283 (1974).

It is not the meaning of subsection (b)(1) that, in the absence of expert opinion testimony as to the weight to be given the respective indicators of "fair value," the Commission must give them equal weight and find "fair value" by the mere striking of an arithmetic average of the indicators. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Having made findings of the original cost less depreciation and replacement cost less depreciation, the weight to be given those figures in reaching the ultimate finding of fair value is to be determined by the Commission, not by the reviewing court. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

The Commission is not required to accept expert witness' opinion as to the weight to be given the original cost and replacement cost increments of fair value, even though there be no contrary expert testimony. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

This section does require expert testimony as to the weight which the Commissioner should give to original cost and to replacement cost factors in carrying out its mandate to "consider" these indicators of "fair value." State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Reviewing court may not properly disturb an order of the Commission merely because it would have given different weight to each of the indicators of "fair value." State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

A reviewing court may not set aside the Commission's determination of "fair value" merely because the court would have given the respective elements different weights and would, therefore, have arrived at a different "fair value." State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

A finding of "fair value" by the Commission is not rendered immune to judicial review by Commission's declaration that, in reaching such finding, it followed no formula. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The mere recital by the Commission that it has considered all of the factors prescribed by this section in arriving at its ascertainment of "fair value" does not preclude the reviewing court from setting aside the finding of "fair value" where the record discloses that the Commission in fact failed to do so. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 15 N.C. App. 41, 189 S.E.2d 777 (1972).

When Commission's Finding of Fair Value May Be Set Aside. - The determination of the weight to be given each factor in its ascertainment of "fair value" is for the Commission, not the reviewing court. But if it is clear from the record that the Commission reached its finding of "fair value" by disregarding or giving minimal consideration to one of the enumerated factors, its finding of the ultimate fact of "fair value" may be set aside by the court on the ground of error of law in such ascertainment. Similarly, the finding of "fair value" may be set aside by the reviewing court if it clearly appears that the Commission has made its determination thereof by giving weight to a factor as to which there is no substantial evidence in the record, and likewise where the order of the Commission shows that it reached its determination of "fair value" by considering unspecified facts other than original cost and replacement cost depreciated. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Determination of Fair Value Upheld. - There was no reversible error in the Commission's determination that the fair value of the power company's properties, exclusive of the allowance for working capital, should be determined by giving a weighting of one third to replacement cost, depreciated, and two-thirds weighting to original cost, depreciated. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

C. ORIGINAL COST.

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In fixing fair value, original cost is an item to be considered. State ex rel. Utils. Comm'n v. Public Serv. Co. of N.C. Inc., 257 N.C. 233, 125 S.E.2d 457 (1962).

But Is Only One Factor. - The establishment of the reasonable original cost of the property, as referred to in subsection (b)(1), is of significance only because reasonable original cost is one of several figures and factors which the statute requires the Commission to consider in arriving at fair value. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Ordinarily, Price Actually Paid Is Considered Reasonable Original Cost. - Where a public utility's property has been purchased from a stranger, ordinarily the price actually paid by the utility would be considered its reasonable costs, though it would not necessarily be so. Even in such a case the Commission may find that the management of the utility acted improvidently or carelessly and paid a price greater than reasonable. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Determining Reasonable Original Cost of Property Sold to Utility by Affiliated Corporation. - In determining the rate base, the fact that equipment or services are sold to the utility by an affiliated corporation does not alter the ultimate question for the Commission. That question is whether the prices paid by the utility are reasonable and, therefore, reflect the "reasonable original cost" of the properties. The only effect of the affiliation between the utility and its supplier is that such relationship calls for a close scrutiny by the Commission of the price paid by the utility. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

For purposes of determining a utilities rate base, when considering a purchase made from an affiliated company, the bargaining is not at arm's length and when the transaction is called in question, the burden is upon the utility to show that the price it paid was reasonable. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

In cases in which a substantial portion of a utility's property was acquired by purchase from an affiliated company, it becomes obligatory upon the Commission to scrutinize the prices paid and, to the extent it finds such prices unreasonable, to make adjustments in the utility's figures accordingly. This is all the more true where the affiliated supplier so dominates the market that its pricing policies may not be sufficiently controlled by normal competition. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Where the prices paid by a telephone company to an affiliated manufacturing company are the same as those which the manufacturing company charges other affiliated companies to which it makes a majority of its sales, the Utilities Commission could properly determine the reasonableness of the prices charged by the manufacturing company by comparing its rate of return on common equity with the rates of return experienced by other manufacturing companies operating in similar fields. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

D. REPLACEMENT COST.

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Necessity of Finding Replacement Cost. - Without a finding by the Commission of the replacement cost of a public utility's properties "used and useful in providing the service," the Commission's finding of "fair value" was affected by an error of law and, consequently, its finding of a fair rate of return on such "fair value" was so affected and was premature. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

While the consideration or weight to be given replacement cost, depreciated, in ascertaining "fair value" rests in the sound discretion of the Commission, the reviewing court cannot satisfactorily determine whether the Commission considered or weighed this element at all, or merely gave it minimal consideration, unless the Commission sets forth what it found this element to be. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

Discounting Replacement Cost for Depreciation. - In determining "fair value," the Commission may discount the replacement cost new by the same percentage as that indicated by the total accumulated depreciation in arriving at the replacement cost factor, or, if there is evidence to support such a finding, may discount replacement cost new by a greater or a smaller amount on account of depreciation, including obsolescence. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

It is for the Commission to determine what weight to give to evidence as to replacement cost. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Fair Value Usually Less Than Reconstruction Cost. - Ordinarily, the fair value of a utility's property is found to be less than the reconstruction cost of the property. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

Fair Value Cannot Exceed Present Cost of Constructing Substitute. - The present "fair value" of a utility system of generating plants, transmission lines and distribution lines cannot exceed the present cost of constructing a substitute system of modern design, capable of generating and distributing the same quantity of power at less operating expense. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

V. OPERATING EXPENSES AND WORKING CAPITAL.

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Reasonable Operating Expenses Must Be Ascertained. - In fixing rates to be charged by the public utility, the Commission is directed to ascertain, among other things, the public utility's reasonable operating expenses. State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98, cert. denied, 284 N.C. 124, 199 S.E.2d 663 (1973).

Term to Be Liberally Interpreted and Applied. - When a narrow construction of the operating expense element of a regulatory act would frustrate the purposes of the act, the term should be liberally interpreted and applied. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

A restrictive interpretation of the operating expense element of the rate-making formula would severely limit the ability of the Commission to act in the best interest of the consuming public in emergency situations. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Cost of collecting past-due accounts is an operating expense. State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98 (1973).

Cancellation Costs as Operating Expense. - There was no error in the Commission's authorization for utility to amortize costs associated with abandoned construction of nuclear power plant as operating expenses for rate making purposes; this action was within the commission's power and supported by competent, material, and substantial evidence. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Costs Held to Be Cancellation Costs. - Costs of the additional burden assured by one unit at nuclear power plant in anticipation of reducing the costs of the remaining three units, which were later cancelled, should have been treated as cancellation costs of the abandoned units, to be recovered as operating expenses through amortization. State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 484, 385 S.E.2d 463 (1989).

Tracking Rate Increases as Operating Expenses. - Tracking rate increases, designed to recover the reasonable costs of approved exploration projects, must be said to be operating expenses, if practical effect is to be given to this chapter, where the Commission has found that if no new supply source were obtained, the utilities would be unable to supply adequate service to their customers. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Cost of Service Calculation. - The Utilities Commission's ultimate conclusion that the peak and average cost-of-service methodology more properly allocates fixed costs between annual use and peak day utilization of the facilities than does the peak responsibility method or the imputed load factor method was supported by sufficient findings and competent, material and substantial evidence. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

As to constitutionality of permitting utilities to recover excess costs of exploration ventures through tracking rate increases, see State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

Error to Add Interest Charged to Construction to Operating Revenue. - It was error for the Commission to add to the company's operating revenue for the best period interest charged to construction during the test period. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

"Depreciation" Defined. - Broadly speaking, depreciation is the loss not restored by current maintenance which is due to all the factors causing the ultimate retirement of the property. While property remains in the plant, the estimated depreciation rate is applied to the book cost and the resulting amounts are charged currently as expenses of operation. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Depreciation Deductions. - For rate-making purposes a public utility is allowed to deduct annually, as an operating expense, so much of its capital investment as is actually consumed during the current year in rendering the service required of it. But the cost represents the amount of the investment, and it is the actual cost, not theretofore recouped by depreciation deductions, that must constitute the base for this allowance. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954); State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975).

In establishing rates a public utility is entitled to deduct each year as an operating expense only such depreciation as represents the investment currently consumed and not provided against by maintenance. Thus the integrity of the investment is maintained, and this is all the utility has a right to demand. The rate should be fixed, as near as may be, so that it will extend over the usable life of the property being depreciated. Otherwise the allowance will be unjust either to the utility or to the public. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

The purpose of an annual allowance for depreciation and the resulting accumulation of a depreciation reserve is not, as is sometimes erroneously supposed, to provide the utility with a fund by which it may purchase a replacement for the property when it is worn out. The purpose of the allowance is to enable the utility to recover the cost of such property to it. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975).

The rate of depreciation allowed by the federal government for income tax purposes is not necessarily the proper rate to be allowed for rate-making purposes. Indeed, for rate-making purposes it would ordinarily be excessive, especially in respect to buildings and like permanent improvements. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Depreciation Based on Original Cost. - Subdivision (b)(3) clearly directs that the annual allowance for depreciation of durable properties, such as a pipeline, be based upon the original cost of the property to the utility and not upon either its current fair value or the cost of installation borne by a former owner, such as the real estate developers in the present case. State ex rel. Utils. Comm'n v. Heater Util., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975).

An instruction that the current rather than the cost value of capital investment shall be used as the basis for estimating depreciation allowances is incorrect. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Using Property Which Has Been Fully Depreciated for Other Purposes. - It would be unfair to a utility not to take into consideration the present fair value of property now in use but which has been fully depreciated for other purposes. On the other hand, if the rate of depreciation allowed for rate-making purposes is in excess of the investment currently consumed, over and above maintenance costs, it is unfair to the public, for then the company is permitted to recover annually a part of its investment which is not currently consumed. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Transactions Between Utilities and Affiliated Supply Companies. - It is the duty of the Commission to look closely at transactions between utility operating companies and affiliated supply companies to be sure that the public is not required to pay rates based on excessive costs resulting from excessive profits earned by an unregulated supplier. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The financial condition of a public utility and the demand for its bonds and securities which affect its capacity to compete on the open market for additional equity and debt capital are ordinarily material considerations in fixing rates. But these factors are of little moment where the applicant has available at all times a fund provided by its parent company from which it may borrow at will for needed improvements or enlargements. What it has to pay for its borrowings from this fund is of more importance. These are some of the "other facts" the statute requires the Commission to consider. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Capital Investment Determined as of Time Rates Are Effective. - Where a utility is currently investing large amounts of capital in expansion, the Utility Commission should determine the capital invested as of the time the rates fixed by it are to be effective, rather than the average net investment of the utility for the entire test year, since the rates fixed are prospective. State ex rel. N.C. Utils. Comm'n v. Piedmont Natural Gas Co., 254 N.C. 536, 119 S.E.2d 469 (1961).

Large Sum of Money on Hand for Working Capital. - When, in fixing rates which will produce a fair return on the investment of a utility, it is made to appear that it has on hand continuously a large sum of money it is using as working capital and to pay current bills for materials and supplies, that fact must be taken into consideration. And if the fund on hand is sufficient, no additional sum should be allowed at the expense of the public. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Where a public utility uses, for operating capital, moneys collected by it in taxes for the federal government which it is not required to pay to the federal government until a later date, the Utilities Commission should take such capital into consideration in fixing rates, which action is neither a condemnation nor a condonement of the practice. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Advance Billing Not Creditable to Working Capital Requirements. - In determining the local rates for a telephone company, the amounts paid to the company by its customers as a result of the company's practice of billing the customers one month in advance are not creditable to the company's working capital requirements. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Income Produced by Increase of Facilities. - In fixing the rate for a telephone company, the Utilities Commission must take into consideration the net income to be produced by the increase in the number of telephones in service at the end of any test period adopted by the Commission. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Exclusion of Expenditures Relating to Unsuccessful Expansion Attempt. - The Commission's conclusion that expenditures related to utility's unsuccessful attempt to expand its service area should be excluded from its cost of service was supported by substantial evidence and was neither arbitrary nor capricious. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Contractual Buy-Back Costs. - The Commission properly classified contractual buy-back costs of power company as operating expenses. State ex rel. Utils. Comm'n v. Eddleman, 320 N.C. 344, 358 S.E.2d 339 (1987).

VI. RATE OF RETURN.

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Rate of Return Defined. - The "rate of return" is a percentage which the North Carolina Utilities Commission concludes should be earned on the rate base. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

The overall rate of return is a percentage which the Commission concludes the utility should be permitted to earn on its rate base, which is the cost of the utility's property used and useful in providing service to the public. The rate of return percentage is calculated by subtracting from the utility's revenues its cost of service and dividing the difference by the rate base. State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 328 N.C. 37, 399 S.E.2d 98 (1991).

Commission to Determine Fair Rate of Return. - It is for the Commission, not for the Supreme Court, to determine what is a fair rate of return. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Determination of Rate of Return. - Determining the effective rate of return for a particular North Carolina Natural Gas Corporation (NCNG) customer class involves a mathematical computation containing several components. The computation must be performed after the fact by utilizing the financial information for a given test year with adjustments made for any subsequent increase in rates. There are in the computation three basic components which must be ascertained. First, an allocation must be made to determine the portion of the total rate base applicable to each customer class. Likewise an allocation must be made to determine the cost of service or operating expenses applicable to each customer class. Finally, the revenues NCNG collected from each customer class for the test period, adjusted for any subsequent increase in rates, must also be determined. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

The formula for determining the rate of return for each customer class is as follows: Operating revenues less cost of service (operating expenses and taxes) divided by the rate base equals the rate of return. Thus, the rate of return for any particular customer class varies inversely with the amount of the rate base and the amount of the cost of service, and directly with the amount of the revenues, allocated to that customer class. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Consideration of Factors Held Proper. - With regard to investor risk, it was not improper for the Commission to consider the fact that a natural gas supply company was a "small but efficient and well managed natural gas utility." State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

The law permits the Commission to consider both size and management in assessing investor risk insofar as such risk may bear on an appropriate return on equity capital; a utility's small size may increase investor risk and justify a higher return. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

While efficient management should not justify a higher common equity rate of return, it is appropriate for the Commission to consider good management as a factor which reduces investor risk and militates in favor of a lower return on equity capital. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

Commission could properly consider increased risk to investors caused by the possible loss of customers who may switch to alternative fuels in its determination of the common equity rate of return for a natural gas supply company. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

North Carolina Utilities Commission's order authorizing a 102 percent return on equity for an electric company was supported by competent, material, and substantial evidence where the order appropriately considered changing economic conditions upon customers, the Commission gave great weight to testimony concerning the State's unemployment rate, and certain costs were excluded from the rate base for one year in order to serve customer interests. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 444, 761 S.E.2d 640 (2014).

What constitutes a fair rate of return on common equity is a conclusion of law, which must be predicated on adequate factual findings. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

A public utility corporation is entitled to a just and reasonable rate of return based upon the fair value of the properties used and useful in rendering the service for which the rate is established. State ex rel. Utils. Comm'n v. City of Greensboro, 244 N.C. 247, 93 S.E.2d 151 (1956).

Even though a utility contemplates no substantial expansion of its plant, and so presently does not contemplate the issuance of either stocks or bonds, it is, nevertheless, entitled to charge rates sufficient to enable it to earn a fair rate of return, as defined in subsection (b)(4), upon the fair value of its properties used and useful in rendering its service in this State. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977).

As to a "just and reasonable" rate, see Smyth v. Ames, 169 U.S. 466, 18 S. Ct. 418, 42 L. Ed. 819, modified, 171 U.S. 361, 18 S. Ct. 888, 43 L. Ed. 197 (1898); State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

What a "just and reasonable" rate of return is depends on several variables: (1) the rate base which earns the return; (2) the gross income received by the applicant from its authorized operations; (3) the amount to be deducted for operating expenses, which must include the amount of capital investment currently consumed in rendering the service; and (4) what rate constitutes a just and reasonable rate of return on the predetermined rate base. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).

Reasonableness of Rate of Return Depends on Whether Property Is Fairly Valued. - Whether a 4%, 5%, or 6% return is just and reasonable depends very largely on whether the Commission has placed a fair value on the property of the utility which is used and useful in producing its revenue. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

There is no fixed "fair rate of return" applicable to all utility companies, or to a single utility company at all times. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

"Fair rate of return" is one sufficient to enable the utility to attract, on reasonable terms, capital necessary to enable it to render adequate service. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

In this State the test of a fair rate of return is that laid down by the Supreme Court of the United States in Bluefield Waterworks & Imp. Co v. Public Serv. Comm'n, 262 U.S. 679, 43 S. Ct. 675, 67 L. Ed. 1176 (1923), namely, if the company continues to earn such a rate of return, will it be able to attract on reasonable terms the capital it needs for the expansion of its service to the public? State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

The rate-making procedure prescribed in this section is designed to yield to the utility a return which will meet the test laid down in Bluefield Waterworks & Imp. Co v. Public Serv. Comm'n, 262 U.S. 679, 43 S. Ct. 675, 67 L. Ed. 1176 (1923). State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Crucial Question as to Rate of Return. - To require the Commission in a general rate case to go into minute details with respect to each of the proposed increases and the possible inequalities which might be created thereby would distract its attention from the crucial question, namely: What is a fair rate of return on company's investment so as to enable it by sound management to pay a fair profit to its stockholders and to maintain and expand its facilities and services in accordance with the reasonable requirements of its customers in the territory covered by its franchise? State ex rel. Utils. Comm'n v. County of Harnett, 30 N.C. App. 24, 226 S.E.2d 515 (1976).

What Dollar Return Contemplated. - Under this section a fair rate of return on the fair value of the properties used in rendering the service clearly contemplates the allowance of a greater dollar return than would be allowed if the rate base were the original cost, depreciated, of the same properties, assuming that the value of the properties has been enhanced by inflation. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Power company is entitled to earn same rate of return on fair value of its plant as on retained earnings which it has reinvested in its plant. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Absolute Accuracy Not Required. - Since the rate of return on the fair value of its properties which will enable a utility company to attract the capital it needs cannot be pinpointed with absolute accuracy, it is universally recognized that, for a utility rendering acceptable service, there is a zone of reasonableness extending over a few hundredths of one percent, within which a rate of return fixed by a regulatory commission will not be disturbed by the courts. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

It is impossible to fix rates which will give the utility each day a fair return, and no more, upon its plant in service on that day. The best that can be done, both from the standpoint of the company and from the standpoint of the person served, is to fix rates on the basis of a substantial period of time. Otherwise, rate hearings and adjustments would be a perpetual process. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Utility Not Entitled to Compensation for Past Deficit. - Failure of utility, in a previous period, to earn the anticipated return over and above its then expenses, does not authorize it to charge its present customers a rate higher than reasonable for present service in order to compensate for the past deficit. Prospective rate-making to recover unexpected past expense, or to refund expected past expense which did not materialize, is as improper as is retroactive rate-making. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

Effect of Rate of Return in Other State. - An inadequate return in Virginia would not of itself justify a rate increase in North Carolina, nor would a high rate of return in Virginia justify less than a fair and reasonable rate in North Carolina. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

The Utilities Commission of this State does not have the right to fix less than a reasonable or fair rate of return on a telephone company's investment in North Carolina because the utilities commission in Virginia may have fixed rates in Virginia which, in the opinion of the Utilities Commission in this State, gives the company a reasonable return on its entire properties when its Virginia and North Carolina revenues are combined. State ex rel. Utils. Comm'n v. Lee Tel. Co., 263 N.C. 702, 140 S.E.2d 319 (1965).

Anticipated Rate of Return. - Adjusted revenue deductions are subtracted from adjusted revenues to determine what net operating income a company may anticipate under the previously established rates, in a period of the same length as the test period, during which all presently known conditions prevail. Such net operating income, divided by the rate base, gives the rate of return which the company may anticipate, on its properties used in rendering its service, under the previously established rates for service, in a period of the same length as the test period, throughout which all presently known conditions prevail. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Finding That New Rate Is Fair Tantamount to Finding Existing Rates Inadequate. - The finding that a new rate represented a fair rate of return on the fair value of a company's utility property is tantamount to a finding that the existing rates were inadequate. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Less Than Fair Rate of Return Necessitates Raising of Rates. - If the rate of return derived from the previously established rates during the test period, adjusted pro forma, is less than a fair rate of return, this section requires the Commission to raise the company's rates for services, assuming that the quality of service is adequate. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

No Change in Rates May Be Justified. - If the rate of return derived from the previously established rates for service during the test period, adjusted pro forma, was fair, no change in the rates for service is justified. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Rate Reduction May Be Required. - If the rate of return derived from the previously established rates for service during the test period, adjusted pro forma, was in excess of a fair rate of return, the statute requires the Commission to reduce the rates for service. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Consideration of Expert Opinion Testimony. - The Commission must consider and weigh testimony of expert witnesses, on the question of the fair rate of return, in the light of its own adjustment, for rate-making purposes, of the utility's actual capital structure by its determination of the "fair value" of its properties. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The Commission may reject the uncontradicted testimony of a utility's expert witnesses as to the fair rate of return on the utility's common equity, and while the better practice is for the Commission to state its reasons for doing so in its order establishing a lower rate of return, it is not required to do so as a matter of law. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Previous findings are not res judicata, even as to what was a fair rate of return on common equity capital as of the dates of former orders, and such findings do not prevent the Commission from finding a lower return on common equity capital fair in a later case, even though the tide of inflation has continued to rise. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

Its former allowance of a rate of return is not res judicata barring the Commission from fixing a lesser rate in a subsequent proceeding. State ex rel. Utils. Comm'n v. State, 239 N.C. 333, 80 S.E.2d 133 (1954).

Failure to Give Specific Findings of Fact Was An Error of Law. - The Commission was required to make specific findings showing what effect, if any, it gave to financing costs or down market protection, or both, in arriving at its common equity rate of return decision. Failure to do so constituted an error of law requiring a remand for further proceedings. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 322 N.C. 689, 370 S.E.2d 567 (1988).

Legitimate Justification for Maintaining Industrial and City Rates of Return. - The North Carolina Utilities Commission drew legitimate distinctions which justified its decision to maintain industrial and cities' rates of return at a higher level than residential and commercial and small industrial rates. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Rates of Return Reasonable and Did Not Discriminate. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable and did not unreasonably discriminate among the various classes of North Carolina Natural Gas Corporation customers and were supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Evidence Held Sufficient to Support Commission's Determination of Rate of Return. - Where the Commission's order showed the Commission considered and gave weight to expert testimony, including that proffered by appellant's expert, and set forth proper factors to support conclusions regarding natural gas supplier's rate of return, the record was sufficient to show that the Commission's decision was supported by competent, material and substantial evidence. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

Decision of Utilities Commission to accept an expert's recommendation of an 11.4% return on equity, based on the credibility and objectivity of his company-specific "discounted cash flow" analysis, was independently reached and supported by competent, material, and substantial evidence. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Order of the North Carolina Utilities Commission, authorizing a percentage of return on equity for a utility company, was appropriate because the order contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 644, 766 S.E.2d 827 (2014).

North Carolina Utilities Commission's findings of fact demonstrated that the Commission considered the impact of changing economic conditions upon customers and specified how this influenced the Commission's decision to authorize a 10.2 percent return on equity; the findings were supported by the evidence, including public witness testimony, expert testimony, and the parties' stipulation, and thus the Commission made sufficient findings regarding the impact of changing economic conditions upon customers and these findings were supported by substantial evidence. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

The court may not substitute its judgment for that of the Commission even when it is of the opinion that the rate of return authorized by the Commission is inadequate. State ex rel. Utils. Comm'n v. Duke Power Co., 21 N.C. App. 89, 203 S.E.2d 404, rev'd on other grounds, 285 N.C. 377, 206 S.E.2d 269 (1974).

Order Setting Return on Common Equity Improper. - North Carolina Utilities Commission's (Commission) order approving a 10.5 percent return on common equity was not supported by substantial evidence under G.S. 62-94(b) and did not comply with G.S. 62-79(a) where: (1) although the 10.5 percent return on common equity agreed to in a non-unanimous stipulation fell within the range of returns on common equity recommended by the witnesses, no witness specifically recommended an return on common equity of 10.5 percent; (2) the Commission did not weigh any testimony presented, but merely recited the witnesses' testimony; (3) the Commission did not discuss why one witness's testimony was more credible than another's or which methodology was afforded the greatest weight; (4) the Commission adopted the stipulated return on common equity wholesale, as opposed to considering it as one piece of evidence to be weighed in making an otherwise independent determination based on the G.S. 62-133 factors; and (5) the Commission failed to make findings of fact regarding the impact of changing economic conditions on customers. State ex rel. Utils. Comm'n v. Cooper, 366 N.C. 484, 739 S.E.2d 541 (2013).

VII. TEST PERIOD.

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Basic, underlying theory of using company's operating experience in a test period, recently ended, in fixing rates to be charged by it for its service in the near future is that rates for service, in effect throughout the test period, will, in the near future, produce the same rate of return on the company's property, used in rendering such service, as was produced by them on such property in the test period, adjusted for known changes in conditions. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Rates Fixed on Basis of Substantial Period of Time. - It is impossible to fix rates which will give the utility each day a fair return, and no more, upon its plant in service on that day. The best that can be done, both from the standpoint of the company and from the standpoint of the persons served, is to fix rates on the basis of a substantial period of time. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Test Period Fixed to Estimate Revenues and Operating Expenses. - For the purpose of making required estimates of the public utility's revenues and operating expenses, the customary and proper procedure is for the Commission to fix a test period of 12 months, ending, as close as practicable, before the opening of the hearing. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

The factors used in fixing rates are to be determined as of the end of the test period. State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).

The plain language of subsection (c) merely provides that the components of the rate making formula are to be determined based on an historical test period, and do not require a nexus between operating expenses and "property used and useful." The statute reserves this requirement solely to the reasonable original cost of the public utility's property, the ratebase component which is described in subdivision (b)(1). State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989).

Value of Property Determined as of End of Trial Period. - The Commission is required under subsection (c) to determine the fair value of the utility's property as of the end of the trial period, based on the plant and equipment in operation at that time. State ex rel. N.C. Utils. Comm'n v. Westco Tel. Co., 266 N.C. 450, 146 S.E.2d 487 (1966), decided prior to 1977 amendment.

Not by Averaging over Period. - The value of plant and service must be determined as of a specific date, the end of the test period, and not by averaging a group of periods or months within a period. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 205, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Adjustments for Abnormalities and Changes in Conditions. - The actual experience of the company during the test period, both as to revenues produced and as to operating expenses, is the basis for a reasonably accurate estimate of what may be anticipated in the near future if, but only if, appropriate pro forma adjustments are made for abnormalities which existed in the test period and for changes in conditions occurring during the test period. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972); State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Operating revenue deductions (operating expenses, depreciation, taxes and all other proper deductions from revenue) for expenditures actually made in the test period are adjusted, pro forma, for changes in conditions during the test period, such as an increase in the wage rate, so that the result reflects what would have been the total of such deductions had the conditions, prevailing at the end of the test period, prevailed throughout it. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Pro forma adjustments to revenue are made to reflect what the revenues would have been in the test period, which is usually 12 months, had present conditions prevailed throughout that period, so that the result shows what revenues will be produced in 12 months by application of the previously established rates for service conditions existing at the end of the test period; i.e., at the date, nearest the present, for which data are available. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971).

Subdivision (b)(3) and subsection (c) of this section, taken together, allow the Commission to make pro forma adjustments to revenue and expenses to reflect what their effect would have been had those future conditions prevailed throughout, or at the end of, the test period or to adjust for abnormalities and changes in conditions. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Provisions in this section compel the conclusion that the Utilities Commission is required to adjust test period data to reflect abnormalities which had a probable impact on the utility's revenues and expenses during the test period. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985).

This section requires the Commission to adjust test period data to reflect abnormalities which had a probable impact on the utility's revenues and expenses during the test period. This allows for a reasonably accurate estimate of what may be anticipated in the future. However, no pro forma adjustment is to be made unless the Commission finds that an abnormality having a probable impact on the utility's revenues and expenses existed during the test period. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Since fuel costs comprise a large portion of a utility's expenses, the statutory mandate to normalize test period data includes a requirement that the Commission adjust the test period fuel costs for any abnormalities established by competent, material, and substantial evidence. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Since the system nuclear capacity factor directly impacts upon the generation mix, which in turn affects fuel costs, any abnormality in the system nuclear capacity which is shown to have existed during the test year must be adjusted. State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).

Normalizing of Nuclear Capacity Factors for Test Periods. - Commission did not err by normalizing nuclear capacity factors for test periods to reflect the average lifetime nuclear capacity factors actually achieved by an electric utility as of the end of each of the test periods in question, where such factors did not vary significantly from the national average. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 320 N.C. 1, 358 S.E.2d 35 (1987).

Commission did not improperly refuse to adjust its figure for revenues based on evidence of post-test year growth, even though it increased utility's operating expenses based on other post-test year evidence, where contrary to the Public Staff 's contention, there was no correlation between the use of post-test year salary expenses and the utility's increase in customers, as the Commission in its order explained that the use of 1985 estimated salary expenditures was appropriate because it had ordered additional improvements and increased routine maintenance, and thus the increased allowance in operating expenses for salaries did not require any offsetting change in revenue. State ex rel. Utils. Comm'n v. Public Staff, 317 N.C. 26, 343 S.E.2d 898 (1986).

Probable Future Revenues. - Subsection (c) clearly provides that the Commission is to include in the probable future revenues of the company only those revenues based on the plant and equipment in operation at the end of the test period. State ex rel. Utils. Comm'n v. Morgan, 278 N.C. 235, 179 S.E.2d 419 (1971), decided prior to 1977 amendment.

Estimates regarding probable future revenues and expenses must be based upon the utility's plant and equipment actually in operation at the end of the test period. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976), decided prior to 1977 amendment.

VIII. OTHER FACTS.

.

A. IN GENERAL.

.

The plain meaning of subsection (d) of this section is that, after considering all other factors, considerations and adjustments specifically set forth in the various sections of the statute, the Commission must consider "all other material facts of record" which ought to be taken into consideration in setting rates which are reasonable and just. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Other Facts to Be Established by Evidence and Set Forth in Record. - The Legislature properly understood that, at times, other facts may exist, bearing on value and rates, which the Commission should take into account in addition to those specifically detailed in this section; it was contemplated that such facts be established by evidence, be found by the Commission, and be set forth in the record so that the utility might have them reviewed by the courts. State ex rel. Utils. Comm'n v. Public Serv. Co. of N.C. Inc., 257 N.C. 233, 125 S.E.2d 457 (1962); State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

"Other facts" which the Commission considers in determining the "fair value" of the utility's properties must be found and set forth in its order, so that the reviewing court may see what these elements are and determine the authority of the Commission to consider them as "relevant to the present fair value." State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).

The "other material facts of record" considered by the Commission under subsection (d) in fixing reasonable and just rates must be found and set forth in its order so that the reviewing court may see what these elements are. State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982).

Right to Consider "Other Facts" Limited. - This section gives the Commission the right to consider "all other material facts" that will enable it to determine what are reasonable and just rates, but this right is not a grant to roam at large in an unfenced field. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The right of the Commission to consider "all other material facts" is not a grant to roam at large in an unfenced field. State ex rel. Utils. Comm'n v. Public Serv. Co., 257 N.C. 233, 125 S.E.2d 457 (1962).

B. QUALITY AND ADEQUACY OF SERVICE.

.

Subsection (d) of this section authorizes the Commission to consider quality of service as a factor in determining what constitutes just and reasonable rates to be charged by a utility. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Evidence of service deficiencies provides other material facts of record which the Commission is required to consider in making its determination as to what are just and reasonable rates for the quality of service which the applicant utility is providing its customers. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

Serious inadequacy of service, found by the Commission upon substantial evidence, is one of the facts which the Commission is required by this section to take into account in making a determination of rates. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971); State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

It was not the intent of the legislature to require the Commission to fix rates without any regard to the quality of the service rendered by the utility and thus to assure a "complacent monopoly" a "fair return upon the fair value of its properties" while it persists in rendering mediocre service and turns a deaf ear both to customer complaints and to Commission orders for improvement. On the contrary, the quality of the service rendered is, necessarily, a factor to be considered in fixing the "just and reasonable" rate therefor. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

This section lays down the procedure by which the Commission is to fix rates which will enable the utility "by sound management" to pay all of its costs of operation, including maintenance, depreciation and taxes, and have left a fair return upon the fair value of its properties, but this must be applied in the light of the provisions of this Chapter relating to the duty of the utility to render adequate service. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Serious inadequacy of a utility company's service, whether due to poor maintenance of its equipment or to other causes, is one of the facts which the Commission is required to take into account in determining what is a reasonable rate to be charged by the particular utility company for the service it proposes to render. State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657, cert. denied, 301 N.C. 531, 273 S.E.2d 462 (1980).

Commission Is Not Required to Ignore Inadequate Service. - It is not reasonable to construe subsection (b) of this section to require the Commission to shut its eyes to "poor" and "substandard" service resulting from a company's willful or negligent failure to maintain its properties or to heed complaints from its subscribers when the Commission is called upon by the company to permit it to increase its rates for its inadequate service. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Commission is not forbidden to grant a rate increase to a company whose service is inadequate, even though the inadequacy be due to a willful or negligent failure by the company to perform its duty. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

In a hearing upon an application by a telephone company for a rate increase in its franchise area, the Utilities Commission is authorized to grant the company an increase in the rates charged to its customers, notwithstanding a finding by the Commission that the quality of service rendered by the company was poor and substandard. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Assuming adequate findings of fact, supported by competent, substantial evidence, there is nothing in the provisions of this Chapter which makes it unlawful for the Commission, in the exercise of its sound administrative discretion, to conclude that an increase in rates is warranted, notwithstanding existing service inadequacy due to the company's neglect of its properties, and that such increase is an appropriate step in the improvement of the service. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

Efficiency of Operations. - It is not only entirely appropriate but even necessary for the Commission to take into account the efficiency of the company's operations in fixing its rates in a general rate case as provided in this section. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 58 N.C. App. 453, 293 S.E.2d 888 (1982), modified and aff'd, 309 N.C. 195, 306 S.E.2d 435 (1983).

Customer Should Not Be Required to Pay for Inefficiency. - If a utility fails to provide adequate service on account of inefficient management, rates should not be permitted which would require the customer to pay for this inefficiency. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405, aff'd, 278 N.C. 235, 179 S.E.2d 419 (1971).

Subtraction for Consistently Poor Service in Ascertaining Fair Value. - Consistently poor service, attributable to defective or inadequate or poorly designed equipment or construction, justifies a subtraction from both the original cost and the reproduction cost of the existing plant before weighing these factors in ascertaining the present "fair value" of the properties. State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Reduction of Rate Where Inadequate Service Due to Defective Equipment. - If inadequate service is attributable to defective, inadequate or poorly designed equipment or construction or obsolete equipment, then the Commission is justified in reducing the present fair value of the utilities' properties. In such a case, this is not a penalty, and a reduction of the rate arrived at by way of penalty for inadequate service is justified. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

Poorly maintained equipment justifies a subtraction from both the original cost and the reproduction cost of existing plant before weighing these factors in ascertaining the present "fair value" rate base of the utility's properties as required by this section. Serious inadequacy of a utility company's service, whether due to poor maintenance of its equipment or to other causes, is one of the facts which the Commission is required to take into account in determining what is a reasonable rate to be charged by the particular utility company for the service it proposes to render. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 58 N.C. App. 453, 293 S.E.2d 888 (1982), modified and aff'd, 309 N.C. 195, 306 S.E.2d 435 (1983).

Reduction of Rates Where Due to Bad Management. - When, upon substantial evidence, a public utility is found to be rendering grossly inadequate service, due to bad management and managerial indifference, and the rates presently charged by it yield a return sufficient to pay the interest on its indebtedness and a substantial dividend upon its stock, but less than that which would be deemed a fair return upon the fair value of its properties were the service adequate, the Utilities Commission may lawfully deny it authority to increase its rates for such service. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

Inadequacy of service due not to the condition of the properties but to inefficient personnel, bad management and the indifference of a "complacent monopoly" does not relate to the value of the properties, but to the value of the service and to the reasonableness of the rates proposed to be charged therefor. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974).

If reduction from fair value of utilities' properties is because of inadequate service due to inefficient personnel and human error, then the reduction amounts to a penalty, and a further penalty for inadequate service by reduction of rate is not justified by statute or by decided cases. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

Fuel Costs. - The requirement, for general rate cases, of an inquiry into the reasonableness of costs incurred extends to fuel costs incurred by the utility. State ex rel. Utils. Comm'n v. Public Staff - North Carolina Utils. Comm'n, 58 N.C. App. 480, 293 S.E.2d 880 (1982), rev'd on other grounds, 309 N.C. 195, 306 S.E.2d 435 (1983).

Finding Required as to Quality of Service. - The Commission may not lawfully ignore the duty imposed upon it by this section to consider the quality of service by reason of the company's poor service, nor does it discharge that duty by a mere statement that it has considered the matter, without showing the effect given to it. Such finding or conclusion is necessary to enable a reviewing court to determine whether the duty imposed by statute has been performed. State ex rel. Utils. Comm'n v. Morgan, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

If the Commission found the quality of a utility's service to fall short of the requirement in G.S. 62-131 that it be adequate, efficient and reasonable, then the Commission should make specific findings showing the effect of any such inadequacy upon its decision under this section. State ex rel. Utils. Comm'n v. General Tel. Co., 12 N.C. App. 598, 184 S.E.2d 526 (1971), modified and aff'd, 281 N.C. 318, 189 S.E.2d 705 (1972).

The Commission must make a specific finding showing the effect it gave the relevant factor of consistently poor service, if it made a deduction from the original cost and reproduction cost of the existing plant on that account. State ex rel. Utils. Comm'n v. General Tel. Co., 21 N.C. App. 408, 204 S.E.2d 529, rev'd on other grounds, 285 N.C. 671, 208 S.E.2d 681 (1974).

The Bluefield test assumes reasonably good service. State ex rel. Utils. Comm'n v. General Tel. Co., 285 N.C. 671, 208 S.E.2d 681 (1974). See notes under analysis line VI, Rate of Return.


§ 62-133.1. Small water and sewer utility rates.

  1. In fixing the rates for any water or sewer utility, the Commission may fix such rates on the ratio of the operating expenses to the operating revenues, such ratio to be determined by the Commission, unless the utility requests that such rates be fixed under G.S. 62-133(b) or G.S. 62-133.1B. Nothing in this subsection shall be held to extinguish any remedy or right not inconsistent herewith. This subsection shall be in addition to other provisions of this Chapter which relate to public utilities generally, except that in cases of conflict between such other provisions, this section shall prevail for water and sewer utilities.
  2. A water or sewer utility may enter into uniform contracts with nonusers of its utility service within a specific subdivision or development for the payment by such nonusers to the utility of a fee or charge for placing or maintaining lines or other facilities or otherwise making and keeping such utility's service available to such nonusers; or such a utility may, by contract of assignment, receive the benefits and assume the obligations of uniform contracts entered into between the developers of subdivisions and the purchasers of lots in such subdivisions whereby such developer has contracted to make utility service available to lots in such subdivision and purchasers of such lots have contracted to pay a fee or charge for the availability of such utility service; provided, however, that the maximum nonuser rate shall be as established by contract, except that the contractual charge to nonusers of the utility service can never exceed the lawfully established minimum rate to user customers of the utility service.

History

(1973, c. 956, s. 2; 2021-149, s. 1(b).)

Effect of Amendments. - Session Laws 2021-149, s. 1(b), effective September 10, 2021, substituted "G.S. 62-133(b) or G.S. 62-133.1B" for "G.S. 62-133(b)" in subsection (a).

CASE NOTES

This section was enacted in direct response to the Utilities Commission's conclusion that nonusers were not "consumers" of the utility and that an "availability charge" could not be made to property owners solely because they owned land in an area served by the utility. State ex rel. N.C. Utils. Comm'n v. Transylvania Util. Co., 30 N.C. App. 336, 226 S.E.2d 824, cert. denied, 291 N.C. 179, 229 S.E.2d 692 (1976).

Section Proscribes Commission's Power. - By enacting this section, the General Assembly proscribed the Commission's power to disapprove charges called for in uniform contracts between utilities and nonuser property owners if the charges do not exceed those expressly authorized by the statute. State ex rel. N.C. Utils. Comm'n v. Transylvania Util. Co., 30 N.C. App. 336, 226 S.E.2d 824, cert. denied, 291 N.C. 179, 229 S.E.2d 692 (1976).

Components of Expenses Must Be Examined. - For rates to be reasonable, the figures from which they are derived must be reasonable. To uphold its statutory duty to establish reasonable rates, then, the Commission must examine each of the components going to make up a utility's expenses for reasonableness. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Cited in State ex rel. Utils. Comm'n v. Heater Utils., Inc., 288 N.C. 457, 219 S.E.2d 56 (1975); State ex rel. Utils. Comm'n v. Springdale Estates Ass'n, 46 N.C. App. 488, 265 S.E.2d 647 (1980).


§ 62-133.1A. Fair value determination of government-owned water and wastewater systems.

  1. Election. - A water or wastewater public utility, as defined by G.S. 62-3(23)a.2., may elect to establish rate base by using the fair value of the utility property instead of original cost when acquiring an existing water or wastewater system owned by a municipality or county or an authority or district established under Chapter 162A of the General Statutes.
  2. Determination of Fair Value. -
    1. The fair value of a system to be acquired shall be based on three separate appraisals conducted by accredited, impartial valuation experts chosen from a list to be established by the Commission. The following shall apply to the valuation:
      1. One appraiser shall represent the public utility acquiring the system, another appraiser shall represent the utility selling the system, and another appraiser shall represent the Public Staff of the Commission.
      2. Each appraiser shall determine fair value in compliance with the uniform standards of professional appraisal practice, employing cost, market, and income approaches to assessment of value.
      3. Fair value, for ratemaking purposes under G.S. 62-133, shall be the average of the three appraisals provided for by this subsection.
      4. The original source of funding for all or any portions of the water and sewer assets being acquired is not relevant to an evaluation of fair value.
    2. The acquiring public utility and selling utility shall jointly retain a licensed engineer to conduct an assessment of the tangible assets of the system to be acquired, and the assessment shall be used by the three appraisers in determining fair value.
    3. Reasonable fees, as determined by the Commission, paid to utility valuation experts, may be included in the cost of the acquired system, in addition to reasonable transaction and closing costs incurred by the acquiring public utility.
    4. The rate base value of the acquired system, which shall be reflected in the acquiring public utility's next general rate case for ratemaking purposes, shall be the lesser of the purchase price negotiated between the parties to the sale or the fair value plus the fees and costs authorized in subdivision (3) of this subsection.
    5. The normal rules of depreciation shall begin to apply against the rate base value upon purchase of the system by the acquiring public utility.
  3. An application to the Commission for a determination of the rate base value of the system to be acquired shall contain all of the following:
    1. Copies of the valuations performed by the appraisers, as provided in subdivision (1) of subsection (b) of this section.
    2. Any deficiencies identified by the engineering assessment conducted pursuant to subdivision (2) of subsection (b) of this section and a five-year plan for prudent and necessary infrastructure improvements by the acquiring entity.
    3. Projected rate impact for the selling entity's customers for the next five years.
    4. The averaging of the appraisers' valuations, which shall constitute fair value for purposes of this section.
    5. The assessment of tangible assets performed by a licensed professional engineer, as provided in subdivision (2) of subsection (b) of this section.
    6. The contract of sale.
    7. The estimated valuation fees and transaction and closing costs incurred by the acquiring public utility.
    8. A tariff, including rates equal to the rates of the selling utility. The selling utility's rates shall be the rates charged to the customers of the acquiring public utility until the acquiring public utility's next general rate case, unless otherwise ordered by the Commission for good cause shown.
  4. Final Order. - If the application meets all the requirements of subsection (c) of this section, the Commission shall issue its final order approving or denying the application within six months of the date on which the application was filed. An order approving an application shall determine the rate base value of the acquired property for ratemaking purposes in a manner consistent with the provisions of this section.
  5. Commission's Authority. - The Commission shall retain its authority under Chapter 62 of the General Statutes to set rates for the acquired system in future rate cases, and shall have the discretion to classify the acquired system as a separate entity for ratemaking purposes, consistent with the public interest. If the Commission finds that the average of the appraisals will not result in a reasonable fair value, the Commission may adjust the fair value as it deems appropriate and in the public interest.
  6. The Commission shall adopt rules to implement this section.

History

(2018-51, s. 2; 2021-23, s. 25.)

Editor's Note. - Session Laws 2018-51, s. 3, made this section effective June 25, 2018.

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in this section.


§ 62-133.1B. Water and Sewer Investment Plan ratemaking mechanism authorized.

  1. Notwithstanding the methods for fixing water and sewer rates under G.S. 62-133 or G.S. 62-133.1, upon application by a water or sewer utility in a general rate proceeding, the Commission may approve a Water and Sewer Investment Plan. A Water and Sewer Investment Plan, as filed by a water or sewer utility, shall include performance-based metrics that benefit customers and ensure the provision of safe, reliable, and cost-effective service by the water or sewer utility. For purposes of this section, "Water and Sewer Investment Plan" means a plan under which the Commission sets water or sewer base rates, revenue requirements through banding of authorized returns as provided in this section, and authorizes annual rate changes for a three-year period based on reasonably known and measurable capital investments and anticipated reasonable and prudent expenses approved under the plan without the need for a base rate proceeding during the plan period.
  2. The Commission may approve a Water and Sewer Investment Plan proposed by a water or sewer utility only upon a finding by the Commission that the plan results in rates that are just and reasonable and are in the public interest. In reviewing any application under this section, the Commission shall consider whether the water or sewer utility's application, as proposed, (i) establishes rates that are fair both to the customer and to the water or sewer utility, (ii) reasonably ensures the continuation of safe and reliable utility services, (iii) will not result in sudden substantial rate increases to customers annually or over the term of the plan, (iv) is representative of the utility's operations over the plan term, and (v) is otherwise in the public interest. In approving an application submitted under this section, the Commission may impose any conditions in the implementation of a Water and Sewer Investment Plan that the Commission considers necessary to ensure that the utility complies with the plan, and that the plan and associated rates are just, reasonable, and in the public interest, and the plan reasonably ensures the provision of safe, reliable, and cost-effective service to customers.
  3. Any rate adjustment allowed under a Water and Sewer Investment Plan approved pursuant to this section shall not, on an annual basis for years two and three of the plan, exceed five percent (5%) of the utility's North Carolina retail jurisdictional gross revenues for the preceding plan year. Upon a petition to the Commission, the Commission may consider the addition of unplanned emergency capital investments that must be undertaken during a plan term to address risk of noncompliance with primary drinking water or effluent standards, or to mitigate cyber or physical security risks, even if such expenditures would cause the above-referenced cap to be exceeded.
  4. Any rate adjustment mechanism authorized pursuant to G.S. 62-133.12 or G.S. 62-133.12A shall be discontinued during the term of any Water and Sewer Investment Plan. The utility may file for a rate adjustment mechanism authorized pursuant to G.S. 62-133.12, which shall not become effective before the end of the Water and Sewer Investment Plan. No capital improvements recovered through a Water and Sewer Investment Plan may be included for recovery in a rate adjustment mechanism authorized pursuant to G.S. 62-133.12.
  5. The Commission shall, after notice and an opportunity for interested parties to be heard, issue an order ruling on the water or sewer utility's request to adjust base rates under G.S. 62-133, denying or approving, with or without modifications, a water or sewer utility's proposed Water and Sewer Investment Plan. An approved plan shall be effective no later than the end of the maximum suspension period pursuant to G.S. 62-134(b).
  6. At any time, for good cause shown and after an opportunity for hearing, the Commission may modify or terminate an approved Water and Sewer Investment Plan if modification or termination is determined to be in the public interest.
  7. The Commission shall establish banding of authorized returns on equity for Water and Sewer Investment Plans approved pursuant to this section. For purposes of this section, "banding of authorized returns" means a rate mechanism under which the Commission sets an authorized return on equity for a water or sewer utility that acts as a midpoint and then applies a low- and high-end range of returns to that midpoint under which a water or sewer utility will not overearn if within the high-end range and will not underearn if within the low-end range. Any banding of the water or sewer utility's authorized return shall not exceed 100 basis points above or below the midpoint. [The following applies:]
    1. If a water or sewer utility exceeds the high-end range of the band that is approved by the Commission, the water or sewer utility shall refund or credit earnings above that high-end range to customers in a manner to be prescribed by rules adopted by the Commission pursuant to subsection (i) of this section.
    2. If a water or sewer utility falls below the low-end range of the band that is approved by the Commission, the utility may file a general rate case.
  8. The Commission shall annually review a water or sewer utility's earnings to ensure the utility is not earning in excess of its allowable return on equity for reasonable and prudent costs to provide service. For purposes of measuring a water or sewer utility's earnings under any mechanisms, plans, or settlements approved under this section, the utility shall make an annual filing that sets forth the utility's earned return on equity for the prior 12-month period.
  9. The Commission shall adopt rules to implement the requirements of this section, including rules to:
    1. Establish procedures for filing a Water and Sewer Investment Plan under this section.
    2. Require reporting on an annual basis of performance-based metrics and evaluation of those metrics' results to ensure the utility continues to perform in a safe, reliable, and cost-effective manner.
    3. Develop banding of authorized returns. In setting a midpoint authorized rate of return on equity for banding of authorized returns pursuant to this section, the Commission may consider any decreased or increased risk to a water or sewer utility that may result from having an approved Water and Sewer Investment Plan.
    4. Establish a procedure for the water or sewer utility to annually refund or credit to customers excess earnings above the high end of the authorized band of returns.
    5. Establish a methodology to annually review the costs subject to the adjustment mechanism, including the opportunity for public hearings.
  10. On or before July 1, 2026, the Commission shall report to the Joint Legislative Commission on Energy Policy on the impacts of each Water and Sewer Investment Plan approved by the Commission pursuant to this section for a water or sewer utility. At a minimum, the report shall include a Plan's impact on rates for customers of the applicable utility, the number of customers disconnected for nonpayment in the four years prior to Commission approval of a Plan for the applicable utility, the number of utility customers disconnected for nonpayment after approval and implementation of the Plan to the date the report is submitted, and the amount of utility earnings under an approved plan. In consultation with the Department of Environmental Quality, the Commission shall also report on any impacts to drinking water quality of utility customers or to surface or groundwater resources from Plans implemented by water and sewer utilities. The report may include any other information the Commission deems relevant, and shall include any Commission recommendations for legislative action.

History

(2021-23, s. 25; 2021-149, s. 1(a).)

Editor's Note. - Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term ‘ratemaking' for the terms ‘rate-making' or ‘rate making' wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in the section heading.

Session Laws 2021-149, s. 1(c), provides: "The Commission shall adopt rules as required by G.S. 62-133.1B(i), as enacted by Section 1(a) of this act, no later than 120 days after the date this act becomes law."

Session Laws 2021-149, s. 3, made this section, as added by Session Laws 2021-149, s. 1(a), effective September 10, 2021, and applicable to any rate-making mechanisms, designs, plans, or settlements filed by a water or sewer utility on or after the date that rules adopted pursuant to subsection (i) of this section become effective.

The bracketed phrase "[The following applies:]" was added at the end of the introductory paragraph of subsection (g) at the direction of the Revisor of Statutes.

§ 62-133.2. Fuel and fuel-related charge adjustments for electric utilities.

  1. The Commission shall permit an electric public utility that generates electric power by fossil fuel or nuclear fuel to charge an increment or decrement as a rider to its rates for changes in the cost of fuel and fuel-related costs used in providing its North Carolina customers with electricity from the cost of fuel and fuel-related costs established in the electric public utility's previous general rate case on the basis of cost per kilowatt hour.
  2. As used in this section, "cost of fuel and fuel-related costs" means all of the following:
    1. The cost of fuel burned.
    2. The cost of fuel transportation.
    3. The cost of ammonia, lime, limestone, urea, dibasic acid, sorbents, and catalysts consumed in reducing or treating emissions.
    4. The total delivered noncapacity related costs, including all related transmission charges, of all purchases of electric power by the electric public utility, that are subject to economic dispatch or economic curtailment.
    5. The capacity costs associated with all purchases of electric power from qualifying cogeneration facilities and qualifying small power production facilities, as defined in 16 U.S.C. § 796, that are subject to economic dispatch by the electric public utility.
    6. Except for those costs recovered pursuant to G.S. 62-133.8(h), the total delivered costs of all purchases of power from renewable energy facilities and new renewable energy facilities pursuant to G.S. 62-133.8 or to comply with any federal mandate that is similar to the requirements of subsections (b), (c), (d), (e), and (f) of G.S. 62-133.8.
    7. The fuel cost component of other purchased power.
    8. Cost of fuel and fuel-related costs shall be adjusted for any net gains or losses resulting from any sales by the electric public utility of fuel and other fuel-related costs components.
    9. Cost of fuel and fuel-related costs shall be adjusted for any net gains or losses resulting from any sales by the electric public utility of by-products produced in the generation process to the extent the costs of the inputs leading to that by-product are costs of fuel or fuel-related costs.
    10. The total delivered costs, including capacity and noncapacity costs, associated with all purchases of electric power from qualifying cogeneration facilities and qualifying small power production facilities, as defined in 16 U.S.C. § 796, that are not subject to economic dispatch or economic curtailment by the electric public utility and not otherwise recovered under subdivision (6) of this subsection.
    11. All nonadministrative costs related to the renewable energy procurement pursuant to G.S. 62-159.2 not recovered from the program participants.
  3. For those costs identified in subdivisions (4), (5), (6), (10), and (11) of subsection (a1) of this section, the annual increase in the aggregate amount of these costs that are recoverable by an electric public utility pursuant to this section shall not exceed two and one-half percent (2.5%) of the electric public utility's total North Carolina retail jurisdictional gross revenues for the preceding calendar year. The costs described in subdivisions (4), (5), (6), (10), and (11) of subsection (a1) of this section shall be recoverable from each class of customers as a separate component of the rider as follows:
    1. For the noncapacity costs described in subdivisions (4), (10), and (11) of subsection (a1) of this section, the specific component for each class of customers shall be determined by allocating these costs among customer classes based on the method used in the electric public utility's most recently filed fuel proceeding commenced on or before January 1, 2017, as determined by the Commission, until the Commission determines how these costs shall be allocated in a general rate case for the electric public utility commenced on or after January 1, 2017.
    2. For the capacity costs described in subdivisions (5), (6), (10), and (11) of subsection (a1) of this section, the specific component for each class of customers shall be determined by allocating these costs among customer classes based on the method used in the electric public utility's most recently filed fuel proceeding commenced on or before January 1, 2017, as determined by the Commission, until the Commission determines how these costs shall be allocated in a general rate case for the electric public utility commenced on or after January 1, 2017.
  4. Notwithstanding subsections (a1) and (a2) of this section, for an electric public utility that has fewer than 150,000 North Carolina retail jurisdictional customers as of December 31, 2006, the costs identified in subdivisions (1), (2), (6), (7), and (10) of subsection (a1) of this section and the fuel cost component, as may be modified by the Commission, of electric power purchases identified in subdivision (4) of subsection (a1) of this section shall be recovered through the increment or decrement rider approved by the Commission pursuant to this section. For the costs identified in subdivisions (6) and (10) of subsection (a1) of this section that are incurred on or after January 1, 2008, the annual increase in the amount of these costs shall not exceed one percent (1%) of the electric public utility's total North Carolina retail jurisdictional gross revenues for the preceding calendar year. These costs described in subdivisions (6) and (10) of subsection (a1) of this section shall be recoverable from each class of customers as a separate component of the rider. For the costs described in subdivisions (6) and (10) of subsection (a1) of this section, the specific component for each class of customers shall be determined by allocating these costs among customer classes based on the electric public utility's North Carolina peak demand for the prior year, as determined by the Commission, until the Commission determines how these costs shall be allocated in a general rate case for the electric public utility commenced on or after January 1, 2008.
  5. The Commission shall conduct a hearing within 12 months of each electric public utility's last general rate case order to determine whether an increment or decrement rider is required to reflect actual changes in the cost of fuel and fuel-related costs over or under the cost of fuel and fuel-related costs on a kilowatt-hour basis in base rates established in the electric public utility's last preceding general rate case. Additional hearings shall be held on an annual basis but only one hearing for each electric public utility may be held within 12 months of the last general rate case.
  6. Each electric public utility shall submit to the Commission for the hearing verified annualized information and data in such form and detail as the Commission may require, for an historic 12-month test period, relating to:
    1. Cost of fuel and fuel-related costs used in each generating facility owned in whole or in part by the utility.
    2. Fuel procurement practices and fuel inventories for each facility.
    3. Burned cost of fuel used in each generating facility.
    4. Plant capacity factor for each generating facility.
    5. Plant availability factor for each generating plant.
    6. Generation mix by types of fuel used.
    7. Sources and fuel cost component of purchased power used.
    8. Recipients of and revenues received for power sales and times of power sales.
    9. Test period kilowatt-hour sales for the utility's total system and on the total system separated for North Carolina jurisdictional sales.
    10. Procurement practices and inventories for: fuel burned and for ammonia, lime, limestone, urea, dibasic acid, sorbents, and catalysts consumed in reducing or treating emissions.
    11. The cost incurred at each generating facility of fuel burned and of ammonia, lime, limestone, urea, dibasic acid, sorbents, and catalysts consumed in reducing or treating emissions.
    12. Any net gains or losses resulting from any sales by the electric public utility of fuel or other fuel-related costs components.
    13. Any net gains or losses resulting from any sales by the electric public utility of by-products produced in the generation process to the extent the costs of the inputs leading to that by-product are costs of fuel or fuel-related costs.
  7. The Commission shall provide for notice of a public hearing with reasonable and adequate time for investigation and for all intervenors to prepare for hearing. At the hearing the Commission shall receive evidence from the utility, the Public Staff, and any intervenor desiring to submit evidence, and from the public generally. In reaching its decision, the Commission shall consider all evidence required under subsection (c) of this section as well as any and all other competent evidence that may assist the Commission in reaching its decision including changes in the cost of fuel consumed and fuel-related costs that occur within a reasonable time, as determined by the Commission, after the test period is closed. The Commission shall incorporate in its cost of fuel and fuel-related costs determination under this subsection the experienced over-recovery or under-recovery of reasonable costs of fuel and fuel-related costs prudently incurred during the test period, based upon the prudent standards set pursuant to subsection (d1) of this section, in fixing an increment or decrement rider. Upon request of the electric public utility, the Commission shall also incorporate in this determination the experienced over-recovery or under-recovery of costs of fuel and fuel-related costs through the date that is 30 calendar days prior to the date of the hearing, provided that the reasonableness and prudence of these costs shall be subject to review in the utility's next annual hearing pursuant to this section. The Commission shall use deferral accounting, and consecutive test periods, in complying with this subsection, and the over-recovery or under-recovery portion of the increment or decrement shall be reflected in rates for 12 months, notwithstanding any changes in the base fuel cost in a general rate case. The burden of proof as to the correctness and reasonableness of the charge and as to whether the cost of fuel and fuel-related costs were reasonably and prudently incurred shall be on the utility. The Commission shall allow only that portion, if any, of a requested cost of fuel and fuel-related costs adjustment that is based on adjusted and reasonable cost of fuel and fuel-related costs prudently incurred under efficient management and economic operations. In evaluating whether cost of fuel and fuel-related costs were reasonable and prudently incurred, the Commission shall apply the rule adopted pursuant to subsection (d1) of this section. To the extent that the Commission determines that an increment or decrement to the rates of the utility due to changes in the cost of fuel and fuel-related costs over or under base fuel costs established in the preceding general rate case is just and reasonable, the Commission shall order that the increment or decrement become effective for all sales of electricity and remain in effect until changed in a subsequent general rate case or annual proceeding under this section.
  8. Within one year after ratification of this act, for the purposes of setting cost of fuel and fuel-related costs rates, the Commission shall adopt a rule that establishes prudent standards and procedures with which it can appropriately measure management efficiency in minimizing cost of fuel and fuel-related costs.
  9. If the Commission has not issued an order pursuant to this section within 180 days of a utility's submission of annual data under subsection (c) of this section, the utility may place the requested cost of fuel and fuel-related costs adjustment into effect. If the change in rate is finally determined to be excessive, the utility shall make refund of any excess plus interest to its customers in a manner ordered by the Commission.
  10. Nothing in this section shall relieve the Commission from its duty to consider the reasonableness of the cost of fuel and fuel-related costs in a general rate case and to set rates reflecting reasonable cost of fuel and fuel-related costs pursuant to G.S. 62-133. Nothing in this section shall invalidate or preempt any condition adopted by the Commission and accepted by the utility in any proceeding that would limit the recovery of costs by any electric public utility under this section.
  11. Repealed by Session Laws 2014-120, s. 10(d), effective September 18, 2014.

History

(1981 (Reg. Sess., 1982), c. 1197, s. 1; 1987, c. 677, ss. 1, 5; 1989, c. 15, s. 1; 1991, c. 129, s. 1; 1995, c. 15, ss. 1, 2; 2007-397, s. 5; 2011-291, s. 2.11; 2014-120, s. 10(d); 2017-192, s. 4(a); 2018-114, s. 22.)

Editor's Note. - Session Laws 1987, c. 677, ss. 2 and 3 provide: "The enactment of this act shall be construed as clarifying rather than changing the meaning of G.S. 62-133.2 as it was previously worded and as construed by the Utilities Commission in Commission Rule R8-55 so that electric utilities will recover only their reasonable fuel expenses prudently incurred, including the fuel cost component of purchased power, with no over-recovery or under-recovery, in a manner that will serve the public interest.

"Until the Commission has formally adopted a rule as prescribed by subsection (d1) of G.S. 62-133.2 all fuel charge adjustment proceedings shall be heard and decided pursuant to the applicable provisions of subsection (a), (b), (c), (d), (e) and (f) of G.S. 62-133.2 and Commission Rule R8-55."

Session Laws 1995, c. 15, s. 2 was codified as subsection (g) of this section at the direction of the Revisor of Statutes.

Effect of Amendments. - Session Laws 2007-397, s. 5, effective January 1, 2008, rewrote subsection (a); added subsections (a1) through (a3); rewrote subsection (b); inserted "public" in subsection (c); in subdivision (c)(1), substituted "Cost" for "Purchased cost" and inserted "and fuel-related costs"; added subdivisions (c)(10) through (c)(13); rewrote subsection (d); in subsection (d1), substituted "cost of fuel and fuel-related costs rates," for "fuel rates," and substituted "cost of fuel and fuel-related" for "fuel" at the end; in the first sentence of subsection (e), substituted "180 days" for "120 days" and substituted "cost of fuel and fuel-related costs" for "fuel"; rewrote subsections (f) and (g); and made minor stylistic changes throughout. For further clarification of the effective date, see the Editor's note.

Session Laws 2011-291, s. 2.11, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in subsection (g).

Session Laws 2014-120, s. 10(d), effective September 18, 2014, repealed subsection (g), which required the Utilities Commission to provide a report to the Joint Legislative Commission on Governmental Operations summarizing the proceedings conducted pursuant to this section during the preceding two years.

Session Laws 2017-192, s. 4(a), effective July 27, 2017, added subdivisions (a1)(10) and (a1)(11); and rewrote subsection (a2).

Session Laws 2018-114, s. 22, effective June 27, 2018, substituted "subdivisions (1), (2), (6), (7), and (10)" for "subdivisions (1), (2), (6), and (7)" in the first sentence of subsection (a3); and in the second through fourth sentences of subsection (a3) substituted "subdivisions (6) and (10)" for "subdivision (6)."

CASE NOTES

This section was enacted by the General Assembly in order to eliminate undesirable limitations which existed under former G.S. 62-134(e). State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).

Subsections (a) and (d) Compared. - Subsection (a) of this section defines what decision the Commission is authorized to make, while subsection (d) of this section directs how the Commission should reach its decision. State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).

True-Ups for Past over or Under Recoveries Not Authorized. - This section was not intended by the General Assembly to authorize true-ups for past over-recoveries or under-recoveries of fuel costs or the fuel component of purchased power of electric utilities. State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).

By enacting subsection (d) of this section, the General Assembly did not modify the judicially adopted rule prohibiting retroactive rate making, heretofore extant in this State, so as to authorize the Utilities Commission to employ an Experience Modification Factor in connection with an electric utility's fuel charge adjustment proceedings in order to provide for a "true-up" of the utility's past over-recoveries or under-recoveries of fuel costs. Subsection (d) does not authorize such a "true-up" system. State ex rel. Utils. Comm'n v. Thornburg, 84 N.C. App. 482, 353 S.E.2d 413 (1987).

