Municipalities; Operation of Water and Sewage Facilities by State Agencies

Subject:

Requested By: D. A. Phillips, Chairman Wanchese Harbor Commission

Questions: (1)

May the Wanchese Harbor Commission on its own authority operate water and sewage facilities within the Wanchese Industrial Park and bill the tenants therein for services rendered?

(2)

May the Commission on its own authority extend such services to persons who are not tenants of the Industrial Park?

Conclusions: (1)

Yes.

(2)

Yes.

The inquiry referred to this Office indicates that the N.C. State Ports Authority has formed the Wanchese Harbor Commission for the purpose of studying and developing a facility to be known as the Wanchese Harbor Industrial Park. The Park will be owned by the State of North Carolina and operated by the Wanchese Harbor Commission or a successor agency created by the Legislature. Industrial tenants would lease space in the Park from the State. Among the services to be provided the tenants are water and sewage treatment facilities. The inquiry questions whether the agency operating the Industrial Park would require certificates or licenses from the

N.C. Utilities Commission in order to provide these services to tenants of the Industrial Park or to persons outside the Park who should desire to "tap on" to the facilities developed by the State.

It is the opinion of this Office that the operation of the facilities in question by the State of North Carolina, or any agency thereof, is not subject to regulation by the N.C. Utilities Commission.

The N.C. Utilities Commission is ad administrative agency created by statute and has no authority except as conferred upon it by Chapter 62 of the General Statutes. N.C.G.S. 62-2 vests in the Commission the authority "to regulate public utilities. . . ." (Emphasis added). N.C.G.S. 62.3(23) defines the term "public utility," and the State (or any agency thereof) is not included in that definition. The courts have held that since the statute does not include the state in the definition of a public utility, the Commission has no authority over it. Utilities Commission v. Chapel Hill Telephone Co. 12 N.C. App. 543, 183 SE 2d 802 (1971) (cert. denied 279 N.C. 729). Later the Legislature specifically included the University of North Carolina in its definition of a public utility (N.C. G.S. 62-3(23(e), thereby at least by implication excluding all other agencies of the State.

It is clear that "(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)." Utilities Commission v. Carolina Telephone and Telegraph Company, 267 N.C. 257, 148 SE 2d 100 (1966). It follows that the State may construct and operate its proposed facilities at Wanchese Harbor without regulation by the State.

We note that the Resolution of the North Carolina State Ports Authority dated March 14, 1978, which established the Wanchese Harbor Commission, states that "the 1979 General Assembly is expected to create an agency to administer and manage the Park." In order to eliminate absolutely any question as to the authority of the Utilities Commission over the operation of the facilities in question, it may be helpful to have that agency added to those listed in G.S. 62-3(23)d as being specifically excluded from the Commission’s authority. This would only be a precautionary measure, however, since we do not feel that the Harbor Commission or its successor agency would be subject to regulation by the Utilities Commission in any event.

Rufus L. Edmisten Attorney General

Dennis P. Myers Associate Attorney General

Francis W. Crawley Associate Attorney General