U S West Communications, Inc. v. City of Longmont

Justice KOURLIS,

dissenting:

Because I view the ordinance as intruding upon matters reserved to the jurisdiction and expertise of the Public Utilities Commission (PUC), I respectfully dissent. Tariffs setting utility rates and allocating utility costs have historically been afforded the status of state law. The majority calls that history into question.

A.

The regulation of public utilities is a matter of mixed state and local concern. U S West Communications, Inc. v. City of Longmont, 924 P.2d 1071 (Colo.App.1995).

The state-wide component of interest in the regulation of utilities is reflected first in the Colorado Constitution. The Public Utilities Commission has the power, by operation of Article XXV of the Colorado Constitution, to regulate all facilities, services and charges therefor even within home rule cities and home rule towns. The authority includes exclusive jurisdiction over the facilities of a public utility and the location and relocation of those facilities. Intermountain R.E.A. v. District Court, 160 Colo. 128, 134, 414 P.2d 911, 914 (1966).

The state-wide nature of utility relocation is further reflected in section 29-8-105, 9 C.R.S. (1997), in which the General Assembly has provided one means by which the under-grounding of overhead facilities may be financed. Certainly this statute is not the exclusive means of paying for underground-ing, but it does clearly reflect the public policy that those who wish to require utility lines to be buried should be the ones to pay for the benefit. The statute also reflects the General Assembly’s assumption that the un-dergrounding of facilities is an issue of sufficient state-wide importance to require some legislative direction.

Added to the state concerns are the local concerns inherent in regulating objects in a public right of way, see Moffat v. City & County of Denver, 57 Colo. 473, 477-78, 143 P. 577, 578-79 (1914), thereby creating the mixture of local and state-wide concerns.

As to matters of mixed local and state-wide concern, a local ordinance may coexist with state law only if there is no conflict between the two. If there is a conflict, the local ordinance will be preempted by state law. See City & County of Denver v. State, 788 P.2d 764, 767 (Colo.1990); Denver & Rio Grande W. R.R. Co. v. City & County of Denver, 673 P.2d 354, 358 (Colo.1983).

*525B.

The PUC has specifically dealt with allocation of the costs associated with underground relocation of utilities and has adopted Tariff 4.6 (Tariff). A tariff created through the exercise of properly delegated legislative authority has the force and effect of state law. See Shoemaker v. Mountain States Tel. & Tel. Co., 38 Colo.App. 321, 559 P.2d 721 (1976) (filed tariff has force and effect of state law and extinguishes inconsistent common law remedy); see also Lee v. Consolidated Edison Co., 98 Misc.2d 304, 413 N.Y.S.2d 826, 828 (N.Y.Sup.Ct.1978) (“Once accepted by the [public utilities] Commission, the tariff schedule (including the limitation of liability provision) takes on the force and effect of law and governs every aspect of the utility’s rates and practices”); Annotation, Carrier’s Understatement of Charges Where Discrimination is Forbidden, 88 A.L.R.2d 1377 § 2 (1963) (“It is said that the published tariffs have the same effect as statutory law.”).

In Colorado, the interpretation of tariffs as equating to state law arose out of this court’s adoption of the “filed rate doctrine.” See Denver & Rio Grande W. R.R. v. Marty, 143 Colo. 496, 500, 353 P.2d 1095, 1097 (1960). Under this widely accepted doctrine, a filed tariff becomes the law and neither the utility, the customer, nor the courts may change or modify it. See, e.g., Public Serv. Co. of Colo. v. Public Utils. Comm’n, 644 P.2d 933, 939 (Colo.1982); Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915).

The filed rate doctrine was originally established to ensure strict adherence to filed rates and to prevent utilities from intentionally misquoting rates to preferred customers who could then enforce a lower rate than the filed tariff. See Maislin Indus. U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 127-28, 110 S.Ct. 2759, 2766-67, 111 L.Ed.2d 94 (1990). The purpose was to avoid statutorily forbidden discrimination in rates. See id. However, the filed rate doctrine is not limited to “rates” per se, and also encompasses subjects which will directly affect rates. See Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 966-67, 106 S.Ct. 2349, 2357, 90 L.Ed.2d 943 (1986) (holding that FERC decision on power allocation which directly affects a utility’s rates also implicates the filed rate doctrine).

The General Assembly supports this interpretation of tariffs as state law by carefully specifying the manner by which tariffs are to be filed and modified, and prohibiting any deviation therefrom. See §§ 40-3-103 to - 105,11 C.R.S. (1997).

The majority recognizes that a filed tariff has the effect of law to the extent that it abrogates conflicting common law (maj. op. at 515-16); however, not to the extent it might abrogate a local ordinance. The majority holds that a local concern, state concern, or mixed local and state concern analysis applies, not when comparing a tariff with a municipal ordinance, but only when resolving which of two sovereign entities’ express legislative enactments prevail. This is just such a situation. A filed tariff is the result of properly delegated legislative power directly from the General Assembly and enjoys the same status as any other legislative enactment from that body. To hold otherwise impairs the authority of the General Assembly to delegate legislative power by diluting the force and effect of properly delegated functions. A filed tariff either has the effect of law or it does not. In my view it should and does.9 Tariff 4.6 was properly adopted and has the force and effect of state law. Hence, the only inquiry in this case is whether the conflicts with Tariff 4.6 and I believe that it does.