Applied in State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 309 N.C. 195, 306 S.E.2d 435 (1983).

Cited in State ex rel. Utils. Comm'n v. Thornburg, 316 N.C. 238, 342 S.E.2d 28 (1986).


§ 62-133.3: Repealed by Session Laws 1995, c. 27, s. 5.

§ 62-133.4. Gas cost adjustment for natural gas local distribution companies.

  1. Rate changes for natural gas local distribution companies occasioned by changes in the cost of natural gas supply and transportation may be determined under this section rather than under G.S. 62-133(b), (c), or (d).
  2. From time to time, as changes in the cost of natural gas require, each natural gas local distribution company may apply to the Commission for permission to change its rates to track changes in the cost of natural gas supply and transportation. The Commission may, without a hearing, issue an order allowing such rate changes to become effective simultaneously with the effective date of the change in the cost of natural gas or at any other time ordered by the Commission. If the Commission has not issued an order under this subsection within 120 days after the application, the utility may place the requested rate adjustment into effect. If the rate adjustment is finally determined to be excessive or is denied, the utility shall make refund of any excess, plus interest as provided in G.S. 62-130(e), to its customers in a manner ordered by the Commission. Any rate adjustment under this subsection is subject to review under subsection (c) of this section.
  3. Each natural gas local distribution company shall submit to the Commission information and data for an historical 12-month test period concerning the utility's actual cost of gas, volumes of purchased gas, sales volumes, negotiated sales volumes, and transportation volumes. This information and data shall be filed on an annual basis in the form and detail and at the time required by the Commission. The Commission, upon notice and hearing, shall compare the utility's prudently incurred costs with costs recovered from all the utility's customers that it served during the test period. If those prudently incurred costs are greater or less than the recovered costs, the Commission shall, subject to G.S. 62-158, require the utility to refund any overrecovery by credit to bill or through a decrement in its rates and shall permit the utility to recover any deficiency through an increment in its rates. If the Commission finds the overrecovery or deficiency has been or is likely to be substantially reduced, negated, or reversed before or during the period in which it would be credited or recovered, the Commission, in its discretion, may order the utility to make an appropriate adjustment or no adjustment to its rates, consistent with the public interest.
  4. Nothing in this section prohibits the Commission from investigating and changing unreasonable rates as authorized by this Chapter, nor does it prohibit the Commission from disallowing the recovery of any gas costs not prudently incurred by a utility.
  5. As used in this section, the word "cost" or "costs" shall be defined by Commission rule or order and may include all costs related to the purchase and transportation of natural gas to the natural gas local distribution company's system.

History

(1991, c. 598, s. 8; 2021-23, s. 15.)

Effect of Amendments. - Session Laws 2021-23, s. 15, effective May 17, 2021, added last sentence in subsection (c).

CASE NOTES

Cited in State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 142 N.C. App. 127, 542 S.E.2d 247 (2001).


§ 62-133.5. Alternative regulation, tariffing, and deregulation of telecommunications utilities.

  1. Any local exchange company, subject to the provisions of G.S. 62-110(f1), that is subject to rate of return regulation pursuant to G.S. 62-133 or a form of alternative regulation authorized by subsection (b) of this section may elect to have the rates, terms, and conditions of its services determined pursuant to a form of price regulation, rather than rate of return or other form of earnings regulation. Under this form of price regulation, the Commission shall, among other things, permit the local exchange company to determine and set its own depreciation rates, to rebalance its rates, and to adjust its prices in the aggregate, or to adjust its prices for various aggregated categories of services, based upon changes in generally accepted indices of prices. Upon application, the Commission shall, after notice and an opportunity for interested parties to be heard, approve such price regulation, which may differ between local exchange companies, upon finding that the plan as proposed (i) protects the affordability of basic local exchange service, as such service is defined by the Commission; (ii) reasonably assures the continuation of basic local exchange service that meets reasonable service standards that the Commission may adopt; (iii) will not unreasonably prejudice any class of telephone customers, including telecommunications companies; and (iv) is otherwise consistent with the public interest. Upon approval, and except as provided in subsection (c) of this section, price regulation shall thereafter be the sole form of regulation imposed upon the electing local exchange company, and the Commission shall thenceforth regulate the electing local exchange company's prices, rather than its earnings. The Commission shall issue an order denying or approving the proposed plan for price regulation, with or without modification, not more than 90 days from the filing of the application. However, the Commission may extend the time period for an additional 90 days at the discretion of the Commission. If the Commission approves the application with modifications, the local exchange company subject to such approval may accept the modifications and implement the proposed plan as modified, or may, at its option, (i) withdraw its application and continue to be regulated under the form of regulation that existed immediately prior to the filing of the application; (ii) file another proposed plan for price regulation; or (iii) file an application for a form of alternative regulation under subsection (b) of this section. If the initial price regulation plan is approved with modifications and the local exchange company files another plan pursuant to part (ii) of the previous sentence, the Commission shall issue an order denying or approving the proposed plan for price regulation, with or without modifications, not more than 90 days from that filing by the local exchange company.
  2. Any local exchange company that is subject to rate of return regulation pursuant to G.S. 62-133 and which elects not to file for price regulation under the provisions of subsection (a) above may file an application with the Commission for forms of alternative regulation, which may differ between companies and may include, but are not limited to, ranges of authorized returns, categories of services, and price indexing. Upon application, the Commission shall approve such alternative regulatory plan upon finding that the plan as proposed (i) protects the affordability of basic local exchange service, as such service is defined by the Commission; (ii) reasonably assures the continuation of basic local exchange service that meets reasonable service standards established by the Commission; (iii) will not unreasonably prejudice any class of telephone customers, including telecommunications companies; and (iv) is otherwise consistent with the public interest. The Commission shall issue an order denying or approving the proposed plan with or without modification, not more than 90 days from the filing of the application. However, the Commission may extend the time period for an additional 90 days at the discretion of the Commission. If the Commission approves the application with modifications, the local exchange company subject to such approval may, at its option, accept the modifications and implement the proposed plan as modified or may, at its option, (i) withdraw its application and continue to be regulated under the form of regulation that existed at the time of filing the application; or (ii) file an application for another form of alternative regulation. If the initial plan is approved with modifications and the local exchange company files another plan pursuant to part (ii) of the previous sentence, the Commission shall issue an order denying or approving the proposed plan, with or without modifications, not more than 90 days from that filing by the local exchange company.
  3. Any local exchange company subject to price regulation under the provisions of subsection (a) of this section may file an application with the Commission to modify such form of price regulation or for other forms of regulation. Any local exchange company subject to a form of alternative regulation under subsection (b) of this section may file an application with the Commission to modify such form of alternative regulation. Upon application, the Commission shall approve such other form of regulation upon finding that the plan as proposed (i) protects the affordability of basic local exchange service, as such service is defined by the Commission; (ii) reasonably assures the continuation of basic local exchange service that meets reasonable service standards established by the Commission; (iii) will not unreasonably prejudice any class of telephone customers, including telecommunications companies; and (iv) is otherwise consistent with the public interest. If the Commission disapproves, in whole or in part, a local exchange company's application to modify its existing form of price regulation, the company may elect to continue to operate under its then existing plan previously approved under this subsection or subsection (a) of this section.
  4. In determining whether a price regulation plan is otherwise consistent with the public interest, the Commission shall not consider the local exchange company's past or present earnings or rates of return.
  5. Any local exchange company subject to price regulation under the provisions of subsection (a) of this section, or other alternative regulation under subsection (b) of this section, or other form of regulation under subsection (c) of this section shall file tariffs for basic local exchange service and toll switched access services stating the terms and conditions of the services and the applicable rates. However, fees charged by such local exchange companies applicable to charges for returned checks shall not be tariffed or otherwise regulated by the Commission. The filing of any tariff changing the terms and conditions of such services or increasing the rates for such services shall be presumed valid and shall become effective, unless otherwise suspended by the Commission for a term not to exceed 45 days, 14 days after filing. Any tariff reducing rates for basic local exchange service or toll switched access service shall be presumed valid and shall become effective, unless otherwise suspended by the Commission for a term not to exceed 45 days, seven days after filing. Any local exchange company subject to price regulation under the provisions of subsection (a) of this section, or other alternative regulation under subsection (b) of this section, or other form of regulation under subsection (c) of this section may file tariffs for services other than basic local exchange services and toll switched access services. Any tariff changing the terms and conditions of such services or increasing the rates for an existing service or establishing the terms, conditions, or rates for a new service shall be presumed valid and shall become effective, unless otherwise suspended by the Commission for a term not to exceed 45 days, 14 days after filing. Any tariff reducing the rates for such services shall be presumed valid and shall become effective, unless otherwise suspended by the Commission for a term not to exceed 45 days, seven days after filing. In the event of a complaint with regard to a tariff filing under this subsection, the Commission may take such steps as it deems appropriate to assure that such tariff filing is consistent with the plan previously adopted pursuant to subsection (a) of this section, subsection (b) of this section, or subsection (c) of this section.
  6. Any allegation of anticompetitive activity by a competing local provider or a local exchange company shall be raised in a complaint proceeding pursuant to G.S. 62-73.
  7. Notwithstanding the provisions of G.S. 62-140, or any Commission rule or regulations: (i) the Commission shall permit a local exchange company or a competing local provider to offer competitive services with flexible pricing arrangements to business customers pursuant to contract and shall permit other flexible pricing options; and (ii) local exchange companies and competing local providers may provide a promotional offering for any tariffed service or tariffed offering by giving one day's notice to the Commission, but no Commission approval of the notice is required. Promotional offerings of any nontariffed service may be implemented without notice to the Commission or Commission approval. Carriers offering promotions of regulated services that are available for resale must provide a means for interested parties to receive notice of each promotional offering of regulated service, including the duration of the offering, at least one business day prior to the effective date of the promotional offering. Furthermore, local exchange companies and competing local providers may offer special promotions and bundles of new or existing service or products without the obligation to identify or convert existing customers who subscribe to the same or similar services or products. The Commission's complaint authority under G.S. 62-73 and subsection (e) of this section is applicable to any promotion or bundled service offering filed or offered under this subsection.
  8. The following sections of Chapter 62 of the General Statutes shall not apply to local exchange companies subject to price regulation under the terms of subsection (a) of this section or electing companies subject to alternative regulation under the terms of subsection (h) or (m) of this section: G.S. 62-35(c), 62-45, 62-51, 62-81, 62-111, 62-130, 62-131, 62-132, 62-133, 62-134, 62-135, 62-136, 62-137, 62-139, 62-142, and 62-153.
  9. Notwithstanding any other provision of this Chapter, a local exchange company that is subject to rate of return regulation or subject to another form of regulation authorized under this section and whose territory is open to competition from competing local providers may elect to have its rates, terms, and conditions for its services determined pursuant to the plan described in this subsection by filing notice of its intent to do so with the Commission. The election is effective immediately upon filing. A local exchange company shall not be permitted to make the election under this section unless it commits to provide stand-alone basic residential lines to rural customers at rates that are less than or comparable to those rates charged to urban customers for the same service.
    1. Definitions. - The following definitions apply in this subsection:
      1. Local exchange company. - The same meaning as provided in G.S. 62-3(16a).
      2. Open to competition from competing local providers. - Both of the following apply:
        1. G.S. 62-110(f1) applies to the franchised area and to local exchange and exchange access services offered by the local exchange company.
        2. The local exchange company is open to interconnection with competing local providers that possess a certificate of public convenience and necessity issued by the Commission. The Commission is authorized to resolve any disputes concerning whether a local exchange company is open to interconnection under this section.
      3. Single-line basic residential service. - Single-line residential flat rate basic voice grade local service with touch tone within a traditional local calling area that provides access to available emergency services and directory assistance, the capability to access interconnecting carriers, relay services, access to operator services, and one annual local directory listing (white pages or the equivalent).
      4. Stand-alone basic residential line. - Single-line basic residential service that is billed on a billing account that does not also contain another service, feature, or product that is sold by the local exchange company or an affiliate of the local exchange company and is billed on a recurring basis on the local exchange company's bill.
    2. Beginning on the date that the local exchange company's election under this subsection becomes effective, the local exchange company shall continue to offer stand-alone basic residential lines to all customers who choose to subscribe to that service, and the local exchange company may increase rates for those lines annually by a percentage that does not exceed the percentage increase over the prior year in the Gross Domestic Product Price Index as reported by the United States Department of Commerce, Bureau of Economic Analysis, unless otherwise authorized by the Commission. With the sole exception of ensuring the local exchange company's compliance with the preceding sentence, the Commission shall not:
      1. Impose any requirements related to the terms, conditions, rates, or availability of any of the local exchange company's stand-alone basic residential lines.
      2. Otherwise regulate any of the local exchange company's stand-alone basic residential lines.
    3. Except to the extent provided in subdivision (2) of this subsection, beginning on the date the local exchange company's election under this subsection becomes effective, the Commission shall not do any of the following:
      1. Impose any requirements related to the terms, conditions, rates, or availability of any of the local exchange company's retail services.
      2. Otherwise regulate any of the local exchange company's retail services.
      3. Impose any tariffing requirements on any of the local exchange company's services that were not tariffed as of the date of the election; or impose any constraints on the rates of the local exchange company's services that were subject to full pricing flexibility as of the date of election.
    4. A local exchange company's election under this subsection does not affect the obligations or rights of an incumbent local exchange carrier, as that term is defined by section 251(h) of the Federal Telecommunications Act of 1996 (Act), under sections 251 and 252 of the Act or any Federal Communications Commission regulation relating to sections 251 and 252 of the Act, nor does it affect any authority of the Commission to act in accordance with federal or State laws or regulations, including those granting authority to set rates, terms, and conditions for access to unbundled network elements and to arbitrate and enforce interconnection agreements.
    5. A local exchange company's election under this subsection does not prevent a consumer from seeking the assistance of the Public Staff of the North Carolina Utilities Commission to resolve a complaint with that local exchange company, as provided in G.S. 62-73.1.
    6. A local exchange company's election under this subsection does not affect the Commission's jurisdiction concerning the following:
      1. Enforce federal requirements on the local exchange company's marketing activities. However, the Commission may not adopt, impose, or enforce other requirements on the local exchange company's marketing activities.
      2. The telecommunications relay service pursuant to G.S. 62-157.
      3. The Life Line or Link Up programs consistent with Federal Communications Commission rules, including, but not limited to, 47 C.F.R. § 54.403(a)(3), as amended from time to time, and relevant orders of the North Carolina Utilities Commission.
      4. Universal service funding pursuant to G.S. 62-110(f1).
      5. Carrier of last resort obligations pursuant to G.S. 62-110.
      6. The authority delegated to it by the Federal Communications Commission to manage the numbering resources involving that local exchange company.
      7. Regulatory authority over the rates, terms, and conditions of wholesale services.
  10. A competing local provider authorized by the Commission to do business under the provisions of G.S. 62-110(f1) may also elect to have its rates, terms, and conditions for its services determined pursuant to the plans described in subsection (h) or (m) of this section. However, it is provided further that any provisions of subsection (h) of this section requiring the provision of a specific retail service or impacting the pricing of such service, including stand-alone residence service, shall not apply to competing local providers.
  11. Notwithstanding any other provision of this Chapter, the Commission has jurisdiction over matters concerning switched access and intercarrier compensation of a local exchange company that has elected to operate under price regulation, as well as a local exchange carrier or competing local provider operating under any form of regulation covered under this Article or G.S. 62-110(f1).
  12. To evaluate the affordability and quality of local exchange service provided to consumers in this State, a local exchange company or competing local provider offering basic local residential exchange service that elects to have its rates, terms, and conditions for its services determined pursuant to the plans described in subsection (h) or (m) of this section shall make an annual report to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources on the state of its company's operations. The report shall be due 30 days after the close of each calendar year and shall cover the period from January 1 through December 31 of the preceding year. The Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources shall review the annual reports and shall decide whether to recommend that the General Assembly take corrective action in response to those reports. The report shall include the following:
    1. An analysis of telecommunications competition by the local exchange company or competing local provider, including access line gain or loss and the impact on consumer choices from the date the local exchange company makes its election to be subject to alternative regulation under the terms of subsection (h) or (m) of this section.
    2. An analysis of service quality based on customer satisfaction studies from the date the local exchange company makes its election to be subject to alternative regulation under the terms of subsection (h) or (m) of this section.
    3. An analysis of the level of local exchange rates from the date the local exchange company makes its election to be subject to alternative regulation under the terms of subsection (h) or (m) of this section.
  13. For a local exchange company that has made an election to be subject to alternative regulation under subsection (m) of this section, the requirement to report annually to the General Assembly under subsection (k) of this section shall no longer apply on and after the third anniversary following the date of the local exchange company's election.
  14. Notwithstanding any other provision of this Chapter, a local exchange company that is subject to rate of return regulation or subject to another form of regulation authorized under this section and who forgoes receipt of any funding from a State funding mechanism, other than interconnection rates, that may be established to support universal service as described in G.S. 62-110(f1) and whose territory is open to competition from competing local providers may elect to have its rates, terms, and conditions for its services determined pursuant to the plan described in this subsection by filing notice of its intent to do so with the Commission. The election is effective immediately upon filing. The terms "local exchange company" and "open to competition from competing local providers" shall have the same meanings as in subsection (h) of this section.
    1. Beginning on the date the local exchange company's election under this subsection becomes effective, the Commission shall not:
      1. Impose any requirements related to the terms, conditions, rates, or availability of any of the local exchange company's retail services, regardless of the technology used to provide these services.
      2. Otherwise regulate any of the local exchange company's retail services, regardless of the technology used to provide these services.
      3. Impose any tariffing requirements on any of the local exchange company's services that were not tariffed as of the date of the election, or impose any constraints on the rates of the local exchange company's services that were subject to full pricing flexibility as of the date of election.
    2. A local exchange company's election under this subsection does not affect the obligations or rights of an incumbent local exchange carrier, as that term is defined by section 251(h) of the Federal Telecommunications Act of 1996 (Act), under sections 251 and 252 of the Act, or any Federal Communications Commission regulation relating to sections 251 and 252 of the Act.
    3. A local exchange company's election under this subsection does not affect the Commission's jurisdiction concerning:
      1. Enforcement of federal requirements on the local exchange company's marketing activities as set forth in 47 U.S.C. Part 64. However, the Commission may not adopt, impose, or enforce other requirements on the local exchange company's marketing activities.
      2. The telecommunications relay service pursuant to G.S. 62-157.
      3. The Life Line or Link Up programs consistent with Federal Communications Commission rules and relevant orders of the North Carolina Utilities Commission.
      4. Universal service funding pursuant to G.S. 62-110(f1).
      5. The authority delegated to it by the Federal Communications Commission to manage the numbering resources involving that local exchange company.
      6. Regulatory authority over the rates, terms, and conditions of wholesale services.
      7. The Commission's authority under section 214(e) of the Federal Communications Act of 1934, consistent with Federal Communications Commission rules.
      8. The authority of the Commission to act in accordance with federal or State laws or regulations, including those granting authority to set rates, terms, and conditions for access to unbundled network elements and to arbitrate and enforce interconnection agreements.
    4. A local exchange company's election under this subsection does not prevent a consumer from seeking the assistance of the Public Staff of the North Carolina Utilities Commission to resolve a complaint with that local exchange company, as provided in G.S. 62-73.1.

History

(1995, c. 27, s. 6; 2003-91, s. 2; 2007-157, s. 1; 2009-238, ss. 1-4; 2009-570, s. 36; 2010-173, ss. 1-3; 2011-52, s. 3; 2011-291, s. 2.12; 2017-57, s. 14.1(u).)

Editor's Note. - Subsection (d), as added by Session Laws 2003-91, s. 2, was redesignated as subsection (c1) at the direction of the Revisor of Statutes.

The preamble to Session Laws 2009-238, provides: "Whereas, the technology used to provide communications services has evolved and continues to evolve at an ever-increasing pace; and

"Whereas, the resulting competition between traditional telephone service providers, cable companies offering communications services, Voice-over Internet Protocol (VoIP) providers, wireless communications service providers, and other communications service providers promotes and continues to promote additional consumer choices for these services; and

"Whereas, traditional telephone service providers remain subject to certain antiquated statutory and regulatory restrictions that do not apply to other communications service providers; and

"Whereas, this disparity may deprive consumers of traditional telephone companies of the full range of timely and competitive options and offerings that otherwise would be available to them; and

"Whereas, the General Assembly finds that relaxing certain restrictions for traditional telephone companies will relieve consumers of unnecessary costs and burdens, encourage investment, and promote timely deployment of more innovative offerings at more competitive prices for customers; and

"Whereas, in order to make the full range of competitive options and offerings available to consumers of communications services while maintaining inflation-based price controls for those existing customers who currently receive and wish to continue receiving only stand-alone basic residential lines from traditional telephone companies, the General Assembly hereby enacts the 'Consumer Choice and Investment Act of 2009'; Now, therefore,"

The definitions in subdivision (h)(1), as added by Session Laws 2009-238, s. 1, have been set out in alphabetical order at the direction of the Revisor of Statutes.

Subsections ( l ) and (m) of this section were originally enacted by Session Laws 2011-52, s. 3, as subsections (k1) and ( l ), respectively. The subsections have been redesignated at the direction of the Revisor of Statutes.

Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'"

Session Laws 2017-57, s. 39.6, is a severability clause.

Effect of Amendments. - Session Laws 2009-238, ss. 1-4, effective June 30, 2009, added subsections (h) through (k).

Session Laws 2009-570, s. 36, effective August 28, 2009, substituted "Department of Commerce, Bureau of Economic Analysis," for "Department of Labor, Bureau of Labor Statistics" in the introductory paragraph of subdivision (h)(2).

Session Laws 2010-173, ss. 1-3, effective August 2, 2010, in subsection (g), inserted "or electing companies subject to alternative regulation under the terms of subsection (h) of this section"; in the first paragraph in subsection (h), inserted "that are less than or" in the last sentence; added subdivision (h)(3)c. and made a related change; added subdivision (h)(6)g; and in subsection (i), deleted "To the extent applicable" from the beginning of the first sentence, and added the last sentence.

Session Laws 2011-52, s. 3, effective April 26, 2011, in the first sentence in subsections (g), (i), and (k), substituted "subsection (h) or (m)" for "subsection (h)"; in the first sentence in subsections (i) and (k), substituted "plans" for "plan"; in subdivisions (k)(1) through (k)(3), substituted the language beginning "the date the local exchange company" for "enactment of the Consumer Choice and Investment Act of 2009"; and added subsections ( l ) and (m).

Session Laws 2011-291, s. 2.12, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in the last sentence of the introductory paragraph in subsection (k).

Session Laws 2017-57, s. 14.1(u), effective July 1, 2017, in subsection (k), substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "General Assembly" in the first sentence and, in the second sentence, substituted "Legislative Oversight Committee on Agriculture and Natural and Economic Resources shall" for "Legislative Commission on Governmental Operations must", and inserted "shall" in the middle.

§ 62-133.6. Environmental compliance costs recovery.

  1. As used in this section:
    1. "Coal-fired generating unit" means a coal-fired generating unit, as defined by 40 Code of Federal Regulations § 96.2 (July 1, 2001 Edition), that is located in this State and has the capacity to generate 25 or more megawatts of electricity.
    2. "Environmental compliance costs" means only those capital costs incurred by an investor-owned public utility to comply with the emissions limitations set out in G.S. 143-215.107D that exceed the costs required to comply with 42 U.S.C. § 7410(a)(2)(D)(i)(I), as implemented by 40 Code of Federal Regulations § 51.121 (July 1, 2001 Edition), related federal regulations, and the associated State or Federal Implementation Plan, or with 42 U.S.C. § 7426, as implemented by 40 Code of Federal Regulations § 52.34 (July 1, 2001 Edition) and related federal regulations. The term "environmental compliance costs" does not include:
      1. Costs required to comply with a final order or judgment rendered by a state or federal court under which an investor-owned public utility is found liable for a failure to comply with any federal or state law, rule, or regulation for the protection of the environment or public health.
      2. The net increase in costs, above those proposed by the investor-owned public utility as part of its plan to achieve compliance with the emissions limitations set out in G.S. 143-215.107D, that are necessary to comply with a settlement agreement, consent decree, or similar resolution of litigation arising from any alleged failure to comply with any federal or state law, rule, or regulation for the protection of the environment or public health.
      3. Any criminal or civil fine or penalty, including court costs imposed or assessed for a violation by an investor-owned public utility of any federal or state law, rule, or regulation for the protection of the environment or public health.
      4. The net increase in costs, above those proposed by the investor-owned public utility as part of its plan to achieve the emissions limitations set out in G.S. 143-215.107D, that are necessary to comply with any limitation on emissions of oxides of nitrogen (NOx) or sulfur dioxide (SO2) that are imposed on an individual coal-fired generating unit by the Environmental Management Commission or the Department of Environmental Quality to address any nonattainment of an air quality standard in any area of the State.
    3. "Investor-owned public utility" means an investor-owned public utility, as defined in G.S. 62-3.
  2. The investor-owned public utilities shall be allowed to accelerate the cost recovery of their estimated environmental compliance costs over a seven-year period, beginning January 1, 2003 and ending December 31, 2009. For purposes of this subsection, an investor-owned public utility subject to the provisions of subsections (b) and (d) of G.S. 143-215.107D shall amortize environmental compliance costs in the amount of one billion five hundred million dollars ($1,500,000,000) and an investor-owned public utility subject to the provisions of subsections (c) and (e) of G.S. 143-215.107D shall amortize environmental compliance costs in the amount of eight hundred thirteen million dollars ($813,000,000). During the rate freeze period established in subsection (e) of this section, the investor-owned public utilities shall, at a minimum, recover through amortization seventy percent (70%) of the environmental compliance costs set out in this subsection. The maximum amount for each investor-owned public utility's annual accelerated cost recovery during the rate freeze period shall not exceed one hundred fifty percent (150%) of the annual levelized environmental compliance costs set out in this subsection. The amounts to be amortized pursuant to this subsection are estimates of the environmental compliance costs that may be adjusted as provided in this section. The General Assembly makes no judgment as to whether the actual environmental compliance costs will be greater than, less than, or equal to these estimated amounts. These estimated amounts do not define or limit the scope of the expenditures that may be necessary to comply with the emissions limitations set out in G.S. 143-215.107D.
  3. The investor-owned public utilities shall file their compliance plans, including initial cost estimates, with the Commission and the Department of Environmental Quality not later than 10 days after the date on which this section becomes effective. The Commission shall consult with the Secretary of Environmental Quality and shall consider the advice of the Secretary as to whether an investor-owned public utility's proposed compliance plan is adequate to achieve the emissions limitations set out in G.S. 143-215.107D.
  4. Subject to the provisions of subsection (f) of this section, the Commission shall hold a hearing to review the environmental compliance costs set out in subsection (b) of this section. The Commission may modify and revise those costs as necessary to ensure that they are just, reasonable, and prudent based on the most recent cost information available and determine the annual cost recovery amounts that each investor-owned public utility shall be required to record and recover during calendar years 2008 and 2009. In making its decisions pursuant to this subsection, the Commission shall consult with the Secretary of Environmental Quality to receive advice as to whether the investor-owned public utility's actual and proposed modifications and permitting and construction schedule are adequate to achieve the emissions limitations set out in G.S. 143-215.107D. The Commission shall issue an order pursuant to this subsection no later than December 31, 2007.
  5. Notwithstanding G.S. 62-130(d) and G.S. 62-136(a), the base rates of the investor-owned public utilities shall remain unchanged from the date on which this section becomes effective through December 31, 2007. The Commission may, however, consistent with the public interest:
    1. Allow adjustments to base rates, or deferral of costs or revenues, due to one or more of the following conditions occurring during the rate freeze period:
      1. Governmental action resulting in significant cost reductions or requiring major expenditures including, but not limited to, the cost of compliance with any law, regulation, or rule for the protection of the environment or public health, other than environmental compliance costs.
      2. Major expenditures to restore or replace property damaged or destroyed by force majeure.
      3. A severe threat to the financial stability of the investor-owned public utility resulting from other extraordinary causes beyond the reasonable control of the investor-owned public utility.
      4. The investor-owned public utility persistently earns a return substantially in excess of the rate of return established and found reasonable by the Commission in the investor-owned public utility's last general rate case.
    2. Approve any reduction in a rate or rates applicable to a customer or class of customers during the rate freeze period, if requested to do so by an investor-owned public utility that is subject to the emissions limitations set out in G.S. 143-215.107D.
  6. In any general rate case initiated to adjust base rates effective on or after January 1, 2008, the investor-owned public utility shall be allowed to recover its actual environmental compliance costs in accordance with Article 7 of this Chapter less the cumulative amount of accelerated cost recovery recorded pursuant to subsection (b) of this section.
  7. Consistent with the public interest, the Commission is authorized to approve proposals submitted by an investor-owned public utility to implement optional, market-based rates and services, provided the proposal does not increase base rates during the period of time referred to in subsection (e) of this section.
  8. Nothing in this section shall prohibit the Commission from taking any actions otherwise appropriate to enforce investor-owned public utility compliance with applicable statutes or Commission rules or to order any appropriate remedy for such noncompliance allowed by law.
  9. An investor-owned public utility that is subject to the emissions limitations set out in G.S. 143-215.107D shall submit to the Commission and to the Department of Environmental Quality on or before April 1 of each year a verified statement that contains all of the following:
    1. A detailed report on the investor-owned public utility's plans for meeting the emissions limitations set out in G.S. 143-215.107D.
    2. The actual environmental compliance costs incurred by the investor-owned public utility in the previous calendar year, including a description of the construction undertaken and completed during that year.
    3. The amount of the investor-owned public utility's environmental compliance costs amortized in the previous calendar year.
    4. An estimate of the investor-owned public utility's environmental compliance costs and the basis for any revisions of those estimates when compared to the estimates submitted during the previous year.
    5. A description of all permits required in order to comply with the provisions of G.S. 143-215.107D for which the investor-owned public utility has applied and the status of those permits or permit applications.
    6. A description of the construction related to compliance with the provisions of G.S. 143-215.107D that is anticipated during the   following year.
    7. A description of the applications for permits required in order to comply with the provisions of G.S. 143-215.107D that are anticipated during the following year.
    8. The results of equipment testing related to compliance with G.S. 143-215.107D.
    9. The number of tons of oxides of nitrogen (NOx) and sulfur dioxide (SO2) emitted during the previous calendar year from the coal-fired generating units that are subject to the emissions limitations set out in G.S. 143-215.107D.
    10. The emissions allowances described in G.S. 143-215.107D(i) that are acquired by the investor-owned public utility that result from compliance with the emissions limitations set out in G.S. 143-215.107D.
    11. Any other information requested by the Commission or the Department of Environmental Quality.
  10. The Secretary shall review the information submitted pursuant to subsection (i) of this section and determine whether the investor-owned public utility's actual and proposed modifications and permitting and construction schedule are adequate to achieve the emissions limitations set out in G.S. 143-215.107D and shall advise the Commission as to the Secretary's findings and recommendations.
  11. Any information, advice, findings, recommendations, or determinations provided by the Secretary pursuant to this section shall not constitute a final agency decision within the meaning of Chapter 150B of the General Statutes and shall not be subject to review under that Chapter.

History

(2002-4, s. 9; 2015-241, s. 14.30(u), (v).)

Cross References. - As to limitations on emissions of oxides of nitrogen and sulfur dioxide from certain coal-fired generating units, see G.S. 143-215.107D.

Effect of Amendments. - Session Laws 2015-241, s. 14.30(u), effective July 1, 2015, substituted "Department of Environmental Quality" for "Department of Environment and Natural Resources" wherever it appears.

Session Laws 2015-241, s. 14.30(v), effective July 1, 2015, substituted "Secretary of Environmental Quality" for "Secretary of Environment and Natural Resources" in subsections (c) and (d).

CASE NOTES

General Rate Proceeding Preempted. - G.S. 62-133.6(e) simply allows the legislature to preempt the North Carolina Utilities Commission's ability to compel a general rate case by freezing rates until 31 December 2007; the North Carolina Utilities Commission properly dismissed a complaint regarding rates and a petition to initiate a general rate proceeding filed against an energy corporation by a customers association. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 163 N.C. App. 46, 592 S.E.2d 221 (2004), cert. denied, 358 N.C. 739, 602 S.E.2d 683 (2004), cert. dismissed, 358 N.C. 739, 602 S.E.2d 682 (2004).


§ 62-133.7. Customer usage tracking rate adjustment mechanisms for natural gas local distribution company rates.

In setting rates for a natural gas local distribution company in a general rate case proceeding under G.S. 62-133, the Commission may adopt, implement, modify, or eliminate a rate adjustment mechanism for one or more of the company's rate schedules, excluding industrial rate schedules, to track and true-up variations in average per customer usage from levels approved in the general rate case proceeding. The Commission may adopt a rate adjustment mechanism only upon a finding by the Commission that the mechanism is appropriate to track and true-up variations in average per customer usage by rate schedule from levels adopted in the general rate case proceeding and that the mechanism is in the public interest.

History

(2007-227, s. 1.)

§ 62-133.7A. Rate adjustment mechanism for natural gas local distribution company rates.

In setting rates for a natural gas local distribution company in a general rate case proceeding under G.S. 62-133, the Commission may adopt, implement, modify, or eliminate a rate adjustment mechanism to enable the company to recover the prudently incurred capital investment and associated costs of complying with federal gas pipeline safety requirements, including a return based on the company's then authorized return. The Commission shall adopt, implement, modify, or eliminate a rate adjustment mechanism authorized under this section only upon a finding by the Commission that the mechanism is in the public interest.

History

(2013-54, s. 1.)

§ 62-133.8. Renewable Energy and Energy Efficiency Portfolio Standard (REPS).

  1. Definitions. - As used in this section:
    1. "Combined heat and power system" means a system that uses waste heat to produce electricity or useful, measurable thermal or mechanical energy at a retail electric customer's facility.
    2. "Demand-side management" means activities, programs, or initiatives undertaken by an electric power supplier or its customers to shift the timing of electricity use from peak to nonpeak demand periods. "Demand-side management" includes, but is not limited to, load management, electric system equipment and operating controls, direct load control, and interruptible load.
    3. "Electric power supplier" means a public utility, an electric membership corporation, or a municipality that sells electric power to retail electric power customers in the State.
    4. "Electricity demand reduction" means a measurable reduction in the electricity demand of a retail electric customer that is voluntary, under the real-time control of both the electric power supplier and the retail electric customer, and measured in real time, using two-way communications devices that communicate on the basis of standards.
    5. "Energy efficiency measure" means an equipment, physical, or program change implemented after January 1, 2007, that results in less energy used to perform the same function. "Energy efficiency measure" includes, but is not limited to, energy produced from a combined heat and power system that uses nonrenewable energy resources. "Energy efficiency measure" does not include demand-side management.
    6. "New renewable energy facility" means a renewable energy facility that either:
      1. Was placed into service on or after January 1, 2007.
      2. Delivers or has delivered electric power to an electric power supplier pursuant to a contract with NC GreenPower Corporation that was entered into prior to January 1, 2007.
      3. Is a hydroelectric power facility with a generation capacity of 10 megawatts or less that delivers electric power to an electric power supplier.
    7. "Renewable energy certificate" means a tradable instrument that is equal to one megawatt hour of electricity or equivalent energy supplied by a renewable energy facility, new renewable energy facility, or reduced by implementation of an energy efficiency measure that is used to track and verify compliance with the requirements of this section as determined by the Commission. A "renewable energy certificate" does not include the related emission reductions, including, but not limited to, reductions of sulfur dioxide, oxides of nitrogen, mercury, or carbon dioxide.
    8. "Renewable energy facility" means a facility, other than a hydroelectric power facility with a generation capacity of more than 10 megawatts, that either:
      1. Generates electric power by the use of a renewable energy resource.
      2. Generates useful, measurable combined heat and power derived from a renewable energy resource.
      3. Is a solar thermal energy facility.
    9. "Renewable energy resource" means a solar electric, solar thermal, wind, hydropower, geothermal, or ocean current or wave energy resource; a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill methane; waste heat derived from a renewable energy resource and used to produce electricity or useful, measurable thermal energy at a retail electric customer's facility; or hydrogen derived from a renewable energy resource. "Renewable energy resource" does not include peat, a fossil fuel, or nuclear energy resource.
  2. Renewable Energy and Energy Efficiency Standards (REPS) for Electric Public Utilities. -
    1. Each electric public utility in the State shall be subject to a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) according to the following schedule:
    2. An electric public utility may meet the requirements of this section by any one or more of the following:
      1. Generate electric power at a new renewable energy facility.
      2. Use a renewable energy resource to generate electric power at a generating facility other than the generation of electric power from waste heat derived from the combustion of fossil fuel.
      3. Reduce energy consumption through the implementation of an energy efficiency measure; provided, however, an electric public utility subject to the provisions of this subsection may meet up to twenty-five percent (25%) of the requirements of this section through savings due to implementation of energy efficiency measures. Beginning in calendar year 2021 and each year thereafter, an electric public utility may meet up to forty percent (40%) of the requirements of this section through savings due to implementation of energy efficiency measures.
      4. Purchase electric power from a new renewable energy facility. Electric power purchased from a new renewable energy facility located outside the geographic boundaries of the State shall meet the requirements of this section if the electric power is delivered to a public utility that provides electric power to retail electric customers in the State; provided, however, the electric public utility shall not sell the renewable energy certificates created pursuant to this paragraph to another electric public utility.
      5. Purchase renewable energy certificates derived from in-State or out-of-state new renewable energy facilities. Certificates derived from out-of-state new renewable energy facilities shall not be used to meet more than twenty-five percent (25%) of the requirements of this section, provided that this limitation shall not apply to an electric public utility with less than 150,000 North Carolina retail jurisdictional customers as of December 31, 2006.
      6. Use electric power that is supplied by a new renewable energy facility or saved due to the implementation of an energy efficiency measure that exceeds the requirements of this section for any calendar year as a credit towards the requirements of this section in the following calendar year or sell the associated renewable energy certificates.
      7. Electricity demand reduction.
  3. Renewable Energy and Energy Efficiency Standards (REPS) for Electric Membership Corporations and Municipalities. -
    1. Each electric membership corporation or municipality that sells electric power to retail electric power customers in the State shall be subject to a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) according to the following schedule:
    2. An electric membership corporation or municipality may meet the requirements of this section by any one or more of the following:
      1. Generate electric power at a new renewable energy facility.
      2. Reduce energy consumption through the implementation of demand-side management or energy efficiency measures.
      3. Purchase electric power from a renewable energy facility or a hydroelectric power facility, provided that no more than thirty percent (30%) of the requirements of this section may be met with hydroelectric power, including allocations made by the Southeastern Power Administration.
      4. Purchase renewable energy certificates derived from in-State or out-of-state renewable energy facilities. An electric power supplier subject to the requirements of this subsection may use certificates derived from out-of-state renewable energy facilities to meet no more than twenty-five percent (25%) of the requirements of this section.
      5. Acquire all or part of its electric power through a wholesale purchase power agreement with a wholesale supplier of electric power whose portfolio of supply and demand options meets the requirements of this section.
      6. Use electric power that is supplied by a new renewable energy facility or saved due to the implementation of demand-side management or energy efficiency measures that exceeds the requirements of this section for any calendar year as a credit towards the requirements of this section in the following calendar year or sell the associated renewable energy certificates.
      7. Electricity demand reduction.
  4. Compliance With REPS Requirement Through Use of Solar Energy Resources. - For calendar year 2018 and for each calendar year thereafter, at least two-tenths of one percent (0.2%) of the total electric power in kilowatt hours sold to retail electric customers in the State, or an equivalent amount of energy, shall be supplied by a combination of new solar electric facilities and new metered solar thermal energy facilities that use one or more of the following applications: solar hot water, solar absorption cooling, solar dehumidification, solar thermally driven refrigeration, and solar industrial process heat. The terms of any contract entered into between an electric power supplier and a new solar electric facility or new metered solar thermal energy facility shall be of sufficient length to stimulate development of solar energy; provided, the Commission shall develop a procedure to determine if an electric power supplier is in compliance with the provisions of this subsection if a new solar electric facility or a new metered solar thermal energy facility fails to meet the terms of its contract with the electric power supplier. As used in this subsection, "new" means a facility that was first placed into service on or after January 1, 2007. The electric power suppliers shall comply with the requirements of this subsection according to the following schedule:
  5. Compliance With REPS Requirement Through Use of Swine Waste Resources. - For calendar year 2018 and for each calendar year thereafter, at least two-tenths of one percent (0.2%) of the total electric power in kilowatt hours sold to retail electric customers in the State shall be supplied, or contracted for supply in each year, by swine waste. The electric power suppliers, in the aggregate, shall comply with the requirements of this subsection according to the following schedule:
  6. Compliance With REPS Requirement Through Use of Poultry Waste Resources. - For calendar year 2014 and for each calendar year thereafter, at least 900,000 megawatt hours of the total electric power sold to retail electric customers in the State or an equivalent amount of energy shall be supplied, or contracted for supply in each year, by poultry waste combined with wood shavings, straw, rice hulls, or other bedding material. The electric power suppliers, in the aggregate, shall comply with the requirements of this subsection according to the following schedule:
  7. Control of Emissions. - As used in this subsection, Best Available Control Technology (BACT) means an emissions limitation based on the maximum degree a reduction in the emission of air pollutants that is achievable for a facility, taking into account energy, environmental, and economic impacts and other costs. A biomass combustion process at any new renewable energy facility that delivers electric power to an electric power supplier shall meet BACT. The Environmental Management Commission shall determine on a case-by-case basis the BACT for a facility that would not otherwise be required to comply with BACT pursuant to the Prevention of Significant Deterioration (PSD) emissions program. The Environmental Management Commission may adopt rules to implement this subsection. In adopting rules, the Environmental Management Commission shall take into account cumulative and secondary impacts associated with the concentration of biomass facilities in close proximity to one another. In adopting rules the Environmental Management Commission shall provide for the manner in which a facility that would not otherwise be required to comply with BACT pursuant to the PSD emissions programs shall meet the BACT requirement. This subsection shall not apply to a facility that qualifies as a new renewable energy facility under sub-subdivision b. of subdivision (5) of subsection (a) of this section.
  8. Cost Recovery and Customer Charges. -
    1. For the purposes of this subsection, the term "incremental costs" means all reasonable and prudent costs incurred by an electric power supplier to:
      1. Comply with the requirements of subsections (b), (c), (d), (e), and (f) of this section that are in excess of the electric power supplier's avoided costs other than those costs recovered pursuant to G.S. 62-133.9.
      2. Fund research that encourages the development of renewable energy, energy efficiency, or improved air quality, provided those costs do not exceed one million dollars ($1,000,000) per year.
      3. Comply with any federal mandate that is similar to the requirements of subsections (b), (c), (d), (e), and (f) of this section that exceed the costs that the electric power supplier would have incurred under those subsections in the absence of the federal mandate.
      4. Provide incentives to customers, including program costs, incurred pursuant to G.S. 62-155(f).
    2. All reasonable and prudent costs incurred by an electric power supplier to comply with any federal mandate that is similar to the requirements of subsections (b), (c), (d), (e), and (f) of this section, including, but not limited to, the avoided costs associated with a federal mandate that exceeds the avoided costs that the electric power supplier would have incurred pursuant to subsections (b), (c), (d), (e), and (f) of this section in the absence of the federal mandate, shall be recovered by the electric power supplier in an annual rider charge assessed in accordance with the schedule set out in subdivision (4) of this subsection increased by the Commission on a pro rata basis to allow for full and complete recovery of all reasonable and prudent costs incurred to comply with the federal mandate.
    3. Except as provided in subdivision (2) of this subsection, the total annual incremental cost to be incurred by an electric power supplier and recovered from the electric power supplier's retail customers shall not exceed an amount equal to the per-account annual charges set out in subdivision (4) of this subsection applied to the electric power supplier's total number of customer accounts determined as of December 31 of the previous calendar year. An electric power supplier shall be conclusively deemed to be in compliance with the requirements of subsections (b), (c), (d), (e), and (f) of this section if the electric power supplier's total annual incremental costs incurred equals an amount equal to the per-account annual charges set out in subdivision (4) of this subsection applied to the electric power supplier's total number of customer accounts determined as of December 31 of the previous calendar year. The total annual incremental cost recoverable by an electric power supplier from an individual customer shall not exceed the per-account charges set out in subdivision (4) of this subsection except as these charges may be adjusted in subdivision (2) of this subsection.
    4. An electric power supplier shall be allowed to recover the incremental costs incurred to comply with the requirements of subsections (b), (c), (d), (e), and (f) of this section and fund research as provided in subdivision (1) of this subsection through an annual rider not to exceed the following per-account annual charges:
    5. The Commission shall adopt rules to establish a procedure for the annual assessment of the per-account charges set out in this subsection to an electric public utility's customers to allow for timely recovery of all reasonable and prudent costs of compliance with the requirements of subsections (b), (c), (d), (e), and (f) of this section and to fund research as provided in subdivision (1) of this subsection. The Commission shall ensure that the costs to be recovered from individual customers on a per-account basis pursuant to subdivisions (2) and (3) of this subsection are in the same proportion as the per-account annual charges for each customer class set out in subdivision (4) of this subsection.
  9. Adoption of Rules. - The Commission shall adopt rules to implement the provisions of this section. In developing rules, the Commission shall:
    1. Provide for the monitoring of compliance with and enforcement of the requirements of this section.
    2. Include a procedure to modify or delay the provisions of subsections (b), (c), (d), (e), and (f) of this section in whole or in part if the Commission determines that it is in the public interest to do so. The procedure adopted pursuant to this subdivision shall include a requirement that the electric power supplier demonstrate that it made a reasonable effort to meet the requirements set out in this section.
    3. Ensure that energy credited toward compliance with the provisions of this section not be credited toward any other purpose, including another renewable energy portfolio standard or voluntary renewable energy purchase program in this State or any other state.
    4. Establish standards for interconnection of renewable energy facilities and other nonutility-owned generation with a generation capacity of 10 megawatts or less to an electric public utility's distribution system; provided, however, that the Commission shall adopt, if appropriate, federal interconnection standards. The standards adopted pursuant to this subdivision shall include an expedited review process for swine and poultry waste to energy projects of two megawatts (MW) or less and other measures necessary and appropriate to achieve the objectives of subsections (e) and (f) of this section.
    5. Ensure that the owner and operator of each renewable energy facility that delivers electric power to an electric power supplier is in substantial compliance with all federal and state laws, regulations, and rules for the protection of the environment and conservation of natural resources.
    6. Consider whether it is in the public interest to adopt rules for electric public utilities for net metering of renewable energy facilities with a generation capacity of one megawatt or less.
    7. Develop procedures to track and account for renewable energy certificates, including ownership of renewable energy certificates that are derived from a customer owned renewable energy facility as a result of any action by a customer of an electric power supplier that is independent of a program sponsored by the electric power supplier.
  10. Repealed by Session Laws 2021-23, s. 16, effective May 17, 2021.
  11. Tracking of Renewable Energy Certificates. - No later than July 1, 2010, the Commission shall develop, implement, and maintain an Internet Web site for the online tracking of renewable energy certificates in order to verify the compliance of electric power suppliers with the REPS requirements of this section and to facilitate the establishment of a market for the purchase and sale of renewable energy certificates.
  12. The owner, including an electric power supplier, of each renewable energy facility or new renewable energy facility, whether or not required to obtain a certificate of public convenience and necessity pursuant to G.S. 62-110.1, that intends for renewable energy certificates it earns to be eligible for use by an electric power supplier to comply with G.S. 62-133.8 shall register the facility with the Commission. Such an owner shall file a registration statement in the form prescribed by the Commission and remit to the Commission the fee required pursuant to G.S. 62-300(a)(16).

Calendar Year REPS Requirement 2012 3% of 2011 North Carolina retail sales 2015 6% of 2014 North Carolina retail sales 2018 10% of 2017 North Carolina retail sales 2021 and thereafter 12.5% of 2020 North Carolina retail sales

2012 3% of 2011 North Carolina retail sales 2015 6% of 2014 North Carolina retail sales 2018 and thereafter 10% of 2017 North Carolina retail sales

2010 0.02% 2012 0.07% 2015 0.14% 2018 0.20%

2012 0.07% 2015 0.14% 2018 0.20%

2012 170,000 megawatt hours 2013 700,000 megawatt hours 2014 900,000 megawatt hours

Residential per account $10.00 $12.00 $27.00 Commercial per account $50.00 $150.00 $150.00 Industrial per account $500.00 $1,000.00 $1,000.00

History

(2007-397, s. 2(a); 2009-475, s. 14(a); 2011-55, ss. 1, 2, 3; 2011-291, s. 2.13; 2011-309, s. 2; 2011-394, s. 1; 2015-241, s. 14.30(u); 2017-57, s. 14.1(p); 2017-192, ss. 7, 8(b), 10(a), 5.1(a); 2021-23, s. 16.)

Editor's Note. - Session Laws 2007-397, s. 2(a), enacted this section as G.S. 62-133.7. It has been renumbered as this section at the direction of the Revisor of Statutes.

Session Laws 2011-309, s. 1, provides: "Legislative Findings. - The General Assembly makes the following findings regarding the need to allow renewable energy certificates (RECs) derived from the thermal energy output of combined heat and power facilities that use poultry waste as a fuel to meet the requirements of the poultry waste set-aside under G.S. 62-133.8(f) (Compliance With REPS Requirements Through the Use of Poultry Waste Resources):

"(1) The electric power suppliers have experienced considerable difficulty in procuring sufficient electricity derived from the use of poultry waste at a reasonable cost to meet the especially restrictive language of the poultry waste set-aside.

"(2) The public interest of the State will be served by providing a cost-effective option for the electric power suppliers to use in order to comply with the poultry waste set-aside.

"(3) The State and the public will benefit directly from reduced process steam costs to North Carolina businesses, which will help North Carolina businesses remain competitive and viable.

"(4) The State and the public will benefit directly from diversifying the State's viable generation resource options, which utilize indigenous North Carolina resources to foster development of renewable projects in the State and encourage investment in new renewable projects.

"(5) The health and safety of the citizens of the State will be served through improving air quality and water quality through the controlled destruction of methane, the capture of organic residuals, and addressing the very important environmental concern involving the current disposal practice of land application of poultry waste, which poses an ever increasing threat of pollution and contamination of the waters of the State."

Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'"

Session Laws 2017-57, s. 39.6, is a severability clause.

Effect of Amendments. - Session Laws 2009-475, s. 14(a), effective February 17, 2009, added subsection (k).

Session Laws 2011-55, ss. 1 through 3, effective April 28, 2011, added subdivisions (a)(3a), (b)(2)g., and (c)(2)g.

Session Laws 2011-291, s. 2.13, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in the first sentence of subsection (j).

Session Laws 2011-309, s. 2, effective June 27, 2011, inserted "or an equivalent amount of energy" in the first sentence of subsection (f).

Session Laws 2011-394, s. 1, effective July 1, 2011, added the last sentence in subsection (g).

Session Laws 2015-241, s. 14.30(u), effective July 1, 2015, substituted "Department of Environmental Quality" for "Department of Environment and Natural Resources" in subsection (j).

Session Laws 2017-57, s. 14.1(p), effective July 1, 2017, substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "Joint Legislative Commission on Governmental Operations" in subsection (j).

Session Laws 2017-192, s. 5.1(a), substituted "$27.00" for "$34.00" in the "2015 and thereafter" column of the table in subdivision (h)(4); added the last sentence in subdivision (i)(4); added subdivision (h)(1)d; and added subsection ( l ). For effective date and applicability, see editor's note.

Session Laws 2021-23, s. 16, effective May 17, 2021, deleted subsection (j).

Legal Periodicals. - For article, "Wind Over North Carolina Waters: The State's Preparedness to Address Offshore and Coastal Water-Based Wind Energy Projects," see 87 N.C.L. Rev. 1819 (2009).

For article, "Ripening on the Vine: North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard Should Be Left Unchanged Ahead of 2012 Compliance Deadline," see 34 N.C. Cent. L. Rev. 111 (2012).

For article, "Solving the Multimillion Dollar Constitutional Puzzle Surrounding State 'Sustainable' Energy Policy," see 49 Wake Forest L. Rev. 121 (2014).

For article, "Seeing Green: North Carolina's Clean Energy Plan, the Social Cost of Carbon, and a Way Forward Under a Least-Cost Framework," see 99 N.C. L. Rev. Addendum 59 (2020).

CASE NOTES

Wood Fuel Derived From Primary Harvest Whole Trees Is Biomass Resource. - Where the North Carolina Renewable Energy and Energy Efficiency Portfolio Standard, G.S. 62-133.8(a)(6), includes "biomass resource," among the list of resources qualifying as "renewable energy resources," the North Carolina Utilities Commission does not err in determining that wood derived from whole trees in primary harvest is a "biomass resource" and thus a "renewable energy resource" within the meaning of the statute; any resource that can be considered a biomass because it is organic and renewable is a biomass resource within the plain meaning of the statute, and all wood fuel meets these criteria and thus is a "biomass resource" and a "renewable energy resource." State ex rel. Utils. Comm'n v. EDF, 214 N.C. App. 364, 716 S.E.2d 370 (2011).

Wood fuel from primary harvest whole trees is a biomass resource within the meaning of the North Carolina Renewable Energy and Energy Efficiency Portfolio Standard, G.S. 62-133.8(b) because G.S. 62-133.8(b), is not ambiguous; the list provided by the legislature is not an exhaustive list of all of the biomass materials included in the broad term "biomass resources," and he term "biomass resources" is not limited by the doctrine of ejusdem generis. State ex rel. Utils. Comm'n v. EDF, 214 N.C. App. 364, 716 S.E.2d 370 (2011).

Electric Utility Merger Not Contrary to Public Convenience and Necessity. - Merger of electric utilities approved by the North Carolina Utilities Commission (Commission) was not contrary to public convenience and necessity because (1) testimony and G.S 62-133.8(b) and G.S. 62-133.9(b) supported the Commission's monopsony analysis, (2) the Commission considered job losses, and (3) low-income families were not harmed. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Energy Efficiency Measure. - Utilities Commission erred in ruling that a topping cycle combined heat and power (CHP) system does not constitute an energy efficiency measure under G.S. 62-133.8(a)(4), except to the extent that the waste heat component is used and meets the definition of an energy efficiency measure in G.S. 62-133.8(a)(4). Instead, the appellate court held that for the purposes of classifying a topping cycle CHP as an energy efficiency measure, the entire topping cycle CHP system is included. State ex rel. Utils. Comm'n v. N.C. Sustainable Energy Ass'n, 254 N.C. App. 761, 803 S.E.2d 430 (2017).


§ 62-133.9. Cost recovery for demand-side management and energy efficiency measures.

  1. The definitions set out in G.S. 62-133.8 apply to this section. As used in this section, "new," used in connection with demand-side management or energy efficiency measure, means a demand-side management or energy efficiency measure that is adopted and implemented on or after January 1, 2007, including subsequent changes and modifications.
  2. Each electric power supplier shall implement demand-side management and energy efficiency measures and use supply-side resources to establish the least cost mix of demand reduction and generation measures that meet the electricity needs of its customers. An electric membership corporation or municipality that qualifies as an electric power supplier may satisfy the requirements of this section through its purchases from a wholesale supplier of electric power that uses supply-side resources and demand-side management to meet all or a portion of the supply needs of its members and their retail customers, and that, by aggregating and promoting demand-side management and energy efficiency measures for its members, meets the requirements of this section.
  3. Each electric power supplier to which G.S. 62-110.1 applies shall include an assessment of demand-side management and energy efficiency in its resource plans submitted to the Commission and shall submit cost-effective demand-side management and energy efficiency options that require incentives to the Commission for approval.
  4. The Commission shall, upon petition of an electric public utility, approve an annual rider to the electric public utility's rates to recover all reasonable and prudent costs incurred for adoption and implementation of new demand-side management and new energy efficiency measures. Recoverable costs include, but are not limited to, all capital costs, including cost of capital and depreciation expenses, administrative costs, implementation costs, incentive payments to program participants, and operating costs. In determining the amount of any rider, the Commission:
    1. Shall allow electric public utilities to capitalize all or a portion of those costs to the extent that those costs are intended to produce future benefits.
    2. May approve other incentives to electric public utilities for adopting and implementing new demand-side management and energy efficiency measures. Allowable incentives may include:
      1. Appropriate rewards based on the sharing of savings achieved by the demand-side management and energy efficiency measures.
      2. Appropriate rewards based on capitalization of a percentage of avoided costs achieved by demand-side management and energy efficiency measures.
      3. Any other incentives that the Commission determines to be appropriate.
  5. The Commission shall determine the appropriate assignment of costs of new demand-side management and energy efficiency measures for electric public utilities and shall assign the costs of the programs only to the class or classes of customers that directly benefit from the programs.
  6. None of the costs of new demand-side management or energy efficiency measures of an electric power supplier shall be assigned to any industrial customer that notifies the industrial customer's electric power supplier that, at the industrial customer's own expense, the industrial customer has implemented at any time in the past or, in accordance with stated, quantified goals for demand-side management and energy efficiency, will implement alternative demand-side management and energy efficiency measures and that the industrial customer elects not to participate in demand-side management or energy efficiency measures under this section. The electric power supplier that provides electric service to the industrial customer, an industrial customer that receives electric service from the electric power supplier, the Public Staff, or the Commission on its own motion, may initiate a complaint proceeding before the Commission to challenge the validity of the notification of nonparticipation. The procedures set forth in G.S. 62-73, 62-74, and 62-75 shall govern any such complaint. The provisions of this subsection shall also apply to commercial customers with significant annual usage at a threshold level to be established by the Commission.
  7. An electric public utility shall not charge an industrial or commercial customer for the costs of installing demand-side management equipment on the customer's premises if the customer provides, at the customer's expense, equivalent demand-side management equipment.
  8. The Commission shall adopt rules to implement this section.
  9. The Commission shall submit to the Governor and to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources a summary of the proceedings conducted pursuant to this section during the preceding two fiscal years on or before September 1 of odd-numbered years.

History

(2007-397, s. 4(a); 2011-291, s. 2.14; 2017-57, s. 14.1(p).)

Editor's Note. - Session Laws 2007-397, s. 4(a), enacted this section as G.S. 62-133.8. It has been renumbered as this section at the direction of the Revisor of Statutes.

Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'"

Session Laws 2017-57, s. 39.6, is a severability clause.

Effect of Amendments. - Session Laws 2011-291, s. 2.14, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in subsection (i).

Session Laws 2017-57, s. 14.1(p), effective July 1, 2017, substituted "Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources" for "Joint Legislative Commission on Governmental Operations" in subsection (i).

CASE NOTES

Electric Utility Merger Not Contrary to Public Convenience and Necessity. - Merger of electric utilities approved by the North Carolina Utilities Commission (Commission) was not contrary to public convenience and necessity because (1) testimony and G.S 62-133.8(b) and G.S. 62-133.9(b) supported the Commission's monopsony analysis, (2) the Commission considered job losses, and (3) low-income families were not harmed. In re Duke Energy Corp., 232 N.C. App. 573, 755 S.E.2d 382 (2014).

Cited in State ex rel. Utils. Comm'n v. N.C. Sustainable Energy Ass'n, 254 N.C. App. 761, 803 S.E.2d 430 (2017).


§ 62-133.10: Repealed by Session Laws 2021-23, s. 17, effective May 17, 2021.

History

(2009-390, s. 2; repealed by 2021-23, s. 17, effective May 17, 2021.)

Editor's Note. - Former G.S. 62-133.10 pertained to retention of fuel and fuel-related cost savings associated with the purchase or construction of a carbon offset facility.

§ 62-133.11. Rate adjustment for changes in costs based on third-party rates.

  1. The Commission shall permit a water or sewer public utility to adjust its rates approved pursuant to G.S. 62-133 to reflect changes in costs based solely upon changes in the rates imposed by third-party suppliers of purchased water or sewer service, including applicable taxes and fees.
  2. Any water or sewer public utility seeking to adjust its rates pursuant to this section shall file a verified petition in such form and detail as the Commission may require.
  3. The Commission shall issue an order approving, denying, or approving with modifications a rate adjustment requested pursuant to this section within 60 days of the date of filing of a completed petition, unless that time is for good cause extended up to a maximum of 90 days.

History

(2013-106, s. 1.)

§ 62-133.12. Rate adjustment mechanism based on investment in repair, improvement, and replacement of water and sewer facilities.

  1. The Commission may approve a rate adjustment mechanism in a general rate proceeding pursuant to G.S. 62-133 to allow a water or sewer public utility to recover through a system improvement charge the incremental depreciation expense and capital costs associated with the utility's reasonable and prudently incurred investment in eligible water and sewer system improvements. The Commission shall approve a rate adjustment mechanism authorized by this section only upon a finding that the mechanism is in the public interest. The frequency and manner of rate adjustments under the mechanism shall be as prescribed by the Commission.
  2. For purposes of this section, "eligible water system improvements" or "eligible sewer system improvements" shall include only those improvements found necessary by the Commission to enable the water or sewer utility to provide safe, reliable, and efficient service in accordance with applicable water quality and effluent standards.
  3. For purposes of this section, "eligible water system improvements" means:
    1. Distribution system mains, valves, utility service lines (including meter boxes and appurtenances), meters, hydrants, hydro tanks, and pumping equipment installed as replacements.
    2. Main extensions installed to eliminate dead ends and to implement solutions to regional water supply in order to comply with primary and, upon specific Commission approval, secondary drinking water standards.
    3. Equipment and infrastructure installed to comply with primary drinking water standards.
    4. Equipment and infrastructure installed at the direction of the Commission to comply with secondary drinking water standards or other health or environmental standards established by federal, State, or local governments.
    5. Unreimbursed costs of relocating facilities due to roadway projects.
  4. For the purposes of this section, "eligible sewer system improvements" means:
    1. Collection main extensions installed to implement solutions to wastewater problems.
    2. Repealed by Session Laws 2021-149, s. 2, effective September 10, 2021.
    3. Unreimbursed costs of relocating facilities due to roadway projects.
    4. Replacement or improvement of force mains, gravity mains, service lines, pumps, motors, blowers, and other electrical or mechanical equipment.
  5. The Commission shall provide for audit and reconciliation procedures, including measures for refunds of any over-collections under the system improvement charge with interest pursuant to G.S. 62-130(e).
  6. The Commission may eliminate or modify any rate adjustment mechanism authorized pursuant to this section upon a finding that it is not in the public interest.
  7. Cumulative system improvement charges for a water or sewer utility pursuant to a rate adjustment mechanism approved by the Commission under this section may not exceed seven and one-half percent (7.5%) of the total annual service revenues approved by the Commission in the water or sewer utility's last general rate case. Unreimbursed costs incurred for projects that are eligible under subdivisions (c)(5) and (d)(3) of this section shall be exempt from the percentage limitation imposed by this subsection on cumulative system improvement charges based upon annual service revenues. Accumulated depreciation for eligible water or sewer system improvements shall be updated in each filing submitted by a utility within the same docket. "

History

(2013-106, s. 2; 2021-149, s. 2.)

Effect of Amendments. - Session Laws 2021-149, s. 2, effective September 10, 2021, rewrote subsections (c), (d), and (g).

CASE NOTES

Construction. - By enacting the statute, the General Assembly authorized the use of a rate adjustment mechanism upon a "finding" by the North Carolina Utilities Commission that the mechanism is in the public interest. State ex rel. Utils. Comm'n v. Cooper, 368 N.C. 216, 775 S.E.2d 809 (2015).

Rate Adjustment Proper. - North Carolina Utilities Commission properly concluded it was in the public interest to allow a public utility to utilize a rate adjustment mechanism because its determination was supported by substantial evidence; the Commission thoroughly explained how the utility's use of a rate adjustment mechanism would benefit its customers and took meaningful steps to ensure that problems were addressed and that customers were charged after the utility made improvements to its service. State ex rel. Utils. Comm'n v. Cooper, 368 N.C. 216, 775 S.E.2d 809 (2015).


§ 62-133.12A. Customer usage tracking rate adjustment mechanisms for water and wastewater rates.

In setting rates for a water and wastewater utility in a general rate proceeding under G.S. 62-133, the Commission may adopt, implement, modify, or eliminate a rate adjustment mechanism for one or more of the company's rate schedules to track and true-up variations in average per customer usage from levels approved in the general rate case proceeding. The Commission may adopt a rate adjustment mechanism only upon a finding by the Commission that the mechanism is appropriate to track and true-up variations in average per customer usage by rate schedule from levels adopted in the general rate case proceeding and the mechanism is in the public interest.

History

(2019-88, s. 1.)

Editor's Note. - Session Laws 2019-88, s. 4, made this section effective July 8, 2019.

§ 62-133.12B. Computation of income tax expense for ratemaking purposes; taxable contributions.

A water or wastewater public utility is solely responsible for funding the income taxes on taxable contributions in aid of construction and customer advances for construction and shall record the income taxes the water or wastewater utility pays in accumulated deferred income taxes for accounting and ratemaking purposes.

History

(2021-23, s. 25; 2021-76, s. 4.)

