FORMAL OPINION
8 June 1993
Subject: State Ports Authority; Public Utility Status.
Requested by: J. J. Scott, Jr., Executive Director, North Carolina State Ports Authority
Question:
. Is the North Carolina State Ports Authority a "public utility" as defined by G.S. 62-3(23) and
G.S. 62-3(23)(d) if it sells electric power to its tenants through facilities it owns and operates?
. Is the North Carolina Ports Authority required to obtain a certificate of public convenience and necessity from the North Carolina Utilities Commission to sell electricity to its tenants?
. Is the State Ports Authority subject to regulation by the North Carolina Utilities Commission of its services, rates and charges when it sells electric power to its tenants?
Conclusion:
. No, the State Ports Authority is not a public utility as defined by G.S. 62-3(23) or G.S. 623(23)(d).
. No, the State Ports Authority is not required to obtain a certificate of public convenience and necessity from the Utilities Commission.
. No, the State Ports Authority is not subject to regulation of its services, rates, and charge by the North Carolina Utilities Commission.
The N.C. State Ports Authority (SPA) is "a true agency and instrument of the State," Guthrie v. State Ports Authority, 307 N.C. 522, 532, 299 S.E. 2d 618 (1983), empowered to accomplish a public purpose, Nat Harrison Associates, Inc. v. State Ports Authority, 280 N.C. 251, 258, 185 S.E.2d 793, 797, reh. denied 281 N.C. 317 (1972). The SPA’s enabling legislation authorizes it to construct and maintain facilities at state ports, G.S. 143B-453(1), and permits it to issue bonds for special projects which include the construction of utility facilities, G.S. 143B-456.1(a). Under its general statutory grant of authority, the SPA can lease its facilities to private corporations. North Carolina State Ports Authority v. First Citizens Bank and Trust Co., 242 N.C. 416, 88 S.E.2d 109 (1955).
The SPA currently receives electric service at its Wilmington Terminal from Carolina Power and Light Company. It transmits that electricity through lines it owns to various buildings and facilities at the Wilmington Terminal. Currently, the SPA is reimbursed by some of its tenants for electric usage by including the estimated cost of that tenant’s electrical usage in the tenant’s lease payment. This method is unsatisfactory because it does not fairly reimburse the SPA for the actual usage of its tenants and provides no incentive for tenants to conserve electricity. For these reasons, the SPA would like to install meters for its tenants and charge them for the amount of electricity they use. The SPA envisions that these charges would take into account only the actual cost of electricity from CP and L plus the cost of metering and billing. The SPA queries whether it may undertake this activity without regulation by the North Carolina Utilities Commission.
Chapter 62 of the General Statutes vests in the North Carolina Utilities Commission the authority to regulate a "public utility." G.S. 62-3(23) defines "public utility" as:
(a) … 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:
Producing, generating, transmitting, delivering or furnishing electricity ….
(d The term "public utility," except as otherwise expressly provided in this Chapter shall not include … 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; provided however, that any person … who distributes or provides utility service to his … tenants by individual meters … with a charge for metered … service shall be a public utility within the definition and meaning of this Chapter with respect to the regulaton of rates and provisions of service rendered through such meter … imposing such separate metered utility charge. (Emphasis added).
The threshold question then is whether the SPA as an agency of the State is a "person" within the meaning of G.S. 62-3(23)(a) subject to regulation by the Utilities Commission. Chapter 62 provides guidance. G.S. 62-3(21) defines "person" for the purpose of utility regulation as "a corporation, individual, copartnership, company, association or any combination of individuals or organizations doing business as a unit …"
Normally when construing a statute, the words used are given their ordinary meaning unless it appears from their context that they should be taken in a different sense. Abernethy v. Board of Commissioners, 169 N.C. 631, 86 S.E. 577 (1915). Nothing in the context of Chapter 62 appears to negate the plain meaning of the words used in the definition. Given their plain meaning, the words of the definition appear to limit "persons" who are "public utilities" to business organizations–corporations, individuals, partnerships, joint ventures and the like.