Editor's Note. - Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking” for the terms "rate-making” or "rate making” wherever the term appears in Chapter 62 of the General Statutes.” Pursuant to this authority, the substitution was made in the section heading and near the end of this section.

Session Laws 2021-76, s. 5, made this section, as added by Session Laws 2021-76, s. 4, effective July 2, 2021, and further provides that it "clarifies existing law with minimum standards employed by all generally accepted accounting, engineering, and planning methodologies used to calculate system development fees for public water and sewer systems."

§ 62-133.13. Recovery of costs related to unlawful discharges from coal combustion residuals surface impoundments to the surface waters of the State.

The Commission shall not allow an electric public utility to recover from the retail electric customers of the State costs resulting from an unlawful discharge to the surface waters of the State from a coal combustion residuals surface impoundment, unless the Commission determines the discharge was due to an event of force majeure. For the purposes of this section, "coal combustion residuals surface impoundments" has the same meaning as in G.S. 130A-309.201. For the purposes of this section, "unlawful discharge" means a discharge that results in a violation of State or federal surface water quality standards.

History

(2014-122, s. 1(a).)

§ 62-133.14. Cost recovery for acquisition of joint municipal power agency ownership interest in generating facilities.

  1. The Commission shall, upon the petition of an electric public utility and after hearing, approve an annual rider to the electric public utility's rates to recover the North Carolina retail portion of all reasonable and prudent costs incurred to acquire, operate, and maintain the proportional interest in electric generating facilities purchased from a joint agency established under Chapter 159B of the General Statutes. For the purposes of this section, "acquisition costs" means the amount paid by an electric public utility on or before December 31, 2016, to acquire the generating facilities, including the amount paid above the net book value of the generating facilities. The Commission shall adopt rules to implement the provisions of this section.
  2. In determining the amount of the rider, the Commission shall:
    1. Allow an electric public utility to recover acquisition costs, as reasonable and prudent costs. For the benefit of the consumer, the acquisition costs shall be levelized over the useful life of the assets at the time of acquisition.
    2. Include financing costs equal to the weighted average cost of capital as authorized by the Commission in the electric public utility's most recent general rate case.
    3. Include an estimate of operating costs based on prior year's experience and the costs projected for the next 12-month period for any proportional capital investments in the acquired electric generating facilities.
    4. Include adjustments to reflect the North Carolina retail portion of financing and operating costs related to the electric public utility's other used and useful generating facilities owned at the time of the acquisition to properly account for updated jurisdictional allocation factors.
    5. Utilize the customer allocation methodology approved by the Commission in the electric public utility's most recent general rate case.
  3. The Commission shall require that an electric public utility file the following proposed annual adjustments to the rider:
    1. Any under-recovery or over-recovery resulting from the operation of the rider.
    2. Any changes necessary to recover costs as forecast for the next 12-month period.
    3. Any changes to cost of capital determined in any general rate proceeding occurring after the initial establishment of the rider, where the cost of capital applies to both the remaining acquisition costs and additional capital investment in the electric generating facilities.
    4. Any changes to the customer allocation methodology determined in any general rate proceeding occurring after the initial establishment of the rider.
  4. Any rider established under this section will expire after the end of the useful life of the acquired electric generating facilities at the time of acquisition, with any remaining unrecovered costs deferred until the electric public utility's next general rate proceeding under G.S. 62-133.

History

(2015-3, s. 1.)

Cross References. - As to Joint Municipal Electric Power and Energy Act, see G.S. 159B-1 et seq.

§ 62-133.15. (Expires July 1, 2026 - see note) Cost recovery for natural gas economic development infrastructure.

  1. Purpose. - The purpose of this section is to prescribe a methodology for cost recovery by a natural gas local distribution company that constructs natural gas economic development infrastructure to serve a project the Department of Commerce determines is an eligible project under G.S. 143B-437.021. The Commission shall adopt rules to implement this section.
  2. Eligibility. - Cost recovery under this section is limited to natural gas economic development infrastructure the Commission determines satisfies all of the following conditions:
    1. The project will be located in an area where adequate natural gas infrastructure for the eligible project is not economically feasible.
    2. Either the developer, prospective customer, or the occupant of the eligible project provides, prior to initiation of construction of the natural gas economic development infrastructure, a binding commitment in the form of a commercial contract or other form acceptable to the Commission to the natural gas local distribution company regarding service needed for a period of at least 10 years from the date the gas is made available.
    3. The projected margin revenues not recoverable under G.S. 62-133.4 from the eligible project will not be sufficient to cover the cost of the natural gas infrastructure associated with the project.
  3. Economic Feasibility. - The Commission shall permit a natural gas local distribution company to recover reasonable and prudent natural gas economic development infrastructure costs only to the extent necessary to make the construction of the infrastructure economically feasible, as determined by the Commission. In determining economic feasibility, the Commission shall employ the net present value method of analysis. Only natural gas economic development infrastructure with a negative net present value shall be determined to be economically infeasible.
  4. Costs Recoverable. - Eligible economic development infrastructure development costs are the reasonable and prudent costs determined by the Commission to be both directly related to the construction of natural gas infrastructure for an eligible project and economically infeasible. The costs may include any of the following:
    1. Planning costs.
    2. Development costs.
    3. Construction costs and an allowance for funds used during construction and a return on investment once the project is completed, calculated using the pretax overall rate of return approved by the Commission in the company's most recent general rate case.
    4. A revenue retention factor.
    5. Depreciation.
    6. Property taxes.
  5. Rate Adjustment Surcharge Mechanism. - The Commission shall permit recovery of eligible economic development infrastructure costs in a rate adjustment surcharge mechanism. The mechanism shall allow for recovery on an annual or semiannual basis, as determined by the Commission, subject to audit and reconciliation procedures. Any rate adjustment surcharge mechanism adopted under this section shall terminate upon the earlier of the full recovery of the costs allowed under subsection (d) of this section or the natural gas local distribution company's next general rate case in which the eligible infrastructure development costs shall be included in the natural gas distribution company's rate base. Nothing in this section precludes the natural gas local distribution company from recovering eligible economic development infrastructure costs in a general rate case.
  6. Limitations. - A natural gas local distribution company shall not invest more than twenty-five million dollars ($25,000,000) of eligible infrastructure development costs in any year. The aggregate amount of eligible infrastructure development costs recovered under rate adjustment surcharge mechanisms for all natural gas local distribution companies in the State cannot exceed seventy-five million dollars ($75,000,000). Cumulative rate adjustments allowed under a rate adjustment surcharge mechanism approved by the Commission under this section shall not exceed five percent (5%) of the total annual service margin revenues not recoverable under G.S. 62-133.4 approved by the Commission in the natural gas local distribution company's last general rate case.

History

(2016-118, s. 1; 2020-58, s. 7.3.)

Editor's Note. - Session Laws 2016-118, s. 3, as amended by Session Laws 2020-58, s. 7.3, provides: "This act is effective when it becomes law [July 28, 2016] and expires July 1, 2026. The expiration does not affect the validity of any rate adjustment surcharge mechanism imposed or authorized under the provisions of this act prior to the effective date of the expiration."

§§ 62-133.16 through 62-133.19: Reserved for future codification purposes.

§ 62-133.20. Cleanfields renewable energy demonstration parks.

  1. Criteria for Designation. - A parcel or tract of land, or any combination of contiguous parcels or tracts of land, that meet all of the following criteria may be designated as a cleanfields renewable energy demonstration park:
    1. The park consists of at least 250 acres of contiguous property.
    2. All of the real property comprising the park is contiguous to a body of water.
    3. The property within the park is or may be subject to remediation under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.), except for a site listed on the National Priorities List pursuant to 42 U.S.C. § 9605.
    4. The park contains a manufacturing facility that is idle, underutilized, or curtailed and that at one time employed at least 250 people.
    5. The owners of the park plan to attract at least 250 new jobs to the site.
    6. The owners of the park have entered into a brownfields agreement with the Department of Environment and Natural Resources pursuant to G.S. 130A-310.32 and have provided satisfactory financial assurance for the brownfields agreement.
    7. The creation of the park is for the purpose of featuring clean-energy facilities, laboratories, and companies, thereby spurring economic growth by attracting renewable energy and alternative fuel industries.
    8. The development plan for the park must include at least three renewable energy or alternative fuel facilities.
    9. The development plan for the park must include a biomass renewable energy facility that utilizes refuse derived fuel, including yard waste, wood waste, and waste generated from construction and demolition, but not including wood directly derived from whole trees, as the primary source for generating energy. The refuse derived fuel shall undergo an enhanced recycling process before being utilized by the biomass renewable energy facility.
    10. The initial biomass renewable energy facility will not be a major source, as that term is defined in 40 C.F.R. § 70.2 (July 1, 2009 edition), for air quality purposes. The biomass renewable energy facility will remain in compliance with all applicable State and federal emissions requirements throughout its operating life.
  2. Certification. - The owner of a parcel or tract of land that seeks to establish a cleanfields renewable energy demonstration park shall submit to the Secretary of State an application for designation. The Secretary shall examine the application and may request any additional information from the owner of the parcel or tract of land or the Department of Environment and Natural Resources needed to verify that the project meets all of the criteria for designation. The Secretary may rely on certifications provided by the owner or the Department of Environment and Natural Resources that the criteria are met. If the Secretary determines that the project meets all of the criteria, the Secretary shall make and issue a certificate designating the parcel or tract of land as a cleanfields renewable energy demonstration park to the owner and shall file and record the application and certificate in an appropriate book of record. The parcel or tract of land shall be designated as a cleanfields renewable energy demonstration park on the date the certificate is filed and recorded.
  3. Renewable Energy Generation. - The definitions in G.S. 62-133.8 apply to this section. If the Utilities Commission determines that a biomass renewable energy facility located in the cleanfields renewable energy demonstration park is a new renewable energy facility, the Commission shall assign triple credit to any electric power or renewable energy certificates generated from renewable energy resources at the biomass renewable energy facility that are purchased by an electric power supplier for the purposes of compliance with G.S. 62-133.8. The additional credits assigned to the first 10 megawatts of biomass renewable energy facility generation capacity shall be eligible for use to meet the requirements of G.S. 62-133.8(f). The additional credits assigned to the first 10 megawatts of biomass renewable energy facility generation capacity shall first be used to satisfy the requirements of G.S. 62-133.8(f). Only when the requirements of G.S. 62-133.8(f) are met, shall the additional credits assigned to the first 10 megawatts of biomass renewable energy facility generation capacity be utilized to comply with G.S. 62-133.8(b) and (c). The triple credit shall apply only to the first 20 megawatts of biomass renewable energy facility generation capacity located in all cleanfields renewable energy demonstration parks in the State.

History

(2010-195, ss. 2-4; 2011-279, s. 1.)

Editor's Note. - Session Laws 2010-195, ss. 2-4, as amended by Session Laws 2011-279, s. 1, has been codified as this section at the direction of the Revisor of Statutes.

Session Laws 2010-195, s. 1, effective June 23, 2011, provides: "Legislative findings. - The General Assembly makes the following findings regarding the need for cleanfields renewable energy demonstration parks:

"(1) Economic development in the State will be served by providing an opportunity to convert former manufacturing sites into cleanfields renewable energy demonstration parks, thereby providing employment opportunities for the residents of North Carolina.

"(2) The health and safety of the citizens of North Carolina will be served through the assessment and remediation of environmental conditions at former manufacturing facilities.

"(3) The public interest of the State will be served by diversifying the resources used to reliably meet the energy needs of consumers in the State, providing greater energy security through the use of indigenous energy resources available within the State, and encouraging private investment in renewable energy and energy efficiency.

"(4) The public interest of the State will be served by encouraging former operators of manufacturing facilities to transfer ownership in property, making it possible for new operators to restart production at such facilities.

"(5) The State and the public will directly benefit from the innovative approach utilized in a cleanfields renewable energy demonstration park to resolving pressing societal and environmental issues facing the State and its citizens.

"(6) The public interest of the State will be served by the innovative nature of a cleanfields renewable energy demonstration park as a model for future projects and for its ability to provide information on the risks and complexity associated with the development of renew- able energy projects."

§ 62-134. Change of rates; notice; suspension and investigation.

  1. Unless the Commission otherwise orders, no public utility shall make any changes in any rate which has been duly established under this Chapter, except after 30 days' notice to the Commission, which notice shall plainly state the changes proposed to be made in the rates then in force, and the time when the changed rates will go into effect. The public utility shall also give such notice, which may include notice by publication, of the proposed changes to other interested persons as the Commission in its discretion may direct. All proposed changes shall be shown by filing new schedules, or shall be plainly indicated upon schedules filed and in force at the time and kept open to public inspection. The Commission, for good cause shown in writing, may allow changes in rates without requiring the 30 days' notice, under such conditions as it may prescribe. All such changes shall be immediately indicated upon its schedules by such public utility.
  2. Whenever there is filed with the Commission by any public utility any schedule stating a new or revised rate or rates, the Commission may, either upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness of such rate or rates. Pending such hearing and the decision thereon, the Commission, upon filing with such schedule and delivering to the public utility affected thereby a statement in writing of its reasons therefor, may, at any time before they become effective, suspend the operation of such rate or rates, but not for a longer period than 270 days beyond the time when such rate or rates would otherwise go into effect. If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate shall go into effect at the end of such period. After hearing, whether completed before or after the rate goes into effect, the Commission may make such order with respect thereto as would be proper in a proceeding instituted after it had become effective.
  3. At any hearing involving a rate changed or sought to be changed by the public utility, the burden of proof shall be upon the public utility to show that the changed rate is just and reasonable.
  4. Notwithstanding the provisions of this Article, any public utility engaged solely in distributing electricity to retail customers, which electricity has been purchased at wholesale rates from another public utility, an electric membership corporation or a municipality, may in its discretion, and without the necessity of public hearings as in this section is otherwise provided, elect to adopt the same retail rates to customers charged by the public utility, electric membership corporation or municipality from whom the wholesale power is purchased for the same service, unless the North Carolina Utility Commission finds upon a hearing, either on its own initiative or upon complaint, that the rate of return earned by such utility upon the basis of such rates is unjust and unreasonable. In such a proceeding the burden of proof shall be upon the electrical distribution company.
  5. Repealed by Session Laws 1981 (Regular Session, 1982), c. 1197, s. 2.
  6. The Commission may adopt rules prescribing the information and exhibits required to be filed with any applications, or tariff for an increase in utility rates, including but not limited to all of the evidence or proof through the end of the test period which the utility will rely on at any hearing on such increase, and the Commission may suspend such increase until such data, information or exhibits are filed, in addition to the time provided for suspension of such increase in other provisions of this Chapter.
  7. The provisions of this section shall not be applicable to bus companies or to their rates, fares or tariffs.
  8. Notwithstanding the requirements of subsections (a) and (b) of this section, the Commission may, in lieu of fixing specific rates or tariffs for competitive services offered by a public utility defined in G.S. 62-3(23)a6, adopt practices and procedures to permit pricing flexibility, detariffing services, or both. In exercising its authority to permit pricing flexibility, detariffing of services, or both, the Commission shall first determine that the service is competitive. After a determination that the service is competitive, the Commission shall consider the following in deciding whether to permit pricing flexibility, detariffing of services, or both:
    1. The extent to which competing telecommunications services are available from alternative providers in the relevant geographic or service market;
    2. The market share, growth in market share, ease of entry, and affiliations of alternative providers;
    3. The size and number of alternative providers and the ability of such alternative providers to make functionally equivalent or substitute services readily available at competitive rates and on competitive terms and conditions;
    4. Whether the exercise of Commission authority produces tangible benefits to consumers that exceed those available by reliance on market forces;
    5. Whether the exercise of Commission authority inhibits the public utility from competing with unregulated providers of functionally equivalent telecommunications services;
    6. Whether the existence of competition tends to prevent abuses, unjust discrimination or excessive charges for the service or facility offered;
    7. Whether the public utility would gain an unfair advantage in its competitive activities; and
    8. Any other relevant factors protecting the public interest.
  9. On motion of any interested party and for good cause shown, the Commission shall hold hearings prior to adopting any pricing flexibility or detariffing of services permitted under this section. The Commission may also revoke a determination made under this section when the Commission determines, after notice and opportunity to be heard, that the public interest requires that the rates and charges for the service be more fully regulated.
  10. Notwithstanding the provisions of G.S. 62-140, the Commission may permit public utilities subject to subsection (h) of this section to offer competitive services to business customers upon agreement between the public utility and the customer provided the services are compensatory and cover the costs of providing the service.

History

(1933, c. 307, s. 7; 1939, c. 365, s. 3; 1941, c. 97; 1945, c. 725; 1947, c. 1008, s. 24; 1949, c. 1132, s. 22; 1959, c. 422; 1963, c. 1165, s. 1; 1971, c. 551; 1973, c. 1444; 1975, c. 243, s. 8; c. 510, c. 867, s. 7; 1981 (Reg. Sess., 1982), c. 1197, s. 2; 1985, c. 676, s. 15(3); 1989, c. 112, s. 3.)

Cross References. - As to fuel charge adjustments for electric utilities, see G.S. 62-133.2.

Legal Periodicals. - For survey of 1977 law on public utility rate regulation, see 56 N.C.L. Rev. 847 (1978).

For survey of 1980 administrative law, see 59 N.C.L. Rev. 1024 (1981).

CASE NOTES

I. IN GENERAL.

Ex Parte Order Allowing Effectuation of Fuel Adjustment Clause Held Constitutional. - An order entered ex parte allowing a utility to effectuate a fuel adjustment clause did not, in view of the procedures available to contest such action, violate N.C. Const., Art. I, § 19. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Limits on Commission's Authority. - The Commission is a creation of the legislature and, in fixing rates to be charged by public utilities, exercises the legislative function. It has no authority except that given to it by statute. A fortiori, the Commission has no authority to permit that which is forbidden by this section or to extend a previously granted rate increase which former subsection (e) declared terminated. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

Power to Refrain from Prescribing Conditions. - The power to prescribe conditions under subsection (a), like the power to suspend rate changes, includes the power to refrain from prescribing them. Thus the Commission by its affirmative order may allow applied-for rate changes to become immediately effective, conditionally or unconditionally. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Authority to Enter Interim Orders. - G.S. 62-135 and this section clearly authorize the Commission to permit rate schedule changes applied for by a utility to be placed into effect on an interim basis before hearing and final determination. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

The Utilities Commission had authority to enter an interim order allowing a power company's initially requested rate increase to go into effect pending final determination of the case, subject to the refund with interest of any portion of the increase ultimately determined to be excessive. State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972).

Petition to Be Determined on Basis of Facts Existing When Increase Effective. - The Utilities Commission must determine a petition for an increase in telephone rates on the basis of the facts existing at the time such increase is effective. State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

And Not on Basis of Subsequent Events. - The Utilities Commission cannot consider events occurring subsequent to the date certain rates went into effect, to ascertain what were proper rates on that date. State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

If a subsequent change in conditions warrants a new rate, such new rate must relate to the date of change. State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

Transfer of Exchanges to Subsidiary During Pendency of Petition. - Where a telephone company, during the pendency of its petition for an increase in rates, transfers part of its exchanges to a subsidiary, the Utilities Commission, in the exercise of its discretion, may make the subsidiary a formal party and treat the original petition as a joint petition for a uniform system of rates; or it may make the subsidiary a party and fix proper rates for the subsidiary's exchanges and for the original petitioner's exchanges. State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

The parties must be accorded an opportunity to be heard with respect to the effect, if any, a subsequent change in conditions had on the rate structure, and a denial of such opportunity would be a deprivation of due process. State ex rel. N.C. Utils. Comm'n v. Western Carolina Tel. Co., 260 N.C. 369, 132 S.E.2d 873 (1963).

The Commission's findings, supported by substantial evidence, may not properly be set aside by the reviewing court merely because a different conclusion could have been reached upon the evidence. State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

Decision Upheld Unless Assailable Under G.S. 62-94(b). - The decision of the Commission with regard to rates for public utilities will be upheld by the Court of Appeals on appeal unless it is assailable on one of the grounds enumerated in G.S. 62-94(b). State ex rel. Utils. Comm'n v. Mebane Home Tel. Co., 35 N.C. App. 588, 242 S.E.2d 165 (1978), aff'd, 298 N.C. 162, 257 S.E.2d 623 (1979).

For discussion of procedure to be followed in request for coal adjustment clause prior to 1975 enactment of former subsection (e), see State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 662, 217 S.E.2d 201 (1975), aff'd, 291 N.C. 361, 230 S.E.2d 671 (1976).

Applied in State ex rel. N.C. Utils. Comm'n v. Southern Ry., 267 N.C. 317, 148 S.E.2d 210 (1966); State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972); State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 453, 192 S.E.2d 842 (1972); State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972); State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 361, 230 S.E.2d 671 (1976); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 477, 232 S.E.2d 199 (1977); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 478, 232 S.E.2d 200 (1977).

Cited in Senior Citizens Clubs v. Duke Power Co., 425 F. Supp. 411 (W.D.N.C. 1976); State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 289 N.C. 286, 221 S.E.2d 322 (1976); State ex rel. Comm'r of Ins. v. North Carolina Fire Ins. Rating Bureau, 292 N.C. 471, 234 S.E.2d 720 (1977); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 575, 232 S.E.2d 177 (1977); State ex rel. Comm'r of Ins. v. North Carolina Auto. Rate Admin. Office, 294 N.C. 60, 241 S.E.2d 324 (1978); State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Conservation Council, 64 N.C. App. 266, 307 S.E.2d 375 (1983); State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 64 N.C. App. 609, 307 S.E.2d 803 (1983); State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985); State ex rel. Utils. Comm'n v. Empire Power Co., 112 N.C. App. 265, 435 S.E.2d 553 (1993).

II. SUSPENSION OF RATE CHANGES.

Language of Subsection (b) Is Permissive. - While the language of subsection (b) gives the Commission authority to suspend changes in rates subject to the time limitation imposed, it does not require that it do so. The language is permissive, not mandatory. State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

The power granted the Commission by subsection (b) to suspend a requested change in rates is a discretionary one which the Commission may, but need not, exercise. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

Authority to Suspend Rates for Lesser Period. - The authority to suspend rates for not more than 270 days clearly includes the power to suspend them for some lesser period. State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Power to Suspend Portion of Change for Lesser Period. - The discretionary power granted the Commission by subsection (b) to suspend a proposed change in rates for a period not longer than 270 days clearly includes the lesser power to suspend a portion of the change for some lesser period. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

Suspension of Rates May Be Withdrawn or Modified. - Nothing in this section indicates a legislative intent that once the Commission exercises its discretionary power and suspends rates, it thereby necessarily exhausts its authority in that regard, so as thereafter to be precluded from withdrawing or modifying the suspension. State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

It is entirely consistent with the statutory procedure contemplated by this section that upon the filing with the Commission by a utility of a new or revised rate, the Commission, if it exercises its discretion to suspend such rate, should (1) act promptly and suspend the rate for up to the maximum period it is permitted to do so; (2) hold a preliminary hearing, if the Commission should deem this desirable, to receive additional evidence and information; and (3) in the clearer light furnished by the additional information so acquired, reconsider its original order and either modify it or cancel it altogether. State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972).

Implicit within the discretionary authority granted to determine whether and for how long to suspend is the discretion to cancel or modify a suspension once it has been made, and nothing in the language of this section suggests that the legislature intended that the Commission could exercise the discretionary authority granted it only if it did so on an all-or-nothing, once-and-for-all basis. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

III. RATE CHANGES BASED ON FUEL COSTS UNDER FORMER SUBSECTION (E).

.

The purpose of the expedited fuel proceeding was to allow a utility to change its rates based solely on fluctuations in fuel costs. The reasonableness of the utility's based fuel costs are not to be considered. State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

From a review of the language, purpose and history of former subsection (e), it can be concluded that the legislature intended that the Utilities Commission consider in the fuel adjustment proceedings only the fluctuations in the price of fossil fuels - oil, coal and natural gas - used by the utility in the production of electric power in its own generating units. The legislature did not intend to include in the expedited hearing proceedings the myriad of issues relating to purchased or interchange power which necessarily require closer scrutiny. Subsequent action by the legislature in enacting G.S. 62-133.2, which makes express provision for the consideration of such issues in the general rate cases, has now made its intent clear. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 309 N.C. 195, 306 S.E.2d 435 (1983).

Former subsection (e) dealt specifically with the continuation of previously granted rate increases based solely on the increased cost of fuel. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

Former subsection (e) did not roll back electric power rates. On the contrary, it authorized the Commission, after hearing, to incorporate into the basic rates of the utility, chargeable on and after September 1, 1975, an increase determined by the then cost of coal. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

Heat Rate and Plant Availability Not Bases for Determination Under Former Subsection (e). - Pursuant to former subsection (e) of this section, a public utility could apply to the Utilities Commission for authority to increase its rates and charges based solely upon the increased cost of fuel used in the generation of electric power, and the Commission, on its own motion or upon request of an interested rate payor, could consider and determine a decrease in rates or charges based solely upon a decrease in the cost of fuel; therefore, insofar as the Commission considered and passed upon the cost of fuel used by defendant in the generation of electric power during the periods in question by considering the reasonableness of the prices paid by defendant for such fuel, it acted within the scope of the statutorily prescribed procedure, but insofar as the Commission considered and based its determination upon such factors as defendant's heat rate and plant availability in these proceedings, it went beyond the scope of the procedure authorized by former subsection (e). State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657, cert. denied, 301 N.C. 531, 273 S.E.2d 462 (1980).

Plant Efficiency Not Considered in Proceedings Under Former Subsection (e). - Heat rate and capacity factor furnish convenient measuring devices by which to evaluate the overall efficiency with which a particular electrical utility system is operated, and the Utilities Commission should take into account the efficiency of a company's operation in fixing its rates in a general rate case as provided in G.S. 62-133. However, plant efficiency as it bears upon fuel cost was not a factor to be considered in the limited and expedited proceeding provided for by former subsection (e) of this section. State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657, cert. denied, 301 N.C. 531, 273 S.E.2d 462 (1980).

Commission's Decision Held Improper. - Commission's "decision" that the legislature, in enacting former subsection (e), did not intend to deny the utility "recovery of its July and August 1975 fuel expenses actually incurred" was not an interpretation of the statute but a nullification of it, which was beyond the authority of the Commission. The wisdom and fairness of the legislature's determination, clearly expressed, may not be reviewed by the Commission, or even by the courts in the absence of a constitutional question. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).


§ 62-135. Temporary rates under bond.

  1. Notwithstanding an order of suspension of an increase in rates, any public utility except a common carrier may, subject to the provisions of subsections (b), (c) and (d) hereof, put such suspended rate or rates into effect upon the expiration of six months after the date when such rate or rates would have become effective, if not so suspended, by notifying the Commission and its consumers of its action in making such increase not less than 10 days prior to the day when it shall be placed in effect; provided, however, that utilities engaged in the distribution of utility commodities bought at wholesale by the utility for distribution to consumers may put such suspended rate or rates, to the extent occasioned by changes in the wholesale rate of such utility commodity, into effect at the expiration of 30 days after the date when such rate or rates would become effective if not so suspended; provided that no rate or rates shall be left in effect longer than one year unless the Commission shall have rendered its decision upon the reasonableness thereof within such period. This section to become effective July 1, 1963.
  2. No rate or rates placed in effect pursuant to this section shall result in an increase of more than twenty percent (20%) on any single rate classification of the public utility.
  3. No rate or rates shall be placed in effect pursuant to this section until the public utility has filed with the Commission a bond in a reasonable amount approved by the Commission, with sureties approved by the Commission, or an undertaking approved by the Commission, conditioned upon the refund in a manner to be prescribed by order of the Commission, to the persons entitled thereto of the amount of the excess plus interest from the date that such rates were put into effect, if the rate or rates so put into effect are finally determined to be excessive. The amount of said interest shall be determined pursuant to G.S. 62-130(e).
  4. If the rate or rates so put into effect are finally determined to be excessive, the public utility shall make refund of the excess plus interest to its customers within 30 days after such final determination, and the Commission shall set forth in its final order the terms and conditions for such refund. If such refund is not paid in accordance with such order, any persons entitled to such refund may sue therefor, either jointly or severally, and be entitled to recover, in addition to the amount of the refund, all court costs and reasonable attorney fees for the plaintiff, to be fixed by the court.

History

(1933, c. 307, s. 7; 1959, c. 422; 1963, c. 1165, s. 1; 1981, c. 461, s. 2.)

CASE NOTES

Purpose. - This section was enacted for the purpose of minimizing the effect of the unavoidable time lag between the filing of an application by a utility company for an increase in its rates for service and the entry of an order of the Commission finding such increase proper. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974); State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

This section is a direct exercise of the police power of the State by the legislature itself. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

This section prevails over a private contract in conflict therewith. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

Prior contracts between a power company and the municipalities do not bar the power company from putting different rates into effect pursuant to this section, pending final determination by the Commission. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

But Power Company May Not at Will Disregard Such Contract. - The mere existence in the Commission of authority to increase the rates previously specified in a municipal contract does not authorize a power company at its own will to disregard such contract and to charge the other party thereto a higher rate. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

Conditions for Putting Proposed Rates into Effect. - This section authorizes the utility to put its proposed rates into effect after the passage of six months from the filing of its application, if no order has been entered by the Commission determining the validity of the proposed rates and if the utility company files its undertaking, approved by the Commission, for a refund of any portion of such rates ultimately disapproved by the Commission. State ex rel. Utils. Comm'n v. VEPCO, 285 N.C. 398, 206 S.E.2d 283 (1974).

Rate Changes on Interim Basis Permitted. - G.S. 62-134 and this section clearly authorize the Commission to permit rate schedule changes applied for by a utility to be placed into effect on an interim basis before hearing and final determination. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Preference as to Interests of Current Customers. - The power of the Commission to suspend a rate increase under investigation for a six months' period gives an absolute preference for that period to the interest of current customers in paying no more than they have been paying for the electricity they consume. Senior Citizens Clubs v. Duke Power Co., 425 F. Supp. 411 (W.D.N.C. 1976), aff'd, 425 U.S. 928, 96 S. Ct. 1658, 48 L. Ed. 2d 172 (1976).

Conditional Preference as to Future Customers. - If increases may be suspended for longer periods, the interest of a utility's future customers may be impaired by the lack of adequate capacity to serve their needs. Thus, under this section, after lapse of the six-month period during which the interest of present customers has an absolute preference, a conditional preference is given to the interest of future customers by permitting the implementation of the increase subject to mandatory refund to the extent that the implemented increase is larger than the rates ultimately approved by the Commission. Senior Citizens Clubs v. Duke Power Co., 425 F. Supp. 411 (W.D.N.C. 1976), aff'd, 425 U.S. 928, 96 S. Ct. 1658, 48 L. Ed. 2d 172 (1976).

Implementation of rate increase without Commission's approval does not involve state action under 42 U.S.C. § 1983. Senior Citizens Clubs v. Duke Power Co., 425 F. Supp. 411 (W.D.N.C. 1976), aff'd, 425 U.S. 928, 96 S. Ct. 1658, 48 L. Ed. 2d 172 (1976).

Municipality Not Entitled to Temporary Restraining Order. - Where a public service company has filed bond with the Utilities Commission and has obtained authority from the Commission to put into effect an increase in rates in the territory served by it, a municipal corporation is not entitled to a temporary order restraining the service company from putting the rates into effect within the municipality upon the assertion that the increase in rates was contrary to contractual provisions in the franchise granted the public service company by the city, since an adequate and efficient remedy is afforded the city and its inhabitants by suit upon the bond in the event the increase in rate was not justified in law, and therefore the municipality could not suffer irreparable injury. City of Durham v. Public Serv. Co., 257 N.C. 546, 126 S.E.2d 315 (1962).

Applied in State ex rel. Utils. Comm'n v. Edmisten, 26 N.C. App. 613, 216 S.E.2d 743 (1975).

Cited in State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976); State ex rel. Comm'r of Ins. v. North Carolina Fire Ins. Rating Bureau, 292 N.C. 471, 234 S.E.2d 720 (1977).


§ 62-136. Investigation of existing rates; changing unreasonable rates; certain refunds to be distributed to customers.

  1. Whenever the Commission, after a hearing had after reasonable notice upon its own motion or upon complaint of anyone directly interested, finds that the existing rates in effect and collected by any public utility are unjust, unreasonable, insufficient or discriminatory, or in violation of any provision of law, the Commission shall determine the just, reasonable, and sufficient and nondiscriminatory rates to be thereafter observed and in force, and shall fix the same by order.
  2. All municipalities in the State are deemed to be directly interested in the rates and service of public utilities operating in such municipalities, and may institute or participate in proceedings before the Commission involving such rates or service. Any municipality may institute proceedings before the Commission to eliminate unfair and unreasonable discrimination in rates or service by any public utility between such complainant or its inhabitants and any other municipality or its inhabitants, and the Commission shall, upon complaint, after hearing afforded to the public utility affected and to all municipalities affected, have authority to remove such discrimination.
  3. If any refund is made to a distributing company operating as a public utility in North Carolina of charges paid to the company from which the distributing company obtains the energy, service or commodity distributed, the Commission may, in cases where the charges have been included in rates paid by the customers of the distributing company, require said distributing company to distribute said refund plus interest among the distributing company's customers in a manner prescribed by the Commission. The amount of said interest shall be determined pursuant to G.S. 62-130(e).

History

(Ex. Sess. 1913, c. 20, s. 7; C.S., s. 1083; 1933, c. 134, s. 8; c. 307, s. 8; 1937, c. 401; 1941, c. 97; 1963, c. 1165, s. 1; 1981, c. 460, s. 1.)

CASE NOTES

Subsection (a) refers to rate fixing as envisioned by G.S. 62-133. State ex rel. Utils. Comm'n v. Edmisten, 30 N.C. App. 459, 227 S.E.2d 593, rev'd on other grounds, 291 N.C. 451, 232 S.E.2d 184 (1976).

Tax Reform Benefits Passed on to Ratepayers by Rulemaking Rather Than Ratemaking Procedure. - Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 (TRA-86) through a rulemaking procedure rather than a ratemaking procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

The Commission may not fix rates retroactively so as to make them collectible for past service. State ex rel. Utils. Comm'n v. City of Durham, 282 N.C. 308, 193 S.E.2d 95 (1972).

The Utilities Commission exceeded its statutory authority in requiring a manufacturer to pay a surcharge for emergency natural gas used by the manufacturer prior to the date that the tariff including the surcharge became effective, even though the supplier did not bill the manufacturer for such gas until after the tariff became effective. A rate is fixed or allowed when it becomes effective pursuant to G.S. 62-130(a), and rates must be fixed prospectively from their effective date. Subsection (a) of this section provides that the commission shall determine rates to be thereafter observed and in force. The commission may not fix rates retroactively so as to make them collectible for past services. State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 42 N.C. App. 606, 257 S.E.2d 439 (1979), cert. denied, 299 N.C. 124, 261 S.E.2d 926 (1980).

Commission's Order Was Not Retroactive. - Where Utilities Commission's order merely required North Carolina Natural Gas (NCNG) to abide by the rate structure in existence at the time the two percent (2%) monies were collected from T-1 customers, the Commission's order did not constitute unlawful retroactive rate making. State ex rel. Utils. Comm'n v. North Carolina Natural Gas Corp., 323 N.C. 630, 375 S.E.2d 147 (1989).

The Commission may investigate rates upon the request of any person directly interested. It may hear evidence as to the reasonableness of the maximum rates fixed by law or by the Commission, and establish such rates as it may deem just. The authority conferred upon the Commission is plenary. Corporation Comm'n ex rel. Raleigh Granite Co. v. Atlantic C.L.R.R., 187 N.C. 424, 121 S.E. 767 (1924).

As to authority of the Commission, on its own motion or that of another interested party, to intervene and make corrections in the utility's rate schedules, including, if circumstances should require it, the abrogation of the fuel clause, see State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 327, 230 S.E.2d 651 (1976).

Refunds to Customers. - The wording of this section clearly requires that refunds be made to the customers who paid the charges, and that these refunds be contingent upon practicability. State ex rel. Utils. Comm'n v. Public Serv. Co., 56 N.C. App. 448, 289 S.E.2d 82 (1982), aff'd, 307 N.C. 474, 299 S.E.2d 425 (1983).

Under the 1981 amendment, the Commission is empowered to order the distribution of supplier refunds to either current or past customers, utilizing whatever method the Commission deems most appropriate. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Under the 1981 amendment to subsection (c), it is no longer required that the refund be practicable and that the utility have a reasonable return exclusive of the refund in order for the Commission to direct a customer refund. Moreover, the statute no longer provides for distribution of the refunds to customers in proportion to their payment of the charges refunded. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Prior to the 1981 amendment, the legislature intended for the refunds to be made in proportion to each customer's usage in the refund period during which he paid excess charges. There was no language in the statute requiring distribution by customer class. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Prior to the 1981 amendment, subsection (c) of this section required that refunds be distributed only to those individuals who actually paid the overcharges. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

All refunds received after May 28, 1981, will be governed by the 1981 amendment to subsection (c); 1981 Session Laws, c. 460, s. 1. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Subsection (c) speaks in terms of when the refund is received by the utilities, not to the period of time to which the refunds relate. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Subsection (c) of this section more specifically applies to supplier refunds received by natural gas distributing utilities than did former subsection (f) of G.S. 62-133 and is the proper statute to be applied in determining the appropriate distribution of these supplier refunds. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Distribution of refunds received by a utility after the effective date of the statute (January 1, 1964) are governed by subsection (c). State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Former subsection (f) of G.S. 62-133 dealt only with rate changes, while subsection (c) of this section, specifically sets forth the criteria pursuant to which refunds should be distributed. State ex rel. Utils. Comm'n v. Public Serv. Co., 307 N.C. 474, 299 S.E.2d 425 (1983).

Refunds to the local distribution company come under the supervision of the Commission until such time as it makes a determination with regard to the disposition of the refunds, pursuant to subsection (c), creating rights on behalf of the customers, and until that time, the utilities customers have no vested interest in the refunds. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

"Complaint Proceeding". - A hearing which involves a single rate or a small part of the rate structure of a public utility is called a "complaint proceeding." It differs from a general rate case in that it deals with an emergency or change of circumstances which does not affect the entire rate structure of the utility and may be resolved without involving the procedure outlined in G.S. 62-133, and does not justify the expense and loss of time involved in such procedure. State ex rel. Utils. Comm'n v. Carolina Power & Light Co., 250 N.C. 421, 109 S.E.2d 253 (1959).

"General Rate" Case. - A proceeding in which a utility seeks an increase in rates for classes of customers providing its major source of revenue in order to provide funds assertedly necessary for continued operation is a general rate case and not a complaint proceeding, even though the increase is not requested for all classes of customers. State ex rel. Utils. Comm'n v. Tidewater Natural Gas Co., 259 N.C. 558, 131 S.E.2d 303 (1963).

Applied in State ex rel. Utils. Comm'n v. Public Serv. Co., 59 N.C. App. 448, 297 S.E.2d 119 (1982); State ex rel. Utils. Comm'n v. Conservation Council, 312 N.C. 59, 320 S.E.2d 679 (1984).

Cited in Duke Power Co. v. City of High Point, 22 N.C. App. 91, 205 S.E.2d 774 (1974); State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838 (1980); State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).


§ 62-137. Scope of rate case.

In setting a hearing on rates upon its own motion, upon complaint, or upon application of a public utility, the Commission shall declare the scope of the hearing by determining whether it is to be a general rate case, under G.S. 62-133, or whether it is to be a case confined to the reasonableness of a specific single rate, a small part of the rate structure, or some classification of users involving questions which do not require a determination of the entire rate structure and overall rate of return. The procedures established in this section shall not be required when pricing alternatives permitted under G.S. 62-134(h) and (j) are adopted.

History

(1963, c. 1165, s. 1; 1989, c. 112, s. 4.)

Legal Periodicals. - For survey of 1978 administrative law, see 57 N.C.L. Rev. 831 (1979).

CASE NOTES

This section is inapplicable to proceedings conducted under G.S. 62-90(c), since their scope is limited by statute to the exceptions on which the particular appeal of a final order or decision is based, leaving the Commission without authority to declare such a hearing a general rate case or complaint proceeding. State ex rel. Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978).

The question of whether a case "is to be a general rate case" under the terms of this section is a mixed question of law and fact. As to such questions, courts should be hesitant to disturb the commission's expert determination with regard to the nature of the case presented, particularly when its determination is made prior to hearing and for the initial purpose of setting the scope of the hearing and the resulting amount of information which the public utility will be required to furnish. Even at that stage, however, the commission's determination must be supported by "competent, material and substantial evidence in view of the entire record as submitted." State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979).

Tax Reform Benefits Passed on to Ratepayers by Rule Making Rather Than Rate Making Procedure. - Utilities Commission may pass on to the ratepayers the benefits of the Tax Reform Act of 1986 (TRA-86) through a rule making procedure rather than a rate making procedure. State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990).

Since there was no provision in the rule at issue that if tax rates went up the utilities could raise rates just as they were lowered by the reduced tax rates, Utils. Comm'n v. Edmisten, 294 N.C. 598, 242 S.E.2d 862 (1978) does not approve the rule making process for the purpose of adjusting rates, nor is there any statutory authority for the proposition that rates may be adjusted by some other method beyond those set out in G.S. 62-133 or 62-136 and this section.

Applied in State ex rel. Utils. Comm'n v. Morgan, 16 N.C. App. 445, 192 S.E.2d 842 (1972); State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972); State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234 (1980); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982); State ex rel. Utils. Comm'n v. Edmisten, 314 N.C. 122, 333 S.E.2d 453 (1985); In re Petition of Utils., Inc., 147 N.C. App. 182, 555 S.E.2d 333 (2001).

Cited in State ex rel. Utils. Comm'n v. Beatties Ford Util., Inc., 21 N.C. App. 213, 203 S.E.2d 649 (1974); State ex rel. Utils. Comm'n v. County of Harnett, 30 N.C. App. 24, 226 S.E.2d 515 (1976); State ex rel. Utils. Comm'n v. VEPCO, 48 N.C. App. 453, 269 S.E.2d 657 (1980); State ex rel. Utils. Comm'n v. Duke Power Co., 305 N.C. 1, 287 S.E.2d 786 (1982); State ex rel. Utils. Comm'n v. Public Staff-N.C. Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988); State ex rel. Utils. Comm'n v. Thornburg, 325 N.C. 463, 385 S.E.2d 451 (1989); State ex rel. Utils. Comm'n v. Nantahala Power & Light Co., 326 N.C. 190, 388 S.E.2d 118 (1990); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).


§ 62-138. Utilities to file rates, service regulations and service contracts with Commission; publication; certain telephone service prohibited.

  1. Under such rules as the Commission may prescribe, every public utility, except as permitted under G.S. 62-134(h) and (j):
    1. Shall file with the Commission all schedules of rates, service regulations and forms of service contracts, used or to be used within the jurisdiction of the Commission; and
    2. Shall keep copies of such schedules, service regulations and contracts open to public inspection. Except, if there is a sufficient likelihood that a public utility defined in G.S. 62-3(23)a.6. may suffer a competitive disadvantage if the rates for a specific competitive service are disclosed, the Commission may waive the public disclosure of the rates. The Commission may revoke the disclosure waiver upon a showing that the competitive disadvantage no longer exists.
  2. Every common carrier of passengers shall file with the Commission, print, and keep open for public inspection schedules showing all rates for the transportation of passengers in intrastate commerce and all services in connection therewith between points on its own routes and between points on its own routes and points on the routes of other such common carriers, and if it establishes joint rates with other common carriers, it shall include in its schedules so filed such joint rates.
  3. Every irregular route common carrier of household goods shall file with the Commission, print, and keep open for public inspection schedules showing all rates for the transportation of household goods in intrastate commerce between points within the area of its authorized operation, and if it establishes joint rates with other common carriers, it shall include in its schedules so filed such joint rates between points within the area of its own authorized operation and points on the line or route of such other common carriers.
  4. Any person who, though exempt from Commission regulation under Public Law 103-305, agrees to joint line rates or routes as authorized by Public Law 103-305 may file with the Commission, print, and keep open for public inspection schedules showing all such joint rates for the transportation of property in intrastate commerce, and all connected services, between all points the person serves.
  5. The schedules required by this section shall be published, filed, and posted in such form and manner and shall contain such information as the Commission may prescribe; and the Commission is authorized to reject any schedule filed with it which is not in compliance with this section. Any schedule so rejected by the Commission shall be void and its use shall be unlawful.
  6. No public utility, unless otherwise provided by this Chapter, shall engage in service to the public unless its rates for such service have been filed and published in accordance with the provisions of this section.
  7. Under such rules as the Commission may prescribe, every electric membership corporation operating within this State shall file with the Commission, for information purposes, all rates, schedules of rates, charges, service regulations, and forms of service contracts, used or to be used within the State, and shall keep copies of such schedules, rates, charges, service regulations, and contracts open to public inspection.
  8. No public utility may offer or maintain telephone service to any subscriber to such service who has in use or proposes to place in use equipment which will enable said subscriber to observe or monitor telephone calls directed to or placed by said subscriber unless said subscriber shall agree that such equipment shall be used in conformity with the standards for the use of such equipment adopted by the Commission.

History

(1899, c. 164, s. 7; Rev., s. 1109; 1907, c. 217, s. 5; C.S., s. 1074; 1933, c. 134, s. 8; c. 307, s. 4; 1941, c. 97; 1947, c. 1008, s. 25; 1949, c. 1132, s. 23; 1959, c. 209; 1963, c. 1165, s. 1; 1965, c. 287, s. 7; 1977, c. 799; 1989, c. 112, s. 5; 1995, c. 523, s. 6.)

Legal Periodicals. - For survey of 1977 law on common carriers, see 56 N.C.L. Rev. 853 (1978).

CASE NOTES

Use of Availability Charge in Rate Schedule for Recreational Subdivision. - The Utilities Commission has jurisdiction and authority to allow the use of an availability charge in a rate schedule for a recreational subdivision, should any be deserved. State ex rel. Utils. Comm'n v. Carolina Forest Util., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Landowners in a recreational subdivision who pay availability charges are "consumers" or stand in a consumer-like relationship to the utility providing water service. State ex rel. Utils. Comm'n v. Carolina Forest Util., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Contractual obligation to provide water service to a recreational subdivision as well as the actual delivery thereof directly affect a utility's ability to function as a utility. State ex rel. Utils. Comm'n v. Carolina Forest Util., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Cited in State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992).


§ 62-139. Rates varying from schedule prohibited; refunding overcharge; penalty.

  1. No public utility shall directly or indirectly, by any device whatsoever, charge, demand, collect or receive from any person a greater or less compensation for any service rendered or to be rendered by such public utility than that prescribed by the Commission, nor shall any person receive or accept any service from a public utility for a compensation greater or less than that prescribed by the Commission.
  2. Any public utility in the State which shall willfully charge a rate for any public utility service in excess of that prescribed by the Commission, and which shall omit to refund the same within 30 days after written notice and demand of the person overcharged, unless relieved by the Commission for good cause shown, shall be liable to him for double the amount of such overcharge, plus a penalty of ten dollars ($10.00) per day for each day's delay after 30 days from such notice or date of denial or relief by the Commission, whichever is later. Such overcharge and penalty shall be recoverable in any court of competent jurisdiction.

History

(1903, c. 590, ss. 1, 2; Rev., ss. 2642, 2643, 2644; Ex. Sess. 1913, c. 20, ss. 5, 12; C.S., ss. 1082, 1086, 3514; 1933, c. 134, s. 8; c. 307, s. 5; 1941, c. 97; 1963, c. 1165, s. 1; 1989, c. 112, s. 6.)

Cross References. - As to venue of actions against railroad, see G.S. 1-81.

As to charging higher rates after rates reestablished upon reconsideration, see G.S. 62-132.

CASE NOTES

Constitutionality of Former Section. - Under the Interstate Commerce Act, as amended, Congress, in exercise of the constitutional powers conferred on it, has taken entire control of rates upon interstate shipments of goods, and former G.S. 60-110 was inoperative as to such shipments. Blalock Hdwe. Co. v. Seaboard Air Line Ry., 170 N.C. 395, 86 S.E. 1025 (1915).

Former G.S. 60-110, prohibiting freight charges in excess of printed tariffs, was not unconstitutional as in violation of U.S. Const., Amend. XIV or the commerce clause of said Constitution and the acts passed in pursuance thereof. Efland v. Southern Ry., 146 N.C. 135, 59 S.E. 355 (1907); Raleigh Iron Works v. Southern Ry., 148 N.C. 469, 62 S.E. 595 (1908). But see Blalock Hdwe. Co. v. Seaboard Air Line Ry., 170 N.C. 395, 86 S.E. 1025 (1915).

Assurance of Equal Service as Basis for Regulation. - A fundamental basis for the regulation of public utilities is to assure that once monopoly powers have been granted, the utility will provide all of its customers similarly situated with service on a reasonably equal basis. State ex rel. N.C. Utils. Comm'n v. City of Wilson, 252 N.C. 640, 114 S.E.2d 786 (1960).

Claim for Relief Where Disputed Rates "Established" May Exist Under Section. - An appropriate claim for relief where the disputed rates are "established" by the Commission may exist under G.S. 62-140 which prohibits unreasonable discrimination by public utilities, or under this section which prohibits a utility from receiving more compensation for services than the amount prescribed by the Commission. Blue Ridge Textile Printers, Inc. v. Public Serv. Co., 99 N.C. App. 193, 392 S.E.2d 401 (1990).

Telephone Company Proscribed from Furnishing Free Service, etc., to Municipalities. - The Utilities Commission properly proscribes a telephone company from furnishing service to certain municipalities within its territory free or at a reduced rate, and contractual agreements of a telephone company to do so in consideration for franchise rights to use the streets, alleys and roads in such municipalities for its pole line and underground conduits are void, since such concessions constitute discrimination against other customers similarly situated. State ex rel. N.C. Utils. Comm'n v. City of Wilson, 252 N.C. 640, 114 S.E.2d 786 (1960).

Electric Rate Based on Old Contract Upheld. - Where, at the termination of a contract between city and electric company, city officials were doubtful whether it would be advantageous to adopt the new schedule of the electric company, and elected to take current on basis from month to month, it was held that the electric company was not exacting an unlawful rate by billing the city for current on rates contained in the old contract rather than under the new schedule. City of High Point v. Duke Power Co., 34 F. Supp. 339 (M.D.N.C. 1940), aff'd, 120 F.2d 866 (4th Cir. 1941).

Freight Rates Need Not Be Same for Both Directions. - In shipments to a great distance, special circumstances, such as flow of traffic, may justify a higher rate between two points in one direction than in the opposite; and in an action for recovery of the penalty for excessive freight rates, it was error for the judgment below in effect to charge the jury that such tariff rate published between the two points for freight moving in an opposite direction to that of the shipment in question was conclusive, and that they should be governed in their verdict as to the overcharge accordingly. James H. Scull & Co. v. Atlantic C.L.R.R., 144 N.C. 180, 56 S.E. 876 (1907).

Freight Charge on Undelivered Shipment. - Where defendant collected freight charges, for an entire shipment, as invoiced and originally billed, and the sum of 96 cents was paid as freight on that part of the shipment which was "short" and not delivered, this was an overcharge; failure to refund such overcharge after the 60 days allowed for investigation rendered defendant liable for the statutory penalty. Cottrell v. Railroad, 141 N.C. 383, 54 S.E. 288 (1906).

Collection of Surcharge Before Tariff Became Effective. - The Utilities Commission exceeded its statutory authority in requiring a manufacturer to pay a surcharge for emergency natural gas used by the manufacturer prior to the date that the tariff including the surcharge became effective, even though the supplier did not bill the manufacturer for such gas until after the tariff became effective. A rate is fixed or allowed when it becomes effective pursuant to G.S. 62-130(a) and rates must be fixed prospectively from their effective date. G.S. 62-136(a) provides that the commission shall determine rates to be thereafter observed and in force. The commission may not fix rates retroactively so as to make them collectible for past services. State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 42 N.C. App. 606, 257 S.E.2d 439 (1979), cert. denied, 299 N.C. 124, 261 S.E.2d 926 (1980).

Penalty Enforceable Though Charges Small. - The penalty fixed by former G.S. 60-110 to enforce the duty of a carrier in regard to proper charges for transporting freight and refund of overcharges, which penalty could not in any event exceed $100.00, was enforceable for a default established against defendant, even though the particular transportation charges might appear disproportionately small. It is on failure to return small amounts wrongfully overcharged that penalties are especially required. In large matters the claimant can better afford the cost of litigation. Efland v. Southern Ry., 146 N.C. 129, 59 S.E. 359 (1907).

Recovery of Excess Caused by Error in Tariff Distance Table. - Where carriers charged rates in accordance with the published tariffs on file, but because of error in the tariff distance table the charges were excessive, the shippers could recover the excess charged by petition before the Utilities Commission, the remedy by civil action under former G.S. 60-110, 62-138 and this section to recover overcharges and penalties being the proper remedy only when the charges were collected in excess of the published tariffs. State ex rel. N.C. Utils. Comm'n v. Norfolk S. Ry., 249 N.C. 477, 106 S.E.2d 681 (1959).

Agent as Party Aggrieved. - Where, under agreement with his principal, the agent of a manufacturer was obligated to pay the freight charges on shipments made to him, and upon demand of the carrier he paid its unlawful charges on a shipment, he was the party aggrieved, and could maintain his action to recover the excess, and also the penalty when settlement was not made within 60 days. Tilley v. Southern Ry., 172 N.C. 363, 90 S.E. 309 (1916).

What Demand Must Specify. - Where carrier demanded and received an unlawful freight charge for a shipment, and the party aggrieved made written demand of the carrier for payment of the overcharge, as required by the statute, it was not necessary, in order to maintain an action for the penalty imposed upon the carrier failing to settle in 60 days, that the written demand specify the penalty, or that demand therefor be made in the justice's court or alleged in the complaint filed on appeal therefrom. Tilley v. Southern Ry., 172 N.C. 363, 90 S.E. 309 (1916).

Separate Demands in Same Envelope. - The mere fact that plaintiff enclosed separate written demands in the same envelope, and gave an aggregate amount thereof, in a letter accompanying them, did not affect the demands, when the overcharges were separate and distinct, demand was made specifically as to each and was accompanied separately with the paid freight bill and duplicate bill of lading, and each demand was complete in itself; such was a compliance with the provisions of the statute. Efland v. Southern Ry., 146 N.C. 129, 59 S.E. 359 (1907).

Overcharge was Wilful. - Trial court properly ordered campground owners to pay tenants $ 10.00 per day for every day between 2 December 2005 and 16 October 2006 as a penalty for overcharges, as provided for in G.S. 62-139(b). The owners were a public utility and their action in overcharging tenants was wilful. Shepard v. Bonita Vista Props., L.P., 191 N.C. App. 614, 664 S.E.2d 388 (2008), aff'd, 363 N.C. 252, 675 S.E.2d 332 (2009).

Burden of Proving Overcharge. - The burden is upon the plaintiff to show that a freight rate charged and collected by a carrier was in excess of its tariff required of the carrier to be published, when he seeks to recover this excess and the statutory penalty; hence, where the shipment was routed over one line of connecting carriers and the tariff filed by the carrier over another route was shown, no evidence was afforded as to the rate of the actual route of the shipment, and, in the absence of further evidence, a judgment as of nonsuit was proper. Blalock Hdwe. Co. v. Seaboard Air Line Ry., 170 N.C. 395, 86 S.E. 1025 (1915).

Cited in Eaton Corp. v. Public Serv. Co., 99 N.C. App. 174, 392 S.E.2d 404 (1990).


§ 62-140. Discrimination prohibited.

  1. No public utility shall, as to rates or services, make or grant any unreasonable preference or advantage to any person or subject any person to any unreasonable prejudice or disadvantage. No public utility shall establish or maintain any unreasonable difference as to rates or services either as between localities or as between classes of service. The Commission may determine any questions of fact arising under this section; provided that it shall not be an unreasonable preference or advantage or constitute discrimination against any person, firm or corporation or general rate payer for telephone utilities to contract with motels, hotels and hospitals to pay reasonable commissions in connection with the handling of intrastate toll calls charged to a guest or patient and collected by the motel, hotel or hospital; provided further, that payment of such commissions shall be in accordance with uniform tariffs which shall be subject to the approval of the Commission. Provided further, that it shall not be considered an unreasonable preference or advantage for the Commission to order, if it finds the public interest so requires, a reduction in local telephone rates for low-income residential consumers meeting a means test established by the Commission in order to match any reduction in the interstate subscriber line charge authorized by the Federal Communications Commission. If the State repeals any State funding mechanism for a reduction in the local telephone rates for low-income residential consumers, the Commission shall take appropriate action to eliminate any requirement for the reduced rate funded by the repealed State funding mechanism. For the purposes of this section, a State funding mechanism for a reduction in the local telephone rates includes a tax credit allowed for the public utility to recover the reduction in rates.
  2. The Commission shall make reasonable and just rules and regulations:
    1. To prevent discrimination in the rates or services of public utilities.
    2. To prevent the giving, paying or receiving of any rebate or bonus, directly or indirectly, or misleading or deceiving the public in any manner as to rates charged for the services of public utilities.
  3. No public utility shall offer or pay any compensation or consideration or furnish any equipment to secure the installation or adoption of the use of such utility service except upon filing of a schedule of such compensation or consideration or equipment to be furnished and approved thereof by the Commission, and offering such compensation, consideration or equipment to all persons within the same classification using or applying for such public utility service; provided, in considering the reasonableness of any such schedule filed by a public utility the Commission shall consider, among other things, evidence of consideration or compensation paid by any competitor, regulated or nonregulated, of the public utility to secure the installation or adoption of the use of such competitor's service. For the purpose of this subsection, "public utility" shall include any electric membership corporation operating within this State, and the terms "utility service" and "public utility service" shall include the service rendered by any such electric membership corporation.

Nothing in this section prohibits the Commission from establishing different rates for natural gas service to counties that are substantially unserved, to the extent that those rates reflect the cost of providing service to the unserved counties and upon a finding by the Commission that natural gas service would not otherwise become available to the counties.

History

(1899, c. 164, s. 2, subsecs. 3, 5; Rev., s. 1095; 1913, c. 127, s. 6; C.S., s. 1054; 1933, c. 134, s. 8; c. 307, s. 6; 1941, c. 97; 1963, c. 1165, s. 1; 1965, c. 287, s. 8; 1977, 2nd Sess., c. 1146; 1985, c. 694, s. 1; 1997-426, s. 1; 2013-363, s. 11.1; 2021-23, s. 18.)

Effect of Amendments. - Session Laws 2013-363, s. 11.1, effective July 29, 2013, added the fifth and sixth sentences in the first paragraph of subsection (a).

Session Laws 2021-23, s. 18, effective May 17, 2021, deleted the proviso in the former next-to-last sentence of subsection (c), which read: "Provided, further, that nothing herein shall prohibit a public utility from carrying out any contractual commitment in existence at the time of the enactment hereof, so long as such program does not extend beyond December 31, 1963."

Legal Periodicals. - For survey of 1980 administrative law, see 59 N.C.L. Rev. 1024 (1981).

CASE NOTES

I. IN GENERAL.

Reaffirmance of Common-Law Rule. - The requirement to furnish accommodations within a reasonable time is but a reaffirmance of the common law, leaving the courts to say what time is reasonable. Alsop v. Southern Express Co., 104 N.C. 278, 10 S.E. 297 (1889).

Duty to Provide Transportation. - It is the duty of a common carrier to provide sufficient means of transportation for all freight and passengers which its business naturally brings to it, and an unusual occasion by which a greater demand upon it is temporarily made will not relieve it of the obligation if, by the use of reasonable foresight, it could have been provided for. Purcell v. Richmond & D.R.R., 108 N.C. 414, 12 S.E. 954 (1891).

Former Section Declaratory of Common Law. - Former G.S. 60-5, making discrimination in charges by common carriers a misdemeanor, was declaratory of the common law, and secured to every person the right to participate in the use of the facilities furnished, or which it was its duty to furnish, by a common carrier upon terms of equality, in regard to price, and otherwise, and free from unlawful discrimination. Hilton Lumber Co. v. Atlantic C.L.R.R., 141 N.C. 171, 53 S.E. 823 (1906).

Duty Imposed by This Section as Development of Common-Law Obligation. - The duty now imposed by this section upon privately owned distributors and sellers of electric power not to discriminate in service or rates is merely a development of the common-law obligation of equal and undiscriminating service. Dale v. City of Morganton, 270 N.C. 567, 155 S.E.2d 136 (1967).

The obligation of a public service corporation to serve impartially and without unjust discrimination is fundamental. It is not essential that consumers who are charged different rates for service should be competitors in order to invoke this principle. There must be substantial differences in service or conditions to justify differences in rates. There must be no unreasonable discrimination between those receiving the same kind and degree of service. State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953); State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Subsection (a) is similar to § 3 of the Interstate Commerce Act. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

The language of subsection (a) does not mean that customer classifications, once established by a utility, must remain frozen absent a showing of change of conditions justifying a change in classifications. State ex rel. Utils. Comm'n v. Edmisten, 29 N.C. App. 428, 225 S.E.2d 101, aff'd, 291 N.C. 424, 230 S.E.2d 647 (1976).

Application of Subsection (a). - Subsection (a) of this section was enacted to prohibit a utility from unreasonable discrimination among its customers. It was not meant to be applied to the Utilities Commission's conduct toward various public utilities. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).

What Party Entitled to Injunctive Relief. - Where certain carriers by truck sought injunctive relief against railroad carriers for discrimination in rates against certain cities and against certain commodities, it was held that the basis for injunctive relief must be an interference or threatened interference with a legal right of the petitioner, not of a third party, and that the shippers would be the real parties in interest, not the contract truck carriers. Carolina Motor Serv., Inc. v. Atlantic C.L.R.R., 210 N.C. 36, 185 S.E. 479, 104 A.L.R. 1165 (1936).

Recovery of Excess Charges. - Where a higher freight charge was paid than that charged other shippers, the payment was not to be considered voluntary, and the excess could be recovered back upon account for money had and received, and it was not necessary that at the time of payment there should have been any protest. Hilton Lumber Co. v. Atlantic C.L.R.R., 141 N.C. 171, 53 S.E. 823 (1906).

Claim for Relief Where Disputed Rates "Established" May Exist Under Section. - An appropriate claim for relief where the disputed rates are "established" by the Commission may exist under this section which prohibits unreasonable discrimination by public utilities, or under G.S. 62-139 which prohibits a utility from receiving more compensation for services than the amount prescribed by the Commission. Blue Ridge Textile Printers, Inc. v. Public Serv. Co., 99 N.C. App. 193, 392 S.E.2d 401 (1990).

Question for Decision of Court. - Where the Utilities Commission concluded upon undisputed facts that there was no unlawful discrimination by a power company in the rates charged its commercial customers, whether the conclusion was supported by competent, material and substantial evidence in view of the entire record was held to present a question of law for the decision of the court. State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).

Applied in State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 314 N.C. 171, 333 S.E.2d 259 (1985); State ex rel. Util. Comm'n v. Carolina Util. Customers Ass'n, 328 N.C. 37, 399 S.E.2d 98 (1991); State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 348 N.C. 452, 500 S.E.2d 693 (1998).

Cited in State ex rel. Utils. Comm'n v. North Carolina Consumers Council, Inc., 18 N.C. App. 717, 198 S.E.2d 98 (1973); State ex rel. Utils. Comm'n v. Farmers Chem. Ass'n, 33 N.C. App. 433, 235 S.E.2d 398 (1977); State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985); Eaton Corp. v. Public Serv. Co., 99 N.C. App. 174, 392 S.E.2d 404 (1990); State ex rel. Utils. Comm'n v. Mountain Elec. Coop., 108 N.C. App. 283, 423 S.E.2d 516 (1992).

II. DIFFERENCES IN RATES OR SERVICES.

Classifications of customers and differences in rates must be based on reasonable differences in conditions, and the variance in charges must bear a reasonable proportion to the variance in conditions. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 59 N.C. App. 240, 296 S.E.2d 487 (1982), rev'd on other grounds, 309 N.C. 238, 306 S.E.2d 113 (1983).

The question of law with respect to public utility rate differentials is not whether the differential is merely discriminatory or preferential but is whether the differential is an unreasonable or unjust discrimination. State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).

There must be no unreasonable discrimination between those receiving the same kind and degree of service. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966); State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234, cert. denied, 301 N.C. 531, 273 S.E.2d 461 (1980); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

All who ship goods with common carriers are required to be treated equally with respect to the same category of service. State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838, rev'd on other grounds, 302 N.C. 14, 273 S.E.2d 232 (1980).

But Rates May Differ Under Varying Conditions. - The charging of different rates for service rendered under varying conditions and circumstances is not unlawful. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

Provided Differences in Service or Conditions Are Substantial. - There must be substantial differences in service or conditions to justify difference in rates. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966); State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981); State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

When substantial differences in services or conditions exist, unreasonable application of the same rates may be discriminatory and thus improper. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

Factors which constitute "substantial differences in services or conditions" and, therefore, justify a rate differential include (1) quantity of use, (2) time of use, (3) manner of service, and (4) costs of rendering the two services. State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981).

Material Factors in Determining Rates. - Any matter which presents a substantial difference as a ground for distinction between customers, such as quantity used, time of use, or manner of service, is a material factor in the determination of rates. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

In determining whether rate differences constitute unreasonable discrimination, a number of factors should be considered: (1) quantity of use, (2) time of use, (3) manner of service, and (4) costs of rendering the two services. Other factors to be considered include competitive conditions, consumption characteristics of the several classes and the value of service to each class, which is indicated to some extent by the cost of alternate fuels available. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

In determining whether rate differences constitute unreasonable discrimination, a number of factors should be considered: (1) quantity of use, (2) time of use, (3) manner of service, and (4) costs of rendering the two services. Other factors to be considered include competitive conditions, consumption characteristics of the several classes and the value of service to each class, which is indicated to some extent by the cost of alternate fuels available. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

The authority of the Utilities Commission to set different rates is not unbridled. There must be substantial differences in service or conditions to justify difference in rates. There must be no unreasonable discrimination between those receiving the same kind and degree of service. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 424, 230 S.E.2d 647 (1976).

While decisions of the Commission involving the exercise of its discretion of fixing rates are accorded great deference, the Commission has no power to authorize rates that result in unreasonable and unjust discrimination. State ex rel. Utils. Comm'n v. North Carolina Textile Mfrs. Ass'n, 313 N.C. 215, 328 S.E.2d 264 (1985).

Rates for Shipments from Different Origins Need Not Be Equal. - Subsection (a) of this section does not require an equality of rates where the shipments are from different points of origin to the same destination even though the distances be equal or approximately so. State ex rel. Utils. Comm'n v. Nello L. Teer Co., 266 N.C. 366, 146 S.E.2d 511 (1966).

What Constitutes Unlawful Discrimination by Carriers. - Discrimination in freight tariffs by railroad companies means charging shippers of freight unequal sums for carrying the same quantity of freight equal distances, that is, more in proportion for a short than for a long distance. Hines & Battle v. Wilmington & W.R.R., 95 N.C. 434 (1886).

A common carrier is guilty of unlawful discrimination, by the principles of the common law and the terms of the statute, when it charges one person, for service rendered, a larger sum than is charged another person for like service under substantially similar conditions. Hilton Lumber Co. v. Atlantic C.L.R.R., 141 N.C. 171, 53 S.E. 823 (1906).

Different Rate Schedules for Municipalities and Industrial Users of Electrical Energy. - The Commission, in determining whether there is a justifiable basis for establishment of different rate schedules for municipalities engaged in resale of electrical energy and industrial users, must consider use characteristics and load factors as well as the amount of electrical energy purchased under the respective schedules. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

The Commission was justified in placing municipalities engaged in resale of electrical energy and industrial users under different schedules based upon a difference in the load factor. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Commission's Approval of Bifurcated Full-Margin Pricing Method Upheld. - The record, combined with the Utilities Commission's analysis of prior cases addressing the lawfulness of full-margin transportation rates, was more than adequate to support the Commission's approval of a gas company's bifurcated full-margin pricing mechanism, which essentially resulted in sales customers, rather than transportation customers, paying duplicate charges for interstate transportation. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

III. DISCRIMINATION.

.

Charging Subsequent Users for Expense of Serving Prior Users as Discrimination. - The cost of coal burned in generating power has no relation whatever to service in any subsequent month. Thus, it, like wage expense, should be borne by the users of the service in the month in which the expense was incurred and may not properly be amortized so as to make subsequent users pay part of this burden. To cast upon subsequent users the expense of serving prior users is discrimination forbidden by this section. State ex rel. Utils. Comm'n v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977).

An attempted justification of rate differentials by a classification of power furnished as "secondary" and "primary" was held insupportable on the facts. State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).

Giving Preference to Parent Corporation. - A power company which is a subsidiary of one of its commercial customers may not give a preference to its parent corporation, but must give equal treatment to all its customers similarly situated. State ex rel. Utils. Comm'n v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290 (1953).

A power company which is a subsidiary may not be allowed to structure its economic affairs or physical operations in such a way as to effect an unreasonable preference or advantage to anyone, including its parent. State ex rel. Utils. Comm'n v. Edmisten, 299 N.C. 432, 263 S.E.2d 583 (1980).

Furnishing free service for municipal purposes in compliance with franchise provisions constitutes an unjust and illegal discrimination. State ex rel. N.C. Utils. Comm'n v. City of Wilson, 252 N.C. 640, 114 S.E.2d 786 (1960).

A railroad carrying logs to a sawmill cannot charge a shipper agreeing to ship the manufactured products by the same line less for the same service than it charges a shipper who makes no such agreement. Hilton Lumber Co. v. Atlantic C.L.R.R., 136 N.C. 479, 48 S.E. 813 (1904).

Allegation that common carrier for hire gave a named person undue preference by transporting him free ex vi termini alleged discrimination. State v. Southern Ry., 125 N.C. 666, 34 S.E. 527 (1899).

Discriminatory Embargoes. - A common carrier cannot place an embargo on its customer or patron so as to discriminate against him or those dealing with him. Garrison v. Southern Ry., 150 N.C. 575, 64 S.E. 578 (1909).

Commission May Not Permit Unjustified Service Refusal. - A refusal by a telephone company to serve, without a reasonable justification therefor, is a violation of the company's duty, and the Commission has no authority to permit it. State ex rel. Utils. Comm'n v. National Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975).

Right of City to Refuse to Serve Is Same as Private Company's. - The right of a municipal corporation operating a plant for the distribution and sale of electricity to its inhabitants to refuse to serve is neither greater nor less than that of a privately owned electric power company to do so. Dale v. City of Morganton, 270 N.C. 567, 155 S.E.2d 136 (1967).

City May Not Deprive Inhabitant of Service to Compel Obedience to Police Regulations. - A city may not deprive an inhabitant, otherwise entitled thereto, of light, water, or other utility service as a means of compelling obedience to its police regulations, however valid and otherwise enforceable those regulations may be. Dale v. City of Morganton, 270 N.C. 567, 155 S.E.2d 136 (1967).

IV. NO DISCRIMINATION.

.

Rate Designs. - The Utilities Commission properly considered factors other than cost-of-service, i.e., value of service, type of service, quantity of use, time of use, manner of service, competitive conditions relating to acquisition of new customers, historical rate design, revenue stability to the utility, and economic and political factors, in adopting a rate design that would be just and not unreasonably discriminatory among the various customer classes. State ex rel. Utilities Comm'n v. Carolina Util. Customers Ass'n, 351 N.C. 223, 524 S.E.2d 10 (2000).

Rates of Return Not Unreasonably Discriminatory. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable and did not unreasonably discriminate among the various classes of North Carolina Natural Gas Corporation customers and were supported by substantial evidence in view of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Although there were still significant disparities in rates of return between various customer classes, the rates set for each customer class produced revenues in excess of the operating costs allocable to that class; therefore, the rates were not unreasonably discriminatory, and the Commission's order contained findings sufficient to justify its conclusion that the approved rates of return were just and reasonable. State ex rel. Utils. Comm'n v. Public Staff-North Carolina Utils. Comm'n, 323 N.C. 481, 374 S.E.2d 361 (1988).

Legitimate Justifications for Maintaining City and Industrial Rates of Return. - The North Carolina Utilities Commission drew legitimate distinctions which justified its decision to maintain industrial and cities' rates of return at a higher level than residential and commercial and small industrial rates. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Utilities Commission has authority to allow use of an availability charge in a rate schedule for a recreational subdivision, should any be deserved. State ex rel. Utils. Comm'n v. Carolina Forest Util., Inc., 21 N.C. App. 146, 203 S.E.2d 410 (1974).

Rates charged REA cooperatives were not available to municipalities engaged in resale of electrical energy due to the following factors: (1) The cooperatives were required to extend their lines though sparsely settled rural areas with resulting line losses; and (2) the cooperatives were created and operated on a nonprofit basis pursuant to the established public policy of State and federal government. State ex rel. N.C. Utils. Comm'n v. Municipal Corps., 243 N.C. 193, 90 S.E.2d 519 (1955).

Formula Did Not Unreasonably Discriminate. - The North Carolina Utilities Commission's order contained findings sufficient to justify its conclusion that the Industrial Sales Tracker Formula did not unreasonably discriminate between North Carolina Natural Gas Corporation's customer classes, and these findings were supported by substantial evidence in light of the whole record. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 323 N.C. 238, 372 S.E.2d 692 (1988).

Record contained conflicting evidence concerning whether the use of the single coincident peak cost of service methodology was reasonable and fair to customers, and the Commission considered all the evidence presented, explained the weight given to the evidence, and found that the methodology was reasonable; there was substantial evidence in the record to support the Commission's finding that the use of the methodology in question allocated costs equitably, and it was not shown that the use of the methodology here resulted in unreasonable or unjust discrimination. State ex rel. Utils. Comm'n v. Cooper, 367 N.C. 741, 767 S.E.2d 305 (Jan. 23, 2015).

Difference in Service Among Customers in the Same Municipality. - The fact that a power company which is a "secondary supplier" directly serves seven customers within a municipality pursuant to the provisions of G.S. 160A-332 but does not directly serve other customers within the municipality does not constitute an "unreasonable preference or advantage" within the meaning of this section. State ex rel. Utils. Comm'n v. Hunt Mfg. Co., 16 N.C. App. 335, 192 S.E.2d 16 (1972).


§ 62-141. Long and short hauls.

  1. Except when expressly permitted by the Commission, it shall be unlawful for any common carrier to charge or receive any greater compensation in the aggregate for the transportation of like kind of household goods under substantially similar circumstances and conditions for a shorter than for a longer distance over the same line or route in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier within the terms of this Chapter to charge and receive as great compensation for a shorter as for a longer distance.
  2. Upon application to the Commission, common carriers may in special cases be authorized to charge less for longer than for shorter distances for the transportation of household goods; and the Commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section.
  3. The provisions of this section shall not be applicable to bus companies or to their rates, charges or tariffs.

History

(1899, c. 164, s. 14; Rev., s. 1107; Ex. Sess. 1913, c. 20, s. 9; 1915, c. 17, s. 1; C.S., s. 1072; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1985, c. 676, s. 15(4); 1995, c. 523, s. 7.)

§ 62-142. Contracts as to rates.

All contracts and agreements between public utilities as to rates shall be submitted to the Commission for inspection that it may be seen whether or not they are a violation of law or the rules and regulations of the Commission, and all arrangements and agreements whatever as to the division of earnings of any kind by competing public utilities shall be submitted to the Commission for inspection and approval insofar as they affect the rules and regulations made by the Commission to secure to all persons doing business with such utilities just and reasonable rates. The Commission may make such rules and regulations, as to such contracts and agreements as the public interest may require.

History

(1899, c. 164, s. 6; Rev., s. 1108; C.S., s. 1073; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

§ 62-143. Schedule of rates to be evidence.

The schedule of rates fixed by statute or under this Article, in suits brought against any public utility involving the rates of a public utility or unjust discrimination in relation thereto, shall be taken in all courts as prima facie evidence that the rates therein fixed are just and reasonable. Any such schedule when certified by a clerk of the Commission as a true copy of a schedule on file with the Commission shall be received in all courts as prima facie evidence of such schedule without further proof, and, if the clerk certifies that said schedule has been approved by the Commission, as prima facie evidence of such approval.

History

(1899, c. 164, s. 7; Rev., s. 1112; C.S., s. 1077; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

§ 62-144. Free transportation.

  1. All common carriers under the supervision of the Commission shall furnish free transportation to the members of the Commission, and, upon written authority of the Commission, such carriers shall also furnish free transportation to such persons as the Commission may designate in its employ or in the employ of the Department of Motor Vehicles for the inspection of equipment and supervision of safe operating conditions and of traffic upon the highways of the State.
  2. Except as provided in subsection (a), no common carrier shall, directly or indirectly, issue, give, tender, or honor any free fares except to its bona fide officers, agents, commission agents, employees and retired employees, and members of their immediate families: Provided, that common carriers under this Article may exchange free transportation within the limits of this section and may accept as a passenger a totally blind person accompanied by a guide at the usual and ordinary fare charged to one person under such reasonable regulations as may have been established by the carrier and approved by the Commission.
  3. Any person except those permitted by law accepting free transportation shall be guilty of a Class 1 misdemeanor.
  4. Nothing in this section shall prohibit the carriage, storage or handling of household goods free or at reduced rates for the United States, State or municipal governments, or for charitable or educational purposes, or the use of passes for journeys wholly within this State which have been or may be issued for interstate journeys under the authority of the United States Interstate Commerce Commission.

History

(1899, c. 164, s. 22; c. 642; 1901, c. 652; c. 679, s. 2; 1905, c. 312; Rev., s. 1105; Ex. Sess. 1908, c. 144, s. 4; 1911, cc. 49, 148; 1913, c. 100; 1915, c. 215; 1917, cc. 56, 160; C.S., ss. 1069, 1070, 3492; 1933, c. 134, s. 8; 1941, c. 97; 1949, c. 1132, s. 27; 1953, c. 1279; 1963, c. 1165, s. 1; 1993, c. 539, s. 477; 1994, Ex. Sess., c. 24, s. 14(c); 1995, c. 523, s. 8.)

CASE NOTES

Transportation by a common carrier of any person, except of the classes specified, without charge, is unlawful, the offense being the actual free transportation and not the issuance of the free pass. State v. Southern Ry., 122 N.C. 1052, 30 S.E. 133 (1898).

A gratuitous passenger is not in pari delicto with the common carrier. McNeill v. Railroad, 135 N.C. 682, 47 S.E. 765, rehearing denied, 137 N.C. 704, 49 S.E. 1038 (1904).

Recovery for Injury Occasioned While Riding on Illegally Issued Pass. - The rights, privileges and protection attaching to the relation of passenger are imposed by law upon common carriers upon consideration of public policy, independent of contract, and arise from the nature of their public employment. Hence, one injured while riding on a pass illegally issued may recover from the railroad. McNeill v. Railroad, 135 N.C. 682, 47 S.E. 765, rehearing denied, 137 N.C. 704, 49 S.E. 1038 (1904).

Construction of Penal Statute. - In construing a penal statute prohibiting discrimination between passengers, the construction placed on it by common carriers generally, and by private individuals and officials, will not be considered. State v. Southern Ry., 122 N.C. 1052, 30 S.E. 133 (1898).


§ 62-145. Rates between points connected by more than one route.

When there is more than one route between given points in North Carolina, and freight is routed or directed by the shipper or consignee to be transported over a shorter route, and it is in fact shipped by a longer route between such points, the rate fixed by law or by the Commission for the shorter route shall be the maximum rate which may be charged, and it shall be unlawful to charge more for transporting such freight over the longer route than the lawful charge for the shorter route.

History

(Ex. Sess. 1913, c. 20, s. 11; C.S., s. 1085; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

Mileage is calculated over the shortest rail line between the point of origin and the point of delivery. State ex rel. N.C. Utils. Comm'n v. Norfolk Southern Ry., 249 N.C. 477, 106 S.E.2d 681 (1959).

Carrier may not present evidence that rate charged was just and reasonable where a rate was set for a short line distance and the carrier unlawfully charged a shipper the rate at a longer mileage level. State ex rel. Utils. Comm'n v. Boren Clay Prods. Co., 48 N.C. App. 263, 269 S.E.2d 234, cert. denied, 301 N.C. 531, 273 S.E.2d 461 (1980).


§ 62-146. Rates and service of motor common carriers of property.

  1. It shall be the duty of every common carrier of household goods by motor vehicle to provide safe and adequate service, equipment, and facilities for transportation in intrastate commerce and to establish, observe and enforce just and reasonable regulations and practices relating thereto, and, in the case of household goods carriers, relating to the manner and method of presenting, marking, packing and delivering property for transportation in intrastate commerce.
  2. Except under special conditions and for good cause shown, a common carrier by motor vehicle authorized to transport general commodities over regular routes shall establish reasonable through routes and joint rates, charges, and classifications with other such common carriers by motor vehicle; and such common carrier may establish, with the prior approval of the Commission, such routes, joint rates, charges and classifications with any irregular route common carrier by motor vehicle, or any common carrier by rail, express, or water.
  3. Repealed by Session Laws 1985, c. 676, s. 15.
  4. In case of joint rates between common carriers of property, it shall be the duty of the carriers parties thereto to establish just and reasonable regulations and practices in connection therewith, and just, reasonable, and equitable divisions thereof as between the carriers participating therein, which shall not unduly prefer or prejudice any of such participating carriers. Upon investigation and for good cause, the Commission may, in its discretion, prohibit the establishment of joint rates or service.
  5. Any person may make complaint in writing to the Commission that any rate, classification, rule, regulations, or practice in effect or proposed to be put into effect, is or will be in violation of this Article. Whenever, after hearing, upon complaint or in an investigation or its own initiative, the Commission shall be of the opinion that any individual or joint rate demanded, charged, or collected by any common carrier or carriers by motor vehicle, or by any such common carrier or carriers in conjunction with any other common carrier or carriers, for transportation of household goods in intrastate commerce, or any classification, rule, regulation, or practice whatsoever of such carrier or carriers affecting such rate or the value of the service thereunder, is or will be unjust or unreasonable or unjustly discriminatory or unduly preferential or unduly prejudicial, it shall determine and prescribe the lawful rate or the minimum or maximum, or the minimum and maximum rate thereafter to be observed, or the lawful classification, rule, regulation, or practice thereafter to be made effective.
  6. Whenever, after hearing upon complaint or upon its own initiative, the Commission is of the opinion that the divisions of joint rates applicable to the transportation of household goods in intrastate commerce between a common carrier by motor vehicle and another carrier are or will be unjust, unreasonable, inequitable, or unduly preferential or prejudicial as between the carriers parties thereto (whether agreed upon by such carriers or otherwise established), the Commission shall by order prescribe the just, reasonable, and equitable division thereof to be received by the several carriers; and in cases where the joint rate or charge was established pursuant to a finding or order of the Commission and the divisions thereof are found by it to have been unjust, unreasonable, or inequitable or unduly preferential or prejudicial, the Commission may also by order determine what would have been the just, reasonable, and equitable divisions thereof to be received by the several carriers and require adjustment to be made in accordance therewith. The order of the Commission may require the adjustment of divisions between the carriers in accordance with the order from the date of filing the complaint or entry of order of investigation or such other dates subsequent thereto as the Commission finds justified, and in the case of joint rates prescribed by the Commission, the order as to divisions may be made effective as a part of the original order.
  7. In any proceeding to determine the justness or reasonableness of any rate of any common carrier of household goods by motor vehicle, there shall not be taken into consideration or allowed as evidence any elements of value of the property of such carrier, good will, earning power, or the certificate under which such carrier is operating, and such rates shall be fixed and approved, subject to the provisions of subsection (h) hereof, on the basis of the operating ratios of such carriers, being the ratio of their operating expenses to their operating revenues, at a ratio to be determined by the Commission; and in applying for and receiving a certificate under this Chapter any such carrier shall be deemed to have agreed to the provisions of this paragraph, on its own behalf and on behalf of every transferee of such certificate or of any part thereof.
  8. In the exercise of its power to prescribe just and reasonable rates and charges for the transportation of household goods in intrastate commerce by common carriers by motor vehicle, and classifications, regulations, and practices relating thereto, the Commission shall give due consideration, among other factors, to the inherent advantages of transportation by such carriers; to the effect of rates upon movement of traffic by the carrier or carriers for which rates are prescribed; to the need in the public interest of adequate and efficient transportation service by such carriers at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable such carriers under honest, economical, and efficient management to provide such service.
  9. Nothing in this section shall be held to extinguish any remedy or right of action not inconsistent herewith. This section shall be in addition to other provisions of this Chapter which relate to public utilities generally, except that in cases of conflict between such other provisions and this section, this section shall prevail for motor carriers.

History

(1947, c. 1008, s. 23; 1949, c. 1132, s. 22; 1963, c. 1165, s. 1; 1985, c. 676, s. 15(5); 1995, c. 523, s. 9.)

CASE NOTES

Carriers have legal right to contract inter se, and the law encourages cooperation and agreements between them respecting their service to the public. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

Former subsection (c) of this section encouraged cooperation and agreements between common carriers respecting their service to the public. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Duty to Establish Joint Rates and Divide Revenues. - Motor carriers of freight in intrastate commerce who exchange freight in the course of delivery are not only given authority to establish joint rates, but are required to do so, and to provide for the division of revenues derived from such shipments by contract, subject only to the limitation that the contract shall not unduly prefer or prejudice any of the participating carriers. State ex rel. Utils. Comm'n v. Thurston Motor Lines, 240 N.C. 166, 81 S.E.2d 404 (1954).

Authority of Commission to Interfere with Division of Revenue from Interchanged Freight. - The Utilities Commission is given authority to intervene and vacate a contract for division of revenue from interchanged freight between two intrastate motor carriers only upon finding after hearing that the contractual agreement between the carriers for the division of revenue from such shipments is, or will be, unjust, unreasonable and inequitable, or unduly preferential or prejudicial as between the contracting carriers, and when an order is entered by the Commission without such jurisdictional finding, the cause must be remanded. A finding merely that the Commission does not accept the contractual practice of the carriers as being equitable is insufficient. And the provision of subsection (d), giving the Commission discretionary power to prohibit the establishment of joint rates, is inapplicable. State ex rel. Utils. Comm'n v. Thurston Motor Lines, 240 N.C. 166, 81 S.E.2d 404 (1954).

Mileage alone is not a sufficient basis for the determination of intrastate rates by the Utilities Commission, but the Commission must consider all factors involved in rate making, including competition from interstate carriers, the different modes of transportation, the topography and volume of business as affecting costs, etc. State ex rel. Utils. Comm'n v. North Carolina Motor Carriers Ass'n, 253 N.C. 432, 117 S.E.2d 271 (1960).

An operating ratio of 100% means that for every dollar of freight revenue received, the carrier spends a dollar in operating expenses. State ex rel. N.C. Utils. Comm'n v. Attorney Gen., 2 N.C. App. 657, 163 S.E.2d 638 (1968); State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972).

Lower Operating Ratios Indicative of More Profitable Operations. - When the operating ratio exceeds 100%, it means that the expenses exceed the revenues. The lower the operating ratio, the more profitable the operation is to the carrier. State ex rel. N.C. Utils. Comm'n v. Attorney Gen., 2 N.C. App. 657, 163 S.E.2d 638 (1968).

Basis for Determination of Ratios. - A determination of intrastate operating ratios must be based on revenues and expenses incurred in North Carolina alone; where ratios do not reflect an actual separation of intrastate and interstate revenues and expenses, a rate increase based thereon cannot be sustained. State ex rel. Utils. Comm'n v. Motor Carriers' Traffic Ass'n, 16 N.C. App. 515, 192 S.E.2d 580 (1972).

The operating ratios for the movement of tobacco in intrastate traffic cannot be determined with mathematical exactitude. But the carriers can no doubt approximate the rateable proportion of their operating ratios from tobacco movements in intrastate traffic and offer evidence of other facts and circumstances in respect thereto sufficient in probative force to enable the Commission to make findings of fact and to issue such orders as the findings of fact may warrant. State ex rel. N.C. Utils. Comm'n v. Attorney Gen., 2 N.C. App. 657, 163 S.E.2d 638 (1968).

Authority to transport general commodities includes authority to transport meats and packing house products. State ex rel. Utils. Comm'n v. Forbes Transf. Co., 259 N.C. 688, 131 S.E.2d 452 (1963).


§ 62-146.1. Rates and service of bus companies.

  1. It shall be the duty of every bus company to provide safe and adequate service, equipment and facilities for transportation of passengers in intrastate commerce and to establish, observe and enforce just and reasonable regulations and practices.
  2. The Commission by its rules and regulations may require the interlining of passengers by bus companies operating in intrastate commerce in this State where the point of destination of the passenger is not served by the originating carrier. In these cases it shall be the duty of every bus company to establish reasonable through rates with other bus companies; to establish, observe and enforce just and reasonable individual and joint rates, fares and charges and just and reasonable regulations and practices relating to the charges and to the issuance, form and substance of tickets and the carrying of personal and excess baggage.
  3. In case of joint rates between bus companies, it shall be the duty of the bus companies to establish just and reasonable regulations and practices in connection with the joint rates and just, reasonable and equitable divisions between the participating companies, which shall not unduly prefer or prejudice any of the participating companies.
  4. A bus company providing fixed route service may file with the Commission a petition for new or revised rates, fares or charges. Unless the Commission orders otherwise, no bus company shall make any changes in its rates, fares and charges, which have been established under this Chapter, except after 30 days' notice to the Commission. The notice shall plainly state the changes proposed to be made in the rates then in force, and the time when the changed rates will go into effect. The bus company shall also give notice, which may include notice by publication, of the proposed changes to other interested persons that the Commission may direct. All proposed changes shall be shown by filing new schedules, or shall be plainly indicated upon schedules filed with the Commission and in force at the time and kept open to public inspection by the bus company. The Commission, for good cause shown in writing, may allow changes in rates without requiring the 30 days' notice, under any conditions as it prescribes. All changes shall be immediately indicated by the bus company on its schedules.
  5. Whenever there is filed with the Commission by any bus company any schedule stating a new or revised rate, fare or charge, the Commission may, either upon complaint or upon its own initiative, after reasonable notice, hold a hearing to determine if the proposed new or revised rates, fares or charges are just and reasonable. Pending the hearing and a decision, the Commission, upon filing with the proposed schedule and delivering to the affected bus company a statement in writing of its reasons, may, at any time before they become effective, suspend the operation of the rate or rates, for a period not to exceed 120 days from the filing of the petition. If the proceeding has not been concluded and a final order made within the period of suspension, the proposed change of rate shall go into effect at the end of the 120-day period.
  6. In any proceeding to determine the justness or reasonableness of any rates, fares or charges of a bus company, the Commission shall authorize revenue levels that are adequate under honest, economical, and efficient management to cover total operating expenses, including the operation of leased equipment and depreciation, plus a reasonable profit. The standards and procedures adopted by the Commission under this subsection shall allow the bus company to achieve revenue levels that will provide a flow of net income, plus depreciation, adequate to support prudent capital outlays, assure the repayment of a reasonable level of debt, permit the raising of needed equity capital, attract and retain capital and amounts adequate to provide a sound passenger bus transportation system in this State, and take into account reasonable estimated or foreseeable future costs.
  7. Notwithstanding any provision of this section, the Commission may not investigate, suspend, review or revoke the operation of proposed new or revised rates, fares or charges if the proposed new or revised rates, fares or charges do not exceed the standard rates, fares or charges then in effect by the petitioning bus company for comparable interstate transportation of passengers.
  8. Any person may make complaint in writing to the Commission that any rate, fare, charge, classification, rule, regulation, or practice in effect, or proposed to be put in effect, is or will be in violation of this Chapter. Whenever, after holding a hearing, upon complaint, in an investigation, or upon its own initiative, the Commission finds that any individual or joint rate demanded, charged, or collected by any bus company for transportation of passengers in intrastate commerce, or any classification, rule, regulation or practice of the bus company affecting the rate or the value of the service provided, is or will be unjust or unreasonable or unjustly discriminatory or unduly preferential or unduly prejudicial or constitute an unfair or destructive competitive practice, or otherwise contravenes the policies declared in this Chapter, or is in contravention of any provision of this Chapter, the Commission shall determine and prescribe the lawful rate, or the lawful classification, rule, regulation or practice to be put into effect.
  9. For purposes of this Chapter, rates, fares and charges established pursuant to this section shall be deemed fair, just and reasonable.
  10. Notwithstanding any other provision of this Chapter, the rates, fares and charges established for charter service by a bus company authorized and engaged in charter operations in this State shall be exempt from regulation by the Commission. A bus company authorized and engaged in charter operations shall file with the Commission a current statement of its rates, fares and charges as required by the Commission.

History

(1985, c. 676, s. 15(6).)

§ 62-147: Repealed by Session Laws 1995, c. 523, s. 10.

§ 62-148. Rates on leased or controlled utility.

If any public utility operating in the State other than a motor carrier is owned, controlled or operated by lease or other agreement by any other public utility doing business in the State, its rates may, in the discretion of the Commission, be determined for such public utility by the rates prescribed for the public utility which owns, controls or operates it.

History

(Ex. Sess. 1908, c. 144, s. 2; C.S., s. 3490; 1963, c. 1165, s. 1.)

§ 62-149. Unused tickets to be redeemed.

Whenever any ticket is sold and is not wholly used by the purchaser, it shall be the duty of the carrier selling such ticket to redeem it or the unused portion thereof at the price paid for it, or in such manner and at such price as the Commission shall prescribe by regulation.

History

(1891, c. 290; 1893, c. 249; 1895, c. 83, ss. 2, 3; 1897, c. 418; Rev., s. 2627; C.S., s. 3503; 1963, c. 1165, s. 1.)

§ 62-150. Ticket may be refused intoxicated person; penalty for prohibited entry.

The ticket agent of any common carrier of passengers shall at all times have power to refuse to sell a ticket to any person applying for the same who may at the time be intoxicated. The driver or other person in charge of any conveyance for the use of the traveling public shall at all times have power to prevent any intoxicated person from entering such conveyance. If any intoxicated person, after being forbidden by the driver or other person having charge of any such conveyance for the use of the traveling public, shall enter such conveyance, he shall be guilty of a Class 1 misdemeanor.

History

(1885, c. 358, ss. 1, 2, 3; Rev., ss. 2625, 2626, 3757; C.S., s. 3504; 1963, c. 1165, s. 1; 1993, c. 539, s. 478; 1994, Ex. Sess., c. 24, s. 14(c); 1998-128, s. 5.)

CASE NOTES

When Exemplary Damages Allowed. - In an action for damages for refusal to allow a person with a ticket to board a train because he was intoxicated, exemplary damages would be allowed if such refusal was made with malice, undue force, or insult. Story v. Norfolk & S.R.R., 133 N.C. 59, 45 S.E. 349 (1903).


§ 62-151. Passenger refusing to pay fare or violating rules may be ejected.

If any passenger shall refuse to pay his fare, or be or become intoxicated, or violate the rules of a common carrier, it shall be lawful for the driver of the bus or other conveyance, and servants of the carrier, on stopping the conveyance, to put him and his baggage out of the conveyance, using no unnecessary force.

History

(1871-2, c. 138, s. 34; Code, s. 1962; Rev., s. 2629; C.S., s. 3507; 1949, c. 1132, s. 30; 1953, c. 1140, s. 4; 1957, c. 1152, s. 16; 1961, c. 472, s. 11; 1963, c. 1165, s. 1; 1998-128, s. 6.)

CASE NOTES

Ejection from Baggage Car. - A person who gets on a blind baggage car, even though he has a ticket, and does not tell the conductor that he has it, where the conductor does not see it, is not entitled to recover as a passenger for injuries received by being pulled off the train by the conductor. McGraw v. Railroad, 135 N.C. 264, 47 S.E. 758 (1904).

Where individual shipped horses by express with an agreement that he should ride in the same car, he could not ride in the passenger coach without paying his fare. Teeter v. Southern Express Co., 172 N.C. 616, 90 S.E. 761, rehearing denied, 172 N.C. 620, 90 S.E. 927 (1961).

Mileage Book Holder Must Comply with Terms. - The holder of a mileage book must comply with its terms if reasonable opportunity is given, or he may be ejected. Mason v. Seaboard Air Line Ry., 159 N.C. 183, 75 S.E. 25 (1912); McNairy v. Norfolk & W.R.R., 172 N.C. 505, 90 S.E. 497 (1916).

Ejection of Party Refusing to Show Mileage Book. - When a purchaser of a mileage book from a railroad company is riding on an exchange ticket and refuses, without excuse, to show his mileage book, in connection with the ticket, to the conductor on the train, he is not regarded as a passenger, and the conductor has the right to eject him from the train. Mason v. Seaboard Air Line Ry., 159 N.C. 183, 75 S.E. 25 (1912).

Ejection Caused by Failure of Conductor to Return Ticket. - Where the conductor failed to return a ticket to a passenger to be used on another train, and the passenger was ejected therefrom for lack of the ticket, the railroad was liable for all damages attending the ejection. Sawyer v. Norfolk S.R.R., 171 N.C. 13, 86 S.E. 166 (1915).

Reliance on Agent's Statements. - The purchaser of a ticket may rely upon the statements of the railroad agent as to trains, connection, validity of ticket, etc., and if the passenger is ejected as a result of the agent's mistake the railroad is liable. Hallman v. Southern Ry., 169 N.C. 127, 85 S.E. 298 (1915); Creech v. Atlantic C.L.R.R., 174 N.C. 61, 93 S.E. 453 (1917).

Carrier Not Liable for Unforeseen Result of Ejection. - A conductor requiring an intoxicated man to leave the train for nonpayment of fare did not render the carrier liable for the death of the man from exposure, where the conductor did not have reasonable ground to believe that the man was unable to find his way or walk to the nearest house or to the railroad station, or even to his own father's house, which was not far away. Roseman v. Carolina Cent. R.R., 112 N.C. 709, 16 S.E. 766 (1893).

Evidence of Drunkenness Held Inadmissible. - In an action for wrongful ejection from a train, evidence of drunkenness of plaintiff was not admissible where the answer simply denied the wrongful ejection alleged in the complaint. Raynor v. Wilmington Seacoast R.R., 129 N.C. 195, 39 S.E. 821 (1901).

As to requirement of former statute that passenger be ejected near usual stopping place or dwelling house, see Roseman v. Carolina Cent. R.R., 112 N.C. 709, 16 S.E. 766 (1893); Bullock v. Atlantic C.L.R.R., 152 N.C. 66, 67 S.E. 60 (1910); McNairy v. Norfolk & W.R.R., 172 N.C. 505, 90 S.E. 497 (1916).


§ 62-152: Repealed by Session Laws 1998-128, s. 13, effective September 4, 1998.

§ 62-152.1. Uniform rates; joint rate agreements among carriers.

  1. Definitions. - As used in this section, unless the context otherwise requires, the term:
    1. "Carrier" means any common carrier as defined in G.S. 62-3(6).
    2. For purposes of this section, carriers by motor vehicles are carriers of the same class, carriers by pipeline are carriers of the same class, carriers by water are carriers of the same class, carriers by air are carriers of the same class, and freight forwarders are carriers of the same class.
    3. The term "antitrust laws" means the provisions of Chapter 75 of the General Statutes (N.C.G.S. 75-1, et seq.), relating to combinations in restraint of trade.
  2. For the purpose of achieving a stable rate structure it shall be the policy of this State to fix uniform rates for the same or similar services by carriers of the same class. In order to realize and effectuate this policy and regulatory goal any carrier subject to regulation by this Commission and party to an agreement between or among two or more carriers relating to rates, fares, classifications, divisions, allowances or charges (including charges between carriers and compensation paid or received for the use of facilities and equipment), or rules and regulations pertaining thereto, or procedures for the joint consideration, initiation or establishment thereof, may, under such rules and regulations as the Commission may prescribe, apply to the Commission for approval of the agreement, and the Commission shall by order approve any such agreement (if approval thereof is not prohibited by subsection (d) or (e) of this section) if it finds that, by reason of furtherance of the transportation policy and goal declared in this section and in G.S. 62-2 or G.S. 62-259 as may be pertinent, the relief provided in subsection (h) shall apply with respect to the making and carrying out of such agreement; otherwise, the application shall be denied. The approval of the Commission shall be granted only upon such terms and conditions as the Commission may prescribe as necessary to enable it to grant its approval in accordance with the standard above set forth in this subsection.
  3. Each conference, bureau, committee, or other organization established or continued pursuant to any agreement approved by the Commission under this section shall maintain such accounts, records, files and memoranda and shall submit to the Commission such information and reports as may be prescribed by the Commission, and all the accounts, records, files and memoranda shall be subject to inspection by the Commission or its duly authorized representatives.
  4. The Commission shall not approve under this section any agreement between or among carriers of different classes unless it finds that the agreement is of the character described in subsection (b) of this section and is limited to matters relating to transportation under joint rates or over through routes.
  5. The Commission shall not approve under this section any agreement which establishes a procedure for the determination of any matter through joint consideration unless it finds that under the agreement there is accorded to each party the free and unrestrained right to take independent action after any determination arrived at through such procedure.
  6. The Commission is authorized, upon complaint or upon its own initiative without complaint, to investigate and determine whether any agreement previously approved by it under this section, or terms and conditions upon which the approval was granted is not or are not in conformity with the standards set forth in subsection (b) of this section, or whether any such terms and conditions are not necessary for the purposes of conformity with such standards, and, after such investigation, the Commission shall by order terminate or modify its approval of such agreement if it finds such action necessary to insure conformity with such standards, and shall modify the terms and conditions upon which such approval was granted to the extent it finds necessary to insure conformity with such standards or to the extent to which it finds such terms and conditions not necessary to insure such conformity. The effective date of any order terminating or modifying approval, or modifying terms and conditions, shall be postponed for such period as the Commission determines to be reasonably necessary to avoid undue hardships.
  7. No order shall be entered under this section except after interested parties have been afforded reasonable notice and opportunity for hearing.
  8. Parties to any agreement approved by the Commission under this section and other parties are, if the approval of such agreement is not prohibited by subsection (d) or (e) of this section, hereby relieved from the operation of the antitrust laws with respect to the making of such agreement, and with respect to the carrying out of such agreement in conformity with the terms and conditions prescribed by the Commission.
  9. Any action of the Commission under this section in approving an agreement, or in denying an application for such approval, or in terminating or modifying its approval of an agreement, or prescribing the terms and conditions upon which its approval is to be granted, or in modifying such terms and conditions, shall be construed as having effect solely with reference to the applicability of the relief provisions of subsection (h) of this section.

History

(1977, c. 219, s. 1; 1998-128, s. 7.)

Legal Periodicals. - For survey of 1977 law on common carriers, see 56 N.C.L. Rev. 853 (1978).

§ 62-152.2. Standard transportation practices.

  1. For the purposes of this section, "standard transportation practices" means:
    1. Uniform cargo liability rules.
    2. Uniform bills of lading or receipts for property being transported.
    3. Uniform cargo credit rules.
    4. Antitrust immunity for joint line rates or routes, classification, and mileage guides.
  2. A person otherwise exempt from regulation by the Commission under Public Law 103-305 may file an application with the Commission to participate in one or more standard transportation practices under rules set out by the Commission.

History

(1995, c. 523, s. 10.1.)

§ 62-153. Contracts of public utilities with certain companies and for services.

  1. All public utilities shall file with the Commission copies of contracts with any affiliated or subsidiary holding, managing, operating, constructing, engineering, financing or purchasing company or agency, and when requested by the Commission, copies of contracts with any person selling service of any kind. The Commission may disapprove, after hearing, any such contract if it is found to be unjust or unreasonable, and made for the purpose or with the effect of concealing, transferring or dissipating the earnings of the public utility. Such contracts so disapproved by the Commission shall be void and shall not be carried out by the public utility which is a party thereto, nor shall any payments be made thereunder. Provided, however, that in the case of motor carriers of passengers this subsection shall apply only to such contracts as the Commission shall request such carriers to file.
  2. No public utility shall pay any fees, commissions or compensation of any description whatsoever to any affiliated or subsidiary holding, managing, operating, constructing, engineering, financing or purchasing company or agency for services rendered or to be rendered without first filing copies of all proposed agreements and contracts with the Commission and obtaining its approval. Provided, however, that this subsection shall not apply to (i) motor carriers of passengers or (ii) power purchase agreements entered into pursuant to the competitive renewable energy procurement process established pursuant to G.S. 62-110.8.

History

(1931, c. 455; 1933, c. 134, s. 8; c. 307, s. 17; 1941, c. 97; 1963, c. 1165, s. 1; 2017-192, s. 2(b).)

Editor's Note. - Session Laws 2017-192, s. 14(a), contains a severability clause.

Effect of Amendments. - Session Laws 2017-192, s. 2(b), effective July 27, 2017, substituted "shall not apply to (i) motor carriers of passengers or (ii) power purchase agreements entered into pursuant to the competitive renewable energy procurement process established pursuant to G.S. 62-110.8." for "shall not apply to motor carriers of passengers." in the last sentence of subsection (b).

Legal Periodicals. - For survey of 1981 administrative law, see 60 N.C.L. Rev. 1165 (1982).

CASE NOTES

Purpose. - The purpose of this section is merely to assure that executory contracts between affiliates be just and reasonable on their face. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

This section was clearly enacted for the purpose of discovering contracts between affiliated corporations which are "unjust or unreasonable, and made for the purpose or with the effect of concealing, transferring or dissipating the earnings of the public utility." State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Affiliate Company Cannot Be Used to Transmit Unreasonable Profits to Parent Holding Company. - The Commission cannot permit parent holding companies to use affiliate companies as a device for transmitting an unreasonable level of profits to such parent holding company from goods or services supplied the operating company by way of an affiliate company. State ex rel. Utils. Comm'n v. Morgan, 7 N.C. App. 576, 173 S.E.2d 479, rev'd on other grounds, 277 N.C. 255, 177 S.E.2d 405 (1970), reaffirmed, 278 N.C. 235, 179 S.E.2d 419 (1971).

The statutory scheme is directed at prior approval. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Standard for Approval. - The consideration of the Commission under this section is directed to whether the contracts are just and reasonable. If they are, and are not efforts to divert or conceal profits, they are to be approved. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Basis for Determining Reasonableness of Affiliate's Charges. - The Utilities Commission must determine the reasonableness of charges to a public utility by an affiliated corporation on the basis of either: (1) the cost of the same services on the open market; (2) the cost similar utilities pay to their service companies; or (3) the reasonableness of the expenses incurred by the affiliated corporation in generating its services. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Consideration for Rate Making Purposes of Expenses Pursuant to Unfiled Contracts. - This section does not prohibit the Utilities Commission from considering fees or charges owed to affiliated corporations under unfiled contracts as expenses of the public utility for purposes of rate making, so long as the Commission determines in the rate making procedure that the agreements between the utility and the affiliated corporations are just and reasonable and it does not appear that their purpose is to conceal or divert profits from the public utility to an affiliate. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Expenses incurred under unreasonable contracts would have to be disregarded in computing a utility's expenses. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Examination of Books and Records of Affiliated Companies. - An examination by the Utilities Commission of the books and records of companies affiliated with a regulated utility is necessary in a rate case only if there is no evidence of what the utility would have had to pay nonaffiliated companies for the same services or of what similar utilities pay their service companies for similar services. State ex rel. Utils. Comm'n v. Intervenor Residents, 52 N.C. App. 222, 278 S.E.2d 761 (1981), rev'd on other grounds, 305 N.C. 62, 286 S.E.2d 770 (1982).

Cited in State ex rel. Utils. Comm'n v. General Tel. Co., 281 N.C. 318, 189 S.E.2d 705 (1972).


§ 62-154. Surplus power rates.

The Commission is authorized to investigate the sale of surplus electric power and the rates made for such energy, and to prescribe reasonable rules and rates for such sales.

History

(1963, c. 1165, s. 1.)

§ 62-155. Electric power rates to promote conservation.

  1. It is the policy of the State to conserve energy through efficient utilization of all resources.
  2. If the Utilities Commission after study determines that conservation of electricity and economy of operation for the public utility will be furthered thereby, it shall direct each electric public utility to notify its customers by the most economical means available of the anticipated periods in the near future when its generating capacity is likely to be near peak demand and urge its customers to refrain from using electricity at these peak times of the day. In addition, each public utility shall, insofar as practicable, investigate, develop, and put into service, with approval of the Commission, procedures and devices that will temporarily curtail or cut off certain types of appliances or equipment for short periods of time whenever an unusual peak demand threatens to overload its system.
  3. The Commission itself shall inform the general public as to the necessity for controlling demands for electricity at peak periods and shall require the several electric public utilities to carry out its program of information and education in any reasonable manner.
  4. The Commission shall study the feasibility of and, if found to be practicable, just and reasonable, make plans for the public utilities to bill customers by a system of nondiscriminatory peak pricing, with incentive rates for off-peak use of electricity charging more for peak periods than for off-peak periods to reflect the higher cost of providing electric service during periods of peak demand on the utility system. No order regarding such rates shall be issued by the Commission without a prior public hearing, whether in a single electric utility company rate case or in general orders relating to two or more or all electric utilities.
  5. No Class A electric public utility shall apply for any rate change unless it files at the time of the application a report of the probable effect of the proposed rates on peak demand on it and its estimate of the kilowatt hours of electricity that will be used by its customers during the ensuing one year and five years from the time such rates are proposed to become effective.
  6. Each electric public utility serving more than 150,000 North Carolina retail jurisdictional customers as of January 1, 2017, shall file with the Commission an application requesting approval of a program offering reasonable incentives to residential and nonresidential customers for the installation of small customer owned or leased solar energy facilities participating in a public utility's net metering tariff, where the incentive shall be limited to 10 kilowatts alternating current (kW AC) for residential solar installations and 100 kilowatts alternating current (kW AC) for nonresidential solar installations. Each public utility required to offer the incentive program pursuant to this subsection shall be authorized to recover all reasonable and prudent costs of incentives provided to customers and program administrative costs by amortizing the total program incentives distributed during a calendar year and administrative costs over a 20-year period, including a return component adjusted for income taxes at the utility's overall weighted average cost of capital established in its most recent general rate case, which shall be included in the costs recoverable by the public utility pursuant to G.S. 62-133.8(h). Nothing in this section shall prevent the reasonable and prudent costs of a utility's programs to incentivize customer investment in or leasing of solar energy facilities, including an approved incentive, from being reflected in a utility's rates to be recovered through the annual rider established pursuant to G.S. 62-133.8(h). The program incentive established by each public utility subject to this section shall meet all of the following requirements:
    1. Shall be limited to 10,000 kilowatts (kW) of installed capacity annually starting in January 1, 2018, and continuing until December 31, 2022, and shall provide incentives to participating customers based upon the installed alternating current nameplate capacity of the generators.
    2. Nonresidential installations will also be limited to 5,000 kilowatts (kW) in aggregate for each of the years of the program.
    3. Two thousand five hundred kilowatts (kW) of the capacity for nonresidential installations shall be set aside for use by nonprofit organizations; 50 kilowatts (kW) of the set aside shall be allocated to the NC Greenpower Solar Schools Pilot or a similar program. Any set-aside rebates that are not used by December 31, 2022, shall be reallocated for use by any customer who otherwise qualifies. For purposes of this section, "nonprofit organization" means an organization or association recognized by the Department of Revenue as tax exempt pursuant to G.S. 105-130.11(a), or any bona fide branch, chapter, or affiliate of that organization.
    4. If in any year a portion of the incentives goes unsubscribed, the utility may roll excess incentives over into a subsequent year's allocation.

History

(1975, c. 780, s. 2; 2017-192, s. 8(a).)

Editor's Note. - Session Laws 2017-192, s. 8(c) made subsection (f) of this section effective July 27, 2017, and further provides: "The application required to be filed with the Utilities Commission pursuant to G.S. 62 155(f), as enacted by subsection (a) of this section, shall be filed by the electric public utility no later than 180 days after the effective date of this section."

Session Laws 2017-192, s. 14(a), contains a severability clause.

Effect of Amendments. - Session Laws 2017-192, s. 8(a), added subsection (f). For effective date and applicability, see editor's note.

Legal Periodicals. - For article, "Solar Energy for the People of North Carolina: Net Metering After the competitive Energy Solutions Act of 2017,” see 12 Elon L. Rev. 175 (2020).

§ 62-156. Power sales by small power producers to public utilities.

  1. In the event that a small power producer and an electric public utility are unable to mutually agree to a contract for the sale of electricity or to a price for the electricity purchased by the electric public utility, the Commission shall require the electric public utility to purchase the power, under rates and terms established as provided in subsection (b) or (c) of this section.
  2. At least every two years, the Commission shall determine the standard contract avoided cost rates to be included within the tariffs of each electric public utility and paid by electric public utilities for power purchased from small power producers, according to the following standards:
    1. Standard Contract for Small Power Producers up to 1,000 kilowatts (kW). - The Commission shall approve a standard offer power purchase agreement to be used by the electric public utility in purchasing energy and capacity from small power producers subject to this subsection. Long-term contracts up to 10 years for the purchase of electricity by the electric public utility from small power producers with a design capacity up to and including 1,000 kilowatts (kW) shall be encouraged in order to enhance the economic feasibility of these small power production facilities; provided, however, that when an electric public utility, pursuant to this subsection, has entered into power purchase agreements with small power producers from facilities (i) in the aggregate capacity of 100 megawatts (MW) or more and (ii) which established a legally enforceable obligation after November 15, 2016, the eligibility threshold for that utility's standard offer shall be reduced to 100 kilowatts (kW).
    2. Avoided Cost of Energy to the Utility. - The rates paid by an electric public utility to a small power producer for energy shall not exceed, over the term of the purchase power contract, the incremental cost to the electric public utility of the electric energy which, but for the purchase from a small power producer, the utility would generate or purchase from another source. A determination of the avoided energy costs to the utility shall include a consideration of the following factors over the term of the power contracts: the expected costs of the additional or existing generating capacity which could be displaced, the expected cost of fuel and other operating expenses of electric energy production which a utility would otherwise incur in generating or purchasing power from another source, and the expected security of the supply of fuel for the utilities' alternative power sources.
    3. Availability and Reliability of Power. - The rates to be paid by electric public utilities for capacity purchased from a small power producer shall be established with consideration of the reliability and availability of the power. A future capacity need shall only be avoided in a year where the utility's most recent biennial integrated resource plan filed with the Commission pursuant to G.S. 62-110.1(c) has identified a projected capacity need to serve system load and the identified need can be met by the type of small power producer resource based upon its availability and reliability of power, other than for (i) swine or poultry waste for which a need is established consistent with G.S. 62-133.8(e) and (f) and (ii) hydropower small power producers with power purchase agreements with an electric public utility in effect as of July 27, 2017, and the renewal of such a power purchase agreement, if the hydroelectric small power producer's facility total capacity is equal to or less than five megawatts (MW).
  3. Rates to be paid by electric public utilities to small power producers not eligible for the utility's standard contract pursuant to subsection (b) of this section shall be established through good-faith negotiations between the utility and small power producer, subject to the Commission's oversight as required by law. In establishing rates for purchases from such small power producers, the utility shall design rates consistent with the most recent Commission-approved avoided cost methodology for a fixed five-year term. Rates for such purchases shall take into account factors related to the individual characteristics of the small power producer, as well as the factors identified in subdivisions (2) and (3) of subsection (b) of this section. Notwithstanding this subsection, small power producers that produce electric energy primarily by the use of any of the following renewable energy resources may negotiate for a fixed-term contract that exceeds five years: (i) swine or poultry waste; (ii) hydropower, if the hydroelectric power facility total capacity is equal to or less than five megawatts (MW); or (iii) landfill gas, manure digester gas, agricultural waste digester gas, sewage digester gas, or sewer sludge digester gas.
  4. Notwithstanding any other provision of this section, an electric public utility shall not be required to enter into a contract with or purchase power from a small power producer if the electric public utility's obligation to purchase from such small power producers has been terminated pursuant to 18 C.F.R. § 292.309.

History

(1979, 2nd Sess., c. 1219, s. 2; 2017-192, s. 1(b); 2019-132, s. 3(a).)

Editor's Note. - Session Laws 2017-192, s. 1(c), provides: "A small power production facility which would otherwise be eligible for the standard offer rate schedules and power purchase agreement terms and conditions approved by the Commission in Docket No. E-100, Sub 140, but which fails to commence delivering power to the utility on or before September 10, 2018, shall, notwithstanding such failure, remain eligible for such rate schedules and terms and conditions, unless the nameplate capacity of the generation facility when taken together with the nameplate capacity of other generation facilities connected to the same substation transformer exceeds the nameplate capacity of the substation transformer. The term of a power purchase agreement eligible for such rate schedules and terms and conditions pursuant to this section shall commence on September 10, 2018, and shall end on the date that is 15 years after the commencement date. An electric public utility shall have the option in its discretion of electing not to interconnect to its distribution system a solar photovoltaic facility with a nameplate capacity of 10 megawatts (MW) or greater that had not executed an interconnection agreement prior to July 1, 2017, and instead requiring such facility to interconnect to the utility's transmission system."

Session Laws 2017-192, s. 1(d), provides: "This section is effective when it becomes law [July 27, 2017]. Subsection (b) of this section applies to any standard contract rates and terms approved by the Commission or nonstandard negotiated agreements entered into between a small power producer and the electric public utility on or after that date. Subsection (c) of this section applies to small power production facilities that established a legally enforceable obligation in accordance with the Commission's then applicable requirements on or before November 15, 2016."

Session Laws 2017-192, s. 14(a), contains a severability clause.

Session Laws 2019-132, s. 3(b), provides: "The exception for hydropower small power producers from limitations on capacity payments established in G.S. 62-156(b)(3), as amended by Section 3(a) of this act, shall not be construed in any manner to affect the applicability of G.S. 62-156(b)(3) as it relates to any other small power producer."

Effect of Amendments. - Session Laws 2017-192, s. 1(b), rewrote the section. For effective date and applicability, see editor's note.

Session Laws 2019-132, s. 3(a), effective July 19, 2019, inserted "for (i)" and added "and (ii) hydropower small power producers with power purchase agreements with an electric public utility in effect as of July 27, 2017, and the renewal of such a power purchase agreement, if the hydroelectric small power producer's facility total capacity is equal to or less than five megawatts (MW)" in subdivision (b)(3).

§ 62-157. Telecommunications relay service.

  1. Finding. - The General Assembly finds and declares that it is in the public interest to provide access to public telecommunications services for hearing impaired or speech impaired persons, including those who also have vision impairment, and that a statewide telecommunications relay service for telephone service should be established.
  2. Definitions. - For purposes of this section:
    1. "CMRS" is as defined in G.S. 143B-1400.
    2. "CMRS connection" is as defined in G.S. 143B-1400.
    3. "CMRS provider" is as defined in G.S. 143B-1400.
    4. "Exchange access facility" means a connection from a particular telephone subscriber's premises to the telephone system of a service provider, and includes company-provided local access lines, private branch exchange trunks, and centrex network access registers.
    5. "Local service provider" means a local exchange company, competing local provider, or telephone membership corporation.
  3. Authority to Require Surcharge. - The Commission shall require local service providers to impose a monthly surcharge on all residential and business local exchange access facilities to fund a statewide telecommunications relay service by which hearing impaired or speech impaired persons, including those who also have vision impairment, may communicate with others by telephone. This surcharge, however, may not be imposed on participants in the Subscriber Line Charge Waiver Program or the Link-up Carolina Program established by the Commission. This surcharge, and long distance revenues collected under subsection (f) of this section, are not includable in gross receipts subject to the franchise tax levied under G.S. 105-120 or the sales tax levied under G.S. 105-164.4.
  4. Specification of Surcharge. - The Department of Health and Human Services shall initiate a telecommunications relay service by filing a petition with the Commission requesting the service and detailing initial projected required funding. The Commission shall, after giving notice and an opportunity to be heard to other interested parties, set the initial monthly surcharge based upon the amount of funding necessary to implement and operate the service, including a reasonable margin for a reserve. The surcharge shall be identified on customer bills as a special surcharge for provision of a telecommunications relay service for hearing impaired and speech impaired persons. The Commission may, upon petition of any interested party, and after giving notice and an opportunity to be heard to other interested parties, revise the surcharge from time to time if the funding requirements change. In no event shall the surcharge exceed twenty-five cents (25›) per month for each exchange access facility.
  5. Funds to Be Deposited in Special Account. - The local service providers shall collect the surcharge from their customers and deposit the moneys collected with the State Treasurer, who shall maintain the funds in an interest-bearing, nonreverting account. After consulting with the State Treasurer, the Commission shall direct how and when the local service providers shall deposit these moneys. Revenues from this fund shall be available only to the Department of Health and Human Services to administer the statewide telecommunications relay service program, including its establishment, operation, and promotion. The Commission may allow the Department of Health and Human Services to use, over a rolling 12-month period, up to four cents (4›) per exchange access facility of the surcharge for the purpose of providing telecommunications devices for hearing impaired or speech impaired persons, including those who also have vision impairment, through a distribution program. The Commission shall prepare such guidelines for the distribution program as it deems appropriate and in the public interest. Both the Commission and the Public Staff may audit all aspects of the telecommunications relay service program, including the distribution programs, as they do with any public utility subject to the provisions of this Chapter. Equipment paid for with surcharge revenues, as allowed by the Commission, may be distributed only by the Department of Health and Human Services.
  6. The Department of Health and Human Services shall utilize revenues from the wireless surcharge collected under subsection (i) of this section to support the Division of Services for the Deaf and the Hard of Hearing, in accordance with G.S. 143B-216.33, G.S. 143B-216.34, and Chapter 8B of the General Statutes.
  7. Administration of Service. - The Department of Health and Human Services shall administer the statewide telecommunications relay service program, including its establishment, operation, and promotion. The Department may contract out the provision of this service for four-year periods to one or more service providers, using the provisions of G.S. 143-129. The Department shall administer all programs and services, including the Regional Resource Centers within the Division of Services for the Deaf and the Hard of Hearing in accordance with G.S. 143B-216.33, G.S. 143B-216.34, and Chapter 8B of the General Statutes.
  8. Charge to Users. - The users of the telecommunications relay service shall be charged their approved long distance and local rates for telephone services (including the surcharge required by this section), but no additional charges may be imposed for the use of the relay service. The local service providers shall collect revenues from the users of the relay service for long distance services provided through the relay service. These revenues shall be deposited in the special fund established in subsection (d) of this section in a manner determined by the Commission after consulting with the State Treasurer. Local service providers shall be compensated for collection, inquiry, and other administrative services provided by said companies, subject to the approval of the Commission.
  9. Reporting Requirement. - The Commission shall, after consulting with the Department of Health and Human Services, develop a format and filing schedule for a comprehensive financial and operational report on the telecommunications relay service program. The Department of Health and Human Services shall thereafter prepare and file these reports as required by the Commission with the Commission and the Public Staff. The Department shall also be required to report to the Revenue Laws Study Committee.
  10. Power to Regulate. - The Commission shall have the same power to regulate the operation of the telecommunications relay service program as it has to regulate any public utility subject to the provisions of this Chapter.
  11. Wireless Surcharge. - A CMRS provider, as part of its monthly billing process, must collect the same surcharge imposed on each exchange access facility under this section for each CMRS connection. A CMRS provider may deduct a one percent (1%) administrative fee from the total amount of surcharge collected. A CMRS provider shall remit the surcharge collected, less the administrative fee, to the 911 Board in the same manner and with the same frequency as the local service providers remit the surcharge to the State Treasurer. The 911 Board shall remit the funds collected from the surcharge to the special account created under subsection (d) of this section.

History

(1989, c. 599; 1997-443, s. 11A.118(a); 1999-402, s. 1; 2003-341, s. 1; 2007-383, s. 4; 2009-451, s. 10.56(c), (d); 2012-142, s. 10.24(a), (b); 2015-241, s. 7A.3; 2016-94, s. 12J.2.)

Editor's Note. - G.S. 105-120 referred to in subsection (b) was repealed by Session Laws 2001-430, s. 12.

Effect of Amendments. - Session Laws 2007-383, s. 4, effective January 1, 2008, substituted "G.S. 62A-40" for "G.S. 62A-21" in subdivisions (a1)(1) through (a1)(3); and deleted "Wireless" preceding "911 Board" twice in subsection (i).

Session Laws 2009-451, s. 10.56(c) and (d), effective July 1, 2009, added subsection (d1), and added the last sentence of subsection (e).

Session Laws 2012-142, s. 10.24(a), (b), effective July 1, 2012, in subsection (d1), substituted "support" for "fund the Regional Resource Centers within"; and in the third sentence of subsection (e), inserted "all programs and services, including."

Session Laws 2015-241, s. 7A.3, effective September 18, 2015, substituted "G.S. 143B-1400" for "G.S. 62A-40" once in (a1)(1), (2) and (3).

Session Laws 2016-94, s. 12J.2, effective July 1, 2016, rewrote subdivision (a1)(4), which read " 'Exchange access facility' means a connection from a particular telephone subscriber's premises to the telephone system of a service provider, and includes company-provided local access lines, private branch exchange trunks, and centrex network access registers"; and in subsection (d), inserted "over a rolling 12-month period" and substituted "per exchange access facility" for "per access line per month" in the fourth sentence.

§ 62-158. Natural gas expansion.

  1. In order to facilitate the construction of facilities in and the extension of natural gas service to unserved areas, the Commission may, after a hearing, order a natural gas local distribution company to create a special natural gas expansion fund to be used by that company to construct natural gas facilities in areas within the company's franchised territory that otherwise would not be feasible for the company to construct. The fund shall be supervised and administered by the Commission. Any applicable taxes shall be paid out of the fund.
  2. Sources of funding for a natural gas local distribution company's expansion fund may, pursuant to the order of the Commission, after hearing, include:
    1. Refunds to a local distribution company from the company's suppliers of natural gas and transportation services pursuant to refund orders or requirements of the Federal Energy Regulatory Commission;
    2. Expansion surcharges by the local distribution company charged to customers purchasing natural gas or transportation services throughout that company's franchised territory; provided, however, in determining the amount of any surcharge the Commission shall take into account the prices of alternative sources of energy and the need to remain competitive with those alternative sources, and the need to maintain just and reasonable rates for natural gas and transportation services for all customers served by the company; provided further that the expansion surcharge shall not be greater than fifteen cents (15›) per dekatherm; and
    3. Other sources of funding approved by the Commission.
  3. The application of all such funds to expansion projects shall be pursuant to the order of the Commission. The Commission shall ensure that all projects to which expansion funds are applied are consistent with the intent of this section and G.S. 62-2(9). In determining economic feasibility, the Commission shall employ the net present value method of analysis on a project specific basis. Only those projects with a negative net present value shall be determined to be economically infeasible for the company to construct. In no event shall the Commission authorize a distribution from the fund of an amount greater than the negative net present value of any proposed project as determined by the Commission. If at any time a project is determined by the Commission to have become economically feasible, the Commission may require the company to remit to the expansion fund or to customers appropriate portions of the distributions from the fund related to the project, and the Commission may order such funds to be returned with interest in a reasonable amount to be determined by the Commission. Utility plant acquired with expansion funds shall be included in the local distribution company's rate base at zero cost except to the extent such funds have been remitted by the company pursuant to order of the Commission.
  4. The Commission, after hearing, may adopt rules to implement this section, including rules for the establishment of expansion funds, for the use of such funds, for the remittance to the expansion fund or to customers of supplier and transporter refunds and expansion surcharges or other funds that were sources of the expansion fund, and for appropriate accounting, reporting and ratemaking treatment.

History

(1991, c. 598, s. 2; 2011-291, s. 2.15; 2014-120, s. 10(b).)

Effect of Amendments. - Session Laws 2011-291, s. 2.15, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in the last sentence of subsection (d).

Session Laws 2014-120, s. 10(b), effective September 18, 2014, deleted the last sentence in subsection (d), which read: "The Commission and Public Staff shall report to the Joint Legislative Commission on Governmental Operations on the operation of any expansion funds in conjunction with the reports required under G.S. 62-36A."

CASE NOTES

The purpose of this section is to facilitate the construction of facilities and the extension of natural gas service into areas of the State where it may not be economically feasible to expand with traditional funding methods in order to provide infrastructure to aid industrial recruitment and economic development. State ex rel. Utils. Comm'n v. Piedmont Natural Gas Co., 346 N.C. 558, 488 S.E.2d 591 (1997).

Expansion fund legislation is a proper delegation of legislative authority to an administrative agency and is not unconstitutional. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Commission Authority. - As an administrative agency created by the legislature, the Commission has not been given jurisdiction to determine the constitutionality of legislative enactments, specifically G.S. 62-2(9) or this section. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

The Commission did not act under a misapprehension of applicable law when it granted the petition and established the expansion fund pursuant to a proper interpretation of its authority and discretion to do so. State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 336 N.C. 657, 446 S.E.2d 332 (1994).

Expansion Funds Not Used Where Alternative Financing Feasible. - Utilities Commission concluded that it would be inappropriate and inconsistent with the legislative intent expressed in this section to allow expansion funds to be used where alternative financing was feasible. State ex rel. Utils. Comm'n v. Piedmont Natural Gas Co., 346 N.C. 558, 488 S.E.2d 591 (1997).

Utilities commission's ruling that creation of natural gas expansion fund was not in the public interest was not arbitrary and capricious, where the court found that (1) the areas to be served by the expansion were small and were within a county that had significant natural gas infrastructure; (2) there were alternate means of mitigating the costs of extending service to unserved areas; and (3) a refund of the $2 million the utility held in escrow would be better used to mitigate high customer bills. State ex rel. Utils. Comm'n v. NUI Corp., 154 N.C. App. 258, 572 S.E.2d 176 (2002).