The legislative intent in defining "person" under Chapter 62 is even clearer when that definition is contrasted with the definition of "person" supplied by G.S. 12-3(6), the Legislature’s instructions for general statutory construction. The rules of general statutory construction define "person" much more broadly as "extending and being applied to bodies politic and corporate," which could arguably include governmental bodies. When construing statutes, the General Assembly is presumed to have acted with care and deliberation, having full knowledge of prior and existing laws, State v Benton, 276 N.C. 641, 174 S.E.2d 793 (1970). Thus the elimination from the definition of "person" in Chapter 62 of "bodies politic" is presumed to have been deliberate.
Additionally, the definition of "person" that extends to bodies corporate and politic is
found in a statute of general application. Where one statute deals with a subject in detail with reference to a particular situation, and another deals with the same subject in general and comprehensive terms, the particular statute controls. State v Leeper, 59 N.C.App. 199, 296 S.E.2d 7, disc. rev. denied, 307 N.C. 272, 299 S.E.2d 218 (1982). Under these rules of statutory construction, the definition of "person" in Chapter 62 controls, and that definition does not extend to the state or an agency of the state as a body politic.
This statutory interpretation is consistent with the general rule that when the effect of a statute is to restrict or limit the rights of the state, to affect its interests or to impose liabilities on it, the statute is deemed to be inapplicable to the state unless the state is named expressly or by necessary implication. United States v Herron, 20 Wall (U.S.) 251, 22 L.Ed. 275. In North Carolina, courts have consistently held that a general statute does not bind the State unless the State is expressly mentioned within the statute. Yancey v Highway Commission, 222 N.C. 106, 22 S.E.2d 256 (1942).
Adhering to this general rule, North Carolina courts have held that "public utility" as it is defined in Chapter 62 does not include agencies of the state. In State ex. rel Utilities Commission v Chapel Hill Telephone Company, 12 N.C. App. 543, 183 S.E.2d 802, cert. denied, 279 N.C. 729, 184 S.E.2d 887 (1971), the Utilities Commission declined to extend jurisdiction over the services of the Chapel Hill Telephone Company, a utility owned and operated by the University of North Carolina at Chapel Hill. The Court of Appeals upheld the Commission’s decision reasoning:
The General Statutes, (G.S. 62-3(23), in establishing the Utilities Commission, defined a public utility over which the Commission would have jurisdiction, and did not include in that definition the State or any agency, such as the University of the State. 12 N.C. App. at 545 (Emphasis added).
The fact that the appellant [the University] participated to a limited extent in the hearing does not confer jurisdiction on the Commission. The appellant expressly reserved its objection to the jurisdiction of the Commission. The appellant, even by its presence or consent, could not confer greater jurisdiction on the Commission than was conferred by the statutes establishing it.
"No man can put himself in the place of the sovereign and make the adjudication of a court valid by ratifying an unauthorized exercise of power by its agent when the law of the land, which is the agent’s power of attorney, declares that the court has no authority to render the judgment …." Springer v Shavender, 118 N.C. 33, 23 S.E. 976 (1896).
12 N.C. App. at 545-546.
The Court in the Chapel Hill Telephone case implicitly recognized that provision of utility service is a governmental, rather than a propriety, function of the State. G.S. 62-2 provides:
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 … (Emphasis added.)
Provision of utility service by nongovernmental entities is strictly regulated by the State Utilities Commission, G.S. 62-1 et seq., and the State grants a certificate to provide utility service to a private entity only if public convenience and necessity requires it.
At those times when the General Assembly has intended to allow the State and its agencies to be regulated by the Utilities Commission, it has expressly so indicated. In G.S. 116-35, the General Assembly has specifically stated that member institutions of the University of North Carolina which operate electric power plants and distribution systems can sell the surplus power to the "people of the community at a rate or rates approved by the Utilities Commission." Without such a specific provision, the individual member institutions of the University could not have their rates regulated by the Utilities Commission. In those instances where the Commission regulates rates and charges of University providers pursuant to this statute, the Commission clearly states in its orders that the statutory language does not confer utility status on the University but only permits regulation of rates. See, e.g., In re Application of Western Carolina University for an Adjustment in its Rates and Charges, "Recommended Order Granting Rate Increase," NCUC docket number E-35, Sub 12 at page 2 (August 25, 1983).
In summary, under plain words of Chapter 62, the general rule of the sovereignty of the State and the holding of Chapel Hill Telephone Company, the Attorney General concludes that the SPA is not a "person" subject to utility regulation.
Michael F. Easley Attorney General
Karen E. Long
Assistant Attorney General