Cited in State ex rel. Utils. Comm'n v. Carolina Util. Customers Ass'n, 337 N.C. 236, 446 S.E.2d 348 (1994); State ex rel. Utils. Comm'n v. North Carolina Gas Serv., 128 N.C. App. 288, 494 S.E.2d 621 (1998).


§ 62-159. Additional funding for natural gas expansion.

  1. In order to facilitate the construction of facilities in and the extension of natural gas service to unserved areas, the Commission may provide funding through appropriations from the General Assembly or the proceeds of general obligation bonds as provided in this section to either (i) an existing natural gas local distribution company; (ii) a person awarded a new franchise; or (iii) a gas district for the construction of natural gas facilities that it otherwise would not be economically feasible for the company, person, or gas district to construct.
  2. The use of funds provided under this section shall be pursuant to an order of the Commission after a public hearing. The Commission shall ensure that all projects for which funds are provided under this section are consistent with the intent of this section and G.S. 62-2(9). In determining whether to approve the use of funds for a particular project pursuant to this section, the Commission shall consider the scope of a proposed project, including the number of unserved counties and the number of anticipated customers that would be served, the total cost of the project, the extent to which the project is considered feasible, and other relevant factors affecting the public interest. In determining economic feasibility, the Commission shall employ the net present value method of analysis on a project specific basis. Only those projects with a negative net present value shall be determined to be economically infeasible for the company, person, or gas district to construct. In no event shall the Commission provide funding under this section of an amount greater than the negative net present value of any proposed project as determined by the Commission. If at any time a project is determined by the Commission to have become economically feasible, the Commission shall require the recipient of funding to remit to the Commission appropriate funds related to the project, and the Commission may order those funds to be returned with interest in a reasonable amount to be determined by the Commission. Funds returned, together with interest, shall be deposited with the State Treasurer to be used for other expansion projects pursuant to the provisions of this section. Utility plant acquired with expansion funds shall be included in the local distribution company's rate base at zero cost except to the extent such funds have been remitted by the company pursuant to order of the Commission. In the event a gas district wishes to sell or otherwise dispose of facilities financed with funds received under this section, it must first notify the Commission which shall determine the method of repayment or accounting for those funds.
  3. To the extent that one or more of the counties included in a proposed project to be funded pursuant to this section are counties affected by the loss of exclusive franchise rights provided for in G.S. 62-36A(b), the Commission may conclude that the public interest requires that the person obtaining the franchise or funding pursuant to this section be given an exclusive franchise and that the existing franchise be canceled. Any new exclusive franchise granted under this subsection shall be subject to the provisions of G.S. 62-36A(b). This subsection does not apply to gas districts formed under Article 28 of Chapter 160A of the General Statutes.
  4. The Commission, after hearing, shall adopt rules to implement this section as soon as practicable.

History

(1998-132, s. 17; 1999-456, s. 17; 2011-291, s. 2.16; 2014-120, s. 10(c).)

Editor's Note. - Section 62-36A, referred to in subsection (c), was repealed by Session Laws 2014-120, s. 10(a), effective September 18, 2014.

Session Laws 1998-132, s. 16 provides that the extension of natural gas facilities to unserved parts of the state is necessary and to be encouraged, that the construction of facilities may not be feasible with traditional funding methods, and that it is necessary to authorize additional funding methods to facilitate the expansion of natural gas service.

Session Laws 1998-132, s. 1 provides that this act shall be known as the Clean Water and Natural Gas Critical Needs Bond Act of 1998.

Effect of Amendments. - Session Laws 2011-291, s. 2.16, effective June 24, 2011, substituted "Joint Legislative Commission on Governmental Operations" for "Joint Legislative Utility Review Committee" in subsection (d).

Session Laws 2014-120, s. 10(c), effective September 18, 2014, deleted the last sentence in subsection (d), which read: "The Commission and Public Staff shall report to the Joint Legislative Commission on Governmental Operations on the use of funding provided under this section in conjunction with the reports required under G.S. 62-36A."

§ 62-159.1. Debt collection practices.

  1. A public utility, electric membership corporation, and telephone membership corporation shall not do any of the following in its debt collection practices:
    1. Suspend or disconnect service to a customer because of a past-due and unpaid balance for service incurred by another person who resides with the customer after service has been provided to the customer's household, unless one or more of the following apply:
      1. The customer and the person were members of the same household at a different location when the unpaid balance for service was incurred.
      2. The person was a member of the customer's current household when the service was established, and the person had an unpaid balance for service at that time.
      3. The person is or becomes responsible for the bill for the service to the customer.
    2. Require that in order to continue service, a customer must agree to be liable for the delinquent account of any other person who will reside in the customer's household after the customer receives the service, unless one or more of the following apply:
      1. The customer and the person were members of the same household at a different location when the unpaid balance for service was incurred.
      2. The person was a member of the customer's current household when the service was established, and the person had an unpaid balance for service at that time.
  2. Notwithstanding the provisions of subsection (a) of this section, if a customer misrepresents his or her identity in a written or verbal agreement for service or receives service using another person's identity, the public utility, electric membership corporation, and telephone membership corporation shall have the power to collect a delinquent account using any remedy provided by law for collecting and enforcing private debts from that customer.

History

(2009-302, s. 1.)

Cross References. - Deceptive representation, see G.S. 58-70-110 and 75-54.

§ 62-159.2. Direct renewable energy procurement for major military installations, public universities, and large customers.

  1. Each electric public utility providing retail electric service to more than 150,000 North Carolina retail jurisdictional customers as of January 1, 2017, shall file with the Commission an application requesting approval of a new program applicable to major military installations, as that term is defined in G.S. 143-215.115(1), The University of North Carolina, as established in Article 1 of Chapter 116 of the General Statutes, and other new and existing nonresidential customers with either a contract demand (i) equal to or greater than one megawatt (MW) or (ii) at multiple service locations that, in aggregate, is equal to or greater than five megawatts (MW).
  2. Each public utility's program application required by this section shall provide standard contract terms and conditions for participating customers and for renewable energy suppliers from which the electric public utility procures energy and capacity on behalf of the participating customer. The application shall allow eligible customers to select the new renewable energy facility from which the electric public utility shall procure energy and capacity. The standard terms and conditions available to renewable energy suppliers shall provide a range of terms, between two years and 20 years, from which the participating customer may elect. Eligible customers shall be allowed to negotiate with renewable energy suppliers regarding price terms.
  3. Each contracted amount of capacity shall be limited to no more than one hundred twenty-five percent (125%) of the maximum annual peak demand of the eligible customer premises. Each public utility shall establish reasonable credit requirements for financial assurance for eligible customers that are consistent with the Uniform Commercial Code of North Carolina. Major military installations and The University of North Carolina are exempt from the financial assurance requirements of this section.
  4. The program shall be offered by the electric public utilities subject to this section for a period of five years or until December 31, 2022, whichever is later, and shall not exceed a combined 600 megawatts (MW) of total capacity. For the public utilities subject to this section, where a major military installation is located within its Commission-assigned service territory, at least 100 megawatts (MW) of new renewable energy facility capacity offered under the program shall be reserved for participation by major military installations. At least 250 megawatts (MW) of new renewable energy facility capacity offered under the programs shall also be reserved for participation by The University of North Carolina. Major military installations and The University of North Carolina must fully subscribe to all their allocations prior to December 31, 2020, or a period of no more than three years after approval of the program, whichever is later. If any portion of total capacity set aside to major military installations or The University of North Carolina is not used, it shall be reallocated for use by any eligible program participant. If any portion of the 600 megawatts (MW) of renewable energy capacity provided for in this section is not awarded prior to the expiration of the program, it shall be reallocated to and included in a competitive procurement in accordance with G.S. 62-110.8(a).
  5. In addition to the participating customer's normal retail bill, the total cost of any renewable energy and capacity procured by or provided by the electric public utility for the benefit of the program customer shall be paid by that customer. The electric public utility shall pay the owner of the renewable energy facility which provided the electricity. The program customer shall receive a bill credit for the energy as determined by the Commission; provided, however, that the bill credit shall not exceed utility's avoided cost. The Commission shall ensure that all other customers are held neutral, neither advantaged nor disadvantaged, from the impact of the renewable electricity procured on behalf of the program customer.

History

(2017-192, s. 3(a).)

Editor's Note. - Session Laws 2017-192, s. 3(b) made this section effective July 27, 2017, and further provides: "The application required to be filed with the Utilities Commission pursuant to G.S. 62-159.2, as enacted by subsection (a) of this section, shall be filed by the electric public utility no later than 180 days after the effective date of this section."

Session Laws 2017-192, s. 14(a), contains a severability clause.

§§ 62-159.3 through 62-159.5: Reserved for future codification purposes.

ARTICLE 8. Securities Regulation.

Sec.

§ 62-160. Permission to pledge assets.

No public utility shall pledge its faith, credit, moneys or property for the benefit of any holder of its preferred or common stocks or bonds, nor for any other business interest with which it may be affiliated through agents or holding companies or otherwise by the authority of the action of its stockholders, directors, or contract or other agents, the compliance or result of which would in any manner deplete, reduce, conceal, abstract or dissipate the earnings or assets thereof, decrease or increase its liabilities or assets, without first making application to the Commission and by order obtain its permission so to do.

History

(1933, c. 307, s. 17; 1963, c. 1165, s. 1.)

CASE NOTES

The General Assembly intended this Article to apply to all public utilities doing business in this State, whether they be foreign or domestic corporations, and even though they are also engaged in interstate commerce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 288 N.C. 201, 217 S.E.2d 543 (1975).

The Commission may not lawfully require a multistate foreign corporation engaged in interstate commerce to comply with this Article and issue securities in the future only after first making application to and obtaining an order from the Commission authorizing such issue. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).

The regulation and control by this State over the issuance of securities by a multistate foreign corporation engaged in interstate commerce, which the attempted enforcement by the Commission of this Article was held necessarily to entail, is to impose such an undue burden on interstate commerce as to make such regulation and control constitutionally beyond the State's power to enforce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).


§ 62-161. Assumption of certain liabilities and obligations to be approved by Commission; refinancing of public utility securities.

  1. No public utility shall issue any securities, or assume any liability or obligation as lessor, lessee, guarantor, indorser, surety, or otherwise, in respect to the securities of any other person unless and until, and then only to the extent that, upon application by such utility, and after investigation by the Commission of the purposes and uses of the proposed issue, and the proceeds thereof, or of the proposed assumption of obligation or liability in respect of the securities of any other person, the Commission by order authorizes such issue or assumption.
  2. The Commission shall make such order only if it finds that such issue or assumption is (i) for some lawful object within the corporate purposes of the public utility, (ii) is compatible with the public interest, (iii) is necessary or appropriate for or consistent with the proper performance by such utility of its service to the public and will not impair its ability to perform that service, and (iv) is reasonably necessary and appropriate for such purpose.
  3. Any such order of the Commission shall specify the purposes for which any such securities or the proceeds thereof may be used by the public utility making such application.
  4. If a public utility shall apply to the Commission for the refinancing of its outstanding shares of stock by exchanging or redeeming such outstanding shares, the exchange or redemption of such shares of any dividend rate or rates, class or classes, may be made in whole or in part, in the manner and to the extent approved by the Commission, notwithstanding any provisions of law applicable to corporations in general: Provided, that the proposed transactions are found by the Commission to be in the public interest and in the interest of consumers and investors, and provided that any redemption shall be at a price or prices, not less than par, and at a time or times, stated or provided for in the utility's charter or stock certificates.

History

(1933, c. 307, s. 18; 1945, c. 656; 1963, c. 1165, s. 1.)

CASE NOTES

The General Assembly intended this Article to apply to all public utilities doing business in this State, whether they be foreign or domestic corporations, and even though they are also engaged in interstate commerce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 288 N.C. 201, 217 S.E.2d 543 (1975).

The Commission may not lawfully require a multistate foreign corporation engaged in interstate commerce to comply with this Article and issue securities in the future only after first making application to and obtaining an order from the Commission authorizing such issue. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).

The regulation and control by this State over the issuance of securities by a multistate foreign corporation engaged in interstate commerce, which the attempted enforcement by the Commission of this Article was held necessarily to entail, is to impose such an undue burden on interstate commerce as to make such regulation and control constitutionally beyond the State's power to enforce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).

The common capital stock of a corporation is a "security" within the meaning of that term as used in this section and G.S. 62-162. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 243 N.C. 46, 89 S.E.2d 802 (1955).

Cited in State ex rel. Utils. Comm'n v. Duke Power Co., 285 N.C. 377, 206 S.E.2d 269 (1974).


§ 62-162. Commission may approve in whole or in part or refuse approval.

The Commission, by its order, may grant or deny the application provided for in the preceding section [G.S. 62-161] as made, or may grant it in part or deny it in part or may grant it with such modification and upon such terms and conditions as the Commission may deem necessary or appropriate in the premises and may, from time to time, for good cause shown, make such supplemental orders in the premises as it may deem necessary or appropriate and may, by any such supplemental order, modify the provisions of any previous order as to the particular purposes, uses, and extent to which or the conditions under which any securities so authorized or the proceeds thereof may be applied; subject always to the requirements of the foregoing section [G.S. 62-161].

History

(1933, c. 307, s. 19; 1963, c. 1165, s. 1.)

CASE NOTES

Authority of Commission to Set Minimum Price for Sale of Unissued Common Stock. - In view of the language used by the legislature in conferring power of the Utilities Commission to supervise and control the issue and sale of securities by a public utility, the Commission had the authority not only to veto the sale of unissued common stock of a utility at par but also to impose the condition that such stock should be sold at a price not less than $125.00 per share. State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 243 N.C. 46, 89 S.E.2d 802 (1955).


§ 62-163. Contents of application for permission.

Every application for authority for such issue or assumption shall be made in such form and contain such matters as the Commission may prescribe. Every such application and every certificate of notification hereinafter provided for shall be made under oath, signed and filed on behalf of the public utility by its president, a vice-president, auditor, comptroller, or other executive officer duly designated for that purpose by such utility.

History

(1933, c. 307, s. 20; 1963, c. 1165, s. 1.)

§ 62-164. Applications to receive immediate attention; continuances.

All applications for the issuance of securities or assumption of liability or obligation shall be placed at the head of the Commission's docket and disposed of promptly, and all such applications shall be disposed of in 30 days after the same are filed with the Commission, unless it is necessary for good cause to continue the same for a longer period for consideration. Whenever such application is continued beyond 30 days after the time it is filed, the order making such continuance must state fully the facts necessitating such continuance.

History

(1933, c. 307, s. 21; 1963, c. 1165, s. 1.)

§ 62-165. Notifying Commission as to disposition of securities.

Whenever any securities set forth and described in any such application for authority or certificate of notification as pledged or held unencumbered in the treasury of the utility shall, subsequent to the filing of such application or certificate, be sold, pledged, repledged, or otherwise disposed of, by the utility, such utility shall, within 10 days after such sale, pledge, repledge, or other disposition, file with the Commission a certificate of notification to that effect, setting forth therein all such facts as may be required by the Commission.

History

(1933, c. 307, s. 22; 1963, c. 1165, s. 1.)

§ 62-166. No guarantee on part of State.

Nothing herein shall be construed to imply any guarantee or obligation as to such securities on the part of the State of North Carolina.

History

(1933, c. 307, s. 23; 1963, c. 1165, s. 1.)

§ 62-167. Article not applicable to note issues and renewals; notice to Commission.

The provisions of the foregoing sections shall not apply to notes issued by a utility for proper purposes and not in violation of law, payable at a period of not more than two years from the date thereof, and shall not apply to like notes issued by a utility payable at a period of not more than two years from date thereof, to pay, retire, discharge, or refund in whole or in part any such note or notes, and shall not apply to renewals thereof from time to time not exceeding in the aggregate six years from the date of the issue of the original note or notes so renewed or refunded. No such notes payable at a period of not more than two years from the date thereof, shall, in whole or in part, directly or indirectly, be paid, retired, discharged or refunded by any issue of securities or another kind of any term or character or from the proceeds thereof without the approval of the Commission. Within 10 days after the making of any such notes, so payable at periods of not more than two years from the date thereof, the utility issuing the same shall file with the Commission a certificate of notification, in such form as may be determined and prescribed by the Commission.

History

(1933, c. 307, ss. 24, 25; 1963, c. 1165, s. 1.)

§ 62-168. Not applicable to debentures of court receivers.

Nothing contained in this Article shall limit the power of any court having jurisdiction to authorize or cause receiver's certificates or debentures to be issued according to the rules and practice obtained in receivership proceedings in courts of equity.

History

(1933, c. 307, s. 25; 1963, c. 1165, s. 1.)

§ 62-169. Periodical or special reports.

The Commission shall require periodical or special reports from each public utility issuing any security, including such notes payable at periods of not more than two years from the date thereof, which shall show, in such detail as the Commission may require, the disposition made of such securities and the application of the proceeds.

History

(1933, c. 307, s. 26; 1963, c. 1165, s. 1.)

§ 62-170. Failure to obtain approval not to invalidate securities or obligations; noncompliance with Article, etc.

  1. Securities issued and obligations and liabilities assumed by a public utility, for which the authorization of the Commission is required, shall not be invalidated because issued or assumed without such authorization therefor having first been obtained or because issued or assumed contrary to any term or condition of such order of authorization as modified by any order supplemental thereto entered prior to such issuance or assumption.
  2. Securities issued or obligations or liabilities assumed in accordance with all the terms and conditions of the order of authorization therefor shall not be affected by a failure to comply with any provision of this Article or rule or regulation of the Commission relating to procedure and other matters preceding the entry of such order of authorization or order supplemental thereto.
  3. A copy of any order made and entered by the Commission and certified by a clerk of the Commission approving the issuance of any securities or the assumption of any obligation or liability by a public utility shall be sufficient evidence of full and complete compliance by the applicant for such approval with all procedural and other matters required precedent to the entry of such order.
  4. Any public utility which willfully issues any such securities, or assumes any such obligation or liability, or makes any sale or other disposition of securities, or applies any securities or the proceeds thereof to purposes other than the purposes specified in an order of the Commission with respect thereto, contrary to the provisions of this Article, shall be liable to a penalty of not more than ten thousand dollars ($10,000), but such utility is only required to specify in general terms the purpose for which any securities are to be issued, or for which any obligation or liability is to be assumed, and the order of the Commission with respect thereto shall likewise be in general terms.

History

(1933, c. 307, s. 27; 1963, c. 1165, s. 1.)

§ 62-171. Commission may act jointly with agency of another state where public utility operates.

If a commission or other agency or agencies is empowered by another state to regulate and control the amount and character of securities to be issued by any public utility within such other state, then the Utilities Commission of the State of North Carolina shall have the power to agree with such commission or other agency or agencies of such other state on the issue of stocks, bonds, notes or other evidences of indebtedness by a public utility owning or operating a public utility both in such state and in this State, and shall have the power to approve such issue jointly with such commission or other agency or agencies and to issue joint certificate of such approval: Provided, however, that no such joint approval shall be required in order to express the consent to an approval of such issue by the State of North Carolina if said issue is separately approved by the Utilities Commission of the State of North Carolina.

History

(1933, c. 134, s. 8; c. 307, s. 28; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

The General Assembly intended this Article to apply to all public utilities doing business in this State, whether they be foreign or domestic corporations, and even though they are also engaged in interstate commerce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 288 N.C. 201, 217 S.E.2d 543 (1975).

The Commission may not lawfully require a multistate foreign corporation engaged in interstate commerce to comply with the provisions of this Article and issue securities in the future only after first making application to and obtaining an order from the Commission authorizing such issue. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).

The regulation and control by this State over the issuance of securities by a multistate foreign corporation engaged in interstate commerce, which the attempted enforcement by the Commission of this Article was held necessarily to entail, is to impose such an undue burden on interstate commerce as to make such regulation and control constitutionally beyond the State's power to enforce. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 22 N.C. App. 714, 207 S.E.2d 771 (1974), aff'd, 288 N.C. 201, 217 S.E.2d 543 (1975).


§ 62-172. Financing for certain storm recovery costs.

  1. Definitions. - The following definitions apply in this section:
    1. Ancillary agreement. - A bond, insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other financial arrangement entered into in connection with storm recovery bonds.
    2. Assignee. - A legally recognized entity to which a public utility assigns, sells, or transfers, other than as security, all or a portion of its interest in or right to storm recovery property. The term includes a corporation, limited liability company, general partnership or limited partnership, public authority, trust, financing entity, or any entity to which an assignee assigns, sells, or transfers, other than as security, its interest in or right to storm recovery property.
    3. Bondholder. - A person who holds a storm recovery bond.
    4. Code. - The Uniform Commercial Code, Chapter 25 of the General Statutes.
    5. Commission. - The North Carolina Utilities Commission.
    6. Financing costs. - The term includes all of the following:
      1. Interest and acquisition, defeasance, or redemption premiums payable on storm recovery bonds.
      2. Any payment required under an ancillary agreement and any amount required to fund or replenish a reserve account or other accounts established under the terms of any indenture, ancillary agreement, or other financing documents pertaining to storm recovery bonds.
      3. Any other cost related to issuing, supporting, repaying, refunding, and servicing storm recovery bonds, including, servicing fees, accounting and auditing fees, trustee fees, legal fees, consulting fees, structuring adviser fees, administrative fees, placement and underwriting fees, independent director and manager fees, capitalized interest, rating agency fees, stock exchange listing and compliance fees, security registration fees, filing fees, information technology programming costs, and any other costs necessary to otherwise ensure the timely payment of storm recovery bonds or other amounts or charges payable in connection with the bonds, including costs related to obtaining the financing order.
      4. Any taxes and license fees or other fees imposed on the revenues generated from the collection of the storm recovery charge or otherwise resulting from the collection of storm recovery charges, in any such case whether paid, payable, or accrued.
      5. Any State and local taxes, franchise, gross receipts, and other taxes or similar charges, including regulatory assessment fees, whether paid, payable, or accrued.
      6. Any costs incurred by the Commission or Public Staff for any outside consultants or counsel retained in connection with the securitization of storm recovery costs.
    7. Financing order. - An order that authorizes the issuance of storm recovery bonds; the imposition, collection, and periodic adjustments of a storm recovery charge; the creation of storm recovery property; and the sale, assignment, or transfer of storm recovery property to an assignee.
    8. Financing party. - Bondholders and trustees, collateral agents, any party under an ancillary agreement, or any other person acting for the benefit of bondholders.
    9. Financing statement. - Defined in Article 9 of the Code.
    10. Pledgee. - A financing party to which a public utility or its successors or assignees mortgages, negotiates, pledges, or creates a security interest or lien on all or any portion of its interest in or right to storm recovery property.
    11. Public utility. - A public utility, as defined in G.S. 62-3, that sells electric power to retail electric customers in the State.
    12. Storm. - Individually or collectively, a named tropical storm or hurricane, a tornado, ice storm or snow storm, flood, an earthquake, or other significant weather or natural disaster.
    13. Storm recovery activity. - An activity or activities by a public utility, its affiliates, or its contractors, directly and specifically in connection with the restoration of service and infrastructure associated with electric power outages affecting customers of a public utility as the result of a storm or storms, including activities related to mobilization, staging, and construction, reconstruction, replacement, or repair of electric generation, transmission, distribution, or general plant facilities.
    14. Storm recovery bonds. - Bonds, debentures, notes, certificates of participation, certificates of beneficial interest, certificates of ownership, or other evidences of indebtedness or ownership that are issued by a public utility or an assignee pursuant to a financing order, the proceeds of which are used directly or indirectly to recover, finance, or refinance Commission-approved storm recovery costs and financing costs, and that are secured by or payable from storm recovery property. If certificates of participation or ownership are issued, references in this section to principal, interest, or premium shall be construed to refer to comparable amounts under those certificates.
    15. Storm recovery charge. - The amounts authorized by the Commission to repay, finance, or refinance storm recovery costs and financing costs and that are nonbypassable charges (i) imposed on and part of all retail customer bills, (ii) collected by a public utility or its successors or assignees, or a collection agent, in full, separate and apart from the public utility's base rates, and (iii) paid by all existing or future retail customers receiving transmission or distribution service, or both, from the public utility or its successors or assignees under Commission-approved rate schedules or under special contracts, even if a customer elects to purchase electricity from an alternative electricity supplier following a fundamental change in regulation of public utilities in this State.
    16. Storm recovery costs. - All of the following:
      1. All incremental costs, including capital costs, appropriate for recovery from existing and future retail customers receiving transmission or distribution service from the public utility that a public utility has incurred or expects to incur as a result of the applicable storm that are caused by, associated with, or remain as a result of undertaking storm recovery activity. Such costs include the public utility's cost of capital from the date of the applicable storm to the date the storm recovery bonds are issued calculated using the public utility's weighted average cost of capital as defined in its most recent base rate case proceeding before the Commission net of applicable income tax savings related to the interest component.
      2. Storm recovery costs shall be net of applicable insurance proceeds, tax benefits and any other amounts intended to reimburse the public utility for storm recovery activities such as government grants, or aid of any kind and where determined appropriate by the Commission, and may include adjustments for capital replacement and operating costs previously considered in determining normal amounts in the public utility's most recent general rate proceeding. Storm recovery costs includes the cost to replenish and fund any storm reserves and costs of repurchasing equity or retiring any existing indebtedness relating to storm recovery activities.
      3. With respect to storm recovery costs that the public utility expects to incur, any difference between costs expected to be incurred and actual, reasonable and prudent costs incurred, or any other ratemaking adjustments appropriate to fairly and reasonably assign or allocate storm cost recovery to customers over time, shall be addressed in a future general rate proceeding, as may be facilitated by other orders of the Commission issued at the time or prior to such proceeding; provided, however, that the Commission's adoption of a financing order and approval of the issuance of storm recovery bonds may not be revoked or otherwise modified.
    17. Storm recovery property. - All of the following:
      1. All rights and interests of a public utility or successor or assignee of the public utility under a financing order, including the right to impose, bill, charge, collect, and receive storm recovery charges authorized under the financing order and to obtain periodic adjustments to such charges as provided in the financing order.
      2. All revenues, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in the financing order, regardless of whether such revenues, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payment, payments, money, or proceeds.
  2. Financing Orders. -
    1. A public utility may petition the Commission for a financing order. The petition shall include all of the following:
      1. A description of the storm recovery activities that the public utility has undertaken or proposes to undertake and the reasons for undertaking the activities, or if the public utility is subject to a settlement agreement as contemplated by subdivision (2) of this subsection, a description of the settlement agreement.
      2. The storm recovery costs and estimate of the costs of any storm recovery activities that are being undertaken but are not completed.
      3. The level of the storm recovery reserve that the public utility proposes to establish or replenish and has determined would be appropriate to recover through storm recovery bonds and is seeking to so recover and such level that the public utility is funding or will seek to fund through other means, together with a description of the factors and calculations used in determining the amounts and methods of recovery.
      4. An indicator of whether the public utility proposes to finance all or a portion of the storm recovery costs using storm recovery bonds. If the public utility proposes to finance a portion of the costs, the public utility must identify the specific portion in the petition. By electing not to finance a portion of such storm recovery costs using storm recovery bonds, a public utility shall not be deemed to waive its right to recover such costs pursuant to a separate proceeding with the Commission.
      5. An estimate of the financing costs related to the storm recovery bonds.
      6. An estimate of the storm recovery charges necessary to recover the storm recovery costs, including the storm recovery reserve amount determined appropriate by the Commission, and financing costs and the period for recovery of such costs.
      7. A comparison between the net present value of the costs to customers that are estimated to result from the issuance of storm recovery bonds and the costs that would result from the application of the traditional method of financing and recovering storm recovery costs from customers. The comparison should demonstrate that the issuance of storm recovery bonds and the imposition of storm recovery charges are expected to provide quantifiable benefits to customers.
      8. Direct testimony and exhibits supporting the petition.
    2. If a public utility is subject to a settlement agreement that governs the type and amount of principal costs that could be included in storm recovery costs and the public utility proposes to finance all or a portion of the principal costs using storm recovery bonds, then the public utility must file a petition with the Commission for review and approval of those costs no later than 90 days before filing a petition for a financing order pursuant to this section.
    3. Petition and order. -
      1. Proceedings on a petition submitted pursuant to this subdivision begin with the petition by a public utility, filed subject to the time frame specified in subdivision (2) of this subsection, if applicable, and shall be disposed of in accordance with the requirements of this Chapter and the rules of the Commission, except as follows:
        1. Within 14 days after the date the petition is filed, the Commission shall establish a procedural schedule that permits a Commission decision no later than 135 days after the date the petition is filed.
        2. No later than 135 days after the date the petition is filed, the Commission shall issue a financing order or an order rejecting the petition. A party to the Commission proceeding may petition the Commission for reconsideration of the financing order within five days after the date of its issuance.
      2. A financing order issued by the Commission to a public utility shall include all of the following elements:
        1. Except for changes made pursuant to the formula-based mechanism authorized under this section, the amount of storm recovery costs, including the level of storm recovery reserves, to be financed using storm recovery bonds. The Commission shall describe and estimate the amount of financing costs that may be recovered through storm recovery charges and specify the period over which storm recovery costs and financing costs may be recovered.
        2. A finding that the proposed issuance of storm recovery bonds and the imposition and collection of a storm recovery charge are expected to provide quantifiable benefits to customers as compared to the costs that would have been incurred absent the issuance of storm recovery bonds.
        3. A finding that the structuring and pricing of the storm recovery bonds are reasonably expected to result in the lowest storm recovery charges consistent with market conditions at the time the storm recovery bonds are priced and the terms set forth in such financing order.
        4. A requirement that, for so long as the storm recovery bonds are outstanding and until all financing costs have been paid in full, the imposition and collection of storm recovery charges authorized under a financing order shall be nonbypassable and paid by all existing and future retail customers receiving transmission or distribution service, or both, from the public utility or its successors or assignees under Commission-approved rate schedules or under special contracts, even if a customer elects to purchase electricity from an alternative electric supplier following a fundamental change in regulation of public utilities in this State.
        5. A determination of what portion, if any, of the storm recovery reserves must be held in a funded reserve and any limitations on how the reserve may be held, accessed, or used.
        6. A formula-based true-up mechanism for making, at least annually, expeditious periodic adjustments in the storm recovery charges that customers are required to pay pursuant to the financing order and for making any adjustments that are necessary to correct for any overcollection or undercollection of the charges or to otherwise ensure the timely payment of storm recovery bonds and financing costs and other required amounts and charges payable in connection with the storm recovery bonds.
        7. The storm recovery property that is, or shall be, created in favor of a public utility or its successors or assignees and that shall be used to pay or secure storm recovery bonds and all financing costs.
        8. The degree of flexibility to be afforded to the public utility in establishing the terms and conditions of the storm recovery bonds, including, but not limited to, repayment schedules, expected interest rates, and other financing costs.
        9. How storm recovery charges will be allocated among customer classes.
        10. A requirement that, after the final terms of an issuance of storm recovery bonds have been established and before the issuance of storm recovery bonds, the public utility determines the resulting initial storm recovery charge in accordance with the financing order and that such initial storm recovery charge be final and effective upon the issuance of such storm recovery bonds without further Commission action so long as the storm recovery charge is consistent with the financing order.
        11. A method of tracing funds collected as storm recovery charges, or other proceeds of storm recovery property, and determine that such method shall be deemed the method of tracing such funds and determining the identifiable cash proceeds of any storm recovery property subject to a financing order under applicable law.
        12. Any other conditions not otherwise inconsistent with this section that the Commission determines are appropriate.
      3. A financing order issued to a public utility may provide that creation of the public utility's storm recovery property is conditioned upon, and simultaneous with, the sale or other transfer of the storm recovery property to an assignee and the pledge of the storm recovery property to secure storm recovery bonds.
      4. If the Commission issues a financing order, the public utility shall file with the Commission at least annually a petition or a letter applying the formula-based mechanism and, based on estimates of consumption for each rate class and other mathematical factors, requesting administrative approval to make the applicable adjustments. The review of the filing shall be limited to determining whether there are any mathematical or clerical errors in the application of the formula-based mechanism relating to the appropriate amount of any overcollection or undercollection of storm recovery charges and the amount of an adjustment. The adjustments shall ensure the recovery of revenues sufficient to provide for the payment of principal, interest, acquisition, defeasance, financing costs, or redemption premium and other fees, costs, and charges in respect of storm recovery bonds approved under the financing order. Within 30 days after receiving a public utility's request pursuant to this paragraph, the Commission shall either approve the request or inform the public utility of any mathematical or clerical errors in its calculation. If the Commission informs the utility of mathematical or clerical errors in its calculation, the utility may correct its error and refile its request. The time frames previously described in this paragraph shall apply to a refiled request.
      5. Subsequent to the transfer of storm recovery property to an assignee or the issuance of storm recovery bonds authorized thereby, whichever is earlier, a financing order is irrevocable and, except for changes made pursuant to the formula-based mechanism authorized in this section, the Commission may not amend, modify, or terminate the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust storm recovery charges approved in the financing order. After the issuance of a financing order, the public utility retains sole discretion regarding whether to assign, sell, or otherwise transfer storm recovery property or to cause storm recovery bonds to be issued, including the right to defer or postpone such assignment, sale, transfer, or issuance.
    4. At the request of a public utility, the Commission may commence a proceeding and issue a subsequent financing order that provides for refinancing, retiring, or refunding storm recovery bonds issued pursuant to the original financing order if the Commission finds that the subsequent financing order satisfies all of the criteria specified in this section for a financing order. Effective upon retirement of the refunded storm recovery bonds and the issuance of new storm recovery bonds, the Commission shall adjust the related storm recovery charges accordingly.
    5. Within 60 days after the Commission issues a financing order or a decision denying a request for reconsideration or, if the request for reconsideration is granted, within 30 days after the Commission issues its decision on reconsideration, an adversely affected party may petition for judicial review in the Supreme Court of North Carolina. Review on appeal shall be based solely on the record before the Commission and briefs to the court and is limited to determining whether the financing order, or the order on reconsideration, conforms to the State Constitution and State and federal law and is within the authority of the Commission under this section.
    6. Duration of financing order. -
      1. A financing order remains in effect and storm recovery property under the financing order continues to exist until storm recovery bonds issued pursuant to the financing order have been paid in full or defeased and, in each case, all Commission-approved financing costs of such storm recovery bonds have been recovered in full.
      2. A financing order issued to a public utility remains in effect and unabated notwithstanding the reorganization, bankruptcy or other insolvency proceedings, merger, or sale of the public utility or its successors or assignees.
  3. Exceptions to Commission Jurisdiction. -
    1. The Commission may not, in exercising its powers and carrying out its duties regarding any matter within its authority pursuant to this Chapter, consider the storm recovery bonds issued pursuant to a financing order to be the debt of the public utility other than for federal income tax purposes, consider the storm recovery charges paid under the financing order to be the revenue of the public utility for any purpose, or consider the storm recovery costs or financing costs specified in the financing order to be the costs of the public utility, nor may the Commission determine any action taken by a public utility which is consistent with the financing order to be unjust or unreasonable.
    2. The Commission may not order or otherwise directly or indirectly require a public utility to use storm recovery bonds to finance any project, addition, plant, facility, extension, capital improvement, equipment, or any other expenditure. After the issuance of a financing order, the public utility retains sole discretion regarding whether to cause the storm recovery bonds to be issued, including the right to defer or postpone such sale, assignment, transfer, or issuance. Nothing shall prevent the public utility from abandoning the issuance of storm recovery bonds under the financing order by filing with the Commission a statement of abandonment and the reasons therefor. The Commission may not refuse to allow a public utility to recover storm recovery costs in an otherwise permissible fashion, or refuse or condition authorization or approval of the issuance and sale by a public utility of securities or the assumption by the public utility of liabilities or obligations, solely because of the potential availability of storm recovery bond financing.
  4. Public Utility Duties. - The electric bills of a public utility that has obtained a financing order and caused storm recovery bonds to be issued must comply with the provisions of this subsection; however, the failure of a public utility to comply with this subsection does not invalidate, impair, or affect any financing order, storm recovery property, storm recovery charge, or storm recovery bonds. The public utility must do the following:
    1. Explicitly reflect that a portion of the charges on such bill represents storm recovery charges approved in a financing order issued to the public utility and, if the storm recovery property has been transferred to an assignee, must include a statement to the effect that the assignee is the owner of the rights to storm recovery charges and that the public utility or other entity, if applicable, is acting as a collection agent or servicer for the assignee. The tariff applicable to customers must indicate the storm recovery charge and the ownership of the charge.
    2. Include the storm recovery charge on each customer's bill as a separate line item and include both the rate and the amount of the charge on each bill.
  5. Storm Recovery Property. -
    1. Provisions applicable to storm recovery property. -
      1. All storm recovery property that is specified in a financing order constitutes an existing, present intangible property right or interest therein, notwithstanding that the imposition and collection of storm recovery charges depends on the public utility, to which the financing order is issued, performing its servicing functions relating to the collection of storm recovery charges and on future electricity consumption. The property exists (i) regardless of whether or not the revenues or proceeds arising from the property have been billed, have accrued, or have been collected and (ii) notwithstanding the fact that the value or amount of the property is dependent on the future provision of service to customers by the public utility or its successors or assignees and the future consumption of electricity by customers.
      2. Storm recovery property specified in a financing order exists until storm recovery bonds issued pursuant to the financing order are paid in full and all financing costs and other costs of such storm recovery bonds have been recovered in full.
      3. All or any portion of storm recovery property specified in a financing order issued to a public utility may be transferred, sold, conveyed, or assigned to a successor or assignee that is wholly owned, directly or indirectly, by the public utility and created for the limited purpose of acquiring, owning, or administering storm recovery property or issuing storm recovery bonds under the financing order. All or any portion of storm recovery property may be pledged to secure storm recovery bonds issued pursuant to the financing order, amounts payable to financing parties and to counterparties under any ancillary agreements, and other financing costs. Any transfer, sale, conveyance, assignment, grant of a security interest in or pledge of storm recovery property by a public utility, or an affiliate of the public utility, to an assignee, to the extent previously authorized in a financing order, does not require the prior consent and approval of the Commission.
      4. If a public utility defaults on any required payment of charges arising from storm recovery property specified in a financing order, a court, upon application by an interested party, and without limiting any other remedies available to the applying party, shall order the sequestration and payment of the revenues arising from the storm recovery property to the financing parties or their assignees. Any such financing order remains in full force and effect notwithstanding any reorganization, bankruptcy, or other insolvency proceedings with respect to the public utility or its successors or assignees.
      5. The interest of a transferee, purchaser, acquirer, assignee, or pledgee in storm recovery property specified in a financing order issued to a public utility, and in the revenue and collections arising from that property, is not subject to setoff, counterclaim, surcharge, or defense by the public utility or any other person or in connection with the reorganization, bankruptcy, or other insolvency of the public utility or any other entity.
      6. Any successor to a public utility, whether pursuant to any reorganization, bankruptcy, or other insolvency proceeding or whether pursuant to any merger or acquisition, sale, or other business combination, or transfer by operation of law, as a result of public utility restructuring or otherwise, must perform and satisfy all obligations of, and have the same rights under a financing order as, the public utility under the financing order in the same manner and to the same extent as the public utility, including collecting and paying to the person entitled to receive the revenues, collections, payments, or proceeds of the storm recovery property. Nothing in this sub-subdivision is intended to limit or impair any authority of the Commission concerning the transfer or succession of interests of public utilities.
      7. Storm recovery bonds shall be nonrecourse to the credit or any assets of the public utility other than the storm recovery property as specified in the financing order and any rights under any ancillary agreement.
    2. Provisions applicable to security interests. -
      1. The creation, perfection, and enforcement of any security interest in storm recovery property to secure the repayment of the principal and interest and other amounts payable in respect of storm recovery bonds; amounts payable under any ancillary agreement and other financing costs are governed by this subsection and not by the provisions of the Code.
      2. A security interest in storm recovery property is created, valid, and binding and perfected at the later of the time: (i) the financing order is issued, (ii) a security agreement is executed and delivered by the debtor granting such security interest, (iii) the debtor has rights in such storm recovery property or the power to transfer rights in such storm recovery property, or (iv) value is received for the storm recovery property. The description of storm recovery property in a security agreement is sufficient if the description refers to this section and the financing order creating the storm recovery property.
      3. A security interest shall attach without any physical delivery of collateral or other act, and, upon the filing of a financing statement with the office of the Secretary of State, the lien of the security interest shall be valid, binding, and perfected against all parties having claims of any kind in tort, contract, or otherwise against the person granting the security interest, regardless of whether the parties have notice of the lien. Also upon this filing, a transfer of an interest in the storm recovery property shall be perfected against all parties having claims of any kind, including any judicial lien or other lien creditors or any claims of the seller or creditors of the seller, and shall have priority over all competing claims other than any prior security interest, ownership interest, or assignment in the property previously perfected in accordance with this section.
      4. The Secretary of State shall maintain any financing statement filed to perfect any security interest under this section in the same manner that the Secretary maintains financing statements filed by transmitting utilities under the Code. The filing of a financing statement under this section shall be governed by the provisions regarding the filing of financing statements in the Code.
      5. The priority of a security interest in storm recovery property is not affected by the commingling of storm recovery charges with other amounts. Any pledgee or secured party shall have a perfected security interest in the amount of all storm recovery charges that are deposited in any cash or deposit account of the qualifying utility in which storm recovery charges have been commingled with other funds and any other security interest that may apply to those funds shall be terminated when they are transferred to a segregated account for the assignee or a financing party.
      6. No application of the formula-based adjustment mechanism as provided in this section will affect the validity, perfection, or priority of a security interest in or transfer of storm recovery property.
      7. If a default or termination occurs under the storm recovery bonds, the financing parties or their representatives may foreclose on or otherwise enforce their lien and security interest in any storm recovery property as if they were secured parties with a perfected and prior lien under the Code, and the Commission may order amounts arising from storm recovery charges be transferred to a separate account for the financing parties' benefit, to which their lien and security interest shall apply. On application by or on behalf of the financing parties, the Superior Court of Wake County shall order the sequestration and payment to them of revenues arising from the storm recovery charges.
    3. Provisions applicable to the sale, assignment, or transfer of storm recovery property. -
      1. Any sale, assignment, or other transfer of storm recovery property shall be an absolute transfer and true sale of, and not a pledge of or secured transaction relating to, the seller's right, title, and interest in, to, and under the storm recovery property if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer other than for federal and State income tax purposes. For all purposes other than federal and State income tax purposes, the parties' characterization of a transaction as a sale of an interest in storm recovery property shall be conclusive that the transaction is a true sale and that ownership has passed to the party characterized as the purchaser, regardless of whether the purchaser has possession of any documents evidencing or pertaining to the interest. A transfer of an interest in storm recovery property may be created only when all of the following have occurred: (i) the financing order creating the storm recovery property has become effective, (ii) the documents evidencing the transfer of storm recovery property have been executed by the assignor and delivered to the assignee, and (iii) value is received for the storm recovery property. After such a transaction, the storm recovery property is not subject to any claims of the transferor or the transferor's creditors, other than creditors holding a prior security interest in the storm recovery property perfected in accordance with subdivision (2) of subsection (e) of this section.
      2. The characterization of the sale, assignment, or other transfer as an absolute transfer and true sale and the corresponding characterization of the property interest of the purchaser, shall not be affected or impaired by the occurrence of any of the following factors:
        1. Commingling of storm recovery charges with other amounts.
        2. The retention by the seller of (i) a partial or residual interest, including an equity interest, in the storm recovery property, whether direct or indirect, or whether subordinate or otherwise, or (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed on the collection of storm recovery charges.
        3. Any recourse that the purchaser may have against the seller.
        4. Any indemnification rights, obligations, or repurchase rights made or provided by the seller.
        5. The obligation of the seller to collect storm recovery charges on behalf of an assignee.
        6. The transferor acting as the servicer of the storm recovery charges or the existence of any contract that authorizes or requires the public utility, to the extent that any interest in storm recovery property is sold or assigned, to contract with the assignee or any financing party that it will continue to operate its system to provide service to its customers, will collect amounts in respect of the storm recovery charges for the benefit and account of such assignee or financing party, and will account for and remit such amounts to or for the account of such assignee or financing party.
        7. The treatment of the sale, conveyance, assignment, or other transfer for tax, financial reporting, or other purposes.
        8. The granting or providing to bondholders a preferred right to the storm recovery property or credit enhancement by the public utility or its affiliates with respect to such storm recovery bonds.
        9. Any application of the formula-based adjustment mechanism as provided in this section.
      3. Any right that a public utility has in the storm recovery property before its pledge, sale, or transfer or any other right created under this section or created in the financing order and assignable under this section or assignable pursuant to a financing order is property in the form of a contract right or a chose in action. Transfer of an interest in storm recovery property to an assignee is enforceable only upon the later of (i) the issuance of a financing order, (ii) the assignor having rights in such storm recovery property or the power to transfer rights in such storm recovery property to an assignee, (iii) the execution and delivery by the assignor of transfer documents in connection with the issuance of storm recovery bonds, and (iv) the receipt of value for the storm recovery property. An enforceable transfer of an interest in storm recovery property to an assignee is perfected against all third parties, including subsequent judicial or other lien creditors, when a notice of that transfer has been given by the filing of a financing statement in accordance with sub-subdivision c. of subdivision (2) of this subsection. The transfer is perfected against third parties as of the date of filing.
      4. The Secretary of State shall maintain any financing statement filed to perfect any sale, assignment, or transfer of storm recovery property under this section in the same manner that the Secretary maintains financing statements filed by transmitting utilities under the Code. The filing of any financing statement under this section shall be governed by the provisions regarding the filing of financing statements in the Code. The filing of such a financing statement is the only method of perfecting a transfer of storm recovery property.
      5. The priority of a transfer perfected under this section is not impaired by any later modification of the financing order or storm recovery property or by the commingling of funds arising from storm recovery property with other funds. Any other security interest that may apply to those funds, other than a security interest perfected under subdivision (2) of this subsection, is terminated when they are transferred to a segregated account for the assignee or a financing party. If storm recovery property has been transferred to an assignee or financing party, any proceeds of that property must be held in trust for the assignee or financing party.
      6. The priority of the conflicting interests of assignees in the same interest or rights in any storm recovery property is determined as follows:
        1. Conflicting perfected interests or rights of assignees rank according to priority in time of perfection. Priority dates from the time a filing covering the transfer is made in accordance with sub-subdivision c. of subdivision (2) of this subsection.
        2. A perfected interest or right of an assignee has priority over a conflicting unperfected interest or right of an assignee.
        3. A perfected interest or right of an assignee has priority over a person who becomes a lien creditor after the perfection of such assignee's interest or right.
  6. Description or Indication of Property. - The description of storm recovery property being transferred to an assignee in any sale agreement, purchase agreement, or other transfer agreement, granted or pledged to a pledgee in any security agreement, pledge agreement, or other security document, or indicated in any financing statement is only sufficient if such description or indication refers to the financing order that created the storm recovery property and states that the agreement or financing statement covers all or part of the property described in the financing order. This section applies to all purported transfers of, and all purported grants or liens or security interests in, storm recovery property, regardless of whether the related sale agreement, purchase agreement, other transfer agreement, security agreement, pledge agreement, or other security document was entered into, or any financing statement was filed.
  7. Financing Statements. - All financing statements referenced in this section are subject to Part 5 of Article 9 of the Code, except that the requirement as to continuation statements does not apply.
  8. Choice of Law. - The law governing the validity, enforceability, attachment, perfection, priority, and exercise of remedies with respect to the transfer of an interest or right or the pledge or creation of a security interest in any storm recovery property shall be the laws of this State.
  9. Storm Recovery Bonds Not Public Debt. - Neither the State nor its political subdivisions are liable on any storm recovery bonds, and the bonds are not a debt or a general obligation of the State or any of its political subdivisions, agencies, or instrumentalities, nor are they special obligations or indebtedness of the State or any agency or political subdivision. An issue of storm recovery bonds does not, directly, indirectly, or contingently, obligate the State or any agency, political subdivision, or instrumentality of the State to levy any tax or make any appropriation for payment of the storm recovery bonds, other than in their capacity as consumers of electricity. All storm recovery bonds must contain on the face thereof a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of North Carolina is pledged to the payment of the principal of, or interest on, this bond."
  10. Legal Investment. - All of the following entities may legally invest any sinking funds, moneys, or other funds in storm recovery bonds:
    1. Subject to applicable statutory restrictions on State or local investment authority, the State, units of local government, political subdivisions, public bodies, and public officers, except for members of the Commission.
    2. Banks and bankers, savings and loan associations, credit unions, trust companies, savings banks and institutions, investment companies, insurance companies, insurance associations, and other persons carrying on a banking or insurance business.
    3. Personal representatives, guardians, trustees, and other fiduciaries.
    4. All other persons authorized to invest in bonds or other obligations of a similar nature.
  11. Obligation of Nonimpairment. -
    1. The State and its agencies, including the Commission, pledge and agree with bondholders, the owners of the storm recovery property, and other financing parties that the State and its agencies will not take any action listed in this subdivision. This paragraph does not preclude limitation or alteration if full compensation is made by law for the full protection of the storm recovery charges collected pursuant to a financing order and of the bondholders and any assignee or financing party entering into a contract with the public utility. The prohibited actions are as follows:
      1. Alter the provisions of this section, which authorize the Commission to create an irrevocable contract right or chose in action by the issuance of a financing order, to create storm recovery property, and make the storm recovery charges imposed by a financing order irrevocable, binding, or nonbypassable charges.
      2. Take or permit any action that impairs or would impair the value of storm recovery property or the security for the storm recovery bonds or revises the storm recovery costs for which recovery is authorized.
      3. In any way impair the rights and remedies of the bondholders, assignees, and other financing parties.
      4. Except for changes made pursuant to the formula-based adjustment mechanism authorized under this section, reduce, alter, or impair storm recovery charges that are to be imposed, billed, charged, collected, and remitted for the benefit of the bondholders, any assignee, and any other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related storm recovery bonds have been paid and performed in full.
    2. Any person or entity that issues storm recovery bonds may include the language specified in this subsection in the storm recovery bonds and related documentation.
  12. Not a Public Utility. - An assignee or financing party is not a public utility or person providing electric service by virtue of engaging in the transactions described in this section.
  13. Conflicts. - If there is a conflict between this section and any other law regarding the attachment, assignment, or perfection, or the effect of perfection, or priority of, assignment or transfer of, or security interest in storm recovery property, this section shall govern.
  14. Consultation. - In making determinations under this section, the Commission or Public Staff or both may engage an outside consultant and counsel.
  15. Effect of Invalidity. - If any provision of this section is held invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence does not affect the validity of any action allowed under this section which is taken by a public utility, an assignee, a financing party, a collection agent, or a party to an ancillary agreement; and any such action remains in full force and effect with respect to all storm recovery bonds issued or authorized in a financing order issued under this section before the date that such provision is held invalid or is invalidated, superseded, replaced, or repealed, or expires for any reason.

History

(2019-244, s. 1; 2021-23, ss. 24, 25.)

Editor's Note. - Session Laws 2019-244, s. 3, made this section effective November 6, 2019.

Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subdivision (a)(6)f, and subsection (n).

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subdivision (a)(16)c.


§§ 62-173 through 62-179: Reserved for future codification purposes.

ARTICLE 9. Acquisition and Condemnation of Property.

Sec.

§ 62-180. Use of railroads and public highways.

Any person operating electric power, telegraph or telephone lines or authorized by law to establish such lines, has the right to construct, maintain and operate such lines along any railroad or public highway, but such lines shall be so constructed and maintained as not to obstruct or hinder unreasonably the usual travel on such railroad or highway.

History

(1874-5, c. 203, s. 2; Code, s. 2007; 1899, c. 64, s. 1; 1903, c. 562; Rev., s. 1571; C.S., s. 1695; 1939, c. 228, s. 1; 1963, c. 1165, s. 1.)

CASE NOTES

Constitutionality of Former Law. - The provisions of former G.S. 56-1 to 56-10, empowering electric power or lighting companies, etc., to condemn lands for the erection of poles, establishment of offices, and other appropriate purposes, were constitutional and valid. Wissler v. Yadkin River Power Co., 158 N.C. 465, 74 S.E. 460 (1912).

No Rights over Private Land Under Former Law. - Former G.S. 56-1 applied to constructing lines along the highway and not to constructing the lines over private land. Wade v. Carolina Tel. & Tel. Co., 147 N.C. 219, 60 S.E. 987 (1908).

Upon What Telegraph Companies Rights Conferred. - The right to construct and operate telegraph lines along any railroad or other public highway in the State, and to obtain the right-of-way therefor by a condemnatory proceeding, was expressly conferred upon any telegraph company incorporated by this or by any other state. North Carolina & R. & D.R.R. v. Carolina Cent. Ry., 83 N.C. 489 (1880); Yadkin River Power Co. v. Wissler, 160 N.C. 269, 76 S.E. 267 (1912).

Telegraph Line as Additional Burden on Land. - A telegraph line along a railroad and on the right-of-way of the railroad is an additional burden upon the land, for which the landowner is entitled to just compensation. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902); Hodges v. Western Union Tel. Co., 133 N.C. 225, 45 S.E. 572 (1903); Query v. Postal Tel. Cable Co., 178 N.C. 639, 101 S.E. 390 (1919).

As to electric light wires placed along the street being an additional burden on the land, see Brown v. Electric Co., 138 N.C. 533, 51 S.E. 62 (1905).

The construction of a street passenger railway does not impose any additional servitude upon the property fronting on the street so occupied. Hester v. Traction Co., 138 N.C. 288, 50 S.E. 711 (1905).

Maintenance of a utility pole along a public highway does not constitute an act of negligence unless the pole constitutes a hazard to motorists using the portion of the highway designated and intended for vehicular travel in a proper manner. Shapiro v. Toyota Motor Co., 38 N.C. App. 658, 248 S.E.2d 868 (1978).

Maintenance of a telephone pole 12 1/2 inches beyond the elevated curbing of a road did not constitute an act of negligence in a personal injury action in which a car failed to negotiate a curve and crashed into the pole. Shapiro v. Toyota Motor Co., 38 N.C. App. 658, 248 S.E.2d 868 (1978).


§ 62-181. Electric and hydroelectric power companies may appropriate highways; conditions.

Every electric power or hydroelectric power corporation, person, firm or copartnership which may exercise the right of eminent domain under the Chapter Eminent Domain, where in the development of electric or hydroelectric power it shall become necessary to use or occupy any public highway, or any part of the same, after obtaining the consent of the public road authorities having supervision of such public highway, shall have power to appropriate said public highway for the development of electric or hydroelectric power: Provided, that said electric power or hydroelectric power corporation shall construct an equally good public highway, by a route to be selected by and subject to the approval and satisfaction of the public road authorities having supervision of such public highway: Provided further, that said company shall pay all damages to be assessed as provided by law, by the damming of water, the discontinuance of the road, and for the laying out of said new road.

History

(1911, c. 114; C.S., s. 1696; 1939, c. 228, s. 2; 1963, c. 1165, s. 1.)

Cross References. - As to what corporations may exercise the right of eminent domain, see G.S. 40A-3.

CASE NOTES

Change in Section of Highway. - Where a hydroelectric power company appropriated a section of a public highway and built another section in lieu thereof, the provision of the statute that the company pay all damages assessed as provided by law did not entitle the plaintiff to recover damages for the slight change in the road causing inconvenience to him in hauling wood, etc., to and from his market town. Crowell v. Tallassee Power Co., 200 N.C. 208, 156 S.E. 493 (1931).


§ 62-182. Acquisition of right-of-way by contract.

Such telegraph, telephone, or electric power or lighting company has power to contract with any person or corporation, the owner of any lands or of any franchise or easement therein, over which its lines are proposed to be erected, for the right-of-way for planting, repairing and preservation of its poles or other property, and for the erection and occupation of offices at suitable distances for the public accommodation. This section shall not be construed as requiring electric power or lighting companies to erect offices for public accommodation.

History

(1874-5, c. 203, s. 3; Code, s. 2008; 1899, c. 64; 1903, c. 562, ss. 1, 2; Rev., s. 1572; C.S., s. 1697; 1963, c. 1165, s. 1.)

Cross References. - As to recording deeds of easement, see G.S. 47-27.

CASE NOTES

Nonowner Cannot Grant Easement. - Railroad company which is not the owner of the soil cannot grant an easement to a telegraph company. Hodges v. Western Union Tel. Co., 133 N.C. 225, 45 S.E. 572 (1903). See also, Narron v. Wilmington & W.R.R., 122 N.C. 856, 29 S.E. 356 (1898).

How Easement Acquired. - A telegraph company can acquire an easement in lands for construction and maintenance of its lines by grant, or pursuant to statute, or by adverse and continuous use for the period of 20 years. Teeter v. Postal Tel. Cable Co., 172 N.C. 783, 90 S.E. 941 (1916).


§ 62-182.1. Access to dedicated public right-of-way.

When any map or plat of a subdivision, recorded as provided in G.S. 47-30 and G.S. 136-102.6, reflects the dedication of a public street or other public right-of-way, the dedicated public street or public right-of-way shall, upon recordation of the map or plat, become immediately available for use by any public utility, telephone membership corporation organized under G.S. 117-30, or cable television system to install, maintain, and operate lines, cables, or facilities for the provision of service to the public. No public utility, telephone membership corporation organized under G.S. 117-30, or cable television system shall place or erect any line, cable, or facility in, over, or upon a street or right-of-way in a subdivision that is intended to become a public street or public right-of-way, until a map or plat of the subdivision has been recorded as provided in G.S. 47-30 and G.S. 136-102.6, and except in accordance with procedures established by the Department of Transportation, Division of Highways, for accommodating utilities or cable television systems on highway rights-of-way. Upon recordation of a map or plat of a subdivision as provided in G.S. 47-30 and G.S. 136-102.6, no liability shall attach to the developer of the property as a result of any activity of a public utility, telephone membership corporation organized under G.S. 117-30, or cable television system occurring in the dedicated public street or public right-of-way. Nothing in this section shall relieve the developer of the property of responsibilities under G.S. 136-102.6.

History

(2005-286, s. 1; 2006-259, s. 15.)

§ 62-183. Grant of eminent domain.

Such telegraph, telephone, electric power or lighting company shall be entitled, upon making just compensation therefor, to the right-of-way over the lands, privileges and easements of other persons and corporations, including rights-of-way for the construction, maintenance, and operation of pipelines for transporting fuel to their power plants; and to the right to erect poles and towers, to establish offices, and to take such lands as may be necessary for the establishment of their reservoirs, ponds, dams, works, railroads, or sidetracks, or powerhouses, with the right to divert the water from such ponds or reservoirs, and conduct the same by flume, ditch, conduit, waterway or pipeline, or in any other manner, to the point of use for the generation of power at its said powerhouses, returning said water to its proper channel after being so used.

History

(1874-5, c. 203, s. 4; Code, s. 2009; 1899, c. 64; 1903, c. 562; Rev., s. 1573; 1907, c. 74; C.S., s. 1698; 1921, c. 115; 1923, c. 60; 1925, c. 175; 1957, c. 1046; 1963, c. 1165, s. 1; 1981, c. 919, s. 2.)

Cross References. - As to the right of eminent domain in general, see Chapter 40A.

Legal Periodicals. - For article on remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Power of Eminent Domain Granted for Public Benefit. - The power of eminent domain is conferred upon corporations affected with public use, not so much for the benefit of the corporations themselves, but for the use and benefit of the people at large. Wissler v. Yadkin River Power Co., 158 N.C. 465, 74 S.E. 460 (1912).

Limitation of Right of Eminent Domain. - The statute limits the right of eminent domain, and any special power claimed by charter must clearly appear. Yadkin River Power Co. v. Whitney Co., 150 N.C. 31, 63 S.E. 188 (1908), appeal dismissed, 214 U.S. 503, 29 S. Ct. 702, 53 L. Ed. 1061 (1909). See also Blue Ridge Interurban Ry. v. Hendersonville Light & Power Co., 169 N.C. 471, 86 S.E. 296 (1915), on rehearing, 171 N.C. 314, 88 S.E. 245 (1916).

Extent of Rights Usually Determined by Companies. - The extent of the rights to be acquired is primarily and very largely referred to the companies or grantees of the power, and only becomes an issuable question, usually determinable by the court, on allegation of facts tending to show bad faith on the part of the companies, or an oppressive or manifest abuse of their discretion. Yadkin River Power Co., v. Wissler, 160 N.C. 269, 76 S.E. 267 (1912). See also Carolina Cent. Ry. v. Love, 81 N.C. 434 (1879).

The right of eminent domain is not necessarily exhausted by a single exercise of the power, but, within the limits established by the general law or special charter, a subsequent or further exercise of the power may be permissible. Thomason v. Railroad, 142 N.C. 318, 55 S.E. 205 (1906); Yadkin River Power Co. v. Wissler, 160 N.C. 269, 76 S.E. 267 (1912).

Construction of Future Facilities. - Property owner's contention that the energy company did not have the authority to condemn an easement to construct "future facilities" had to be rejected, as statutory law gave the energy company the authority to condemn an easement for "future facilities," including the right to erect poles and towers, and to establish offices and powerhouses. Progress Energy Carolinas, Inc. v. Strickland, 181 N.C. App. 610, 640 S.E.2d 856 (2007).

Compensation Essential. - Private property may not be taken for public use, directly or indirectly, without just compensation. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Conflicting Claims. - Where the claims of two companies conflict, the prior right belongs to that company which first defines and marks its route. Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 171 N.C. 248, 88 S.E. 349 (1916).

Effect of Subsequent Charter. - Where a legislative charter has been granted since a statute was passed, the powers given in the charter are not subject to the restriction of the statute. Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 171 N.C. 248, 88 S.E. 349 (1916).

Burden of Proof of Excepted Status on Defendant. - Where a quasi-public corporation brings action for condemnation, and the defendant resists upon the ground that the lands or power sought to be taken are protected by the statute, the burden of proof is upon the defendant to bring the lands or water power within the provision of the statute excepting them. Blue Ridge Interurban Ry. v. Hendersonville Light & Power Co., 171 N.C. 314, 88 S.E. 245 (1916), aff'd, 243 U.S. 563, 37 S. Ct. 440, 61 L. Ed. 900 (1917).

As to effect of federal statute, see Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Applied in Carolina Power & Light Co. v. Bowman, 229 N.C. 682, 51 S.E.2d 191 (1949).


§ 62-184. Dwelling house of owner, etc., may be taken under certain cases.

The dwelling house, yard, kitchen, garden or burial ground of the owner may be taken under G.S. 62-183 when the company alleges, and upon the proceedings to condemn makes it appear to the satisfaction of the court, that it owns or otherwise controls not less than seventy-five percent (75%) of the fall of the river or stream on which it proposes to erect its works, from the location of its proposed dam to the head of its pond or reservoir; or when the Commission, upon the petition filed by the company, shall, after due inquiry, so authorize. Nothing in this section repeals any part or feature of any private charter, but any firm or corporation acting under a private charter may operate under or adopt any feature of this section.

History

(1907, c. 74; 1917, c. 108; C.S., s. 1699; 1933, c. 134, ss. 7, 8; 1963, c. 1165, s. 1.)

§ 62-185. Exercise of right of eminent domain; parties' interests only taken; no survey required.

When such telegraph, telephone, electric power or lighting company fails on application therefor to secure by contract or agreement such right-of-way for the purposes aforesaid over the lands, privilege or easement of another person or corporation; it may condemn the said interest through the procedures of the Chapter entitled Eminent Domain.

Only the interest of such parties as are brought before the court shall be condemned in any such proceedings, and if the right-of-way of a railroad or railway company sought to be condemned extends into or through more counties than one, the whole right and controversy may be heard and determined in one county into or through which such right-of-way extends.

It is not necessary for the petitioner to make any survey of or over the right-of-way, nor to file any map or survey thereof, nor to file any certificate of the location of its line by its board of directors.

History

(1874-5, c. 203, s. 5; Code, s. 2010; 1899, c. 64, s. 2; 1903, c. 562; Rev., s. 1574; C.S., s. 1700; 1963, c. 1165, s. 1; 1981, c. 919, s. 3.)

Cross References. - As to eminent domain, see Chapter 40A.

CASE NOTES

Editor's Note. - The cases cited below were decided under former statutory provisions, and were decided prior to the 1981 amendment which substituted reference to the Eminent Domain Chapter for specific procedural provisions.

"Right-of-way" is not used as synonymous with "easement," but, as applied to railroads, includes the strip of land over which the track is laid through the country, and which is used in connection therewith, whether the railroad company owns only an easement therein or the title in fee. Postal Tel. Cable Co. v. Southern Ry., 90 F. 30 (W.D.N.C. 1898), appeal dismissed, 93 F. 393 (4th Cir. 1899).

Condemnation Not Confined to Right-of-Way. - The power of condemnation is not confined to a right-of-way, delimited by surface boundaries, but may be extended to cutting of trees or removing obstructions outside of these boundaries, when required for reasonable preservation and protection of lines and other property. Yadkin River Power Co. v. Wissler, 160 N.C. 269, 76 S.E. 267 (1912).

No Entry Until Damage Paid. - A telegraph company seeking to condemn a right-of-way for its line cannot be authorized to enter into possession and construct its line until damages have been assessed and paid into court. Postal Tel. Cable Co. v. Southern Ry., 89 F. 190 (W.D.N.C. 1898).

Permanent damages may be awarded a landowner who was injured by telegraph poles placed on his land. The company then acquires an easement. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902); Lambreth v. Southern Power Co., 152 N.C. 371, 67 S.E. 921 (1910).

A purchaser of land subsequent to the taking and erection thereon of a telegraph line may recover permanent damages for the easement taken, and the telegraph company thereby acquires the easement and right to maintain its line thereon. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Limitation of City's Authority. - Authority granted by a city to defendant electric company to remove a shade tree in front of plaintiff's home in order to put up its poles and wires did not justify the act of defendant in removing the tree; the city had no power to deprive plaintiff of his own property for such purpose without compensation. Brown v. Electric Co., 138 N.C. 533, 51 S.E. 62 (1905).

Who May File Petition. - The telegraph, etc., company alone has the right to file the petition in condemnation proceedings. The landowner is not given such right. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Petition Need Not State Railroad Company's Tenure. - It is not necessary that a petition asking for the condemnation of a right-of-way over the right-of-way of a railroad should state by what tenure the railroad company holds. Postal Tel. Cable Co. v. Southern Ry., 89 F. 190 (W.D.N.C. 1898).

Proceeding Does Not Affect Landowner Not Made a Party. - Condemnation proceeding by a telegraph company against a railroad company to condemn the right-of-way, to which the landowner is not a party, gives no rights against the landowner, but gives rights only against the parties before the court. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Jury Trial. - While ordinarily a jury trial is not required in condemnation proceedings, except as to the assessment of damages, the general rule does not apply where the pleadings put at issue the question of whether the character of the lands is such as to be embraced within the right conferred, or within an exception to that right under the terms of a statute. Blue Ridge Interurban R.R. v. Oates, 164 N.C. 167, 80 S.E. 398 (1913).

Judgment Necessary to Give Vested Right Under Prior Act. - In order to acquire a vested right under a statute to condemn lands which was subsequently repealed, it was necessary to show a finality by judgment in the proceedings before the later act became effective; and where it appeared that the summons was served in time, but that the prosecution bond, made a prerequisite by G.S. 1-109, was not, no vested right in the former statute could be acquired by further prosecution of the condemnation proceedings. Blue Ridge Interurban R.R. v. Oates, 164 N.C. 167, 80 S.E. 398 (1913).

Federal statute authorizing telegraph companies to construct their lines over and along any military or post roads of the United States does not give such companies the right to build their lines over the right-of-way of a railroad or other private property without the consent of the owner, or the condemnation of the right-of-way over such property in accordance with the laws of the state where situated. Postal Tel. Cable Co. v. Southern Ry., 89 F. 190 (W.D.N.C. 1898).

§ 62-186: Repealed by Session Laws 1981, c. 919, s. 4.

§ 62-187. Proceedings as under eminent domain.

The proceedings for the condemnation of lands, or any easement or interest therein, for the use of telegraph, telephone, electric power or lighting companies, the appraisal of the lands, or interest therein, the duty of the commissioners of appraisal, the right of either party to file exceptions, the report of commissioners, the mode and manner of appeal, the power and authority of the court or judge, the final judgment and the manner of its entry and enforcement, and the rights of the company pending the appeal, shall be as prescribed in Chapter 40A, the Chapter entitled Eminent Domain.

History

(Code, s. 2012; 1899, c. 64; 1903, c. 562; Rev., s. 1576; C.S., s. 1702; 1963, c. 1165, s. 1; 1981, c. 919, s. 5.)

CASE NOTES

This section refers to proceedings subsequent to the filing of the petition and the service of the required notices. In other words, it refers to the proceedings after the parties are all before the court. Phillips v. Postal Tel. Cable Co., 130 N.C. 513, 41 S.E. 1022 (1902).

Applied in Carolina Power & Light Co. v. Briggs, 268 N.C. 158, 150 S.E.2d 16 (1966); Duke Power Co. v. Parker, 18 N.C. App. 242, 196 S.E.2d 553 (1973).


§ 62-188: Repealed by Session Laws 1981, c. 919, s. 6.

§ 62-189. Powers granted corporations under Chapter exercisable by persons, firms or copartnerships.

All the rights, powers and obligations given, extended to, or that may be exercised by any corporation or incorporated company under this Chapter shall be extended to and likewise be exercised and are hereby granted unto all persons, firms or copartnerships engaged in or authorized by law to engage in the business herein described. Such persons, firms, copartnerships and corporations engaging in such business shall be subject to the provisions and requirements of the public laws which are applicable to others engaged in the same kind of business.

History

(1939, c. 228, s. 3; 1963, c. 1165, s. 1.)

§ 62-190. Right of eminent domain conferred upon pipeline companies; other rights.

  1. Any pipeline company transporting or conveying natural gas, gasoline, crude oil, coal in suspension, or other fluid substances by pipeline for the public for compensation, and incorporated under the laws of the State, or foreign corporations domesticated under the laws of North Carolina, may exercise the right of eminent domain under the provisions of the Chapter, Eminent Domain, and for the purpose of constructing and maintaining its pipelines and other works shall have all the rights and powers given other corporations by this Chapter and acts amendatory thereof. Nothing herein shall prohibit any such pipeline company granted the right of eminent domain under the laws of this State from extending its pipelines from within this State into another state for the purpose of transporting natural gas or coal in suspension into this State, nor to prohibit any such pipeline company from conveying or transporting natural gas, gasoline, crude oil, coal in suspension, or other fluid substances from within this State into another state. All such pipeline companies shall be deemed public utilities and shall be subject to regulation under the provisions of this Chapter.
  2. Liquid pipeline right-of-way must be selected to avoid, as far as practicable, areas containing private dwellings, industrial buildings, and places of assembly.

No liquid pipeline may be located within 50 feet of any private dwelling, or any industrial building or place of public assembly in which persons work, congregate, or assemble, unless it is provided with at least 12 inches of cover in addition to that prescribed in Part 195, Title 49, Code of Federal Regulations.

Any liquid pipeline installed underground must have at least 12 inches of clearance between the outside of the pipe and the extremity of any other underground structure, except that for drainage tile the minimum clearance may be less than 12 inches but not less than two inches. However, where 12 inches of clearance is impracticable, the clearance may be reduced if adequate provisions are made for corrosion control.

History

(1937, c. 280; 1951, c. 1002, s. 3; 1957, c. 1045, s. 2; 1963, c. 1165, s. 1; 1985, c. 696, s. 1; 1998-128, s. 8.)

Cross References. - As to definition of "public utility" including pipeline company, see G.S. 62-3(23)a.5.

As to eminent domain in general, see Chapter 40A.

Legal Periodicals. - For article urging revision and recodification of North Carolina's eminent domain laws, see 45 N.C.L. Rev. 587 (1967).

For note, "The Modern-Day Case of the Lorax Within the Fourth Circuit,” see 13 Elon L. Rev. 291 (2020).

CASE NOTES

For case reviewing the history of this section, see Colonial Pipeline Co. v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979).

The history of this indicates a legislative intent to broaden the scope of the act and to encompass interstate as well as local pipeline companies. Colonial Pipeline Co. v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979).

This section clearly confers the right of eminent domain upon interstate pipeline companies incorporated or domesticated under the laws of North Carolina, regardless of whether their pipelines originate in North Carolina. Colonial Pipeline Co. v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979).

Transport of Natural Gas Is a Public Purpose. - Property taken for the transport of natural gas between states and for its distribution within this state is a public purpose. Transcontinental Gas Pipe Line Corp. v. Calco Enters., 132 N.C. App. 237, 511 S.E.2d 671 (1999).

Effect of Former G.S. 40-2. - The legislature did not intend pipeline companies to be limited by former G.S. 40-2. Colonial Pipeline Co. v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979).

The language "pipelines originating in North Carolina" in former G.S. 40-2 does not impose a limitation on this section. Colonial Pipeline Co. v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979).

Measure of Damages. - The measures of damages to which landowners were entitled for taking of an easement by a gas company was the difference in the fair market value of the land immediately before the taking as compared to the fair market value of the land immediately after the taking. Public Serv. Co. v. Kiser, 9 N.C. App. 202, 175 S.E.2d 686 (1970).

Consideration of Precluded Future Uses in Determining Market Value. - In determining market value where a gas company has taken land for a pipeline, consideration of future uses to which the property is adapted and which are precluded by the taking should be limited to those uses which are so reasonably probable as to have an effect on the present market value of the land, and purely imaginative or speculative value should not be considered. Public Serv. Co. v. Kiser, 9 N.C. App. 202, 175 S.E.2d 686 (1970).


§ 62-191. Flume companies exercising right of eminent domain become common carriers.

All flume companies availing themselves of the right of eminent domain under the provisions of the Chapter Eminent Domain shall become common carriers of freight, for the purpose for which they are adapted, and shall be under the direction, control and supervision of the Commission in the same manner and for the same purposes as is by law provided for other common carriers of freight.

History

(1907, c. 39, s. 4; C.S., s. 3517; 1933, c. 134, s. 8; 1941, c. 97, § 5; 1963, c. 1165, s. 1.)

Local Modification. - Duplin: 1911, c. 214.

Cross References. - As to eminent domain in general, see Chapter 40A.


§ 62-192: Repealed by Session Laws 1998-128, s. 13, effective September 4, 1998.

§ 62-193. Disposition of certain unused easements.

  1. The underlying fee owner of land encumbered by any easement acquired by a utility company, whether acquired by purchase or by condemnation, on which construction has not been commenced by the utility company for the purpose for which the easement was acquired within 20 years of the date of acquisition, may file a complaint with the Commission for an order requiring the utility company to terminate the easement in exchange for payment by the underlying fee owner of the current fair market value of the easement.
  2. Upon receipt of the complaint, the Commission shall serve a copy of the complaint on each utility company named in the complaint, together with an order directing that the utility company file an answer to the complaint within 90 days after service.
  3. If the utility company agrees to terminate the easement, the utility company shall submit to the Commission, within the time allowed for answer, an original plus four copies of a statement of the utility company's agreement to terminate the easement.
  4. If the utility company does not agree that the easement should be terminated, the utility company may request a determination from the Commission as to whether the easement is necessary or advisable for the utility company's long-range needs for the provision of utilities to serve its service area, and whether termination of the easement would be contrary to the interests of the using and consuming public. The Commission may conduct a hearing on the matter, which shall be conducted in accordance with Article 4 of this Chapter. Either party may appeal the Commission's decision in accordance with Article 5 of this Chapter. The burden of proof shall be on the utility company to show that the easement is necessary or advisable for the utility company's long-range needs for the provision of utilities to serve its service area and that termination of the easement would be contrary to the interests of the using and consuming public.
  5. If the underlying fee owner and the utility company cannot reach a mutually agreed upon fair market value of the easement, whether terminated voluntarily or by order of the Commission, the Commission shall make a request to the clerk of superior court in the county where the easement is located for the appointment of commissioners to determine the fair market value of the easement in accordance with the process set forth in G.S. 40A-48.
  6. If the Commission decides that the easement should not be terminated, the underlying fee owner may not file a complaint with the Commission under this section regarding the same easement for a period of five years from the date of the decision.
  7. For purposes of this section, the term "utility company" means a public utility as defined in G.S. 62-3(23), a municipality providing utility services, an authority organized under the North Carolina Water and Sewer Authorities Act, a sanitary district, a metropolitan water district, a metropolitan sewerage district, a metropolitan water and sewerage district, a county water and sewer district, or an electric or telephone membership corporation.

History

(2020-18, s. 1(a).)

Editor's Note. - Session Laws 2020-18, s. 1(b), made this section effective October 1, 2020, and applicable to easements acquired on or after that date.

Session Laws 2020-18, s. 16(a), is a severability clause.

§§ 62-194 through 62-199: Reserved for future codification purposes.

ARTICLE 10. Transportation in General.

Sec.

§ 62-200. Duty to transport household goods within a reasonable time.

  1. It shall be unlawful for any common carrier of household goods doing business in this State to omit or neglect to transport within a reasonable time any goods, merchandise or other articles of value received by it for shipment and billed to or from any place in this State, unless otherwise agreed upon between the carrier and the shipper, or unless the same be burned, stolen or otherwise destroyed, or unless otherwise provided by the Commission.
  2. Any common carrier violating any of the provisions of this section shall forfeit to the party aggrieved the sum of ten dollars ($10.00) for the first day and one dollar ($1.00) for each succeeding day of such unlawful detention or neglect, but the forfeiture shall not be collected for a period exceeding 30 days.
  3. In reckoning what is a reasonable time for such transportation, it shall be considered that such common carrier has transported household goods within a reasonable time if it has done so in the ordinary time required for transporting such articles by similar carriers between the receiving and shipping stations. The Commission is authorized to establish reasonable times for transportation by the various modes of carriage which shall be held to be prima facie reasonable, and a failure to transport within such times shall be held prima facie unreasonable. This section shall be construed to refer not only to delay in starting the household goods from the station where they are received, but to require the delivery at their destination within the time specified: Provided, that if such delay shall be due to causes which could not in the exercise of ordinary care have been foreseen or which were unavoidable, then upon the establishment of these facts to the satisfaction of the court trying the cause, the defendant common carrier shall be relieved from any penalty for delay in the transportation of household goods, but it shall not be relieved from the costs of such action. In all actions to recover penalties against a common carrier under this section, the burden of proof shall be upon such carrier to show where the delay, if any, occurred. The penalties provided in this section shall be in addition to the damages recoverable for failure to transport within a reasonable time.
  4. This section shall not apply to motor carriers of passengers.

History

(Code, s. 1964; 1899, c. 164, s. 2, subsecs. 2, 7; 1903, c. 444; c. 590, s. 3; c. 693; 1905, c. 545; Rev., ss. 1094, 2631, 2632; 1907, cc. 217, 461; C.S., ss. 1053, 3515, 3516; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1995, c. 523, s. 11; 1995 (Reg. Sess., 1996), c. 742, s. 33; 1998-128, s. 9.)

Cross References. - As to venue of actions against railroads, see G.S. 1-81.

CASE NOTES

As to constitutionality of former section, see Grocery Co. v. Railroad Co., 136 N.C. 396, 48 S.E. 801 (1904); Rollins v. Seaboard Air Line Ry., 146 N.C. 153, 59 S.E. 671 (1907); Davis v. Southern Ry., 147 N.C. 68, 60 S.E. 722 (1908); Owens v. Hines, 178 N.C. 325, 100 S.E. 617 (1919), rev'd on other grounds, 256 U.S. 565, 41 S. Ct. 597, 65 L. Ed. 1093 (1921).

Penalty Not Applicable to Interstate Shipments. - A penalty may not be recovered of the carrier of an interstate shipment for negligent delay in transportation under this section. Bivens Bros. v. Atlantic C.L.R.R., 176 N.C. 414, 97 S.E. 215 (1918). See also Hickory Marble & Granite Co. v. Southern Ry., 147 N.C. 53, 60 S.E. 719 (1908).

A penalty cannot be recovered for the failure of a railroad company to transport freight within a reasonable time when the initial and terminal points are within the State, but the shipment necessarily passes into another state in transit. Such is interstate commerce and cannot be interfered with by the State. Shelby Ice & Fuel Co. v. Southern Ry., 147 N.C. 66, 60 S.E. 721 (1908).

For review of the history of legislative penalties for refusal of railroads to transport freight, see Grocery Co. v. Railroad Co., 136 N.C. 396, 48 S.E. 801 (1904).

As to strict construction of former section, see Alexander v. Atlantic C.L.R.R., 144 N.C. 93, 56 S.E. 697 (1907).

Former section did not supersede or alter carrier's duty at common law, but merely enforced an admitted duty and superadded a penalty. Meredith v. Railroad Co., 137 N.C. 478, 50 S.E. 1 (1905).

"Ordinary Time" a Jury Question. - The question of "ordinary time" for the transportation of freight by the carrier, in a suit for a penalty for failure to transport, is a question of fact for the jury. Shelby Ice & Fuel Co. v. Southern Ry., 147 N.C. 66, 60 S.E. 721 (1908); Wall-Huske Co. v. Southern Ry., 147 N.C. 407, 61 S.E. 277 (1908).

In an action for the recovery of a penalty, it was for the jury to find what was "ordinary" time, under the surrounding circumstances, and whether the defendant transported freight within such time, as well as the amount of recovery. It is error for the trial court to instruct the jury that if they believe the evidence they should answer the issue in a certain way or in a sum certain. Davis v. Southern Ry., 147 N.C. 68, 60 S.E. 722 (1908).

No "hard and fast" rule is fixed in defining reasonable time. Jenkins v. Southern Ry., 146 N.C. 178, 59 S.E. 663 (1907).

Burden of Proof Where Time Prima Facie Reasonable. - When the evidence discloses that the time taken by the railroad company for transporting goods, etc., was prima facie reasonable as fixed by the statute, the question of reasonable time is one for the jury to measure by the statutory standard, the burden of proof being upon the plaintiff. Alexander v. Atlantic C.L.R.R., 144 N.C. 93, 56 S.E. 697 (1907).

How Unreasonableness of Time May Be Shown. - In an action to recover the penalty, the burden of proof is on the plaintiff to show that the carrier failed to transport and deliver the goods within a reasonable time, which is defined to be the "ordinary time" required to transport and deliver. This may be shown by proving the distance over which the goods are to be transported and the time consumed therein. From this evidence the jury may, as a matter of common knowledge and observation, draw the conclusion whether, in view of the usual speed of freight trains, the time consumed, the distance, and other conditions, the carrier has failed to transport and deliver within a reasonable time. Jenkins v. Southern Ry., 146 N.C. 178, 59 S.E. 663 (1907).

Over 21 Days to Transport Articles 58 Miles. - Where it was admitted that certain articles were received by defendant to be transported and delivered to plaintiff, the place of shipment and destination both being in the State, 58 miles apart, with but one intermediate point between them, and that the articles were not delivered to plaintiff within 21 days, the delay was unreasonable. Watson v. Atlantic C.L.R.R., 145 N.C. 236, 59 S.E. 55 (1907).

Twelve Days to Transport Shipment 25 Miles. - When there was evidence that it took 12 days to transport a certain shipment from one station to another only 25 miles away, on the same railroad, the jury would be permitted, from their common observation and experience, to consider and determine the question of ordinary time between the two points, and, in the absence of explanation by defendant, fix the amount of wrongful delay. Rollins v. Seaboard Air Line Ry., 146 N.C. 153, 59 S.E. 671 (1907).

For cases construing former provision making delay of two days at initial point and 48 hours at one intermediate point for each 100 miles prima facie reasonable, see Meredith v. Railroad Co., 137 N.C. 478, 50 S.E. 1 (1905); Davis & Hooks v. Atlantic C.L.R.R., 145 N.C. 207, 59 S.E. 53 (1907); Watson v. Atlantic C.L.R.R., 145 N.C. 236, 59 S.E. 55 (1907); Jenkins v. Southern Ry., 146 N.C. 178, 59 S.E. 663 (1907); Wall-Huske Co. v. Southern Ry., 147 N.C. 407, 61 S.E. 277 (1908); Blue Ridge Collection Agency v. Southern Ry., 147 N.C. 593, 61 S.E. 462 (1908); Talley & Baughman, Inc. v. Atlantic C.L.R.R., 198 N.C. 492, 152 S.E. 390 (1930).

Negligent Default in Delivery to Consignee. - Former similar section extended the penalty to cases of negligent default in the carrier's making delivery of the freight to the consignee. Mitchell v. Atlantic C.L.R.R., 183 N.C. 162, 110 S.E. 859 (1922), decided prior to 1907 amendment including such delays, see Alexander v. Atlantic C.L.R.R., 144 N.C. 93, 56 S.E. 697 (1907).

When Transportation Ceases. - Transportation ceases when the duty of the carrier as a warehouseman commences, and in respect to freight transported in carload lots, when the car reaches its destination and is placed for unloading. What particular parts of the carrier's tracks and freight yards may be used for such purposes must of necessity be left to its discretion, but the car must be reasonably accessible and placed for delivery before transportation is fully ended. Brooks Mfg. Co. v. Southern Ry., 152 N.C. 665, 68 S.E. 243 (1910).

Former section did not apply to a delivery on the private tracks of a consignee, but to avoid the penalty it was required of the carrier to place for delivery a carload shipment on its track at destination at a place reasonably accessible. Brooks Mfg. Co. v. Southern Ry., 152 N.C. 665, 68 S.E. 243 (1910).

Transportation does not cease when a carload is placed by the carrier within the yard limits of the point of destination. Wall-Huske Co. v. Southern Ry., 147 N.C. 407, 61 S.E. 277 (1908).

Duty to Notify Consignee. - Where a shipment of goods is delivered to a railroad company for transportation, the title vests in the consignee, with the duty resting upon the carrier on the arrival of the goods at destination to notify the consignee and make delivery. This principle applied to a side-station when notification of arrival should have been given from a nearby station, and the inquiring consignee was there misinformed as to the arrival, and the car in the meanwhile was broken into and the shipment stolen. Acme Mfg. Co. v. Tucker, 183 N.C. 303, 111 S.E. 525 (1922).

When Goods Travel over Several Lines. - When the initial carrier delivers goods to its connecting carrier for further transportation to their destination, and an unreasonable delay occurs, without evidence as to which carrier was responsible for the delay, the defendant, the initial carrier, is liable for the entire delay, the burden of proof being upon it as the party having the evidence peculiarly within its own knowledge or possession. Watson v. Atlantic C.L.R.R., 145 N.C. 236, 59 S.E. 55 (1907).

Where an intrastate shipment of goods is transported over connecting lines to its destination, it is proper for the trial court to make both roads parties to an action to recover the penalty for the failure to transport safely and within a reasonable time, the burden being upon each defendant to show that it had not failed in its duty. Sellars Hosiery Mills v. Southern Ry., 174 N.C. 449, 93 S.E. 952 (1917).

Who Is "Party Aggrieved". - The plaintiff is entitled to recover the penalty as the "party aggrieved," for defendant's wrongfully failing to transport freight within a reasonable time, where the facts show that, from the attendant circumstances or terms of the agreement, he is the one whose legal right is denied and who is alone interested in having the transportation properly made. Cardwell v. Southern Ry., 146 N.C. 218, 59 S.E. 673 (1907).

When the consignor ships goods to be sold for his own benefit, he is the "party aggrieved," and the proper party plaintiff. Robertson v. Atlantic C.L.R.R., 148 N.C. 323, 62 S.E. 413 (1908).

The plaintiff could maintain his action against the defendant railroad company for wrongful failure to transport certain goods received by the latter, and bill of lading issued by it to plaintiff, when it appeared that plaintiff shipped the goods to be sold for his benefit by the consignee, and that the plaintiff was the one who alone acquired the right to demand the service to be rendered by the defendant, and was the party aggrieved. Rollins v. Seaboard Air Line Ry., 146 N.C. 153, 59 S.E. 671 (1907).

Consignor as Party Aggrieved Where Goods Not to Be Paid for Until Delivery. - When the consignor had agreed with the consignee that the latter was only required to pay for the intrastate shipment when it reached its destination, the consignor could maintain his action for delay in transit, as the party aggrieved. Davis v. Southern Ry., 147 N.C. 68, 60 S.E. 722 (1908).

Vendor as Aggrieved Party. - When by the contract or agreement between a vendor and vendee of goods, the goods were to be "received, inspected and weighed" by the vendee before any part of the purchase price was payable, the title did not vest in the vendee, and the vendor was the "party aggrieved." Elliott v. Southern Ry., 155 N.C. 235, 71 S.E. 339 (1911).

Defendant's Knowledge of Who Is Aggrieved Party Immaterial. - When it is shown that the plaintiff is the "party aggrieved," it is of no importance and bears in no way on the justice of plaintiff's demand or of defendant's obligation, whether defendant knew who was the party aggrieved, either at the inception of the matter or at any other time. Rollins v. Seaboard Air Line Ry., 146 N.C. 153, 59 S.E. 671 (1907).

The real "party aggrieved" is entitled to recover the penalty, irrespective of the question of knowledge of or notice to the defendant. Cardwell v. Southern Ry., 146 N.C. 218, 59 S.E. 673 (1907).

Action Not Brought "on Relation of State". - The action for penalty is given directly to the party aggrieved, and is not required to be brought "on relation of the State." If it were, failure to bring the action in such form would be a mere informality, which could be remedied by amendment. Robertson v. Atlantic C.L.R.R., 148 N.C. 323, 62 S.E. 413 (1908).

Joinder of Actions. - An action for damages against a carrier for a lost shipment, and one for the penalty for unreasonable delay, do not merge into each other. They arise on contract and may be joined in the same action. Robertson v. Atlantic C.L.R.R., 148 N.C. 323, 62 S.E. 413 (1908).

Burden of Proof as to Destruction of Goods. - The burden of proof is on the carrier to show that it is relieved of the penalty because the goods were burned, stolen or destroyed. A showing that the goods were placed in defendant's car by the initial carrier and that search had been made therefor, and the absence of evidence that the goods had since been seen, was no evidence that they were burned, stolen or destroyed. Robertson v. Atlantic C.L.R.R., 148 N.C. 323, 62 S.E. 413 (1908).

When Bill of Lading Not Presumptive Evidence. - When it was the consignor's duty to load a car for shipment, which had been placed at its mill by the carrier, and the carrier's agent gave a bill of lading upon the statement of the consignor that the car had been loaded, without being required to verify the statement, the bill of lading was not presumptive evidence of the receipt of the contents of the car, and the question was an open one for the jury in a suit by the consignee for the penalty for failure to deliver. Peele v. Atlantic C.L.R.R., 149 N.C. 390, 63 S.E. 66 (1908).

Motion for Nonsuit Properly Denied. - Where a shipment of various articles was transported by the carrier to destination, and all were received by the consignee, except one of them, which was missing and remained in the carrier's warehouse beyond the statutory reasonable time, a motion for nonsuit was properly denied. Mitchell v. Atlantic C.L.R.R., 183 N.C. 162, 110 S.E. 859 (1922).

Verdict Incomplete. - Where it was established by the jury that a consignment of goods was carried to the delivering point by the carrier, which failed to deliver to the consignee, or to notify him, and the goods were lost while in its possession, the verdict was incomplete where there was no issue submitted as to whether the carrier, which was a party to the action, was in default in not delivering the goods to the consignee. Acme Mfg. Co. v. Tucker, 183 N.C. 303, 111 S.E. 525 (1922).


§ 62-201. Freight charges to be at legal rates; penalty for failure to deliver to consignee on tender of same.

All common carriers doing business in this State shall settle their freight charges according to the rate stipulated in the bill of lading, provided the rate therein stipulated be in conformity with the classifications and rates made and filed with the North Carolina Utilities Commission in the case of intrastate shipments, by which classifications and rates all consignees shall in all cases be entitled to settle freight charges with such carriers; and it shall be the duty of such common carriers to inform any consignee of the correct amount due for freight according to such classification and rates. Upon payment or tender of the amount due on any shipment which has arrived at its destination according to such classification and rates, such common carrier shall deliver the freight in question to the consignee. Any failure or refusal to comply with the provisions hereof shall subject such carrier so failing or refusing to liability for actual damages plus a penalty of fifty dollars ($50.00) for each such failure or refusal, to be recovered by any consignee aggrieved by a suit in a court of competent jurisdiction. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1905, c. 330, s. 1; Rev., s. 2633; C.S., s. 3518; 1933, c. 134, s. 8; 1941, c. 97, s. 5; 1963, c. 1165, s. 1.)

Cross References. - As to venue of actions against railroads, see G.S. 1-81.

As to rates of public utilities, see G.S. 62-130 et seq.

CASE NOTES

As to constitutionality of former section, see Harrill Bros. v. Southern Ry., 144 N.C. 532, 57 S.E. 383 (1907); Hockfield v. Southern Ry., 150 N.C. 419, 64 S.E. 181 (1909); Jeans v. Seaboard Air Line Ry., 164 N.C. 224, 80 S.E. 242 (1913).

Former Section Not Cumulative. - Former section imposed only one penalty for the refusal of the railroad company to deliver freight upon demand and tender of charges, and it was not cumulative upon more than one demand for the same offense. Harrill Bros. v. Southern Ry., 144 N.C. 532, 57 S.E. 383 (1907).

Where a railroad corporation chartered by another state leases a railroad chartered by this State, it is bound to observe and obey all laws of this State regulating the business of transportation. Hines & Battle v. Wilmington & W.R.R., 95 N.C. 434 (1886).

Intrastate Rebilling of Interstate Shipment. - Where an interstate shipment of goods was misdirected and the bill of lading was lost, and the shipment was rebilled from one point in the State to another therein, in an intrastate shipment, upon the carrier's violating former similar section, the penalty therein accrued. Hockfield v. Southern Ry., 150 N.C. 419, 64 S.E. 181 (1909).

Consignee must produce, upon the carrier's demand, a bill of lading for a prepaid shipment of goods in the carrier's possession. Jeans v. Seaboard Air Line Ry., 164 N.C. 224, 80 S.E. 242 (1913).

Insufficient Notice to Consignee. - Notice given by a carrier of the arrival of goods to a transfer company in the habit of hauling consignor's goods from the depot was not of itself sufficient notice to the consignee. Hockfield v. Southern Ry., 150 N.C. 419, 64 S.E. 181 (1909).

Burden of Proving Reason for Refusal to Deliver. - Where the consignee brings his action to recover the value of a shipment of goods from the carrier and shows that the shipment was addressed to him, was prepaid, and was in the carrier's possession at destination, and that a demand for delivery was made, the burden is on the carrier to show a valid reason for its refusal to deliver the shipment. Jeans v. Seaboard Air Line Ry., 164 N.C. 224, 80 S.E. 242 (1913).

No Liability for Unlawful Shipment. - A druggist who has not received a valid license to sell intoxicating liquors for the purposes and in the manner indicated may not recover of the carrier the penalty provided for failure to deliver such liquors to him for the purposes of sale, for such are unlawful and prohibited. Smith v. Southern Express Co., 166 N.C. 155, 82 S.E. 15 (1914).

Agent's Ignorance of Amount of Charges No Defense. - It is no defense to an action to recover a penalty for refusing to deliver a shipment upon tender of freight charges by the consignee for the defendant company to show that its agents did not know the correct amount of the charges because of the defendant's failure to file its schedule of rates. Harrill Bros. v. Southern Ry., 144 N.C. 532, 57 S.E. 383 (1907).

Rate When Smaller Cars Furnished. - Where a consignor requested two cars of a certain standard size and the carrier furnished four cars of a smaller size, the rate for the shipment must be the same. Yorke Furn. Co. v. Southern Ry., 16 N.C. 138, 162 N.C. 138, 78 S.E. 67 (1913).

Carrier cannot collect storage charges arising from wrongful refusal to deliver goods to consignee. Hockfield v. Southern Ry., 150 N.C. 419, 64 S.E. 181 (1909).

Applied in Atlantic C.L.R.R. v. West Paving Co., 228 N.C. 94, 44 S.E.2d 523 (1947).


§ 62-202. Baggage and freight to be carefully handled.

All common carriers shall handle with care all baggage and freight placed with them for transportation, and they shall be liable in damages for any and all injuries to the baggage or freight of persons from whom they have collected fare or charged freight while the same is under their control. Upon proof of injury to baggage or freight in the possession or under the control of any such carrier, it shall be presumed that the injury was caused by the negligence of the carrier. This section shall not apply to motor carriers of passengers.

History

(1897, c. 46; Rev., s. 2624; C.S., s. 3523; 1963, c. 1165, s. 1.)

Cross References. - As to conveying livestock in a cruel manner, see G.S. 14-363.

CASE NOTES

Delivery of Baggage to Carrier. - To fix the responsibility for lost baggage upon a railroad company, either as a common carrier or warehouseman, a delivery, actual or constructive, including an acceptance by the company, is necessary; and when baggage is taken by others to the station, and to places where baggage is usually received, some kind of notice must be given to the agent authorized to receive it. Williams v. Southern Ry., 155 N.C. 260, 71 S.E. 346 (1911).

The requisites of the general rule requiring delivery of baggage of a passenger to a railroad company in order to hold the company liable may become modified by a custom of the latter to consider and treat baggage as received when left at a given place, without further notice. Williams v. Southern Ry., 155 N.C. 260, 71 S.E. 346 (1911).

Effect of Stipulations Attempting to Limit Liability. - Stipulations upon a railroad ticket, limiting the liability of the carrier in a specified sum "unless a greater value has been declared by the owner and excess charge paid thereon at the time of taking passage," and similar provisions in a bill of lading for the transportation of freight, are void as an attempt on the part of the carrier to contract against its own negligence. Cooper v. Norfolk S.R.R., 161 N.C. 400, 77 S.E. 339 (1913).

A common carrier cannot contract with a passenger against the loss of baggage by its negligence. Thomas v. Southern Ry., 131 N.C. 590, 42 S.E. 964 (1902).

Liability for Articles Not Properly Baggage. - While the obligation of a carrier of passengers is limited to ordinary baggage, yet if it knowingly permits a passenger, either with or without payment of an extra charge, to take articles as baggage which are not properly such, it will be liable for their loss or for damage to them, though it may have been without any fault. Trouser Co. v. Railroad, 139 N.C. 382, 51 S.E. 973 (1905).

When Liability as Carrier Ceases. - When baggage has arrived at its destination and has been deposited at the usual or customary place of delivery and kept there a sufficient time for passenger to claim and remove the same, the company's liability as a common carrier ceases, and it is thereafter liable only as a warehouseman, and bound to the use of ordinary care. Trouser Co. v. Railroad, 139 N.C. 382, 51 S.E. 973 (1905).

Liability When Passenger Not Carried. - When there is no partnership arrangement between connecting lines of railroads, and a passenger buys a through ticket from a carrier to his destination on a connecting line, checks his trunk through to his destination and voluntarily returns to the starting point without going upon the road of the connecting lines, the latter carrier is not liable as insurer of the contents of the trunk from larceny by reason of taking the trunk to its destination, storing it there in its baggage room until its return is requested and then forwarding it to the junctional point, without compensation. Kindley v. Seaboard Air Line Ry., 151 N.C. 207, 65 S.E. 897 (1909).

Liability When Baggage Not on Same Train. - The passenger's right to a limited amount of baggage as a part of the consideration for the price of his ticket is upon condition that the baggage accompany the passenger on the same train; and where, without any default on the part of the carrier, its agent, without further charge, has the baggage forwarded on a later train, the carrier's liability is not that of an insurer, but of a gratuitous bailee, under the rule of the prudent man, and attaches only in instances of gross negligence. Perry v. Seaboard Air Line Ry., 171 N.C. 158, 88 S.E. 156 (1916).

Cited in Flexlon Fabrics, Inc. v. Wicker Pick-Up & Delivery Serv., Inc., 39 N.C. App. 443, 250 S.E.2d 723 (1979).


§ 62-203. Claims for loss or damage to goods; filing and adjustment.

  1. Every common carrier receiving household goods for transportation in intrastate commerce shall issue a bill of lading therefor, and shall be liable to the lawful holder thereof for any loss, damage, or injury to such household goods caused by it, or by any carrier participating in the haul when transported on a through bill of lading, and any such carrier delivering said household goods so received and transported shall be liable to the lawful holder of said bill of lading or to any party entitled to recover thereon for such loss, damage, or injury, notwithstanding any contract or agreement to the contrary; provided, however, the Commission may, by regulation or order, authorize or require any such common carrier to establish and maintain rates related to the value of shipments declared in writing by the shipper, or agreed upon as the release value of such shipments, such declaration or agreement to have no effect other than to limit liability and recovery to an amount not exceeding the value so declared or released, in which case, any tariff filed pursuant to such regulation or order shall specifically refer thereto; provided further, that a rate shall be afforded the shipper covering the full value of the goods shipped; provided further, that nothing in this section shall deprive any lawful holder of such bill of lading of any remedy or right of action which such holder has under existing law; provided further, that the carrier issuing such bill of lading, or delivering such household goods so received and transported, shall be entitled to recover from the carrier on whose route the loss, damage, or injury shall have been sustained the amount it may be required to pay to the owners of such property.
  2. Every claim for loss of or damage to household goods while in possession of a common carrier shall be adjusted and paid within 90 days after the filing of such claim with the agent of such carrier at the point of destination of such shipment, or point of delivery to another common carrier, by the consignee or at the point of origin by the consignor, when it shall appear that the consignee was the owner of the shipment: Provided, that no such claim shall be filed until after the arrival of the shipment, or some part thereof, at the point of destination, or until after the lapse of a reasonable time for the arrival thereof.
  3. In every case such common carrier shall be liable for the amount of such loss or damage, together with interest thereon from the date of the filing of the claim therefor until the payment thereof. Failure to adjust and pay such claim within the periods respectively herein prescribed shall subject each common carrier so failing to a penalty of fifty dollars ($50.00) for each and every such failure, to be recovered by any consignee aggrieved (or consignor, when it shall appear that the consignor was the owner of the property at the time of shipment and at the time of suit, and is, therefore, the party aggrieved), in any court of competent jurisdiction: Provided, that unless such consignee or consignor recover in such action the full amount claimed, no penalty shall be recovered, but only the actual amount of the loss or damage, with interest as aforesaid; and that no penalty shall be recoverable under the provisions of this section where claims have been filed by both the consignor and consignee, unless the time herein provided has elapsed after the withdrawal of one of the claims.
  4. A check shall be affixed to every parcel of baggage when taken for transportation by the agent or servant of a common carrier, if there is a handle, loop or fixture so that the same can be attached upon the parcel or baggage so offered for transportation, and a duplicate thereof given to the passenger or person delivering the same on his behalf. If such check be refused on demand, the common carrier shall pay to such passenger the sum of ten dollars ($10.00), to be recovered in a civil action; and further, no fare or toll shall be collected or received from such passenger, and if such passenger shall have paid his fare the same shall be refunded by the carrier.
  5. If a passenger, whose bag has been checked, shall produce the check and his baggage shall not be delivered to him, he may by an action recover the value of such baggage.
  6. Causes of action for the recovery of the possession of the property shipped, for loss or damage thereto, and for the penalties herein provided for, may be united in the same complaint.
  7. This section shall not deprive any consignee or consignor of any other rights or remedies existing against common carriers in regard to freight charges or claims for loss or damage to freight, but shall be deemed and held as creating an additional liability upon such common carriers.
  8. This section shall not apply to motor carriers of passengers and only subsection (a) of this section shall apply to motor carriers of property.

History

(1871-2, c. 138, s. 36; Code, s. 1970; 1905, c. 330, ss. 2, 4, 5; Rev., ss. 2623, 2634, 2635; 1907, c. 983; 1911, c. 139; C.S., ss. 3510, 3524, 3525; 1947, c. 781; c. 1008, s. 27; 1963, c. 1165, s. 1; 1995, c. 523, s. 12.)

Cross References. - As to venue of actions against railroads, see G.S. 1-81.

CASE NOTES

I. IN GENERAL.

Penalty Inapplicable to Interstate Shipments. - The entire regulation of interstate commerce is under federal control, and the penalty provided for by former provision similar to subsection (c) of this section for failure of a carrier to pay a claim in the time prescribed does not apply to interstate shipments. See Morphis v. Southern Express Co., 167 N.C. 139, 83 S.E. 1 (1914).

As to strict construction of former provisions similar to subsections (b) and (c), see Watkins v. American Ry. Express Co., 190 N.C. 605, 130 S.E. 305 (1925). See also B.F. Eagles Co. v. East Carolina Ry., 184 N.C. 66, 113 S.E. 512 (1922).

The common-law remedies of shippers and passengers were not taken away by former similar Chapter. Bell v. Norfolk S.R.R., 163 N.C. 180, 79 S.E. 421 (1913).

Action May Be Brought in Contract or Tort. - A person who has sustained injuries by reason of the failure of a railroad company to provide proper means of transportation or operate its trains may bring an action on contract, or in tort, independent of the statute. Purcell v. Richmond & D.R.R., 108 N.C. 414, 12 S.E. 954 (1891), overruled on other grounds, Hansley v. Jamesville & W.R. Co., 20 S.E. 528 (1894); Virginia-Carolina Peanut Co. v. Atlantic C.L.R.R., 155 N.C. 148, 71 S.E. 71 (1911).

Parol Agreement to Reship Sufficient. - When a carrier has received goods for transportation over its own and a connecting line which were not delivered, and upon consignor's parol request it has them reshipped to the initial or starting point, the latter agreement for reshipment, though resting in parol, is sufficient in an action for damages to the goods occurring while in the carrier's possession. Lyon v. Atlantic C.L.R.R., 165 N.C. 143, 81 S.E. 1 (1914).

Carrier Cannot Contract Against Own Negligence. - A common carrier may relieve itself from liability as an insurer upon a contract reasonable in its terms and founded upon a valuable consideration, but it cannot so limit its responsibility for loss or damage resulting from its negligence. Mitchell v. Carolina Cent. R.R., 124 N.C. 236, 32 S.E. 671 (1899); Everett v. Railroad, 138 N.C. 68, 50 S.E. 557 (1905).

Owner Cannot Generally Refuse Damaged Goods. - Damage to a shipment of goods by a railroad company, caused by the carrier's negligence, does not justify the owner in refusing to accept them on that account, unless the damages are sufficient to render the goods practically worthless. He must accept the goods and sue for the damages upon the refusal of the carrier to pay them. Whittington v. Southern Ry., 172 N.C. 501, 90 S.E. 505 (1916).

II. CONNECTING CARRIERS.

.

Duty Assumed by Carrier. - Where a carrier accepts goods for transportation, in the absence of a special contract, it assumes the duty of safely carrying, within a reasonable time, the goods to the end of its line, and delivering them in like condition to the connecting carrier. Meredith v. Railroad Co., 137 N.C. 478, 50 S.E. 1 (1905).

Duration of Duty of Safe Carriage. - The duty of safe carriage attaches as the goods pass into the custody of each company and ceases only when they are safely delivered to its successor. Lindley v. Richmond & D.R.R., 88 N.C. 547 (1883).

Burden of Proof as to Safe Delivery. - On proof that a carrier received goods in good condition, the burden of proof rests upon such carrier to show delivery in the same condition to the next carrier or to the consignee, such proof being peculiarly within its power. Meredith v. Railroad Co., 137 N.C. 478, 50 S.E. 1 (1905).

Admissibility of Evidence as to Condition of Freight. - To show that freight was in good condition when it was delivered by the defendant to a connecting line, evidence that it was the custom of agents of such lines to examine freights before receiving them, and if found in good condition to forward them, and that such examination was made and forwarding was done, was admissible. Knott v. Raleigh & G.R.R., 98 N.C. 73, 3 S.E. 735 (1887).

Prima Facie Case. - Where a shipment of goods is received by the consignee from the final carrier in bad condition, and there is evidence that this carrier received the goods from its connecting carrier in good condition, a prima facie case of negligence is made out against the delivering carrier, and presents sufficient evidence thereof to be submitted to the jury, with the burden of proof on it. Lyon v. Atlantic C.L.R.R., 165 N.C. 143, 81 S.E. 1 (1914).

Presumption of Damage. - Among connecting lines of railway, that one in whose hands goods are found damaged is presumed to have caused the damage, and the burden is upon it to rebut the presumption. Morganton Mfg. Co. v. Ohio River & Charleston Ry., 121 N.C. 514, 28 S.E. 474 (1897); Mitchell v. Carolina Cent. R.R., 124 N.C. 236, 32 S.E. 671 (1899); Gwyn Harper Mfg. Co. v. Carolina Cent. R.R., 128 N.C. 280, 38 S.E. 894 (1901).

Goods Found Damaged at Destination. - When goods are shipped over several connecting lines of carriers and are found in a damaged condition at destination, there is a rebuttable presumption that the injury was negligently inflicted by the last carrier. Boss v. Atlantic C.L.R.R., 156 N.C. 70, 72 S.E. 93 (1911); Beville v. Atlantic C.L.R.R., 159 N.C. 227, 74 S.E. 349 (1912).

Liability for Negligence of Connecting Carrier. - A railroad company whose line is one of several connecting roads between places from and to which freight is shipped, in the absence of a special contract, or proof of copartnership by which each of the connecting lines will become liable for the contracts of the others, is not responsible for damages for negligence occurring beyond its terminus. Knott v. Raleigh & G.R.R., 98 N.C. 73, 3 S.E. 735 (1887).

Where two or more common carriers unite in forming an association creating a through line for the transportation of freight, payment of tariff charges to be made at the beginning or end of the transportation, with through bills of lading, the freight charges to be divided according to the respective mileage of the companies, they become a copartnership and each line is liable for any damage resulting from delay or otherwise on any part of the through line, notwithstanding a provision in the bill of lading that each company shall be liable only for loss or damage occurring on its own line. Rocky Mount Mills v. Wilmington & W.R.R., 119 N.C. 693, 25 S.E. 854 (1896).

Effect of Court Order Relieving Initial Carrier. - While the initial carrier may also be held liable for damages to a shipment made over connecting lines, a direction of the court relieving it from liability does not necessarily relieve the carrier whose negligence caused the damages. Gilikin v. Norfolk S.R.R., 174 N.C. 137, 93 S.E. 469 (1917).

Interstate Shipments by Connecting Carriers. - While federal laws make the initial carrier liable for damages to a shipment over connecting lines, this does not relieve the intermediate or delivering carrier of responsibility for its own negligence, or prevent the State court from requiring the carriers to show which is responsible for the damage. Aydlett v. Norfolk S.R.R., 172 N.C. 47, 89 S.E. 1000 (1916).

Notice as to damages to the initial carrier of an interstate shipment of goods is sufficient notice to the connecting carrier. Gilikin v. Norfolk S.R.R., 174 N.C. 137, 93 S.E. 469 (1917).

III. FILING OF CLAIM.

.

Filing of Claim Prerequisite to Penalty. - A consignor of a shipment of goods is required to file his claim with the agent of the common carrier at the point of its origin, and this he must have done to maintain his action against the carrier for the penalty prescribed for its failure to settle for its loss, or damage thereto, within 90 days. Hamlet Grocery Co. v. Southern Ry., 170 N.C. 241, 87 S.E. 57 (1915).

In order to recover the penalty, the consignee must file his claim with the agent as the statute directs, and the filing thereof with another of the carrier's agents is insufficient. B.F. Eagles Co. v. East Carolina Ry., 184 N.C. 66, 113 S.E. 512 (1922).

Regulation of Time of Filing by Carrier. - A stipulation in a bill of lading denying the carrier's liability for damages unless written notice of such claim be filed within a specified period is in derogation of the common law, and while it will be upheld if reasonable, the burden of proof is on the carrier to show that it is. Phillips v. Seaboard Air Line Ry., 172 N.C. 86, 89 S.E. 1057 (1916).

Stipulation that claims must be filed in four months is reasonable. Culbreth v. Atlantic C.L.R.R., 169 N.C. 723, 86 S.E. 624 (1915).

An allowance of 60 days is reasonable, but 30 days is unreasonable. Gwyn Harper Mfg. Co. v. Carolina Cent. R.R., 128 N.C. 280, 38 S.E. 894 (1901).

Waiver of Stipulation. - The stipulation in a livestock bill of lading requiring that notice in writing be given the carrier's agent at destination of claim for damages to the animals shipped before they were removed or mingled with other animals, could be waived by the carrier's agent at the delivering point. T.W. Newborn & Co. v. Louisville & N.R.R., 170 N.C. 205, 87 S.E. 37 (1915).

As to necessity of written demand to enforce penalty, see Thompson v. Southern Express Co., 147 N.C. 343, 61 S.E. 182 (1908).

Failure to file a formal written demand is no bar to recovery of actual damages sustained. Hinkle, Craig & Co. v. Southern Ry., 126 N.C. 932, 36 S.E. 348 (1900); Kime v. Southern Ry., 153 N.C. 398, 69 S.E. 264 (1910).

Filing Claim by Mail. - The essential things necessary for the proper filing of the claim against the common carrier for damages, and for the penalty, being its delivery to and acceptance by the carrier's designated agent, such filing is not restricted to its manual delivery, but the same may be done through the agency of the United States mail. The delivery of the mail will be presumed. B.F. Eagles Co. v. East Carolina Ry., 184 N.C. 66, 113 S.E. 512 (1922).

It is not required that a claimant state the amount of his loss in his claim for damages against a carrier. McRary v. Southern Ry., 174 N.C. 563, 94 S.E. 107 (1917).

Notice to Negligent Connecting Carrier. - Where the second carrier in the connected line of shipment causes damages to the shipment by improperly loading it, it may not defeat an action to recover such damages, when the required notice within four months has been filed with and accepted without comment by it, on the ground that such notice had not been filed with the initial or final carrier under the terms of the contract of carriage. The doctrine of notice to the agent is applicable here. Aydlett v. Norfolk S.R.R., 172 N.C. 47, 89 S.E. 1000 (1916).

Notice as to Interstate Shipments. - The federal statutes, while recognizing the right of the carrier to stipulate for the filing of claims within a reasonable period, provide that if loss or damage is due to a delay in transit by negligence, no notice shall be required as a condition precedent to recovery. Mann v. Fairfield & Elizabeth City Transp. Co., 176 N.C. 104, 96 S.E. 731 (1918).

IV. ACTIONS.

.

Who May Bring Action. - Ordinarily the title to a shipment of goods by common carrier passes to the consignee upon acceptance by the carrier, and he may sue for damages thereto in transit; but when it is shown that the consignee refused to accept the damaged goods, and that the sale was cancelled by consent, the consignor may maintain his action against the carrier for damages. Aydlett v. Norfolk S.R.R., 172 N.C. 47, 89 S.E. 1000 (1916).

Joinder of Causes of Action. - A recovery of the value of a shipment of goods and the penalties for the refusal of the carrier to deliver and for the failure to settle the claim within the statutory period may be united in the same action. Jeans v. Seaboard Air Line Ry., 164 N.C. 224, 80 S.E. 242 (1913).

Separate and Distinct Issues. - In an action against a railroad company to recover damages to a shipment of goods and the penalty for the failure of defendant to pay the same within 90 days, the issues raised are entirely separate and distinct from each other, and the trial judge may set aside the verdict on the second issue, and retain that on the first one, for a retrial. Hussey v. Atlantic C.L.R.R., 183 N.C. 7, 110 S.E. 599 (1922).

Prima Facie Case. - In an action against the carrier for damages for the destruction of a shipment of freight by fire, a prima facie case is made out when the plaintiff shows the receipt of the freight for transportation and its nondelivery. Everett v. Railroad, 138 N.C. 68, 50 S.E. 557 (1905); Osborne v. Southern Ry., 175 N.C. 594, 96 S.E. 34 (1918).

Plaintiff Must Prove Failure to Settle. - The burden is on plaintiff to show that the common carrier has failed to settle his claim in 90 days, after written demand under statutory provisions, and the prima facie case made out by showing the unreasonable delay in the delivery of the shipment is not sufficient. Watkins v. American Ry. Express Co., 190 N.C. 605, 130 S.E. 305 (1925).

Burden on Carrier When Prima Facie Case Made. - In cases of limited liability, proof of shipment and loss or injury makes a prima facie case for the shipper, and then the burden is upon the carrier to show that the circumstances of the loss bring it within the excepted causes; when this is shown, the burden still rests upon the carrier of showing that the loss or injury was not due to its own negligence. Mitchell v. Carolina Cent. R.R., 124 N.C. 236, 32 S.E. 671 (1899).

Recovery Must Equal Claim. - In order to recover the penalty for failure to settle a claim for damages within 90 days, the burden is on plaintiff to show that the amount of his recovery is at least equal to the amount of his written demand. Watkins v. American Ry. Express Co., 190 N.C. 605, 130 S.E. 305 (1925).

Effect of Settlement After Penalty Accrues. - The proviso that the consignee must first recover the full amount claimed is only to protect the carrier against excessive demands and not to discourage settlements for losses, and plaintiff's right to recover the penalty in such suits is not lost by accepting settlement for damages for the full amount claimed after the penalty accrues. Rabon v. Atlantic C.L.R.R., 149 N.C. 59, 62 S.E. 743 (1908).

Measure of Damages for Delay. - In the trial of an action against a railroad company for loss occasioned by its delay in transporting machinery shipped over its line by plaintiff, which was engaged in equipping a cotton factory, where it appeared that workmen employed by the plaintiff were forced to remain idle, though under pay of plaintiff, the measure of plaintiff's damages was the interest on the unemployed capital, the wages paid to its workmen and such other costs and expenses incurred by plaintiff in consequence of the delay. Rocky Mount Mills v. Wilmington & W.R.R., 119 N.C. 693, 25 S.E. 854 (1896).


§ 62-204. Notice of claims, statute of limitations for loss, damage or injury to property.

Any claim for loss, damage or injury to property while in the possession of a common carrier shall be filed by the claimant with the carrier in writing within nine months after the same occurred, and the cause of action with respect thereto shall be deemed to have accrued at the expiration of 30 days after the date of such notice, and action for the recovery thereon may be commenced immediately thereafter or at any time within two years after notice in writing shall have been given to the claimant by the adverse party that the claim or any part thereof specified in such notice has been disallowed, and neither party shall by rule, regulation, contract, or otherwise, provide for a shorter time for filing such claims or for commencing actions thereon than the period set out in this section. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1947, c. 1008, s. 21; 1963, c. 1165, s. 1.)

§ 62-205. Joinder of causes of action.

To expedite the settlement of claims between shippers and common carriers, a shipper may join in the same complaint against a common carrier any number of claims for overcharges, or a common carrier may join in the same complaint any number of claims against a shipper for undercharges, whether such claims arose at the same time or in the course of shipments at different times; provided, that each such claim shall be so identified that the same and the allegations with respect thereto may be distinguished from other claims so joined in the complaint, and in cases in which the right of subrogation may be invoked the judgment shall specify the amount of recovery, if any, on each such claim. For the purpose of jurisdiction under this section the aggregate amount set out in the complaint shall be deemed the sum in controversy. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1947, c. 1008, s. 20; 1963, c. 1165, s. 1.)

§ 62-206. Carrier's right against prior carrier.

Any common carrier shall have all the rights and remedies herein provided for against a common carrier from which it received the household goods in question. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1905, c. 330, s. 3; Rev., s. 2636; C.S., s. 3526; 1963, c. 1165, s. 1; 1995, c. 523, s. 13.)

Cross References. - As to power of Utilities Commission to act as arbitrator in disputes between carriers, see G.S. 62-40.

§ 62-207: Repealed by Session Laws 1998-128, s. 13.

§ 62-208. Common carriers to settle promptly for cash-on-delivery shipments; penalty.

Every common carrier which shall fail to make settlement with the consignor of a cash-on-delivery shipment, either by payment of the moneys stipulated to be collected upon the delivery of the articles so shipped or by the return to such consignor of the article so shipped, within 20 days after demand made by the consignor and payment or tender of payment by him of the lawful charges for transportation, shall forfeit and pay to such consignor a penalty of twenty-five dollars ($25.00), where the value of the shipment is twenty-five dollars ($25.00) or less; and, where the value of the shipment is over twenty-five dollars ($25.00), a penalty equal to the value of the shipment; the penalty not to exceed fifty dollars ($50.00) in any case: Provided, no penalty shall be collectible where the shipment, through no act of negligence of the common carrier is burned, stolen or otherwise destroyed: Provided further, that the penalties here named shall be cumulative and shall not be in derogation of any right the consignor may have under any other provision of law to recover of the common carrier damages for the loss of any cash-on-delivery shipment or for negligent delay in handling the same. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1909, c. 866; C.S., s. 3530; 1963, c. 1165, s. 1.)

§ 62-209. Sale of unclaimed baggage or household goods; notice; sale of rejected property; escheat.

  1. Any common carrier which has had in its possession on hand at any destination in this State any article whether baggage or household goods, for a period of 60 days from its arrival at destination, which said carrier cannot deliver because unclaimed, may at the expiration of said 60 days sell the same at public auction at any point where in the opinion of the carrier the best price can be obtained: Provided, however, that notice of such sale shall be mailed to the consignor and consignee, by registered or certified mail, if known to such carrier, not less than 15 days before such sale shall be made; or if the name and address of the consignor and consignee cannot with reasonable diligence be ascertained by such carrier, notice of the sale shall be published once a week for two consecutive weeks in some newspaper of general circulation published at the point of sale: Provided, that if there is no such paper published at such point, the publication may be made in any paper having a general circulation in the State: Provided further, however, that if the nondelivery of said article is due to the consignee's and consignor's rejection of it, then such article may be sold by the carrier at public or private sale, and at such time and place as will in the carrier's judgment net the best price, and this without further notice to either consignee or consignor, and without the necessity of publication.
  2. Repealed by Session Laws 1995, c. 523, s. 14.
  3. The common carrier shall keep a record of the articles sold and of the prices obtained therefor, and shall, after deducting all charges and the expenses of the sale, including advertisement, if advertised, pay the balance to the owner of such articles on demand therefor made at any time within five years from the date of the sale. If no person shall claim the surplus within five years, such surplus shall be paid to the Escheat Fund of the Department of State Treasurer.
  4. This section shall not apply to motor carriers of passengers.

History

(1871-2, c. 138, s. 50; Code, s. 1987; Rev., s. 2639; 1921, c. 124, ss. 1, 2, 3; C.S., s. 3534; 1963, c. 1165, s. 1; 1981, c. 531, s. 17; 1995, c. 523, s. 14.)

Cross References. - As to unclaimed personalty escheating to The University of North Carolina, see G.S. 116B-4.

CASE NOTES

For decisions under former statute relating to sale of unclaimed freight, see Norfolk S.R.R. v. New Bern Iron Works & Supply Co., 172 N.C. 188, 90 S.E. 149 (1916); Holloman v. Southern Ry., 172 N.C. 372, 90 S.E. 292 (1916).


§ 62-210. Discrimination between connecting lines.

All common carriers subject to the provisions of this Chapter shall afford all reasonable, proper and equal facilities for the interchange of traffic between their respective lines and for the forwarding and delivering of passengers and freight to and from their several lines and those connecting therewith, and shall not discriminate in their rates, routes and charges against such connecting lines, and shall be required to make as close connection as practicable for the convenience of the traveling public. Common carriers shall obey all rules and regulations made by the Commission relating to trackage. Irregular route motor carriers shall interchange traffic only with the approval of the Commission. Provided, however, that this section shall not apply to motor carriers of passengers.

History

(1899, c. 164, s. 21; Rev., s. 1088; C.S., s. 1107; 1933, c. 134, s. 8; 1935, c. 258; 1941, c. 97; 1963, c. 1165, s. 1.)

Legal Periodicals. - As to the practice of specifying in published tariffs particular routes formed with connecting carriers, see 13 N.C.L. Rev. 364 (1935).

CASE NOTES

For case holding former similar section in the act creating the former Railroad Commission merely declaratory of the common law, see Atlantic Express Co. v. Wilmington & W.R.R., 111 N.C. 463, 16 S.E. 393 (1892).

Authority to Require Trains to Make Connection. - The Commission has power to require a railroad company to have a train arrive at a certain station on its road at a certain schedule time, so as to connect with the train of another company. SCC v. Railroad, 137 N.C. 1, 49 S.E. 191 (1904), aff'd, 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933 (1907).

A railroad company is not compelled to furnish express facilities to another to conduct an express business over its road the same as it provides for itself or affords to any other express company. Atlantic Express Co. v. Wilmington & W.R.R., 111 N.C. 463, 16 S.E. 393 (1892).


§ 62-211: Repealed by Session Laws 1995, c. 523, s. 15.

§ 62-212. Indemnity agreements in motor carrier transportation contracts.

  1. A provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract that purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless the promisee from or against any liability for loss or damage resulting from the negligence or intentional acts or omission of the promisee is against the public policy of this State and is void and unenforceable.
  2. The following definitions apply in this section:
    1. Motor carrier transportation contract. - A contract, agreement, or understanding covering at least one of the following:
      1. The transportation of property for compensation or hire by the motor carrier.
      2. Entrance on property by the motor carrier for the purpose of loading, unloading, or transporting property for compensation or hire.
      3. A service incidental to activity described in sub-subdivision a. or b. of this subdivision, including storage of property.
    2. Promisee. - The person with whom the motor carrier enters into a motor carrier transportation contract and any agents, employees, servants, or independent contractors who are directly responsible to that person, except for motor carriers party to a motor carrier transportation contract with the person, and the motor carrier's agents, employees, servants, or independent contractors directly responsible to the motor carrier.
  3. Nothing contained in this section affects a provision, clause, covenant, or agreement where the motor carrier indemnifies or holds harmless the contract's promisee against liability for damages to the extent that the damages were caused by and resulted from the negligence of the motor carrier, its agents, employees, servants, or independent contractors who are directly responsible to the motor carrier.
  4. Notwithstanding the other provisions contained in this section, the term "motor carrier transportation contract", as defined in this section, shall not include the Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America, or other agreements providing for the interchange, use or possession of intermodal chassis, containers, trailers, or other intermodal equipment that contain substantially the same indemnity provision as the provision contained in the Uniform Intermodal Interchange and Facilities Access Agreement.

History

(2005-185, s. 1; 2006-264, s. 45.5(a).)

§§ 62-213 through 62-219: Reserved for future codification purposes.

ARTICLE 11. Railroads.

§ 62-220: Recodified as G.S. 136-190 by Session Laws 1998-128, s. 14.

§§ 62-221, 62-222: Repealed by Session Laws 1998-128, s. 13.

§§ 62-223 through 62-226: Recodified as G.S. 136-191 through 136-194 by Session Laws 1998-128, s. 14.

§§ 62-227 through 62-234: Repealed by Session Laws 1998-128, s. 13.

§ 62-235: Repealed by Session Laws 1995 (Regular Session, 1996), c. 673, s. 3.

Editor's Note. - Session Laws 1995 (Reg. Sess., 1996), c. 673, s. 1, provides: "The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Rail Safety Section of the Transportation Division of the North Carolina Utilities Commission, is transferred to the Department of Transportation."

§ 62-236: Recodified as G.S. 136-20.1 by Session Laws 1995 (Regular Session, 1996), c. 673, s. 5.

§ 62-237: Recodified as G.S. 136-195 by Session Laws 1998-128, s. 14, effective September 4, 1998.

§§ 62-238, 62-239: Repealed by Session Laws 1998-128, s. 13, effective September 4, 1998.

§ 62-240: Recodified as G.S. 136-196 by Session Laws 1998-128, s. 14, effective September 4, 1998.

§§ 62-241 through 62-247: Repealed by Session Laws 1998-128, s. 13, effective September 4, 1998.

§§ 62-248 through 62-258: Reserved for future codification purposes.

ARTICLE 12. Motor Carriers.

Sec.

§ 62-259. Additional declaration of policy for motor carriers.

In addition to the declaration of policy set forth in G.S. 62-2 of Article 1 of Chapter 62, it is declared the policy of the State of North Carolina to preserve and continue all motor carrier transportation services now afforded this State; and to provide fair and impartial regulations of motor carriers in the use of the public highways in such a manner as to promote, in the interest of the public, the inherent advantages of highway transportation; to promote and preserve adequate economical and efficient service to all the communities of the State by motor carriers; to encourage and promote harmony among all carriers and to prevent discrimination, undue preferences or advantages, or unfair or destructive competitive practices between all carriers; to foster a coordinated statewide motor carrier service; and to conform with the national transportation policy and the federal motor carriers acts insofar as the same may be practical and adequate for application to intrastate commerce. The provisions of this section and these policies are applicable to bus companies and their rates and services only to the extent with which they are consistent with the provisions of G.S. 62-259.1 and of the Bus Regulatory Reform Act of 1985.

History

(1947, c. 1008, s. 1; 1949, c. 1132, s. 2; 1963, c. 1165, s. 1; 1985, c. 676, s. 16.)

Local Modification. - Cabarrus: 1947, c. 532; 1949, c. 1132, s. 39.

Cross References. - As to ridesharing arrangements, see G.S. 136-44.21 through 136-44.26.

Editor's Note. - This Article combines the Bus Act of 1949, Session Laws 1949, c. 1132, and the North Carolina Truck Act, Session Laws 1947, c. 1008.

Legal Periodicals. - For a discussion of the Bus Act of 1949, see 27 N.C.L. Rev. 467 (1949).

For survey of 1980 administrative law, see 59 N.C.L. Rev. 1024 (1981).

CASE NOTES

Purpose of Former Truck Act. - The North Carolina Truck Act was enacted to preserve and continue motor carrier transportation services. State ex rel. Utils. Comm'n v. Fredrickson Motor Express, 232 N.C. 178, 59 S.E.2d 580 (1950).

Policy of Former Bus Act Stated. - The policy of the law controlling the granting of bus franchises is to provide adequate, economical and efficient bus service at reasonable cost to all communities of the State, without discrimination, undue privileges or advantages or unfair or destructive competitive practices, all to the end of promoting the public interest. State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951).

As to application of former article of similar import, see City Coach Co. v. Gastonia Transit Co., 227 N.C. 391, 42 S.E.2d 398 (1947).

This section does not require the Utilities Commission to adopt a rule of the Interstate Commerce Commission. The Commission must make its own independent investigations, determinations and findings of fact based upon the evidence presented to it. State ex rel. Utilities Comm'n v. Associated Petro. Carriers, 13 N.C. App. 554, 186 S.E.2d 612 (1972), cert. denied, 281 N.C. 158, 188 S.E.2d 364 (1972).

Equal Treatment Required. - All who ship goods with common carriers are required to be treated equally with respect to the same category of service. State ex rel. Utils. Comm'n v. Bird Oil Co., 47 N.C. App. 1, 266 S.E.2d 838, rev'd on other grounds, 302 N.C. 14, 273 S.E.2d 232 (1980).

Cited in State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973); State ex rel. Utils. Comm'n v. Bird Oil Co., 302 N.C. 14, 273 S.E.2d 232 (1981); State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).


§ 62-259.1. Specific declaration of policy for bus companies.

The transportation of passengers, their baggage and express, by bus companies has become increasingly subject to competition from other forms of transportation which are unregulated or only partially regulated as to rates and services. It is in the public interest and it is the policy of this State that bus companies be partially deregulated so that they may rely upon competitive market forces to determine the best quality, variety and price of bus services, thereby promoting the public health, safety and welfare by strengthening and increasing the viability of this necessary form of transportation.

History

(1985, c. 676, s. 17.)

§ 62-260. Exemptions from regulations.

  1. Nothing in this Chapter shall be construed to include persons and vehicles engaged in one or more of the following services by motor vehicle if not engaged at the time in the transportation of other passengers or other property by motor vehicle for compensation:
    1. Transportation of passengers or household goods for or under the control of the State of North Carolina, or any political subdivision thereof, or any board, department or commission of the State, or any institution owned and supported by the State;
    2. Transportation of passengers by taxicabs when not carrying more than fifteen passengers or transportation by other motor vehicles performing bona fide taxicab service and not carrying more than fifteen passengers in a single vehicle at the same time when such taxicab or other vehicle performing bona fide taxicab service is not operated on a regular route or between termini; provided, no taxicab while operating over the regular route of a common carrier outside of a municipality and a residential and commercial zone adjacent thereto, as such zone may be determined by the Commission as provided in subdivision (8) of this subsection, shall solicit passengers along such route, but nothing herein shall be construed to prohibit a taxicab operator from picking up passengers along such route upon call, sign or signal from prospective passengers;
    3. Transportation by motor vehicles owned or operated by or on behalf of hotels while used exclusively for the transportation of hotel patronage between hotels and local railroad or other common carrier stations;
    4. Transportation of passengers to and from airports and passenger airline terminals when such transportation is incidental to transportation by aircraft;
    5. Transportation of passengers by trolley buses operated by electric power derived from a fixed overhead wire, furnishing local passenger transportation similar to street railway service;
    6. Transportation by motor vehicles used exclusively for the transportation of passengers to or from religious services or transportation of pupils and employees to and from private or parochial schools or transportation to and from functions for students and employees of private or parochial schools;
    7. Transportation of any bona fide employees to and from their place(s) of regular employment;
    8. Transportation of passengers when the movement is within a municipality exclusively, or within contiguous municipalities and within a residential and commercial zone adjacent to and a part of such municipality or contiguous municipalities; provided, the Commission shall have power in its discretion, in any particular case, to fix the limits of any such zone;
    9. through (17) Repealed by Session Laws 1995, c. 523, s. 16.
  2. The Commission shall have jurisdiction to fix rates of carriers of passengers operating as described in (5) and (8) of subsection (a) of this section in the manner provided in this Chapter, and shall have jurisdiction to hear and determine controversies with respect to extensions and services, and the Commission's rules of practice shall include appropriate provisions for bringing such controversies before the Commission and for the hearing and determination of the same; provided nothing in this paragraph shall include taxicabs.
  3. The Commission may conduct investigations to determine whether any person purporting to operate under the exemption provisions of this section is, in fact, so operating, and make such orders as it deems necessary to enforce compliance with this section.
  4. The venue for any action commenced to enforce compliance with the terms of this Article against any person purporting to operate under any of the exemptions provided in this section shall be in one of the counties of the superior court district or set of districts as defined in G.S. 7A-41.1 wherein the violation is alleged to have taken place and such person shall be entitled to trial by jury.
  5. None of the provisions of this section nor any of the provisions of this Chapter shall be construed so as to prohibit or regulate the transportation of property by any motor carrier when the movement is within a municipality or within contiguous municipalities and within a zone adjacent to and commercially a part of such municipality or contiguous municipalities, as defined by the Commission. The Commission shall have the power in its discretion, in any particular case, to fix the limits of any such zone. Nothing herein shall be construed as an abridgment of the police powers of any municipality over such operation wholly within any such municipality. Nothing in this Chapter shall be construed to prohibit or regulate the transportation of household effects of families from one residence to another by persons who do not hold themselves out as being, and are not generally engaged in the business of transporting such property for compensation.
  6. Notwithstanding the exemption for transportation of passengers and household goods provided under subsections (a) through (e) of this section, all motor carriers transporting passengers for compensation under said exemptions or under any special exemptions granted by the Utilities Commission under G.S. 62-261 shall be subject to the same requirements for security for protection of the public as are established for regulated motor common carriers by the rules of the Utilities Commission pursuant to G.S. 62-268, and all such motor carriers transporting for hire under said exemption provisions shall further be subject to the same requirements for safety of operation of said motor vehicles as are required of regulated motor common carriers under the provisions of Chapter 20 and the regulations of the Division adopted pursuant thereto. The Division is authorized to promulgate rules and regulations for the enforcement of said requirements in the case of all such exempt operations, and the officers and agents of the Division shall have full authority to inspect said exempt vehicles and to apply all enforcement regulations and penalties for violation of said security regulations and safety regulations as in the case of regulated motor carriers.
  7. The owners of all motor vehicles used in any transportation for compensation which is declared to be exempt under this section shall register such operation with the Division of Motor Vehicles and shall secure from the Division of Motor Vehicles a certificate of exemption.

(18) Charter parties, as defined by this subdivision when such charter party is sponsored or organized by, and used by, any organized senior citizen group whose members are sixty (60) years of age or older. Such charter party shall be subject to subsections (f) and (g) of this section. "Charter party", for the purpose of this subdivision, means a group of persons who, pursuant to a common purpose and under a single contract, and at a fixed charge for the vehicle, have acquired the exclusive use of a passenger-carrying motor vehicle to travel together as a group from a point of origin to a specified destination or for a particular itinerary, either agreed upon in advance or modified by the chartering group after having left the place of origin.

History

(1947, c. 1008, s. 4; 1949, c. 1132, s. 5; 1951, c. 987, s. 1; 1953, c. 1140, s. 2; 1955, c. 1194, ss. 1, 2; 1959, c. 102, c. 639, s. 15; 1963, c. 1165, c. 1; 1967, cc. 1135, 1203; 1969, c. 681; 1971, cc. 856, 1192; 1973, c. 175; 1977, c. 217; 1979, c. 204, s. 1; 1985, c. 454, ss. 9-11; 1987 (Reg. Sess., 1988), c. 1037, s. 94; 1995, c. 523, s. 16.)

CASE NOTES

Rate Scheme Held Unconstitutional. - The State regulatory scheme by which the Utilities Commission set rates for franchised carriers to charge the U.S. Army in transportation of household goods violated the national procurement policy and was an unconstitutional burden on the United States in the exercise of its constitutional powers. United States v. North Carolina Utils. Comm'n, 352 F. Supp. 274 (E.D.N.C. 1972).

The Utilities Commission is not vested with power to require the operators of services enumerated in subdivisions (1) to (8) of subsection (a) to obtain a franchise from it and does not have any supervision or jurisdiction over such operation, except the operations set forth in subdivisions (5) and (8) of subsection (a), and as to them it retains jurisdiction to fix rates and "to hear and determine controversies with respect to extensions and services." City of Winston-Salem v. Winston-Salem City Coach Lines, 245 N.C. 179, 95 S.E.2d 510 (1956).

Commission Has Jurisdiction to Determine Exemptions. - The Commission has jurisdiction to determine whether or not the actual operations of a carrier fall under the exemptive provisions. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

Jurisdiction of Commission over City Bus Lines. - The Commission has been given specific authority to fix city bus fares. State ex rel. Utils. Comm'n v. City of Greensboro, 244 N.C. 247, 93 S.E.2d 151 (1956).

Any provisions with respect to rates and services contained in a franchise contract between a utilities company and a municipal corporation, authorizing the utilities company to transport passengers over its streets, are subject to the orders of the Utilities Commission in respect thereto. City of Winston-Salem v. Winston-Salem City Coach Lines, 245 N.C. 179, 95 S.E.2d 510 (1956).

An intracity carrier, holding a certificate of exemption issued by the Commission and a franchise from the city or town in which it operates, is exempt from control of the Commission, except as to rates and controversies with respect to extensions and services. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

Dispute as to Curtailment of Services by Bus Carrier. - Where a municipality has granted a franchise to a utilities company to operate passenger buses over its streets, the parties may mutually agree upon extensions and services, changes in routes, or curtailment of services, when in the opinion of the governing board of the municipality such changes are, under the existing conditions, for the best interest of all concerned, including the public. However, when the parties are unable to agree to a proposed curtailment of existing services, the matter is within the exclusive jurisdiction of the Utilities Commission and the municipality may not enjoin the utility from the proposed curtailment of services, although the utility may not change its schedules or curtail its services unless given authority to do so by the Utilities Commission. City of Winston-Salem v. Winston-Salem City Coach Lines, 245 N.C. 179, 95 S.E.2d 510 (1956).

No Territorial Limitations on Intracity Carrier When Subdivisions (a)(1) and (a)(6) Apply. - An exempted intracity carrier under subdivision (a)(8) has no territorial limitations as to the transportation of passengers under subdivisions (a)(1) and (a)(6) of this section, where the request for such services arises within the area for which such carrier holds a certificate of exemption from the Commission and a franchise from the municipality in which it operates or within any additional zone or zones adjacent thereto which have been fixed by the Commission. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

Operations Devoted Exclusively to Transportation of Employees to and from Work. - The North Carolina Utilities Commission does not have regulatory supervision of operations devoted exclusively to the transportation by motor vehicle of the bona fide employees of industrial plants to and from the places of their employment, even in cases where the persons conducting such operations are engaged at the same time or at other times in carrying on the callings of common carriers by motor vehicle. State ex rel. Utils. Comm'n v. Carolina Coach Co., 236 N.C. 583, 73 S.E.2d 562 (1952).

Transportation to and from Federal Military Reservation. - Carriers in intrastate commerce transporting passengers for hire to and from federal military reservations or bases are exempted from regulation of the Utilities Commission only if such carriers have been procured by the United States government to carry passengers for it, or the transportation of such passengers is under the control of the United States. Bryant v. Barber, 237 N.C. 480, 75 S.E.2d 410 (1953).

Transportation of Athletic Teams and School Bands. - While it is true that the statute which governs the operation of school buses makes no provision one way or the other for the transportation of athletic teams or school bands, it is equally true that school bands and athletic teams are under the control of the school authorities. Therefore, the board controlling such activities would have the inherent right to contract for such transportation as might be necessary to transport its athletic teams and its bands to and from events which have been scheduled under the supervision of school authorities, and such transportation would be exempt under subdivision (a)(1) of this section. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

Municipal Franchise for Limousine Service to Airport. - The provisions of G.S. 63-2, 63-49, 63-50, 63-53, and this section authorize a municipal corporation to award a franchise contract granting the right to provide limousine service to a municipal airport upon certain terms and conditions set forth in the franchise ordinance. Harrelson v. City of Fayetteville, 271 N.C. 87, 155 S.E.2d 749 (1967).

Action by Competing Carrier Against Exempted Carrier Violating Section. - When an exempted carrier is operating in violation of the exemptive provisions of this section, any other carrier adversely affected thereby may institute an action in the superior court against such exempted carrier, pursuant to subsection (d) of this section and G.S. 62-279. State ex rel. N.C. Utils. Comm'n v. McKinnon, 254 N.C. 1, 118 S.E.2d 134 (1961).

As to motor vehicles carrying mail under former statute, see Winborne v. Browning, 206 N.C. 557, 174 S.E. 579 (1934).

Cited in State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. J.D. McCotter, Inc., 16 N.C. App. 475, 192 S.E.2d 629 (1972); State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973); State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

Opinions of Attorney General

Subdivision (a)(1) of this section specifically exempts political subdivisions from regulation by the Utilities Commission. See opinion of Attorney General to Mr. David D. King, Director of Division of Public Transportation, North Carolina Department of Transportation, 55 N.C.A.G. 76 (1986).

The Pasquotank-Perquimans-Camden-Chowan District Health Department has the authority to operate public transit on a fare paying basis, without establishment of a Transportation Authority. Subdivision (a)(1) of this section specifically exempts political subdivisions of this State from regulation by the North Carolina Utilities Commission. See opinion of Attorney General to Mr. David D. King, Director of Division of Public Transportation, North Carolina Department of Transportation, 55 N.C.A.G. 76 (1986).

§ 62-261. Additional powers and duties of Commission applicable to motor vehicles.

The Commission is hereby vested with the following powers and duties:

  1. To supervise and regulate bus companies and to that end, the Commission may establish reasonable requirements with respect to continuous and adequate service, transportation of baggage, newspapers, mail and light express, uniform system of accounts, records and reports and preservation of records.
  2. To supervise the operation and safety of passenger bus stations in any manner necessary to promote harmony among the carriers using such stations and efficiency of service to the traveling public.
  3. Repealed by Session Laws 1985, c. 454, s. 12.
  4. For the purpose of carrying out the provisions of this Article, the Utilities Commission may avail itself of the special information of the Board of Transportation in promulgating safety requirements and in considering applications for certificates or permits with particular reference to conditions of the public highway or highways involved, and the ability of the said public highway or highways to carry added traffic; and the Board of Transportation, upon request of the Utilities Commission, shall furnish such information.
  5. The Commission may, without prior notice and hearing, make and enter any order, rule, regulation, or requirement, not affecting rates, upon unanimous finding by the Commission of the existence of an emergency and make such order, rule, regulation or requirement effective upon notice given to each affected motor carrier by registered mail, or by certified mail pending a hearing thereon as provided in this subdivision. It shall not be necessary for the Commission to give notice to the carriers affected or to hold a hearing prior to a revision in the rules regarding procedures to be followed in filing rates. Any such emergency order, rule, regulation or requirement shall be subject to continuation, modification, change, or revocation after notice and hearing and all such emergency orders, rules, regulations and requirements shall be supplanted and superseded by any final order, rule, regulation or requirement entered by the Commission.
  6. The Commission shall regulate brokers and make and enforce reasonable requirements respecting their licenses, financial responsibility, accounts, records, reports, operations and practices.
  7. Repealed by Session Laws 1985, c. 454, s. 12.
  8. To determine, upon its own motion, or upon motion by a motor carrier, or any other party in interest, whether the transportation of household goods in intrastate commerce performed by any motor carrier or class of motor carriers lawfully engaged in operation in this State is in fact of such nature, character, or quantity as not substantially to affect or impair uniform regulation by the Commission of transportation by motor carriers engaged in intrastate commerce. Upon so finding, the Commission shall issue a certificate of exemption to such motor carrier or class of motor carriers which, during the period such certificate shall remain effective and unrevoked, shall exempt such carrier or class of motor carriers from compliance with the provisions of this Article, and shall attach to such certificate such reasonable terms and conditions as the public interest may require. At any time after the issuance of any such certificate of exemption, the Commission may by order revoke all or any part thereof, if it shall find that the transportation in intrastate commerce performed by the carrier or class of carriers designated in such certificate will be, or shall have become, or is reasonably likely to become, or such nature, character, or quantity as in fact substantially to affect or impair uniform regulation by the Commission of intrastate transportation by motor carriers in effectuating the policy declared in this Chapter. Upon revocation of any such certificate, the Commission shall restore to the carrier or carriers affected thereby, without further proceedings, the authority, if any, to operate in intrastate commerce held by such carrier or carriers at the time the certificate of exemption pertaining to such carrier or carriers became effective. No certificate of exemption shall be denied, and no order of revocation shall be issued, under this paragraph, except after reasonable opportunity for hearing to interested parties.
  9. To inquire into the management of the business of motor carriers and into the management of business of persons controlling, controlled by or under common control with, motor carriers to the extent that such persons have a pecuniary interest in the business of one or more motor carriers, and the Commission shall keep itself informed as to the manner and method in which the same are conducted, and may obtain from such carriers and persons such information as the Commission deems necessary to carry out the provisions of this Article.
  10. Repealed by Session Laws 1985, c. 454, s. 12.
  11. The Commission may from time to time establish such just and reasonable classifications of groups of carriers included in the term "common carrier by motor vehicle" as the special nature of the service performed by such carriers shall require; and such just and reasonable rules, regulations, and requirements, consistent with the provisions of this Article, to be observed by such carriers so classified or grouped, as the Commission deems necessary or desirable in the public interest.

History

(1947, c. 1008, s. 5; 1949, c. 1132, s. 6; 1953, c. 1140, s. 5; 1957, c. 65, s. 11; c. 1152, s. 7; 1961, c. 472, s. 9; 1963, c. 1165, s. 1; 1969, c. 723, s. 2; c. 763; 1973, c. 507, s. 5; 1985, c. 454, s. 12; c. 676, s. 18; 1995, c. 523, s. 17.)

Cross References. - As to revocation of license plates for violation of Chapter, see G.S. 62-278.

CASE NOTES

Power to Promulgate Rules and Regulations. - The Commission may impose upon the holder of a permit any reasonable rules and regulations with respect to the operations thereunder which are now in effect or which may be adopted hereafter for the regulation of motor vehicle carriers performing similar service. State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

Duty to Require Certificate Holder to Render Services Contemplated. - The Truck Act of 1947 and the amendments thereto placed upon the Commission the responsibility of requiring the holder of the certificate to render the service contemplated. State ex rel. Utils. Comm'n v. Colter, 259 N.C. 269, 130 S.E.2d 385 (1963).

A substantial rather than a simulated performance is required to support a bona fide carrier operation. State ex rel. Utils. Comm'n v. Colter, 259 N.C. 269, 130 S.E.2d 385 (1963).

Contracts Subject to Commission's Authority. - Contracts between carriers affecting service to the public are subject to the Commission's regulatory authority. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Approved Contract as Order of Commission. - A contract between public utilities, when formally approved by the Commission, is in effect an order of the Commission binding on each of the parties. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

The interchange of freight between an intrastate and an interstate carrier, even though the property is being moved in interstate commerce, is left to the State commissions. State ex rel. Utils. Comm'n v. Fox, 239 N.C. 253, 79 S.E.2d 391 (1954).


§ 62-262. Applications and hearings other than for bus companies.

  1. Except as otherwise provided in G.S. 62-260[,] 62-262.1 and 62-265, no person shall engage in the transportation of passengers or household goods in intrastate commerce unless such person shall have applied to and obtained from the Commission a certificate authorizing such operations, and it shall be unlawful for any person knowingly or wilfully to operate in intrastate commerce in any manner contrary to the provisions of this Article, or of the rules and regulations of the Commission. No certificate shall be amended so as to enlarge or in any manner extend the scope of operations of a motor carrier without complying with the provisions of this section.
  2. Upon the filing of an application for a certificate, the Commission shall, within a reasonable time, fix a time and place for hearing such application. The Commission shall from time to time prepare a truck calendar containing notice of such hearings, a copy of which shall be mailed to the applicant and to any other persons desiring it, upon payment of charges to be fixed by the Commission. The notice or calendar herein required shall be mailed at least 20 days prior to the date fixed for the hearing, but the failure of any person, other than applicant, to receive such notice or calendar shall not, for that reason, invalidate the action of the Commission in granting or denying the application.
  3. The Commission may, in its discretion, except where a regular calendar providing notice is issued, require the applicant to give notice of the time and place of such hearing together with a brief description of the purpose of said hearing and the exact route or routes and authority applied for, to be published not less than once each week for two successive weeks in one or more newspapers of general circulation in the territory proposed to be served. The Commission may in its discretion require the applicant to give such other and further notice in the form and manner prescribed by the Commission to the end that all interested parties and the general public may have full knowledge of such hearing and its purpose. If the Commission requires the applicant to give notice by publication, then a copy of such notice shall be immediately mailed by the applicant to the Commission, and upon receipt of same the chief clerk shall cause the copy of notice to be entered in the Commission's docket of pending proceedings. The applicant shall, prior to any hearing upon his application, be required to satisfy the Commission that such notice by publication has been duly made, and in addition to any other fees or costs required to be paid by the applicant, the applicant shall pay into the office of the Commission the cost of the notices herein required to be mailed by the Commission.
  4. Any motor carrier desiring to protest the granting of an application for a certificate, in whole, or in part, may become a party to such proceedings by filing with the Commission, not less than 10 days prior to the date fixed for the hearing, unless the time be extended by order of the Commission, its protest in writing under oath, containing a general statement of the grounds for such protest and the manner in which the protestant will be adversely affected by the granting of the application in whole or in part. Such protestant may also set forth in his protest its proposal, if any, to render either alone or in conjunction with other motor carriers, the service proposed by the applicant, either in whole or in part. Upon the filing of such protest it shall be the duty of the protestant to file three copies with the Commission, and the protestant shall certify that a copy of said protest has been delivered or mailed to the applicant or applicant's attorney. When no protest is filed with the Commission within the time herein limited, or as extended by order of the Commission, the Commission may proceed to decide the application on the basis of testimony taken at a hearing, or on the basis of information contained in the application and sworn affidavits, and make the necessary findings of fact and issue or decline to issue the certificate applied for without further notice. Persons other than motor carriers shall have the right to appear before the Commission and give evidence in favor of or against the granting of any application and with permission of the Commission may be accorded the right to examine and cross-examine witnesses.
  5. The burden of proof shall be upon the applicant for a certificate to show to the satisfaction of the Commission:
    1. That public convenience and necessity require the proposed service in addition to existing authorized transportation service, and
    2. That the applicant is fit, willing and able to properly perform the proposed service, and
    3. That the applicant is solvent and financially able to furnish adequate service on a continuing basis.
      1. ,  (j) Repealed by Session Laws 1995, c. 523, s. 18.
  6. through (h) Repealed by Session Laws 1985, c. 676, s. 19.
  7. The Commission shall by general order, or rule, having regard for the public convenience and necessity, provide for the abandonment or permanent or temporary discontinuance of transportation service previously authorized in a certificate.
  8. The provisions of this section shall not be applicable to applications for certificates of authority by bus companies or related hearings.

History

(1947, c. 1008, s. 11; 1949, c. 1132, s. 10; 1953, c. 825, s. 3; 1957, c. 1152, ss. 8, 9; 1959, c. 639, s. 11; 1963, c. 1165, s. 1; 1965, c. 214; 1981, c. 193, s. 4; 1985, c. 676, s. 19; 1995, c. 523, s. 18.)

Editor's Note. - It appears that a comma was intended in the first sentence of subsection (a) following the reference to "G.S. 62-260."

Legal Periodicals. - For survey of 1977 law on common carriers, see 56 N.C.L. Rev. 853 (1978).

CASE NOTES

I. IN GENERAL.

"Route" Not Synonymous with "Territory". - "Route" means the highway or road traveled in serving communities, districts, or territories adjacent to it, and is not synonymous with "territory." State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951); State ex rel. Utils. Comm'n v. Ray, 236 N.C. 692, 73 S.E.2d 870 (1953).

As to what constitutes a contract carrier, see State ex rel. Utils. Comm'n v. Petro. Transp., Inc., 2 N.C. App. 566, 163 S.E.2d 526 (1968).

Requirements for Permit to Operate as Contract Carrier. - In addition to the statutory requirements of G.S. 62-3 and this section, an applicant for a permit to operate as a contract carrier in North Carolina must conform to the standards set forth by the Utilities Commission in Rule R2-15(b). State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970).

"Certificate" authorizes performance as common carrier, while "permit" authorizes performance as contract carrier. State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).

Grant of Franchise to Be Predicated on Public Convenience and Necessity. - The granting of franchise authority for the operation of buses over the highways of this State, for the transportation of persons and property for compensation, must be predicated upon public convenience and necessity. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

The convenience and necessity required are those of the public and not of an individual or individuals. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

The doctrine of convenience and necessity is a relative or elastic theory. The facts in each case must be separately considered, and from those facts it must be determined whether public convenience and necessity require a given service to be performed or dispensed with. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

"Necessity" means reasonably necessary and not absolutely imperative. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Any service or improvement which is desirable for the public welfare and highly important to the public convenience may be properly regarded as necessary. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

What constitutes "public convenience and necessity" is primarily an administrative question with a number of imponderables to be taken into consideration, e.g., whether there is a substantial public need for the service, whether the existing carriers can reasonably meet this need, and whether it would endanger or impair the operations of existing carriers contrary to the public interest. State ex rel. Utils. Comm'n v. Queen City Coach Co., 4 N.C. App. 116, 166 S.E.2d 441 (1969); State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).

If a new service is necessary, and there are carriers already in the field, there is always the vital question, in determining convenience and necessity, whether the new service should be rendered by the existing carriers or by the new applicant. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Burden upon Applicant to Show Public Convenience and Necessity. - The burden of proof is upon the applicant for franchise authority to show public convenience and necessity. State ex rel. N.C. Utils. Comm'n v. Carolina Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964).

The Commission's conclusion that public convenience and necessity required the proposed service was unsupported by competent evidence in view of the entire record, where the petitioner failed to show that any individual required his service for a non-local, intrastate move - witness testimony that he would recommend that his daughter use petitioner's services for a long-distance move did not constitute material evidence of a substantial public need absent statistics, expert testimony or other evidence - and where petitioner failed to present evidence on the issues of whether existing carriers could reasonably meet the need for intrastate moving services and whether the granting of his application would impair the operations of existing carriers contrary to the public interest; furthermore, contrary to the Commission's suggestion, the intervenors did not have the burden of showing that granting the application would have a ruinous effect upon them. Dunnagan v. Ndikom, 139 N.C. App. 246, 533 S.E.2d 494 (2000).

Applicant Failed to Show Public Convenience and Necessity. - The North Carolina Utilities Commission erred in granting petitioner's application for a certificate of public convenience and necessity under this section where the petitioner failed to show that any individual required his service for a non-local, intrastate move and, although the petitioner's desire to serve the Hispanic community was commendable, he failed to show that the moving needs of the Hispanic community were not being met by existing intrastate moving services; a showing that there had been a population increase with nothing more did not establish sufficient evidence of a substantial public need for petitioner's proposed service, and petitioner failed to present evidence on the issues of whether existing carriers could reasonably meet the need for intrastate moving services and whether granting his application would impair the operations of existing carriers contrary to the public interest. Union Transfer & Storage Co. v. Lefeber, 139 N.C. App. 280, 533 S.E.2d 550 (2000).

Special Rule for Relocation of Existing Routes. - The Utilities Commission has developed a special rule for applications that seek only to relocate an existing route over a new highway. In these cases the Commission does not require such an extensive demonstration of public convenience and necessity as in other cases. Instead, the applicant is only required to show that the proposed route, as it now exists and with future improvements, will provide a much safer, quicker and improved service. State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).

By encouraging bus companies to make use of new and improved highways soon after they are opened, the special rule for relocation of existing routes serves "to promote, in the interest of the public, the inherent advantages of highway transportation," which is one of the stated purposes of the motor carriers statute. State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).

Test of "Public Need" Not Applicable to Transfer Proceedings. - The showing of public need which subsection (e)(1) of this section requires of an application for a new authority is not applicable in a transfer proceeding under G.S. 62-111 and was not written into it by G.S. 62-111(a). State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Subsection (e) of G.S. 62-111 does not indicate a policy change toward protecting existing certificate holders from lawful competition. Like the subsection (a) "public convenience and necessity" test, the requirement that the Commission find the transfer "in the public interest" does not write into the transfer approval procedure the new certificate test of public need in subsection (e)(1) of this section. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Where Carrier's Authority Is Not Dormant. - The criteria "if justified by the public convenience and necessity" in subsection (a) of G.S. 62-111 is interpreted as a statutory basis for the test of dormancy. Where the authority has been abandoned or "dormant," the Commission has denied applications for transfer because approval would in effect be the granting of a new authority without satisfying the new authority test of public need set out in subsection (e)(1) of this section. Where the authority has been actively operated, the applicants for sale and transfer of motor freight carrier rights are under no burden to show through shipper witnesses that a demand and need exist. The rationale is that public convenience and necessity were shown to exist when the authority was granted or acquired, and the rebuttable presumption of law is that it continues. State ex rel. Utils. Comm'n v. Associated Petro. Carriers, 7 N.C. App. 408, 173 S.E.2d 25 (1970).

Where the issue of dormancy under G.S. 62-112(c) has been raised, if the Commission finds that the franchise is not dormant, it must then determine if the criteria required by G.S. 62-111 for approval of the transfer has been met. If the Commission finds that the franchise is dormant under G.S. 62-112(c), the application for transfer must be denied, because approval would in effect constitute the granting of a new franchise without satisfying the new authority test and other requirements of subsection (e) of this section. State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 174, 234 S.E.2d 624 (1977).

The factors denominated as imponderables, namely, whether the existing carriers can reasonably meet the need for the service, and whether the granting of the application would endanger or impair the operations of existing carriers contrary to the public interest, are not solely determinative of the right of the Commission to grant the application. Both are directed to the question of public convenience and necessity. Nevertheless, if the proposed operation under the certificate sought would seriously endanger or impair the operations of existing carriers contrary to the public interest, the certificate should not be issued. State ex rel. Utils. Comm'n v. Queen City Coach Co., 4 N.C. App. 116, 166 S.E.2d 441 (1969).

There is no public policy condemning competition as such, between contract carriers, in the field of public utilities; the public policy only condemns unfair or destructive competition. State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 367, 174 S.E.2d 808 (1970).

Grant of Application Not Prohibited by Fact That Competing Carrier's Business Would Be Adversely Affected. - The fact that the granting of a proposed application would adversely affect the business of a carrier corporation is not a sufficiently compelling reason to prohibit the entrance of other contract carriers into the field of transporting bank documents and other commodities. State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 367, 174 S.E.2d 808 (1970).

Applications to Serve Communities Served by Another Carrier and to Duplicate Routes Distinguished. - Application by carrier to serve communities being served by another carrier, who intervenes and protests the application, as distinguished from an application for duplication of routes, does not require the Utilities Commission to find that the existing carrier's service is inadequate and to afford such existing carrier opportunity to remedy the inadequacy. State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951).

Protection as to Duplication in Route. - Granting of a franchise over any part of the route of an existing carrier is prohibited except upon prescribed conditions, and not merely a duplication of the same route from terminus to terminus, but the application to serve communities being served by the intervening carrier need not be denied in toto because there would be a duplication of routes along a short distance, since the existing carrier may be protected as to the duplication in route by proper restrictions in the certificate. State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951).

A traversing of the same highways for certain distances by competing carriers may readily become necessary in the public interest and, in such an instance, more than one certificate may be granted, subject to such restrictions as will protect the authorized carrier in respect of that part of the highway to be traversed by both. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Former subsection (f) of this section did not forbid authority to two or more carriers to traverse the same segment of a highway so long as they did not render duplicate service. The mere fact that the two carriers would use the same highway for a distance did not require a denial of the application. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

When Duplicate Service Permitted. - Under former article of similar import, it was held that the Commission might, in its discretion, grant a franchise which would duplicate in whole or in part a previously authorized similar class of service; and when it was shown to the satisfaction of the Commission that the existing operations were not providing sufficient service reasonably to meet the public convenience and necessity and the existing operators, after 30 days' notice, failed to provide the service required by the Commission, it would be the duty of the Commission to do so. State ex rel. Utils. Comm'n v. Carolina Coach Co., 224 N.C. 390, 30 S.E.2d 328 (1944); State ex rel. Utils. Comm'n v. City Coach Co., 234 N.C. 489, 67 S.E.2d 629 (1951).

This section does not purport to protect against all competition, but is designed to protect authorized carriers against ruinous competition, and does not prohibit service of the same points by different carriers over separate routes when such duplicate service is in the public interest. State ex rel. Utils. Comm'n v. Queen City Coach Co., 233 N.C. 119, 63 S.E.2d 113 (1951); State ex rel. Utils. Comm'n v. Ray, 236 N.C. 692, 73 S.E.2d 870 (1953).

Question of duplication of service must be determined under statute in effect at the time the order of the Commission was entered. State ex rel. Utils. Comm'n v. City Coach Co., 234 N.C. 489, 67 S.E.2d 629 (1951).

Commission May Grant "Closed Door" Authority Though Application Seeks Authority to Duplicate Service. - Since the Utilities Commission is not confined to the immediate scope of the pleadings filed, and may enlarge the scope of the inquiry, it may grant a "closed door" authority even though the application is for authority to duplicate service. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

When "Closed Door" Authority Proper. - Where the principal business of a carrier is the transportation of passengers between two cities of the State along a route serving a number of other cities, and the improvement and construction of highways makes feasible a new and more direct route between the termini, the Utilities Commission, upon appropriate findings of fact, may grant such carrier "closed door" authority along the new route, notwithstanding that other carriers, respectively, serve segments of the route in "open door" operations. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Grant of Application Upheld. - The Utilities Commission properly granted an application for a contract carrier permit authorizing the applicant to transfer bank documents and other commodities between banks in the State, notwithstanding the protest by an existing contract carrier of bank documents that the granting of the application would adversely affect its business, where there were findings, supported by competent and substantial evidence, that banks needed the services offered by the applicant and that their need could not be met by any existing means of transportation. State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 367, 174 S.E.2d 808 (1970).

As to charter service, see State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

For case holding scope of operation of carrier not enlarged by amendment, see State ex rel. Utils. Comm'n v. Fleming, 235 N.C. 660, 71 S.E.2d 41 (1952).

Applied in Bryant v. Barber, 237 N.C. 480, 75 S.E.2d 410 (1953); State ex rel. Utils. Comm'n v. Home Transp. Co., 28 N.C. App. 340, 220 S.E.2d 871 (1976); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 43 N.C. App. 662, 259 S.E.2d 791 (1979); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 47 N.C. App. 418, 267 S.E.2d 488 (1980); State ex rel. Utils. Comm'n v. M.L. Hatcher Pickup & Delivery Servs., Inc., 48 N.C. App. 115, 268 S.E.2d 851 (1980); State ex rel. Utils. Comm'n v. Pony Express Courier Corp., 58 N.C. App. 218, 292 S.E.2d 769 (1982).

Cited in State ex rel. Utils. Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 148 S.E.2d 100 (1966); State ex rel. Utils. Comm'n v. J.D. McCotter, Inc., 16 N.C. App. 475, 192 S.E.2d 629 (1972); State ex rel. Utils. Comm'n v. Estes Express Lines, 33 N.C. App. 99, 234 S.E.2d 628 (1977).

II. PROCEDURE.

The procedure before the Commission is more or less informal, and is not as strict as in civil cases, nor is it confined by technical rules; substance and not form is controlling. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

The power of the Commission is not restricted to the proceedings as commenced, but it may enlarge the scope of the inquiry beyond the issue raised by the pleadings where the parties to be affected are before the Commission, participate in the proceedings, have full opportunity to be heard, and are not misled as to the purpose of the hearing. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

The Commission is not confined to the immediate scope of the pleadings on file. It may enlarge the scope of the inquiry, and where the parties to be affected are before it, participate in the inquiry and make defense, they cannot complain of a departure from the pleadings. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Treatment of Application for New Authority as Motion in Prior Cause. - An application for a new authority to carry passengers between two municipalities of the State along a new route made feasible by the improvement or construction of highways could be treated by the Utilities Commission as a motion in a prior cause in which the Commission approved an agreement of the carriers in regard to their respective services between the cities provided the carriers affected were given notice and an opportunity to be heard. The question of whether the prior order of approval could be collaterally attacked was thus obviated. State ex rel. Utils. Comm'n v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249 (1963).

Findings of fact by the Commission are conclusive and binding upon the reviewing court when supported by competent, material and substantial evidence in view of the entire record. State ex rel. Utils. Comm'n v. Petro. Transp., Inc., 2 N.C. App. 566, 163 S.E.2d 526 (1968); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 358, 174 S.E.2d 814 (1970); State ex rel. Utils. Comm'n v. American Courier Corp., 8 N.C. App. 367, 174 S.E.2d 808 (1970); State ex rel. Utils. Comm'n v. Kenan Transp. Co., 10 N.C. App. 626, 179 S.E.2d 799 (1971).

Procedure Held Contrary to Statutory Requirements. - Where the Commission issued its directive without any notice or hearing whatever, simply instructing the parties peremptorily that they must enter into an agreement, such a procedure was entirely contrary to the statutory requirements, and any such order was invalid. State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973), cert. denied, 284 N.C. 623, 201 S.E.2d 693 (1974).


§ 62-262.1. Certificates of authority for passenger operations by bus companies.

  1. Except as provided in G.S. 62-260, 62-262 and 62-265, no person shall engage in the transportation of passengers in intrastate commerce by motor vehicle without having applied for and obtained a certificate authorizing those operations from the Commission. It shall be unlawful for any person to knowingly or willfully operate in intrastate commerce in a manner contrary to the provisions of this Article or to the rules and regulations of the Commission. No certificate shall be amended to enlarge, or in any manner extend, the scope of operations of a bus company without complying with the provisions of this section.
  2. Any bus company desiring a certificate of authority to operate in intrastate commerce in this State over fixed routes, or to enlarge or in any manner extend the scope of its fixed route operations previously granted by the Commission, may do so by filing a verified application with the Commission and by paying the filing fee established by G.S. 62-300.
  3. The Commission shall issue a certificate of authority to an applicant for the transportation of passengers over a fixed route or to enlarge or extend authority previously granted, if the Commission finds that the applicant is fit, willing and able to provide the transportation to be authorized by the certificate and to comply with the provisions of this Chapter, unless the Commission finds, on the basis of evidence presented by any person objecting to the issuance of the certificate, that the transportation to be authorized is not consistent with the public interest.
  4. In making any findings relating to public interest under subsection (c) of this section, the Commission shall consider, to the extent applicable, (i) the transportation policy of this State as it relates to bus companies under G.S. 62-259.1 and this Chapter; (ii) the value of competition to the traveling and shipping public; (iii) the effect of issuance of the certificate on bus company service to small communities; and (iv) whether issuance of the certificate would impair the ability of any other fixed route carrier of passengers to provide a substantial portion of its fixed route passenger service, except that diversion of revenue or traffic from a fixed route carrier of passengers, alone, shall not be sufficient to support a finding that issuance of the certificate would impair the ability of the carrier to provide a substantial portion of its fixed route passenger service.
  5. Within 10 days after the filing of an application, the applicant shall provide notice to be given as required by Commission rule. If no protest, raising material issues of fact to the granting of the application, is filed with the Commission within 30 days after the notice is given, the Commission may, upon review of the record and without a hearing, issue its certificate of authority granting the requested operating authority, if it is satisfied that the applicant meets the requirements set forth in subsection (c) of this section.
  6. If protests are filed raising material issues of fact to the granting of the application, the Commission shall set the application for hearing, as soon as possible, and cause notice to be given as provided by its rules. At the hearing, the only issues for consideration are those set forth in subsections (c) and (d) of this section. The Commission shall issue its final order not later than 180 days after the application is filed.
  7. Any bus company authorized to transport passengers in intrastate commerce over fixed routes in this State and which in fact provides that service may, without filing a new application or paying further fees: (i) transport newspapers, express parcels or United States mail over the fixed routes on which it provides passenger transportation; (ii) provide charter operations to all points in the State; and (iii) transport charter passengers in the same motor vehicles with fixed route passengers.
  8. Any bus company seeking a certificate to engage solely in charter operations within the State, or to enlarge or in any manner extend the scope of its charter operations previously granted by the Commission, may obtain one by (i) filing a verified application for the authority with the Commission; (ii) paying the applicable filing fee as prescribed by G.S. 62-300; and (iii) demonstrating that it is fit, willing and able to perform the proposed charter operations.
  9. Within 10 days after filing of an application for charter operations, the applicant shall provide notice as required by Commission rule or regulation. If no protests to the granting of the application, raising material issues of fact, are received by the Commission within 30 days after the notice is given, the Commission shall issue its certificate granting the requested authority unless it determines that the applicant is unfit, unwilling or unable to perform the proposed operations. In the event of this determination, or if protests to the proposed operation raising material issues of fact are received, the Commission shall set the application for hearing, as soon as possible, and provide notice to be given as provided by its rules and shall issue its final order within 180 days after application is filed. At the hearing, the only issue for consideration shall be whether the applicant is fit, willing and able to perform the proposed charter operations and the issue of need shall not be considered. On the issue of its fitness, willingness and ability to perform the proposed charter operations, the applicant in its application and at any hearing shall present evidence from which the Commission may find that: (i) the applicant has sufficient assets to perform properly the proposed operations; (ii) the operation will be conducted only with properly qualified drivers; (iii) the applicant will maintain safe, clean and attractive buses and equipment; (iv) the applicant will maintain insurance for the protection of the public as provided in this Chapter; (v) the applicant has sufficient equipment to conduct the proposed operation; and (vi) the applicant will observe all applicable laws, rules and regulations of this State.
  10. Any bus company authorized and engaged solely in charter operations shall not be required to transport passengers over a fixed route in this State as an incidence to its charter operations.

History

(1985, c. 676, s. 20.)

§ 62-262.2. Discontinuance or reduction in service.

  1. When a bus company proposes to discontinue service over any intrastate route or proposes to reduce its level of service to any points on a route to a level which is less than one trip per day (excluding Saturdays and Sundays), it shall petition the Commission for permission to do so. Within 10 days after the filing of a petition, the Commission shall require notice to be given.
  2. Any person or the Public Staff may object, to the Commission, to the granting of permission to any bus company to discontinue or reduce transportation under this section. If neither objects to the granting of permission to discontinue or reduce service under this section, within 30 days after the notice as required by subsection (a) of this section, the Commission may grant the permission based on the record and without hearing.
  3. If, within 30 days after the notice as required by subsection (a) of this section, any person or the Public Staff objects in writing to the Commission to granting of such permission, the Commission shall grant such permission unless the Commission finds as a fact, that the discontinuance or reduction in service is not consistent with the public interest or that continuing the transportation, without the proposed discontinuance or reduction, will not constitute an unreasonable burden on interstate commerce. In making a finding under this subsection, the Commission shall accord great weight to the extent to which the interstate and intrastate revenues from the transportation proposed to be reduced or discontinued are less than the variable costs of providing the transportation, including depreciation for revenue equipment. The Commission may also consider, to the extent applicable, all other factors which are to be considered by the Interstate Commerce Commission in a proceeding commenced under 49 U.S.C. § 10935. For the purposes of this section, the bus company filing a petition for permission to discontinue or reduce service shall have the burden of proving (i) the amount of its interstate and intrastate revenues received for transportation to, from or between, but not through, points on the involved intrastate route; and (ii) the system variable costs of providing the transportation.
  4. The Commission may make its determination with or without a public hearing. The Commission shall take final action upon the petition not later than 120 days after any written objections to the petition are filed.
  5. The provisions of G.S. 62-262(k) shall not be applicable to bus companies.

History

(1985, c. 676, s. 21; 1989 (Reg. Sess., 1990), c. 1024, s. 15.)

§ 62-263. Application for broker's license.

  1. No person shall engage in the business of a broker in intrastate operations within this State unless such person holds a broker's license issued by the Commission.
  2. The Commission shall prescribe the form of application and such reasonable requirements and information as may in its judgment be necessary.
  3. Upon the filing of an application for license the Commission may fix a time and place for the hearing of the application and require such notices, publications, or other service as it may prescribe by the general rule or regulation.
  4. A license shall be issued to any qualified applicant therefor authorizing the whole or any part of the operations covered by the application if it is found that the applicant is fit, willing and able properly to perform the service proposed and to conform to the provisions of this Article and the requirements, rules and regulations of the Commission thereunder, and that the proposed service, to the extent to be authorized by the license, is or will be consistent with the public interest and policy declared herein.
  5. The Commission shall have the same authority over persons operating under and holding a brokerage license as it has over motor carriers under this Article, and shall require a broker to furnish bond or other security approved by the Commission and sufficient for the protection of travelers by motor vehicle.

History

(1949, c. 1132, s. 13; 1963, c. 1165, s. 1.)

§ 62-264: Repealed by Session Laws 1995, c. 523, s. 19.

§ 62-265. Emergency operating authority.

To meet unforeseen emergencies, the Commission may, upon its own initiative, or upon written request by any person, department or agency of the State, or of any county, city or town, with or without a hearing, grant appropriate authority to any owner of a duly licensed vehicle or vehicles, whether such owner holds a certificate or not, to transport passengers or household goods between such points, or within such area during the period of the emergency and to the extent necessary to relieve the same, as the Commission may fix in its order granting such authority; provided, that unless the emergency is declared by the General Assembly or under its authority, the Commission shall find from such request, or from its own knowledge or conditions, that a real emergency exists and that relief to the extent authorized in its order is immediate, pressing and necessary in the public interest, and that the carrier so authorized has the necessary equipment and is willing to perform the emergency service as prescribed by the order. In all cases, under this section, the Commission shall first afford the holders of certificates operating in the territory affected an opportunity to render the emergency service. Upon the termination of the emergency, the operating privileges so granted shall automatically expire and the Commission shall forthwith withdraw all operating privileges granted to any person under this section.

History

(1947, c. 1008, s. 17; 1949, c. 1132, s. 17; 1963, c. 1165, s. 1; 1995, c. 523, s. 20.)

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Tar Heel Indus., Inc., 77 N.C. App. 75, 334 S.E.2d 396 (1985).


§ 62-266: Repealed by Session Laws 1985, c. 454, s. 13.

§ 62-267. Deviation from regular route operations.

  1. A common carrier of passengers by motor vehicle operating under a certificate issued by the Commission may occasionally deviate from the routes over which it is authorized to operate under the certificate, under such general or special rules and regulations as the Commission may prescribe.
  2. Repealed by Session Laws 1995, c. 523, s. 21.
  3. In no event shall the operation of empty equipment by any carrier over any route or highway be construed as a violation of the rights of any carrier.

History

(1947, c. 1008, s. 18; 1949, c. 1132, s. 18; 1963, c. 1165, s. 1; 1995, c. 523, s. 21.)

§ 62-268. Security for protection of public; liability insurance.

No certificate or broker's license shall be issued or remain in force until the applicant shall have procured and filed with the Division of Motor Vehicles such security bond, insurance or self-insurance for the protection of the public as the Commission shall by regulation require. The Commission shall require that every motor carrier for which a certificate or license is required by the provisions of this Chapter, shall maintain liability insurance or satisfactory surety of at least fifty thousand dollars ($50,000) because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, one hundred thousand dollars ($100,000) because of bodily injury to or death of two or more persons in any one accident, and fifty thousand dollars ($50,000) because of injury to or destruction of property of others in any one accident; and the Commission may require any greater amount of insurance as may be necessary for the protection of the public. Notwithstanding any rule or regulation to the contrary, the Commission shall not require that any insurance procured and filed be provided in any single policy of insurance or through a single insurer, if the insurers involved are otherwise qualified. A motor carrier may satisfy the requirements of the Commission by procuring insurance with coverage and limits of liability required by the Commission in one or more policies of insurance issued by one or more insurers.

Notwithstanding any other provisions of this section or Chapter, bus companies shall file with the Commission proof of financial responsibility in the form of bonds, policies of insurance, or shall qualify as a self insurer, with minimum levels of financial responsibility as prescribed for motor carriers of passengers pursuant to the provisions of 49 U.S.C. § 31138. Provided, further, that no bus company operating solely within the State of North Carolina and which is exempt from regulation under the provisions of G.S. 62-260(a)(7) shall be required to file with the Commission proof of the financial responsibility in excess of one million five hundred thousand dollars ($1,500,000).

History

(1947, c. 1008, s. 19; 1949, c. 1132, s. 19; 1963, c. 1165, s. 1; 1973, c. 1206; 1977, c. 920; 1985, c. 454, s. 14; c. 676, s. 22; 1987, c. 374; 1995, c. 523, s. 22; 1998-217, s. 8.)

CASE NOTES

Applied in Jones v. State Farm Mut. Auto. Ins. Co., 270 N.C. 454, 155 S.E.2d 118 (1967).

Cited in American Nat'l Fire Ins. Co. v. Gibbs, 260 N.C. 681, 133 S.E.2d 669 (1963).


§ 62-269. Accounts, records and reports.

The Commission may prescribe the forms of any and all accounts, records and memoranda to be kept by motor carriers, brokers, and lessors, including the accounts, records, and memoranda of the movement of traffic, as well as of the receipts and expenditures of moneys; and it shall be unlawful for such carriers, brokers, and lessors, to keep any accounts, records, and memoranda contrary to any rules, regulations, or orders of the Commission with respect thereto. The Commission may issue orders specifying such operating, accounting, or financial papers, records, books, blanks, stubs, correspondence, or documents of motor carriers, brokers, or lessors, as may after a reasonable time be destroyed, and prescribing the length of time they shall be preserved. The Commission or its duly authorized special agents, accountants, or examiners shall at all times have access to and authority, under its order, to inspect and examine any and all lands, buildings, or equipment of motor carriers, brokers, and lessors; and shall have authority to inspect and copy any and all accounts, books, records, memoranda, correspondence, and other documents of such carriers, brokers, and lessors, and such accounts, books, records, memoranda, correspondence, and other documents of any person controlling, controlled by, or under common control with any such carrier, as the Commission deems relevant to such person's relation to or transactions with such carrier. Motor carriers, brokers, lessors, and persons shall submit their accounts, books, records, memoranda, correspondence, and other documents for the inspection and copying authorized by this section, and motor carriers, brokers, and lessors, shall submit their lands, buildings, and equipment for examination and inspection, to any duly authorized special agent, accountant, auditor, inspector, or examiner of the Commission upon demand and the display of proper credentials.

History

(1947, c. 1008, s. 28; 1949, c. 1132, s. 25; 1959, c. 639, ss. 5, 6, 9, 10; 1961, c. 472, s. 10; 1963, c. 1165, s. 1.)

§ 62-270. Orders, notices, and service of process.

It shall be the duty of every motor carrier operating under a certificate issued under the provisions of this Article to file with the Division of Motor Vehicles a designation in writing of the name and post-office address of a person upon whom service of notices or orders may be made under this Article. Such designation may from time to time be changed by like writing similarly filed. Service of notice or orders in proceedings under this Article may be made upon a motor carrier by personal service upon it or upon the person so designated by it, or by registered mail, return receipt requested, or by certified mail with return receipt requested, addressed to it or to such person at the address filed. In proceedings before the Commission involving the lawfulness of rates, charges, classifications, or practices, service of notice upon the person or agent who has filed a tariff or schedule in behalf of such carrier shall be deemed to be due and sufficient service upon the carrier.

History

(1947, c. 1008, s. 29; 1949, c. 1132, s. 26; 1957, c. 1152, ss. 6, 11; 1963, c. 1165, s. 1; 1985, c. 454, s. 15; 1995, c. 523, s. 23.)

§ 62-271. Collection of rates and charges of motor carriers of household goods.

No common carriers of household goods by motor vehicle shall deliver or relinquish possession at destination of any freight transported by it in intrastate commerce until all tariff rates and charges thereon have been paid, except under such rules and regulations as the Commission may from time to time prescribe to govern the settlement of all such rates and charges, including rules and regulations for weekly or monthly settlement, and to prevent unjust discrimination or undue preference or prejudice; provided, that the provisions of this section shall not be construed to prohibit any such carrier from extending credit in connection with rates and charges on freight transported for the United States, for any department, bureau, or agency thereof, or for the State, or political subdivision thereof. Where any common carrier by motor vehicle is instructed by a shipper or consignor to deliver household goods transported by such carrier to a consignee other than the shipper or consignor, such consignee shall not be legally liable for transportation charges in respect of the transportation of such household goods (beyond those billed against him at the time of delivery for which he is otherwise liable) which may be found to be due after the household goods have been delivered to him, if the consignee (i) is an agent only and had no beneficial title in the household goods, and (ii) prior to delivery of the household goods has notified the delivering carrier in writing of the fact of such agency and absence of beneficial title, and, in the case of shipment reconsigned or diverted to a point other than that specified in the original bill of lading, has also notified the delivering carrier in writing of the name and address of the beneficial owner of the household goods. In such cases the shipper and consignor, or, in the case of a shipment so reconsigned or diverted, the beneficial owner shall be liable for such additional charges, irrespective of any provisions to the contrary in the bill of lading or in the contract under which the shipment was made. If the consignee has given to the carrier erroneous information as to who is the beneficial owner, such consignee shall himself be liable for such additional charges, notwithstanding the foregoing provisions of this section. On shipments reconsigned or diverted by an agent who has furnished the carrier with a notice of agency and the proper name and address of the beneficial owner, and where such shipments are refused or abandoned at ultimate destination, the said beneficial owner shall be liable for all legally applicable charges in connection therewith.

History

(1947, c. 1008, s. 31; 1963, c. 1165, s. 1; 1995, c. 523, s. 24.)

§ 62-272. Allowance to shippers for transportation services.

If the owner of household goods transported under the provisions of this Article directly or indirectly renders any service connected with such transportation, or furnishes any instrumentality used therein, the charge and allowance therefor shall be published in the tariffs or schedules filed in the manner provided in this Article and shall be no more than is just and reasonable; and the Commission may, after hearing on a complaint or on its own initiative, determine what is a reasonable charge as the maximum to be paid by the carrier or carriers for the services so rendered or for the use of the instrumentality so furnished, and fix the same by appropriate order.

History

(1947, c. 1008, s. 32; 1963, c. 1165, s. 1; 1995, c. 523, s. 25.)

§ 62-273. Embezzlement of C.O.D. shipments.

Household goods received by any motor carrier to be transported in intrastate commerce and delivered upon collection on such delivery and remittance to the shipper of the sum of money stated in the shipping instructions to be collected and remitted to the shipper, and the money collected upon delivery of such party, are hereby declared to be held in trust by any carrier having possession thereof or the carrier making the delivery or collection, and upon failure of any such carrier to account for the household goods so received, either to the shipper to whom the collection is payable or the carrier making delivery to any carrier handling the household goods or making the collection, within 15 days after demand in writing by the shipper, or carrier, or upon failure of the delivering carrier to remit the sum so directed to be collected and remitted to the shipper, within 15 days after collection is made, shall be prima facie evidence that the household goods so received, or the funds so received, have been wilfully converted by such carrier to its own use, and the carrier so offending shall be guilty of a Class H felony and such carrier may be indicted, tried, and punished in the county in which such shipment was delivered to the carrier or in any other county into or through which such shipment was transported by such carrier.

History

(1947, c. 1008, s. 33; 1963, c. 1165, s. 1; 1993, c. 539, s. 1277; 1994, Ex. Sess., c. 24, s. 14(c); 1995, c. 523, s. 26.)

CASE NOTES

The lessor-holders of a certificate of convenience and necessity are liable and answerable jointly with the lessee-operator to the shipper for losses sustained by reason of wrongful conversion of C.O.D. moneys collected by the lessee-operator company. Hough-Wylie Co. v. Lucas, 236 N.C. 90, 72 S.E.2d 11 (1952).


§ 62-273.1. Criminal history record checks of applicants for and current holders of certificate to transport household goods.

  1. The following definitions apply in this section:
    1. Applicant. - An individual, partnership, limited liability corporation, or corporation who applies for certification as a common carrier of household goods in the State of North Carolina.
    2. Certificate. - A certificate of exemption or a certificate of public convenience and necessity issued by the Utilities Commission to authorize the holder to engage in the intrastate transportation of household goods for compensation in the State of North Carolina.
    3. Criminal history. - A State or federal history of conviction of a crime, whether a misdemeanor or felony, that bears upon an applicant's or current holder's fitness to possess a certificate.
    4. Current holder. - An individual, partnership, limited liability corporation, or corporation who has been certified as a common carrier of household goods in the State of North Carolina.
  2. The Commission shall conduct a criminal history record check of applicants and current holders of a certificate to transport household goods. An applicant for or current holder of a certificate to transport household goods must furnish the Commission with a complete set of the applicant's fingerprints in a manner prescribed by the Commission. In those instances where the quality characteristic of an applicant's or current holder's fingerprints is determined to be too low or otherwise inadequate for processing by the FBI, the applicant or current holder shall comply with the Commission's criminal history record check requirement pursuant to the Commission's alternate name-based records check procedure.
  3. If the applicant's or current holder's verified criminal history record check reveals one or more convictions, the convictions shall not automatically constitute cause for denying an application or revoking a certificate. However, all of the following factors shall be considered by the Commission in determining whether the application should be denied or the certificate revoked:
    1. The level and seriousness of the crime.
    2. The date of the crime.
    3. The age of the person at the time of the conviction.
    4. The nature of the crime as it relates to the duties and responsibilities of a common carrier of household goods.
    5. The employment history of the person after the date the crime was committed.
    6. Any evidence of rehabilitation of the person after the date the crime was committed.
  4. The Commission may deny an application or revoke a certificate if the applicant or current holder refuses to consent to a criminal history record check or use of fingerprints or other identifying information required by the State or National Repositories of Criminal Histories.

History

(2012-9, s. 1.)

Cross References. - As to Department of Justice providing, from State and National Repositories of Criminal Histories, the criminal history of applicants for and current holders of certificate to transport household goods, see G.S. 114-19.32.

§ 62-274. Evidence; joinder of surety.

No report by any carrier of any accident arising in the course of the operations of such carrier, made pursuant to any requirement of the Commission, and no report by the Commission of any investigation of any such accident, shall be admitted as evidence, or used for any other purpose in any suit or action for damages growing out of any matter mentioned in such report or investigation; nor shall the discharge by any carrier of any truck driver or other employee after any such accident be offered or admitted in evidence for any purpose, in any suit or action against such carrier for damages arising out of any such accident; nor shall any insurance company or surety executing any insurance policy, bond, or other security for the protection of the public, as provided in G.S. 62-268, or as provided in G.S. 62-112, be joined with the assured carrier in any action or suit for damages, debt, or claim thereby secured; nor shall evidence of any such policy, bond, or other security be offered or received in any such action or suit against the carrier, but the surety or insurer shall be obligated within the amount of such policy, bond or other security to pay any final judgment against the carrier.

History

(1947, c. 1008, s. 34; 1949, c. 1132, s. 31; 1963, c. 1165, s. 1.)

CASE NOTES

No North Carolina statute other than this section authorizes or prohibits suit against a liability insurer alone or jointly with its insured by a person allegedly injured by the negligence of the insured. Jones v. State Farm Mut. Auto. Ins. Co., 270 N.C. 454, 155 S.E.2d 118 (1967).


§ 62-275: Repealed by Session Laws 1985, c. 676, s. 23.

§ 62-276. Construction of Article.

Nothing herein contained shall be construed to relieve any motor carrier from any regulation otherwise imposed by law or lawful authority, and this Article shall not be construed to relieve any such motor carrier from any obligation or duty imposed by Chapter 20 of the General Statutes of North Carolina.

History

(1949, c. 1132, s. 35; 1963, c. 1165, s. 1.)

§ 62-277: Repealed by Session Laws 1985, c. 454, s. 16.

§ 62-278. Revocation of license plates by Utilities Commission.

  1. The license plates of any carrier of persons or household goods by motor vehicle for compensation may be revoked and removed from the vehicles of any such carrier for wilful violation of any provision of this Chapter, or for the wilful violation of any lawful rule or regulation made and promulgated by the Utilities Commission. To that end the Commission shall have power upon complaint or upon its own motion, after notice and hearing, to order the license plates of any such offending carrier revoked and removed from the vehicles of such carrier for a period not exceeding 30 days, and it shall be the duty of the Department of Motor Vehicles to execute such orders made by the Utilities Commission upon receipt of a certified copy of the same.
  2. This section shall be in addition to and independent of other provisions of law for the enforcement of the motor carrier laws of this State.

History

(1951, c. 1120; 1963, c. 1165, s. 1; 1995, c. 523, s. 27.)

§ 62-279. Injunction for unlawful operations.

If any motor carrier, or any other person or corporation, shall operate a motor vehicle in violation of any provision of this Chapter applicable to motor carriers or motor vehicles generally, except as to the reasonableness of rates or charges and the discriminatory character thereof, or shall operate in violation of any rule, regulation, requirement or order of the Commission, or of any term or condition of any certificate, the Commission or any holder of a certificate duly issued by the Commission may apply to a superior court judge who has jurisdiction pursuant to G.S. 7A-47.1 or 7A-48 in the district or set of districts as defined in G.S. 7A-41.1 in which the motor carrier or other person or corporation so operates, for the enforcement of any provisions of this Article, or of any rule, regulation, requirement, order, term or condition of the Commission. Such court shall have jurisdiction to enforce obedience to this Article or to any rule, order, or decision of the Commission by a writ of injunction or other process, mandatory or otherwise, restraining such carrier, person or corporation, or its officers, agents, employees and representatives from further violation of this Article or of any rule, order, regulation, or decision of the Commission.

History

(1947, c. 1008, s. 30; 1949, c. 1132, s. 30; 1953, c. 1140, s. 4; 1957, c. 1152, s. 16; 1961, c. 472, ss. 8, 11; 1963, c. 1165, s. 1; 1987 (Reg. Sess., 1988), c. 1037, s. 95; 1995, c. 523, s. 28.)

CASE NOTES

Restraining Illegal Operation Along Route. - A franchise carrier may maintain an action in the superior court to restrain another carrier from illegal operation along his route without a certificate or permit from the Utilities Commission, when such illegal operation by such other carrier interferes with its franchise rights. Bryant v. Barber, 237 N.C. 480, 75 S.E.2d 410 (1953).

As to right of common carrier to apply to court for injunctive relief against wrongful acts of another carrier under former statute repealed and superseded by Bus Act of 1949, see Burke Transit Co. v. Queen City Coach Co., 228 N.C. 768, 47 S.E.2d 297 (1948).

Cited in State ex rel. Utils. Comm'n v. Southern Coach Co., 19 N.C. App. 597, 199 S.E.2d 731 (1973).


§ 62-280. Household goods carrier; marking or identification of vehicles.

  1. No carrier of household goods shall operate any motor vehicle upon a highway, public street, or public vehicular area within the State in the transportation of household goods for compensation in violation of the provisions of G.S. 20-398.
  2. The Utilities Commission may assess a civil penalty not in excess of five thousand dollars ($5,000) for the violation of subsection (a) of this section. The clear proceeds of any civil penalties collected pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.

History

(2011-244, s. 2.)

§ 62-280.1. False representation of household goods carrier certificate unlawful.

  1. It is unlawful for a person not issued a certificate to operate as a carrier of household goods under the provisions of this Chapter to do any of the following:
    1. Orally, in writing, in print, or by sign, including the use of a vehicle placard, phone book, Internet, magazine, newspaper, billboard, or business card, or in any other manner, directly or by implication, represent that the person holds a certificate or is otherwise authorized to operate as a carrier of household goods in this State.
    2. Use in connection with the person's name or place of business any words, letters, abbreviations, or insignia indicating or implying that the person holds a certificate or is otherwise authorized to operate as a carrier of household goods in this State.
  2. Any person who violates subsection (a) of this section or who knowingly aids and abets another person in violating subsection (a) of this section shall be guilty of a Class 3 misdemeanor and punished only by a fine of not more than five hundred dollars ($500.00) for the first offense and not more than two thousand dollars ($2,000) for any subsequent offense.
  3. The Utilities Commission may assess a civil penalty not in excess of five thousand dollars ($5,000) for the violation of subsection (a) of this section. The clear proceeds of any civil penalties collected pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.
  4. Notwithstanding the provisions of G.S. 20-383 to the contrary, any law enforcement officer with territorial jurisdiction is authorized to enforce the provisions of this section.

History

(2011-244, s. 2; 2021-23, s. 19.)

Effect of Amendments. - Session Laws 2021-23, s. 19, effective May 17, 2021, in subsection (b), inserted "or who knowingly aids and abets another person in violating subsection (a) of this section"; and added subsection (d).

§ 62-281: Repealed by Session Laws 1985, c. 454, s. 17.

§§ 62-282 through 62-289: Reserved for future codification purposes.

ARTICLE 12A. Human Service Transportation.

Sec.

§ 62-289.1. Short title.

This Article shall be known and may be cited as the "North Carolina Act to Remove Barriers to Coordinating Human Service and Volunteer Transportation".

History

(1981, c. 792, s. 1.)

§ 62-289.2. Purpose.

In order to promote improved transportation for the elderly, handicapped and residents of rural areas and small towns through an expanded and coordinated transportation network, it is the intent of the General Assembly to recognize human service transportation and volunteer transportation as separate but contributing components of the North Carolina transportation system. Further, it is the intent of the General Assembly to remove barriers to low cost human service transportation.

History

(1981, c. 792, s. 1.)

§ 62-289.3. Definitions.

The following definitions apply in this Article:

  1. Human service agency. - Any charitable or governmental agency including, but not limited to: county departments of social services, area mental health, developmental disabilities, and substance abuse authorities, local health departments, councils on aging, community action agencies, sheltered workshops, group homes, and State residential institutions.
  2. Human service transportation. - Motor vehicle transportation provided on a nonprofit basis by a human service agency for the purpose of transporting clients or recipients in connection with programs sponsored by the agency. "Human service transportation" also means motor vehicle transportation provided by for-profit persons under exclusive contract with a human service agency for the transportation of clients or recipients, and such provider shall also qualify as a human service agency for the purpose of motor vehicle registration during the term of the contract. The motor vehicle may be owned, leased, borrowed, or contracted for use by or from the human service agency.
  3. Nonprofit. - As applied to human service transportation, means motor vehicle transportation provided at cost.
  4. Person. - An individual, corporation, company, association, partnership, or other legal entity.
  5. Volunteer transportation. - Motor vehicle transportation provided by any person under the direction, sponsorship, or supervision of a human service agency. The person may receive an allowance to defray the actual cost of operating the vehicle but shall not receive any other compensation.

History

(1981, c. 792, s. 1; 1987, c. 407; 2018-47, s. 6(b).)

Editor's Note. - Session Laws 2018-47, s. 15, provides: "This act does not affect the coverage, eligibility, rights, responsibilities, or provision of State or federal services or benefits for individuals who have been diagnosed with mental retardation and whose diagnosis has not been changed to a diagnosis of intellectual disability."

Effect of Amendments. - Session Laws 2018-47, s. 6(b), effective June 22, 2018, made stylistic changes throughout the section; rewrote the introductory language; and in subdivision (1) substituted "developmental disabilities and" for "mental retardation or."

§ 62-289.4. Classification of transportation.

The forms of transportation defined in G.S. 62-289.3(2) and (5) shall be classified as "human service transportation" and "volunteer transportation" for purposes of regulation, insurance, and general administration.

History

(1981, c. 792, s. 1.)

§ 62-289.5. Inapplicable laws and regulations.

Human services transportation and volunteer transportation shall not be considered as for-hire transportation, commercial transportation or motor carriers, as defined by G.S. 62-3(17). Such transportation shall not be subject to regulation as motor carriers under G.S. 62-261.

History

(1981, c. 792, s. 1.)

§ 62-289.6. Insurance for volunteers.

Human service agencies are authorized to purchase insurance to cover persons who provide volunteer transportation.

History

(1981, c. 792, s. 1.)

§ 62-289.7. Municipal licenses and taxes.

No county, city, town, municipal corporation or other unit of local government may impose a special tax on or require a special license for human service transportation or volunteer transportation other than that customarily used or imposed on private passenger automobiles unless the tax or license is provided for by a statute, ordinance, or regulation specifically addressing human service transportation or volunteer transportation.

History

(1981, c. 792, s. 1.)

ARTICLE 13. Reorganization of Public Utilities.

Sec.

§ 62-290. Corporations whose property and franchises sold under order of court or execution.

When the property and franchises of a public utility corporation are sold under a judgment or decree of a court of this State, or of the district court of the United States, or under execution, to satisfy a mortgage debt or other encumbrance thereon, such sale vests in the purchaser all the right, title, interest and property of the parties to the action in which such judgment or decree was made, to said property and franchises, subject to all the conditions, limitations and restrictions of the corporation; and the purchaser and his associates thereupon become a new corporation, by such name as they select, and they are the stockholders in the ratio of the purchase money by them contributed; and are entitled to all the rights and franchises and subject to all the conditions, limitations and penalties of the corporation whose property and franchises have been so sold. In the event of the sale of a railroad in foreclosure of a mortgage or deed of trust, whether under a decree of court or otherwise, the corporation created by or in consequence of the sale succeeds to all the franchises, rights and privileges of the original corporation only when the sale is of all the railroad owned by the company and described in the mortgage or deed of trust, and when the railroad is sold as an entirety. If a purchaser at any such sale is a corporation, such purchasing corporation shall succeed to all the properties, franchises, powers, rights, and privileges of the original corporation: Provided, that this shall not affect vested rights and shall not be construed to alter in any manner the public policy of the State now or hereafter established with reference to trusts and contracts in restraint of trade.

History

(Code, ss. 697, 698; 1897, c. 305; 1901, c. 2, s. 99; Rev., s. 1238; 1913, c. 25, s. 1; 1919, c. 75; C.S., s. 1221; 1955, c. 1371, s. 2; 1963, c. 1165, s. 1.)

Legal Periodicals. - For a comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

§ 62-291. New owners to meet and organize; special rule for railroads.

  1. The persons for whom the property and franchises have been purchased pursuant to G.S. 62-290 shall meet within 30 days after the delivery of the conveyance made by virtue of said judgment or decree, and organize the new corporation, 10 days' written notice of the time and place of the meeting having been given to each of said persons. At this meeting they shall adopt a corporate name and seal, determine the amount of the capital stock of the corporation, and shall have power and authority to make and issue certificates of stock in shares of such amounts as they see fit. The corporation may then, or at any time thereafter, create and issue preferred stock to such an amount, and at such time, as they may deem necessary.
  2. Whenever the purchaser of the real estate, track and fixtures of any railroad corporation which has heretofore been sold, or may hereafter be sold, by virtue of any mortgage executed by such corporation or execution issued upon any judgment or decree of any court, shall acquire title to the same in the manner prescribed by law, such purchaser may associate with him any number of persons, and make and acknowledge and file articles of association as prescribed by this Chapter. Such purchaser and his associates shall thereupon be a new corporation, with all the powers, privileges and franchises and subject to all of the provisions of this Chapter.
  3. When any railroad corporation shall be dissolved, or its property sold and conveyed under any execution, deed of trust, mortgage or other conveyance, the owner or purchaser shall constitute a new corporation upon compliance with law.

History

(1871-2, c. 138, s. 5; Code, ss. 1936, 2005; 1901, c. 2, ss. 100, 101, 102; Rev., ss. 1239, 1240, 2552, 2565; C.S., ss. 1222, 3462, 3463; 1955, c. 1371, s. 2; 1963, c. 1165, s. 1.)

Legal Periodicals. - For a comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

CASE NOTES

Railroad May Be Sold. - A railroad is the subject of private property, and in that character is liable to be sold, unless the sale be forbidden by the legislature; not the franchise, but the land itself constituting the road. State v. Rives, 27 N.C. 297 (1844).

A railroad corporation is not dissolved by the sale of its road. State v. Rives, 27 N.C. 297 (1844).

When Sale Effects Dissolution. - In order that the sale of the franchise and property of a railroad corporation under mortgage shall have the effect of a dissolution of such corporation, another corporation must be provided to take its place and assume and discharge the obligations to the public growing out of the grant of the franchise; until that is done the old corporation continues to exist, and when it is done the new corporation will be a domestic corporation. James v. Western N.C.R.R., 121 N.C. 523, 28 S.E. 537 (1897).

Effect of Sale Under Second Mortgage. - The sale of a railroad under a second mortgage and a conveyance thereunder, subject to the first mortgage upon its franchise and corporate property, did not extinguish the corporate existence of the company nor release it from liability to the public for the manner in which it was operated. James v. Western N.C.R.R., 121 N.C. 523, 28 S.E. 537 (1897).

The effect of the sale of a railroad company's franchises and property under a second mortgage, subject to a first mortgage which was assumed by the purchaser, was to place the purchaser in the place of the mortgagor in its relation to the trustee of the first mortgage, with the right to run and operate the road as agent of the mortgagor; however, the old corporation was not extinguished, but was still in existence and liable for damages caused by the maladministration of its agent, which liability could be enforced against the property which it allowed the purchaser to use. James v. Western N.C.R.R., 121 N.C. 523, 28 S.E. 537 (1897).

Purchaser Takes Rights of Old Company. - On the foreclosure of a mortgage given by a railroad company, the purchaser takes the rights that the company had acquired in relation to its right-of-way under its charter. Barker v. Southern R.R., 137 N.C. 214, 49 S.E. 115 (1904).

The legislative purpose is that the property of railroads must be kept in association with their franchises, to preserve value, to give credit to such corporations, to secure creditors, and to keep railroads in operation for the benefit of the public, which was the primary object of the legislature in bestowing such corporate franchises. Bradley v. Ohio R. & C. Ry., 78 F. 387 (W.D.N.C. 1896).

§ 62-292. Certificate to be filed with Secretary of State.

It is the duty of the new corporation provided for by this Article, within one month after its organization, to make certificate thereof, under its common seal, attested by the signature of its president, specifying the date of the organization, the name adopted, the amount of capital stock, and the names of its president and directors, and transmit the certificate to the Secretary of State, to be filed and recorded in his office. A certified copy of this certificate so filed shall be recorded in the office of the clerk of the superior court of the county in which is located the principal office of the corporation, and is the charter and evidence of the corporate existence of the new corporation.

History

(1901, c. 2, s. 103; Rev., s. 1241; C.S., s. 1223; 1955, c. 1371, s. 2; 1963, c. 1165, s. 1.)

§ 62-293. Effect on liens and other rights.

Nothing contained in this Article in any manner impairs the lien of a prior mortgage, or other encumbrance, upon the property or franchises conveyed under a sale pursuant to this Article when by the terms of the judgment or decree under which the sale was made, or by operation of law, the sale was made subject to the lien of any such prior mortgage or other encumbrance. No such sale and conveyance or organization of such new corporation in any way affects the rights of any person or body politic not a party to the action in which the judgment or decree was made, nor of any party except as determined by the judgment or decree. When a trustee has been made a party to such action and his cestui que trust, for reason satisfactory to the court, has not been made a party thereto, the rights and interest of the cestui que trust are concluded by the decree.

History

(1901, c. 2, s. 103; Rev., s. 1241; C.S., s. 1224; 1955, c. 1371, s. 2; 1963, c. 1165, s. 1.)

§§ 62-294 through 62-299: Reserved for future codification purposes.

ARTICLE 14. Fees and Charges.

Sec.

§ 62-300. Particular fees and charges fixed; payment.

  1. The Commission shall receive and collect the following fees and charges in accordance with the classification of utilities as provided in rules and regulations of the Commission, and no others:
    1. Twenty-five dollars ($25.00) with each notice of appeal to the Court of Appeals or the Supreme Court, and with each notice of application for a writ of certiorari.
    2. With each application for a new certificate for motor carrier rights, the fee shall be two hundred fifty dollars ($250.00) when filed by Class 1 motor carriers, one hundred dollars ($100.00) when filed by Class 2 motor carriers, and twenty-five dollars ($25.00) when filed by Class 3 motor carriers, and twenty-five dollars ($25.00) as filing fee for any amendment thereto so as to extend or enlarge the scope of operations thereunder, and twenty-five dollars ($25.00) for each broker who applies for a brokerage license under the provisions of this Chapter.
    3. With each application for a general increase in rates, fares and charges and for each filing of a tariff which seeks general increases in rates, fares and charges, the fee will be five hundred dollars ($500.00) for Class A utilities and Class 1 motor carriers, two hundred fifty dollars ($250.00) for Class B utilities and Class 2 motor carriers, one hundred dollars ($100.00) for Class C utilities and twenty-five dollars ($25.00) for Class D utilities and Class 3 motor carriers; provided that in the case of an application or tariff for a general increase in rates filed by a tariff agent for more than one carrier, the applicable fee shall be the highest fee prescribed for any motor carrier included in the application or tariff. This fee shall not apply to applications for adjustments in particular rates, fares, or charges for the purpose of eliminating inequities, preferences or discriminations or to applications to adjust rates and charges based solely on the increased cost of fuel used in the generation or production of electric power.
    4. One hundred dollars ($100.00) with each application by motor carrier of passengers for the abandonment or permanent or temporary discontinuance of transportation service previously authorized in a certificate.
    5. Repealed by Session Laws 1998-128, s. 10.
    6. With each application for a certificate of public convenience and necessity or for any amendment thereto so as to extend or enlarge the scope of operations thereunder, the fee shall be two hundred fifty dollars ($250.00) for Class A utilities, one hundred dollars ($100.00) for Class B utilities, and twenty-five dollars ($25.00) for Class C and D utilities and two hundred fifty dollars ($250.00) for any other person seeking a certificate of public convenience and necessity.
    7. With each application by a bus company for an original certificate of authority or for any amendment thereto or to an existing certificate of public convenience and necessity so as to extend or enlarge the scope of operations thereunder the fee shall be two hundred fifty dollars ($250.00).
    8. With each application for approval of the issuance of securities or for the approval of any sale, lease, hypothecation, lien, or other transfer of any household goods or operating rights of any carrier or public utility over which the Commission has jurisdiction, the fee shall be two hundred fifty dollars ($250.00) for Class A utilities and Class 1 motor carriers, one hundred dollars ($100.00) for Class B utilities and Class 2 motor carriers, and twenty-five dollars ($25.00) for Class C and D utilities and Class 3 motor carriers; provided, that in the case of sales, leases and transfers between two or more carriers or utilities, the applicable fee shall be the highest fee prescribed for any party to the transaction.
    9. Ten dollars ($10.00) with each application, petition, or complaint not embraced in (2) through (6) of this section, wherein such application, petition, or complaint seeks affirmative relief against a carrier or public utility over which the Commission has jurisdiction. This fee shall not apply to applications for adjustments in particular rates, fares or charges for the purpose of eliminating inequities, preferences or discriminations; nor shall this fee apply to applications, petitions, or complaints made by any county, city or town; nor shall this fee apply to applications or petitions made by individuals seeking service or relief from a public utility.
    10. Repealed by Session Laws 1985, c. 454, s. 18.
    11. One dollar ($1.00) for each page (8 1/2 x 11 inches) of transcript of testimony, but not less than five dollars ($5.00) for any such transcript.
    12. Twenty cents (20›) for each page of copies of papers, orders, certificates or other records, but not less than one dollar ($1.00) for any such order or record, plus five dollars ($5.00) for formal certification of any such paper, order or record.
    13. , (12) Repealed by Session Laws 1985, c. 454, s. 18.
  2. All witness fees, officers' fees serving papers, and cost of serving notice by publication shall be paid by the party at whose instance or for whose benefit such fees and costs are incurred.
  3. No application, petition, complaint, notice of appeal, notice of application for writ of certiorari, or other document or paper, the filing of which requires the payment of a fee under this Article, shall be deemed filed until the fees herein required shall have been paid to the Commission.
  4. The fees and charges as set forth in subdivisions (1), (7), (9) and (10) of subsection (a) of this section shall not apply to the State of North Carolina or to any board, department, commission, institution or other agency of the State; and all applications, petitions or complaints submitted by the State of North Carolina or any board, department, commission, institution or other agency of the State shall be filed without the payment of the fees required by this section. All transcripts, papers, orders, certificates, or other records necessary to perfect an appeal, or to determine whether an appeal is to be taken, shall be furnished without charge to the Attorney General upon his request in cases in which the Attorney General appears in the public interest or as representing any board, department, commission, institution or other agency of the State.
  5. The provisions of this section shall apply with respect to the regulation of electric membership corporations as provided in G.S. 117-18.1.

(13) Two hundred fifty dollars ($250.00) with each application for a certificate of public convenience and necessity to construct a transmission line.

(14) Twenty-five dollars ($25.00) with each filing by a person otherwise exempt from Commission regulation under Public Law 103-305 to participate in standard transportation practices as set out by the Commission.

(15) One hundred dollars ($100.00) for each application for exemption filed by nonprofit and consumer-owned water or sewer utilities pursuant to G.S. 62-110.5.

(16) Two hundred fifty dollars ($250.00) with each application for a certificate of authority to engage in business as an electric generator lessor filed pursuant to G.S. 62-126.7 or each registration statement for a renewable energy facility or new renewable energy facility filed pursuant to G.S. 62-133.8(l) .

(17) Fifty dollars ($50.00) for each report of proposed construction filed by the owner of an electric generating facility that is exempt from the certification requirements of G.S. 62-110.1(a).

History

(1953, c. 825, s. 1; 1955, c. 64; 1957, c. 1152, s. 15; 1961, c. 472, ss. 2-4; 1963, c. 1165, s. 1; 1967, c. 1039; c. 1190, s. 7; 1969, c. 721, s. 2; 1971, c. 736, s. 2; 1975, c. 447, s. 1; 1977, c. 1003; 1977, 2nd Sess., c. 129, s. 32; 1979, c. 792; 1985, c. 311, ss. 1-4; c. 454, ss. 18, 19; c. 676, s. 24; 1991, c. 189, s. 2; 1995, c. 523, ss. 29, 32; 1997-437, s. 3; 1998-128, s. 10; 1999-180, s. 6; 2017-192, s. 10(b); 2021-23, s. 26(a).)

Utility Commission Fees and Charges. - Session Laws 2015-241, s. 15.16A(a), (b), provides: "(a) The Utilities Commission and Public Staff shall jointly review all fees and charges provided for in G.S. 62-300 to determine (i) whether the fees and charges are sufficient to cover the costs of processing the applications and filings required by G.S. 62-300 and (ii) whether new categories should be established to impose fees or charges on persons or entities who make applications or filings to the Utilities Commission but are not expressly included in any of the current categories listed in G.S. 62-300. The review may also include any other relevant matters related to fees and charges for applications and filings made to the Utilities Commission.

"(b) By April 1, 2016, the Utilities Commission and Public Staff shall report their findings, including any recommendations on amending the fees and charges for applications and filings under G.S. 62-300, to the Joint Legislative Commission on Energy Policy, the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources and the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division."

Editor's Note. - Session Laws 2015-241, s. 1.1, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2015.'"

Session Laws 2015-241, s. 33.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2015-2017 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2015-2017 fiscal biennium."

Session Laws 2015-241, s. 33.6, is a severability clause.

Session Laws 2017-192, s. 14(a), contains a severability clause.

Effect of Amendments. - Session Laws 2017-192, s. 10(b), effective July 27, 2017, added subdivisions (a)(16) and (a)(17).

Session Laws 2021-23, s. 26(a), effective July 1, 2021, substituted "two hundred fifty dollars ($250.00)” for "twenty-five dollars ($25.00) in subdivision (a)(5).

CASE NOTES

Cited in State ex rel. Utils. Comm'n v. Rail Common Carriers, 42 N.C. App. 314, 256 S.E.2d 508 (1979).


§ 62-301: Repealed by Session Laws 1989, c. 787, s. 2.

§ 62-302. Regulatory fee.

  1. Fee Imposed. - It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62-2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public and to maintain a reasonable margin for a reserve fund. The amount of the reserve may not exceed one-half of the cost of operating the Commission and the Public Staff as reflected in the certified budget for the previous fiscal year.
  2. Public Utility Rate. -
    1. Repealed by Session Laws 2000-140, s. 56, effective July 21, 2000.
    2. Unless adjusted under subdivision (3) of this subsection, the public utility fee is a percentage of a utility's jurisdictional revenues as follows:
    3. In the first half of each calendar year, the Commission shall review the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including a reasonable margin for the reserve fund allowed under this section. In making this determination, the Commission shall consider all relevant factors that may affect the cost of operating the Commission or the Public Staff or a possible unanticipated change in competitive and noncompetitive jurisdictional revenues. If the estimated receipts provided for under this section are less than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then the Commission may  increase the public utility regulatory fee on noncompetitive jurisdictional revenues effective for the next fiscal year. In no event may the percentage rate of the public utility regulatory fee on noncompetitive jurisdiction revenues exceed seventeen and one-half hundredths of one percent (0.175%). If the estimated receipts provided for under this section are more than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then the Commission shall decrease the public utility regulatory fee on noncompetitive jurisdictional revenues effective for the next fiscal year.
    4. As used in this section:
      1. "Noncompetitive jurisdictional revenues" means all revenues derived or realized from intrastate tariffs, rates, and charges approved or allowed by the Commission or collected pursuant to Commission order or rule, but not including tap-on fees or any other form of contributions in aid of construction.
      2. "Subsection (h) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62-133.5(h).
      3. "Subsection (m) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62-133.5(m).
  3. Electric Membership Corporation Rate. - The electric membership corporation regulatory fee for each fiscal year is two hundred thousand dollars ($200,000).
  4. When Due. - The electric membership corporation regulatory fee imposed under this section shall be paid in quarterly installments. The fee is due and payable to the Commission on or before the 15th day of the second month following the end of each quarter.
  5. Use of Proceeds. - A special fund in the office of State Treasurer, the Utilities Commission and Public Staff Fund, is created. The fees collected pursuant to this section and all other funds received by the Commission or the Public Staff, except for the clear proceeds of civil penalties collected pursuant to G.S. 62-50(d) and the clear proceeds of funds forfeited pursuant to G.S. 62-310(a), shall be deposited in the Utilities Commission and Public Staff Fund. The Fund shall be placed in an interest bearing account and any interest or other income derived from the Fund shall be credited to the Fund. Moneys in the Fund shall only be spent pursuant to appropriation by the General Assembly.
  6. Fee changes. -  If a utility's regulatory fee obligation is changed, the Commission shall either adjust the utility's rates to reflect the change or approve the utility's request for an accounting order allowing deferral of the change in the fee obligation.

It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62-53. Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62-53 and G.S. 117-18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117-16 shall pay an annual fee as provided in this section.

Noncompetitive jurisdiction revenues 0.148% Subsection (h) competitive jurisdictional revenues 0.04% Subsection (m) competitive jurisdictional revenues 0.02%

The public utility regulatory fee imposed under this section is due and payable to the Commission on or before the 15th day of the second month following the end of each quarter. Every public utility subject to the public utility regulatory fee shall, on or before the date the fee is due for each quarter, prepare and render a report on a form prescribed by the Commission. The report shall state the public utility's total North Carolina jurisdictional revenues for the preceding quarter and shall be accompanied by any supporting documentation that the Commission may by rule require. Receipts shall be reported on an accrual basis.

If a public utility's report for the first quarter of any fiscal year shows that application of the percentage rate would yield a quarterly fee of twenty-five dollars ($25.00) or less, the public utility shall pay an estimated fee for the entire fiscal year in the amount of twenty-five dollars ($25.00). If, after payment of the estimated fee, the public utility's subsequent returns show that application of the percentage rate would yield quarterly fees that total more than twenty-five dollars ($25.00) for the entire fiscal year, the public utility shall pay the cumulative amount of the fee resulting from application of the percentage rate, to the extent it exceeds the amount of fees, other than any surcharge, previously paid.

The Utilities Commission and Public Staff Fund shall be subject to the provisions of the State Budget Act except that no unexpended surplus of the Fund shall revert to the General Fund. All funds credited to the Utilities Commission and Public Staff Fund shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public as provided by this Chapter and in regulating electric membership corporations as provided in G.S. 117-18.1.

The clear proceeds of civil penalties collected pursuant to G.S. 62-50(d) and the clear proceeds of funds forfeited pursuant to G.S. 62-310(a) shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.

History

(1989, c. 787, s. 1; 1998-215, s. 126; 1999-180, s. 5; 2000-140, s. 56; 2006-203, s. 18; 2009-238, s. 6; 2011-52, s. 2; 2014-59, s. 1; 2015-134, ss. 1(a), 2, 3.)

Percentage Rates for Calculating Regulatory Fee Under Subdivision (b)(2) Prior to the 2015 Amendment. - The percentage rates for calculating regulatory fees under subdivision (b)(2) prior to the effective date of the 2015 amendment were found in Session Laws 2008-107, s. 28.14(b), Session Laws 2009-451, s. 14.26(b), as amended by Session Laws 2010-31, s. 14.14, Session Laws 2011-145, s. 31.4(a), Session Laws 2012-74, s. 1(a), Session Laws 2013-360, s. 15.1(a), as amended by Session Laws 2014-100, s. 15.2B, and Session Laws 2014-59, ss. 2(a), (b), 3(a), (b), and 4.

Regulatory Fee Imposed Under Subsection (b1) Prior to the 2015 Amendment. - The regulatory fees imposed under subsection (b1) prior to the effective date of the 2015 amendment were found in Session Laws 2008-107, s. 28.14(b), Session Laws 2009-451, s. 14.26(b), as amended by Session Laws 2010-31, s. 14.14, Session Laws 2011-145, s. 31.4(b), Session Laws 2012-74, s. 1(b), and Session Laws 2013-360, s. 15.1(b).

Editor's Note. - The preamble to Session Laws 2009-238, provides: "Whereas, the technology used to provide communications services has evolved and continues to evolve at an ever-increasing pace; and

"Whereas, the resulting competition between traditional telephone service providers, cable companies offering communications services, Voice-over Internet Protocol (VoIP) providers, wireless communications service providers, and other communications service providers promotes and continues to promote additional consumer choices for these services; and

"Whereas, traditional telephone service providers remain subject to certain antiquated statutory and regulatory restrictions that do not apply to other communications service providers; and

"Whereas, this disparity may deprive consumers of traditional telephone companies of the full range of timely and competitive options and offerings that otherwise would be available to them; and

"Whereas, the General Assembly finds that relaxing certain restrictions for traditional telephone companies will relieve consumers of unnecessary costs and burdens, encourage investment, and promote timely deployment of more innovative offerings at more competitive prices for customers; and

"Whereas, in order to make the full range of competitive options and offerings available to consumers of communications services while maintaining inflation-based price controls for those existing customers who currently receive and wish to continue receiving only stand-alone basic residential lines from traditional telephone companies, the General Assembly hereby enacts the 'Consumer Choice and Investment Act of 2009'; Now, therefore,"

Effect of Amendments. - Session Laws 2006-203, s. 18, effective July 1, 2007, and applicable to the budget for the 2007-2009 biennium and each subsequent biennium thereafter, substituted "G.S. 143C-3-5" for "G.S. 143-11" in the first undesignated paragraphs following the second paragraph of subdivision (b)(2) and subsection (b1); and substituted "State Budget Act" for "Executive Budget Act" in the first sentence of the second paragraph of subsection (d).

Session Laws 2009-238, s. 6, effective June 30, 2009, designated the previously existing provisions of subdivision (b)(4) as subdivisions (b)(4) and (b)(4)a; added subdivision (b)(4)b, and made a related stylistic and punctuation change.

Session Laws 2011-52, s. 2, effective April 26, 2011, in subdivision (b)(4)b., inserted "or G.S. 62-133.5(m)" and substituted "under those subsections" for "under that subsection" at the end.

Session Laws 2014-59, s. 1, effective July 1, 2015, rewrote subdivisions (b)(2) and (b)(4); and added subsection (e).

Session Laws 2015-134, s. 1(a), in the first paragraph of subsection (a), added "and to maintain a reasonable margin for a reserve fund" at the end of the former last sentence, and added the present last sentence. For effective date and applicability, see editor's note.

Session Laws 2015-134, s. 2, rewrote (b)(2), (b)(3), (b1), and (e). For effective date and applicability, see editor's note.

Session Laws 2015-134, s. 3, in the form in subdivision (b)(2), substituted "0.04%" for "0.06%" in the second row, and "0.02%" for "0.05%" in the third row. For effective date and applicability, see editor's note.

§ 62-302.1. Regulatory fee for combustion residuals surface impoundments.

  1. (Expires April 1, 2030 - see note) Fee Imposed. - Each public utility with a coal combustion residuals surface impoundment shall pay a regulatory fee for the purpose of defraying the costs of oversight of coal combustion residuals. The fee is in addition to the fee imposed under G.S. 62-302. The fees collected under this section shall only be used to pay the expenses of the Department of Environmental Quality in providing oversight of coal combustion residuals.
  2. Rate. - The combustion residuals surface impoundment fee shall be twenty-two thousandths of one percent (0.022%) of the North Carolina jurisdictional revenues of each public utility with a coal combustion residuals surface impoundment. For the purposes of this section, the term "North Carolina jurisdictional revenues" has the same meaning as in G.S. 62-302.
  3. When Due. - The fee shall be paid in quarterly installments. The fee is payable to the Department of Environmental Quality on or before the 15th of the second month following the end of each quarter. Each public utility subject to this fee shall, on or before the date the fee is due for each quarter, prepare and render a report on a form prescribed by the Department of Environmental Quality. The report shall state the public utility's total North Carolina jurisdictional revenues for the preceding quarter and shall be accompanied by any supporting documentation that the Department of Environmental Quality may by rule require. Receipts shall be reported on an accrual basis.
  4. Use of Proceeds. - A special fund in the Department of Environmental Quality is created. The fees collected pursuant to this section shall be deposited in the Coal Combustion Residuals Management Fund. The Fund shall be placed in an interest-bearing account, and any interest or other income derived from the Fund shall be credited to the Fund. Subject to appropriation by the General Assembly, one hundred percent (100%) shall be used by the Department of Environmental Quality. All funds credited to the Fund shall be used only to pay the expenses of the Department of Environmental Quality in providing oversight of coal combustion residuals.
  5. Recovery of Fee. - The North Carolina Utilities Commission shall not allow an electric public utility to recover this fee from the retail electric customers of the State.

History

(2014-122, s. 15(a); 2015-1, s. 3.6; 2015-7, s. 7; 2015-241, s. 14.30(c), (u); 2016-95, s. 2.)

Editor's Note. - Session Laws 2014-122, s. 15(f), as amended by Session Laws 2015-7, s. 8, provides: "Subsection (a) of this section becomes effective July 1, 2014, and expires April 1, 2030, and applies to jurisdictional revenues earned on or after July 1, 2014, and before April 1, 2030. The remainder of this section becomes effective July 1, 2014."

Session Laws 2014-122, s. 15(b), provides: "Notwithstanding G.S. 62-302.1, as enacted by this section, for the first two quarters of fiscal year 2014-2015, each public utility shall pay the fee in G.S. 62-302.1 on a monthly basis. The fee shall be paid by the 15th of the following month."

Session Laws 2014-122, s. 17, is a severability clause.

Effect of Amendments. - Session Laws 2015-1, s. 3.6, effective March 16, 2015, inserted "Coal Ash Management" preceding "Commission" in the third sentence of (c) and in the fourth sentence of (d).

Session Laws 2015-7, s. 7, effective July 1, 2014, rewrote the fourth sentence in subsection (d).

Session Laws 2015-241, s. 14.30(u), effective July 1, 2015, substituted "Department of Environmental Quality" for "Department of Environment and Natural Resources" in subsection (a) and the second time it appears in subsection (d).

Session Laws 2016-95, s. 2, effective July 14, 2016, in subsection (a) and in the last sentence of subsection (d), deleted "Coal Ash Management Commission and the" preceding "Department of Environmental Quality"; in subsection (b), substituted "twenty-two thousandths of one percent (0.022%)" for "three hundredths of one percent (0.03%)"; in subsection (c), substituted "Department of Environmental Quality" for "Coal Ash Management Commission" three times; in subsection (d), substituted "Department of Environmental Quality" for "Office of State Treasurer and the Coal Ash Management Commission" in the first sentence, deleted "and all other funds received by the Coal Ash Management Commission" following "pursuant to this section," in the second sentence, substituted "one hundred percent (100%)" for "twenty-six and one half percent (26.5%) of the moneys in the Fund shall be used by the Coal Ash Management Commission and the remainder" in the third sentence; deleted the fourth sentence, which read "The Coal Ash Management Commission shall be subject to the provisions of the State Budget Act, except that no unexpended surplus of the Coal Combustion Residuals Management Fund shall revert to the General Fund."

§§ 62-303 through 62-309: Reserved for future codification purposes.

ARTICLE 15. Penalties and Actions.

Sec.

§ 62-310. Public utility violating any provision of Chapter, rules or orders; penalty; enforcement by injunction.

  1. Any public utility which violates any of the provisions of this Chapter or refuses to conform to or obey any rule, order or regulation of the Commission shall, in addition to the other penalties prescribed in this Chapter forfeit and pay a sum up to one thousand dollars ($1,000) for each offense, to be recovered in an action to be instituted in the Superior Court of Wake County, in the name of the State of North Carolina on the relation of the Utilities Commission; and each day such public utility continues to violate any provision of this Chapter or continues to refuse to obey or perform any rule, order or regulation prescribed by the Commission shall be a separate offense.
  2. If any person or corporation shall furnish water or sewer utility service in violation of any provision of this Chapter applicable to water or sewer utilities, except as to the reasonableness of rates or charges and the discriminatory character thereof, or shall provide such service in violation of any rule, regulation or order of the Commission, the Commission shall apply to a superior court judge who has jurisdiction pursuant to G.S. 7A-47.1 or 7A-48 in the district or set of districts as defined in G.S. 7A-41.1 in which the person or corporation so operates, for the enforcement of any provision of this Chapter or of any rule, regulation or order of the Commission. The court shall have jurisdiction to enforce obedience to this Chapter or to any rule, regulation or order of the Commission by appropriate writ, order or other process restraining such person, corporation, or their representatives from further violation of this Chapter or of any rule, regulation or order of the  Commission.

History

(1899, c. 164, s. 23; Rev., s. 1087; C.S., s. 1106; 1933, c. 134, s. 8; c. 307, ss. 36, 37; 1941, c. 97; 1963, c. 1165, s. 1; 1973, c. 1073; 1987 (Reg. Sess., 1988), c. 1037, s. 96.)

CASE NOTES

Action Ex Contractu. - It would seem that an action against a railroad company for a penalty for a statutory violation is an action ex contractu for breach of an implied contract to perform a statutory duty. State ex rel. Carter v. Wilmington & W.R.R., 126 N.C. 437, 36 S.E. 14 (1900).

Construction of Penal Statute. - The rule that a penal statute must be strictly construed means no more than that the court, in ascertaining the meaning of such a statute, cannot go beyond the plain meaning of the words and phraseology employed in search of an intention not certainly implied by them, and when there is reasonable doubt as to the meaning of the words used in the statute, the court will not give them such an interpretation as to impose the penalty, nor will the purpose of the statute be extended by implication, so as to embrace cases not clearly within its meaning. Hines & Battle v. Wilmington & W.R.R., 95 N.C. 434 (1886).

Cited in State ex rel. Utils. Comm'n v. United Tank Lines, 34 N.C. App. 543, 239 S.E.2d 266 (1977).


§ 62-311. Willful acts of employees deemed those of public utility.

The willful act of any officer, agent, or employee of a public utility, acting within the scope of his official duties of employment, shall, for the purpose of this Article, be deemed to be the willful act of the utility.

History

(1933, c. 307, s. 29; 1963, c. 1165, s. 1.)

§ 62-312. Actions to recover penalties.

Except as otherwise provided in this Chapter, an action for the recovery of any penalty under this Chapter shall be instituted in Wake County, and shall be instituted in the name of the State of North Carolina on the relation of the Utilities Commission against the person incurring such penalty; or whenever such action is upon the complaint of any injured person, it shall be instituted in the name of the State of North Carolina on the relation of the Utilities Commission upon the complaint of such injured person against the person incurring such penalty. Such action may be instituted and prosecuted by the Attorney General, the district attorney of the Wake County Superior Court, or the injured person. The procedure in such actions, the right of appeal and the rules regulating appeals shall be the same as provided by law in other civil actions.

History

(Code, s. 1976; 1885, c. 221; 1899, c. 164, ss. 8, 15; Rev., ss. 1092, 1113, 2647; C.S., ss. 1062, 1111, 3415; 1933, c. 134, s. 8; c. 307, s. 30; 1941, c. 97; 1963, c. 1165, s. 1; 1973, c. 47, s. 2.)

Cross References. - As to venue of actions against railroads, see G.S. 1-81.

CASE NOTES

The penalty prescribed by G.S. 62-200 for failure to transport within a reasonable time is given directly to the party aggrieved, and an action therefor is not required to be brought in the name of the State. Robertson v. Atlantic C.L.R.R., 148 N.C. 323, 62 S.E. 413 (1908).

As to duty of Attorney General under former statute, see Southern Ry. v. McNeill, 155 F. 756 (E.D.N.C. 1907).

Plan requiring compensation to local exchange companies for lost revenues during transition period did not impose a "penalty" or constitute money damages, and could more appropriately be considered as a prerequisite to receiving a certificate. State ex rel. Utils. Comm'n v. Southern Bell Tel. & Tel. Co., 88 N.C. App. 153, 363 S.E.2d 73 (1987).


§ 62-313. Refusal to permit Commission to inspect records made misdemeanor.

Any public utility, its officers or agents in charge thereof, that fails or refuses upon the written demand of the Commission, or a majority of said Commission, and under the seal of the Commission, to permit the Commission, its authorized representatives or employees to examine and inspect its books, records, accounts and documents, or its plant, property, or facilities, as provided for by law, shall be guilty of a Class 3 misdemeanor. Each day of such failure or refusal shall constitute a separate offense and each such offense shall be punishable only by a fine of not less than five hundred dollars ($500.00) and not more than five thousand dollars ($5,000).

History

(1963, c. 1165, s. 1; 1993, c. 539, s. 483; 1994, Ex. Sess., c. 24, s. 14(c).)

§ 62-314. Violating rules, with injury to others.

If any public utility doing business in this State by its agents or employees shall be guilty of the violation of the rules and regulations provided and prescribed by the Commission, and if after due notice of such violation given to the principal officer thereof, if residing in the State, or, if not, to the manager or superintendent or secretary or treasurer if residing in the State, or, if not, then to any local agent thereof, ample and full recompense for the wrong or injury done thereby to any person as may be directed by the Commission shall not be made within 30 days from the time of such notice, such public utility shall incur a penalty for each offense of five hundred dollars ($500.00).

History

(1899, c. 164, s. 15; Rev., s. 1086; C.S., s. 1105; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

Validity. - A statute giving authority to the Commission to proceed in the courts to enforce the penalties prescribed for failure of any railroad company to make full and ample recompense for the violation of rules and regulations, after notice, is valid without providing in detail the methods of procedure. Atlantic Express Co. v. Wilmington & W.R.R., 111 N.C. 463, 16 S.E. 393 (1892).

Duty of Commission to Enforce Rules and Orders. - While the Commission has no power to render a judgment for the payment of money, etc., it is its duty to enforce its rules and orders. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908).

Right to Investigate Complaint. - The Commission had the undoubted right and it was eminently proper for it to institute an inquiry and inform itself as to whether a complaint was grounded in truth. The Commission was not required to institute an action for the penalty simply because a citizen feeling himself aggrieved had made a complaint before it. It did have the right to investigate the matter for itself, but the end of such investigation was simply to afford it information and enable it to act intelligently in determining whether it would sue for the penalty given by the statute. State ex rel. N.C. Corp. Comm'n v. Southern Ry., 147 N.C. 483, 61 S.E. 271 (1908).


§ 62-315. Failure to make report; obstructing Commission.

Every officer, agent or employee of any public utility, who shall willfully neglect or refuse to make and furnish any report required by the Commission for the purposes of this Chapter, or who shall willfully or unlawfully hinder, delay or obstruct the Commission in the discharge of the duties hereby imposed upon it, shall forfeit and pay five hundred dollars ($500.00) for each offense, to be recovered in an action in the name of the State. A delay of 10 days to make and furnish such report shall raise the presumption that the same was willful.

History

(1899, c. 164, s. 18; Rev., s. 1089; C.S., s. 1108; 1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1.)

CASE NOTES

Under Code of 1883, s. 1960, which provided a similar penalty against corporations for failure to make returns into court, the penalty could only be recovered in an action brought by the State. A private relator could not maintain the action. State ex rel. Hodge v. Marietta & N.G.R.R., 108 N.C. 24, 12 S.E. 1041 (1891).


§ 62-316. Disclosure of information by employee of Commission unlawful.

It shall be unlawful for any agent or employees of the Commission knowingly and willfully to divulge any fact or information which may come to his knowledge during the course of any examination or inspection made under authority of this Chapter, except as he may be directed by the Commission or by a court or judge thereof.

History

(1947, c. 1008, s. 30; 1949, c. 1132, s. 30; 1953, c. 1140, s. 4; 1957, c. 1152, s. 16; 1961, c. 472, ss. 8, 11; 1963, c. 1165, s. 1; 1971, c. 736, s. 1.)

§ 62-317. Remedies for injuries cumulative.

The remedies given by this Chapter to persons injured shall be regarded as cumulative to the remedies otherwise provided by law against public utilities.

History

(1899, c. 164, s. 26; Rev., s. 1093; C.S., s. 1112; 1963, c. 1165, s. 1.)

§ 62-318. Allowing or accepting rebates a misdemeanor.

If any person shall participate in illegally pooling freights or shall directly or indirectly allow or accept rebates on freights, he shall be guilty of a Class 1 misdemeanor.

History

(1879, c. 237, s. 2; Code, s. 1968; Rev., s. 3762; C.S., s. 3520; 1963, c. 1165, s. 1; 1993, c. 539, s. 484; 1994, Ex. Sess., c. 24, s. 14(c).)

§ 62-319. Riding on train unlawfully; venue.

If any person, with the intention of being transported free in violation of law, rides or attempts to ride on top of any car, coach, engine or tender, on any railroad in this State, or on the drawheads between cars, or under cars, on truss rods, or trucks, or in any freight car, or on a platform of any baggage car, express car or mail car on any train, he shall be guilty of a Class 3 misdemeanor. Any person charged with a violation of this section may be tried in any county in this State through which such train may pass carrying such person, or in any county in which such violation may have occurred or may be discovered.

History

(1899, c. 625; 1905, c. 32; Rev., s. 3748; C.S., s. 3508; 1963, c. 1165, s. 1; 1993, c. 539, s. 485; 1994, Ex. Sess., c. 24, s. 14(c).)

CASE NOTES

Effect on Liability of Insurance Company. - A policy of accident insurance that excepts from the company's full liability "sickness due to immorality or the violation of law" did not of itself exclude such liability for an injury caused by the plaintiff's stealing a ride on a railway train, made a misdemeanor by statute, unless the plaintiff's act was so reckless as to withdraw it from the class of accidents covered by the policy. Poole v. Imperial Mut. Life & Health Ins. Co., 188 N.C. 468, 125 S.E. 8 (1924).


§ 62-320: Repealed by Session Laws 1995, c. 523, s. 30.

§ 62-321. Penalty for nondelivery of intrastate telegraph message.

Any telegraph company doing business in this State that shall fail to transmit and deliver any intrastate message within a reasonable time shall forfeit and pay to anyone who may sue for same a penalty of twenty-five dollars ($25.00). Such penalty shall be in addition to any right of action that any person may have for the recovery of damages. Proof of the sending of any message from one point in this State to another point in this State shall be prima facie evidence that it is an intrastate message.

History

(1919, c. 175; C.S., s. 1704; 1963, c. 1165, s. 1.)

CASE NOTES

Transmission of a message through two states is interstate commerce as a matter of fact. The fact must be tested by the actual transmission, not by whether it was necessary to cross the territory of another state in order to reach the final point. Western Union Tel. Co. v. Speight, 254 U.S. 17, 41 S. Ct. 11, 65 L. Ed. 104 (1920).

§ 62-322. Unauthorized manufacture or sale of switch-lock keys a misdemeanor.

It shall be unlawful for any person to make, manufacture, sell or give away to any other person any duplicate key to any lock used by any railroad company in this State on its switches or switch tracks, except upon the written order of that officer of such railroad company whose duty it is to distribute and issue switch-lock keys to the employees of such railroad company. Any person violating the provisions of this section shall be guilty of a Class 1 misdemeanor.

History

(1909, c. 795; C.S., s. 3477; 1963, c. 1165, s. 1; 1993, c. 539, s. 487; 1994, Ex. Sess., c. 24, s. 14(c).)

§ 62-323. Willful injury to property of public utility a misdemeanor.

If any person shall willfully do or cause to be done any act or acts whatever whereby any building, construction or work of any public utility, or any engine, machine or structure or any matter or thing appertaining to the same shall be stopped, obstructed, impaired, weakened, injured or destroyed, he shall be guilty of a Class 1 misdemeanor.

History

(1871-2, c. 138, s. 39; Code, s. 1974; Rev., s. 3756; C.S., s. 3478; 1963, c. 1165, s. 1; 1993, c. 539, s. 488; 1994, Ex. Sess., c. 24, s. 14(c).)

Cross References. - As to injury to property of railroads and other carriers, see G.S. 14-278, 14-279.

§ 62-324. Disclosure of information as to shipments unlawful.

  1. It shall be unlawful for any common carrier engaged in intrastate commerce or any officer, receiver, trustee, lessee, agent, or employee of such carrier, or for any other person authorized by such carrier, to receive information, knowingly to disclose to, or permit to be acquired by any person other than the shipper or consignee without the consent of such shipper or consignee, any information concerning the nature, kind, quantity, destination, consignee, or routing of any property tendered or delivered to such common carrier for such transportation, which information may be used to the detriment or prejudice of such shipper or consignee, or which may improperly disclose his business transactions to a competitor; and it shall also be unlawful for any person to solicit or knowingly receive any such information which may be so used.
  2. Nothing in this section shall be construed to prevent the giving of such information in response to any legal process issued under the authority of any court, or any officer or agent of the State or of the government of the United States, in the exercise of his power, or to any officer or other duly authorized person seeking such information for the prosecution of persons charged with or suspected of crimes or to another carrier, or its duly authorized agent, for the purpose of adjusting mutual traffic accounts in the ordinary course of business of such carriers.

History

(1947, c. 1008, s. 30; 1961, c. 472, s. 8; 1963, c. 1165, s. 1.)

§ 62-325. Unlawful motor carrier operations.

  1. Any person, whether carrier, passenger, shipper, consignee, or any officer, employee, agent, or representative thereof, who shall knowingly offer, grant, or give or solicit, accept, or receive any rebate, concession, or discrimination in violation of any provision of this Chapter, or who by means of any false statement or representation, or by the use of any false or fictitious bill, bill of lading, receipt, voucher, roll, account, claim, certificate, affidavit, deposition, lease, or bill of sale, or by any other means or device, shall knowingly and willfully by any such means or otherwise fraudulently seek to evade or defeat regulations as in this Chapter provided for motor carriers, shall be deemed guilty of a Class 3 misdemeanor and upon conviction thereof only be fined not more than five hundred dollars ($500.00) for the first offense and not more than two thousand dollars ($2,000) for any subsequent offense.
  2. Any motor carrier, or other person, or any officer, agent, employee, or representative thereof, who shall willfully fail or refuse to make a report to the Commission as required by this Article, or other applicable law, or to make specific and full, true, and correct answer to any question within 30 days from the time it is lawfully required by the Commission so to do, or to keep accounts, records, and memoranda in the form and manner prescribed by the Commission, or shall knowingly and willfully falsify, destroy, mutilate, or alter any such report, account, record, or memorandum, or shall knowingly and willfully neglect or fail to make true and correct entries in such accounts, records, or memoranda of all facts and transactions appertaining to the business of the carrier, or person required under this Article to keep the same, or shall knowingly and willfully keep any accounts, records, or memoranda contrary to the rules, regulations, or orders of the Commission with respect thereto, shall be deemed guilty of a Class 3 misdemeanor and upon conviction thereof only be subject for each offense to a fine of not more than five thousand dollars ($5,000). As used in this subsection the words "kept" and "keep" shall be construed to mean made, prepared, or compiled, as well as retained. It shall be the duty of the Commission to prescribe and enforce such general rules and regulations as it may deem necessary to compel all motor carriers to keep accurate records of all revenue received by them to the end that any tax levied and assessed by the State of North Carolina upon revenues may be collected. Any agent or employee of a motor carrier who shall willfully and knowingly make a false report or record of fares, charges, or other revenue received by a carrier or collected in its behalf shall be guilty of a Class 1 misdemeanor.
  3. Any person who, at any bus terminal, solicits or otherwise attempts to induce any person to use some form of transportation for compensation other than that lawfully using said terminal premises by contract with the terminal operator or by valid order of the Commission shall be guilty of a Class 3 misdemeanor.

History

(1947, c. 1008, s. 30; 1949, c. 1132, s. 30; 1953, c. 1140, s. 4; 1957, c. 1152, s. 16; 1961, c. 472, ss. 8, 11; 1963, c. 1165, s. 1; 1993, c. 539, s. 489; 1994, Ex. Sess., c. 24, s. 14(c).)

§ 62-326. Furnishing false information to the Commission; withholding information from the Commission.

  1. Every person, firm or corporation operating under the jurisdiction of the Utilities Commission or who is required by law to file reports with the Commission who shall knowingly or willfully file or give false information to the Utilities Commission in any report, reply, response, or other statement or document furnished to the Commission shall be guilty of a Class 1 misdemeanor.
  2. Every person, firm, or corporation operating under the jurisdiction of the Utilities Commission or who is required by law to file reports with the Commission who shall willfully withhold clearly specified and reasonably obtainable information from the Commission in any report, response, reply or statement filed with the Commission in the performance of the duties of the Commission or who shall fail or refuse to file any report, response, reply or statement required by the Commission in the performance of the duties of the Commission shall be guilty of a Class 1 misdemeanor.

History

(1969, c. 765, s. 1; 1993, c. 539, s. 490; 1994, Ex. Sess., c. 24, s. 14(c).)

§ 62-327. Gifts to members of Commission, Commission employees, or Public Staff.

It shall be unlawful for any officer, agent, employee, or attorney of any public utility or any public utility holding company, subsidiary, or affiliated company, to knowingly offer or make to any member of the Commission, Commission staff, or Public Staff, any gift of money, property, or anything of value. It shall be unlawful for any member of the Commission, Commission staff, or Public Staff to knowingly accept any gift of money, property, or anything of value from any officer, agent, employee, or attorney of any public utility or any public utility holding company, subsidiary, or affiliated company; provided, however, that it shall not be unlawful for members of the Commission, Commission staff, or Public Staff to attend public breakfasts, lunches, dinners, or banquets sponsored by such entities. Any person violating this section shall be guilty of a Class 3 misdemeanor and may only be fined in the discretion of the court; provided, further, that any member of the Commission staff, or member of the Public Staff violating this section shall also be subject to dismissal for cause.

History

(1977, c. 468, s. 16; 1993, c. 539, s. 491; 1994, Ex. Sess., c. 24, s. 14(c); 2021-23, s. 24.)

Editor's Note. - Session Laws 2021-23, s. 24, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "Public Staff" for the term "public staff" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in this section.


§ 62-328. Unauthorized use of Citizens Band equipment.

  1. As used in this section, "Citizens Band radio equipment" means Citizens Band radio equipment authorized by the Federal Communications Commission.
  2. It shall be unlawful for any person willfully and knowingly to use Citizens Band radio equipment not authorized by the Federal Communications Commission. Unauthorized Citizens Band radio equipment includes the use of power amplifiers or equipment prohibited under applicable federal regulations.
  3. This section does not apply to any licensee that is exempted under the provisions of 47 U.S.C. § 302a(f)(2).
  4. Any person willfully and knowingly violating the provisions of this section shall be guilty of a Class 3 misdemeanor.

History

(2004-72, s. 1.)

§§ 62-329 through 62-332: Reserved for future codification.

ARTICLE 16. Security Provisions.

Sec.

§ 62-333. Screening employment applications.

The Chief Personnel Officer, or that person's designee, of any public utility franchised to do business in North Carolina shall be permitted to obtain from the State Bureau of Investigation a confidential copy of criminal history record information for screening an applicant for employment with or an employee of a utility or utility contractor where the employment or job to be performed falls within a class or category of positions certified by the North Carolina Utilities Commission as permitting or requiring access to nuclear power facilities or access to or control over nuclear material.

The State Bureau of Investigation shall charge a reasonable fee to defray the administrative costs of providing criminal history record information for purposes of employment application screening. The State Bureau of Investigation is authorized to retain fees charged pursuant to this section and to expend those fees in accordance with the State Budget Act for the purpose of discharging its duties under this section.

History

(1979, c. 796; 1979, 2nd Sess., c. 1212, s. 10; 2013-410, s. 6.1.)

Effect of Amendments. - Session Laws 2013-410, s. 6.1, effective August 23, 2013, substituted "Officer, or that person's designee" for "Officer or his designee" in the first paragraph, and substituted "State Budget Act" for "Executive Budget Act" in the second paragraph.

§§ 62-334 through 62-349: Reserved for future codification.

ARTICLE 17. Miscellaneous Provisions.

Sec.

§ 62-350. (See Editor's note) Regulation of pole attachments.

  1. A municipality, or a membership corporation organized under Chapter 117 of the General Statutes, that owns or controls poles, ducts, or conduits, but which is exempt from regulation under section 224 of the Communications Act of 1934, as amended, shall allow any communications service provider to utilize its poles, ducts, and conduits at just, reasonable, and nondiscriminatory rates, terms, and conditions adopted pursuant to negotiated or adjudicated agreements. A request to utilize poles, ducts, or conduits under this section may be denied only if there is insufficient capacity or for reasons of safety, reliability, and generally applicable engineering principles, and those limitations cannot be remedied by rearranging, expanding, or otherwise reengineering the facilities at the reasonable and actual cost of the municipality or membership corporation to be reimbursed by the communications service provider. In granting a request under this section, a municipality or membership corporation shall require the requesting entity to comply with applicable safety requirements, including the National Electrical Safety Code and the applicable rules and regulations issued by the Occupational Safety and Health Administration. Any fees due from a communications service provider accessing or attaching to poles, ducts, or conduits under this section must be billed by separate invoice and shall not be bundled with charges for electric service.
  2. Following receipt of a request from a communications service provider, a municipality or membership corporation shall negotiate concerning the rates, terms, and conditions for the use of or attachment to the poles, ducts, or conduits that it owns or controls. Following a request from a party to an existing agreement made pursuant to the terms of the agreement or made within 120 days prior to or following the end of the term of the agreement, the communications service provider and the municipality or membership corporation which is a party to that agreement shall negotiate concerning the rates, terms, and conditions for the continued use of or attachment to the poles, ducts, or conduits owned or controlled by one of the parties to the agreement. The negotiations shall include matters customary to such negotiations, including a fair and reasonable rate for use of facilities, indemnification by the attaching entity for losses caused in connection with the attachments, and the removal, replacement, or repair of installed facilities for safety reasons. Upon request, a party shall state in writing its objections to any proposed rate, terms, and conditions of the other party.
  3. In the event the parties are unable to reach an agreement within 90 days of a request to negotiate pursuant to subsection (b) of this section, or if either party believes in good faith that an impasse has been reached prior to the expiration of the 90-day period, either party may initiate proceedings to resolve the dispute before the Commission. The Commission shall have exclusive jurisdiction over proceedings arising under this section and shall adjudicate disputes arising under this section on a case-by-case basis. The Commission shall not exercise general ratemaking authority over communication service provider utilization of municipal or membership corporation facilities. This section does not impact or expand the Commission's authority under G.S. 62-133.5(h) or (m). The Public Staff may, at the discretion of the Commission, be made a party to any proceedings under this section as may be appropriate to serve the using and consuming public. The parties shall identify with specificity in their respective filings the issues in dispute. The Commission, in its discretion, may consider any evidence or ratemaking methodologies offered or proposed by the parties and shall resolve any dispute identified in the filings consistent with the public interest and necessity so as to derive just and reasonable rates, terms, and conditions. The Commission shall apply any new rate adopted as a result of the action retroactively to the date immediately following the expiration of the 90-day negotiating period or initiation of the proceeding, whichever is earlier. If the new rate is for the continuation of an existing agreement, the new rate shall apply retroactively to the date immediately following the end of the existing agreement. Prior to initiating any proceedings under this subsection, a party must pay any undisputed fees related to the use of poles, ducts, or conduits which are due and owing under a preexisting agreement with the municipality or membership corporation. In any proceeding brought under this subsection, the Commission may resolve any existing disputes regarding fees alleged to be owing under a preexisting agreement or regarding safety compliance arising under subsection (d) of this section. The provisions of this section do not apply to an entity whose poles, ducts, and conduits are subject to regulation under section 224 of the Communications Act of 1934, as amended.
  4. In the absence of an agreement between an attaching party and the involved municipality or membership corporation that provides otherwise, the following shall apply:
    1. When the lines, equipment, or attachments of a communications service provider that are attached to the poles, ducts, or conduits of a municipality or membership corporation do not comply with applicable safety rules and regulations set forth in subsection (a) of this section, the municipality or membership corporation may provide written notice of the noncompliant lines, equipment, or attachments, and make demand that the communications service provider bring such lines, equipment, and attachments into compliance with the specified safety rules and regulations. Within the 60-day period following the date of the notice and demand, the communications service provider shall either contest the notice of noncompliance in writing or bring its lines, equipment, and attachments into compliance with the specified applicable safety rules and regulations. If the work required to bring the facilities into compliance is not reasonably capable of being completed within the 60-day period, the period for compliance shall be extended as may be deemed reasonable under the circumstances so long as the communications service provider promptly commences and diligently pursues within the 60-day period such actions as are reasonably necessary to cause the facilities to be brought into compliance.
    2. When the communications service provider or, if applicable, another responsible attaching party fails to bring any noncompliant lines, equipment, or attachments into compliance (i) within the 60-day period following the date of notice and demand pursuant to subdivision (1) of this subsection, or (ii) within 120 days following the date of notice and demand when the period is extended pursuant to subdivision (1) of this subsection,  the municipality or membership corporation shall be entitled to take such remedial actions as are reasonably necessary to bring the lines, equipment, and attachments of the communications service provider into compliance, including removal of the lines, equipment, or attachments should removal be required to achieve compliance with the applicable safety rules and regulations.
    3. A municipality or membership corporation that removes or brings into compliance the noncompliant lines, equipment, or attachments of a communications service provider pursuant to subdivision (2) of this subsection shall be entitled to recover its reasonable and actual costs for such activities from the communications service provider or other attaching party whose action or inaction caused the noncompliance, and the responsible attaching party shall reimburse the municipality or membership corporation within 45 days of being billed for such costs.
    4. All attaching parties shall work cooperatively to determine the causation of, and to effectuate any remedy for, noncompliant lines, equipment, and attachments. In the event of disputes under this subsection, the involved municipality or membership corporation or any attaching party may initiate proceedings to resolve any dispute before the Commission. The Commission shall have exclusive jurisdiction over proceedings arising under this section and shall adjudicate disputes arising under this section on a case-by-case basis. The Commission shall not exercise general ratemaking authority over communication service provider utilization of municipal or membership corporation facilities. This section does not impact or expand the Commission's authority under G.S. 62-133.5(h) or (m). The Public Staff may, at the discretion of the Commission, be made a party to any proceedings under this section as may be appropriate to serve the using and consuming public. The Commission shall resolve such disputes consistent with the public interest and necessity. Nothing herein shall prevent a municipality or membership corporation from taking such action as may be necessary to remedy any exigent issue which is an imminent threat of death or injury to persons or damage to property.
  5. For purposes of this section, the term "communications service provider" means a person or entity that provides or intends to provide: (i) telephone service as a public utility under Chapter 62 of the General Statutes or as a telephone membership corporation organized under Chapter 117 of the General Statutes; (ii) broadband service, but excluding broadband service over energized electrical conductors owned by a municipality or membership corporation; or (iii) cable service over a cable system as those terms are defined in Article 42 of Chapter 66 of the General Statutes.
  6. The Commission may adopt such rules as it deems necessary to exercise its responsibility to adjudicate any disputes arising under this section.
  7. Nothing herein shall preclude a party from bringing civil action in the appropriate division of the General Court of Justice seeking enforcement of an agreement concerning the rates, terms, and conditions for the use of or attachment to the poles, ducts, or conduits of a municipality or membership corporation.
  8. As part of final adjudication, the Commission may assess the costs, not to exceed ten thousand dollars ($10,000), of adjudicating a dispute under this section against the parties to the dispute proceeding. If the Public Staff is a party to a dispute proceeding and the Executive Director of the Public Staff deems it necessary to hire expert witnesses or other individuals with professional expertise to assist the Public Staff in the dispute proceeding, the Commission may assess such additional costs incurred by the Public Staff by allocating such costs against the parties to the dispute proceeding.

History

(2009-278, s. 1; 2015-119, ss. 1-5; 2021-23, s. 25.)

Editor's Note. - Session Laws 2009-278, s. 1, enacted this section as G.S. 62-55. It has been recodified under Article 17 of Chapter 62 as this section at the direction of the Revisor of Statutes.

Session Laws 2009-278, s. 2, provides: "This act does not constitute certification of State regulation of pole attachments for purposes of section 224 of the Communications Act of 1934, as amended. If a court of competent jurisdiction determines that this act is tantamount to certification, this act shall become null and void."

Session Laws 2015-119, s. 7, provides: "Notwithstanding the deletion of language referencing the factors or evidence that may be presented by a party in Section 2 of this act, the Commission may consider any evidence presented by a party, including any methodologies previously applied."

Session Laws 2015-119, s. 8, made the amendments to this section by Session Laws 2015-119, ss. 1-5, which rewrote the first sentence and added the last sentence of subsection (a), rewrote subsection (c), subdivision (d)(4), and subsection (f), and added subsection (h), applicable to any action filed on or after June 29, 2015.

Session Laws, 2016-103, s. 9(c), effective July 22, 2016, and repealed effective July 1, 2017, provides: "A city may not impose a fee or charge on businesses listed in G.S. 160A-206(b) for activities conducted in the city's right-of-way, except fees or charges not exceeding those in effect as of June 1, 2016, or payments under agreements subject to G.S. 62-350."

Session Laws 2021-23, s. 25, effective May 17, 2021, provides: "The Revisor of Statutes is authorized to substitute the term "ratemaking" for the terms "rate-making" or "rate making" wherever the term appears in Chapter 62 of the General Statutes." Pursuant to this authority, the substitution was made in subsection (c) and subdivision (d)(4).

Effect of Amendments. - Session Laws 2015-119, ss. 1-5, effective June 29, 2015, rewrote the first sentence and added the last sentence of (a); rewrote (c), (d)(4), and (f); and added (h). For applicability, see editor's note.

CASE NOTES

Statute Established Statutory Rights And Private Cause Of Action To Enforce Rights. - Public Utilities Act establishes several judicially-enforceable statutory rights and expressly created a private cause of action to enforce these rights; thus, communications service providers satisfy the controversy requirement when they allege in their complaint and show at the trial that a real controversy, arising out of these statutory rights exists. Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 228 N.C. App. 510, 747 S.E.2d 610 (2013).

Justiciable Controversy Existed. - Business court erred in dismissing a cable company's case against a town for lack of subject matter jurisdiction because there existed a justiciable controversy; the controversy arose from the parties' failure to reach an agreement regarding pole attachment rates within 90 days, and that failure violated the company's right to establish just, reasonable, and nondiscriminatory pole attachment rates within 90 days of a request to negotiate under the Public Utilities Act. Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 228 N.C. App. 510, 747 S.E.2d 610 (2013).

Unreasonable Rates. - Utility's pole attachment rates charged to a communications service provider for a period at issue were properly found not just or reasonable because (1) it was not error to rely on the Federal Communications Commission cable rate in making this determination, as no competent evidence of another rate was presented, (2) the cable rate was not presumptively adopted, as other factors were considered, and (3) such a result was not an absurd statutory interpretation. Rutherford Elec. Mbrshp. Corp. v. Time Warner Entertainment-Advance/Newhouse P'ship, 240 N.C. App. 199, 771 S.E.2d 768 (N.C. Ct. App. 2015).

Statutory Violation. - Utility was correctly found to have violated G.S. 62-350 by unilaterally raising the utility's pole attachment rates without negotiation because (1) the statute plainly barred the utility from subjecting a communications service provider to a rate without first negotiating and subsequently adopting a rate or litigating disputes, and (2) the utility's organization as an electric membership corporation under N.C. Gen. Stat. ch. 117 did not exempt the utility. Rutherford Elec. Mbrshp. Corp. v. Time Warner Entertainment-Advance/Newhouse P'ship, 240 N.C. App. 199, 771 S.E.2d 768 (N.C. Ct. App. 2015).


§ 62-351. Demand-side management policy; pilot project.

  1. Declaration of Policy. - It is the policy of the State for government-owned facilities that have backup or emergency generators that meet the criteria of utility demand-side management programs or rates to enroll in such programs or rates to the extent those programs or rates are available without diminishing the purpose or use of the facility having the backup or emergency generator.
  2. Department of Public Safety Pilot Program. - By no later than January 1, 2018, the Department of Public Safety shall designate a backup or emergency generator to enroll in the demand-side management program or rate available that would allow electricity load to be shifted to its generator in response to utility-administered programs.
  3. Report. - The Department of Public Safety shall report to the Joint Legislative Commission on Energy Policy by January 31 of each year on the status of the designated backup or emergency generator and whether it is enrolled in the utility demand-side response program or rate.
  4. Sunset. - The pilot program and report required by subsections (b) and (c) of this section shall expire on January 1, 2020.

History

(2017-192, s. 9.)

§ 62-352. Facilities for hearings outside the Commission's offices; security; costs of hearings.

The senior resident superior court judge shall provide suitable facilities for the conduct of hearings under this Chapter in the county or counties within the judge's district at the time the Commission schedules hearings therein. The senior resident superior court judge shall provide or arrange for security at the Commission hearings upon the request of the chair. The Commission shall promptly reimburse the court system or the local government, as the case may be, for the actual costs of conducting the hearings, and the Commission may charge such costs to the involved utility or utilities in cases involving class A or B utilities.

History

(2021-23, s. 20.)

Editor's Note. - Session Laws 2021-23, s. 28, made this section effective May 17, 2021.