C.

The Tariff provides that the “persons requesting” the replacement of overhead facilities with underground facilities shall be responsible for the costs of relocation. The trial court concluded that Longmont was not requesting, but was requiring relocation by operation of law and found the Tariff not to *526be in conflict with the ordinance for that reason. The court of appeals concluded that Longmont was not a person as the term is used in Tariff 4.6(A)(1). I find both distinctions unpersuasive. Rather, like the Washington Supreme Court in General Tel. Co. of Northwest v. City of Bothell, 105 Wash.2d 579, 716 P.2d 879, 881 (1986), I would focus on the intent of the Tariff: namely the allocation of costs associated with the relocation of overhead lines. The Tariff clearly mandates that the costs of relocation are not to be paid by the utility, but rather by the parties benefited by the relocation. In this case, the parties benefited were the City of Longmont and its citizens.

This court has struggled with the proper definition of the term “person” in a host of different contexts. See, e.g., Regional Transp. Dist. v. Foss, 890 P.2d 663, 666 (Colo.1995) (examining legislative intent regarding whether a governmental entity is a “person” under the Colorado No Fault Insurance Act); City & County of Denver v. Board of County Comm’rs, 782 P.2d 753, 764 (Colo.1989) (considering whether the legislature intended the term “person” in the Land Use Act to include municipalities). The common thread among the cases is an effort by the court to analyze the intent and purpose of the legislation or constitutional provision. Here, there can be no argument but that the intent of the PUC was to protect utilities from wholesale assessment of the costs of relocation of overhead facilities.

D.

The majority concludes that the precedent of City & County of Denver v. Mountain States Tel. & Tel. Co., 754 P.2d 1172 (Colo.1988) stands for the proposition that utilities must pay for relocation of facilities when that relocation is required by a municipality unless a contract, franchise agreement or statute requires otherwise. Such a reading, in my view, trespasses upon the constitutional and statutory jurisdiction of the PUC and inappropriately expands the authority of municipal police power.

Longmont’s ordinance is principally an effort to make Longmont a more attractive city. Evidence in the record reflects that particular telephone poles in the city present safety concerns. However, the ordinance permits Longmont to require underground-ing of all lines in the city, and there is certainly no indication that all of the city’s utility poles present safety hazards.

Choosing to require undergrounding of utilities on a city-wide basis is conceptually very different from requiring underground-ing of utilities on an episodic, site-specific basis. In both Mountain States and Meadowbrook-Fairview Metropolitan District v. Board of County Commissioners, 910 P.2d 681 (Colo.1996), cited by the majority, the relocation resulted from episodic road improvement or sewer construction. In that context, local government police power rightfully prevails over conflicting state law. The majority cites section 31-15-702, 9 C.R.S. (1997), in which the General Assembly expressly granted municipalities power to regulate the use of utility poles on streets and public grounds. The language of this statute also supports the distinction between episodic exercise of police power and broad policy choices. The statute provides that municipalities may regulate excavations of public streets and grounds for the “laying-out of gas or water mains and pipes, the building and repairing of sewers, tunnels, and drains, and the erecting of utility poles.” § 31-15-702(l)(a)(II), 9 C.R.S. (1997). This description of specific powers is consistent with the notion that a municipality’s police power may prevail over statewide concerns where particular city projects so require. Here, however, the City of Longmont is not managing a specific project, but rather is implementing a broad policy choice. In my view, neither Mountain States nor Meadowbrook-Fair-view supports the notion that municipalities are free to require relocation of all utilities within their jurisdiction and require the utilities themselves to bear the associated costs.10

The General Assembly has provided a method for financing the costs of utility line *527relocation, pursuant to which those who benefit from the relocation pay the associated costs. The conclusion reached by the majority provides a method of circumventing that legislative direction. For example, if a group of citizens in a municipality believed that their community would benefit from relocation of overhead facilities, that group would need merely to convince their municipality to enact an ordinance to that effect. By that means, they would escape the costs that they would otherwise have to pay for the benefit of the buried lines. I suggest that the General Assembly has provided the appropriate avenue for that same group of citizens through the ereation of an improvement district pursuant to which the properties benefiting from the relocation would bear the associated costs.

E.

The City of Longmont had every right to conclude that the relocation of overhead facilities would be aesthetically preferable. What it did not have the right to do was to require U S West to pay for that choice. If Long-mont had been acting within its local police power, and had required relocation purely to accommodate a specific construction project or safety concern, Mountain States would govern and U S West would be required to pay the relocation costs. But Longmont’s ordinance far exceeds that narrow application. Under the majority’s decision today, if every municipality in the State were to pass a similar ordinance, the utility companies would be faced with the exorbitant costs of relocating every overhead line in the State. In Longmont alone, the undergrounding anticipated in Longmont’s current five-year plan will cost approximately $450,000. The estimate does not even include other areas of the City in which Longmont could, under the terms of the ordinance, require underground-ing.

Both parties and the court of appeals make passing reference to the means by which U S West will finance these costs. I suggest that state law prohibits public utilities from extending any “facility or privilege except those which are regularly and uniformly extended to all corporations and persons.” § 40-3-105(2), 11 C.R.S. (1997). It would therefore be inappropriate to permit rates to be raised state-wide to finance a benefit enjoyed by the City of Longmont for improvements to its community.

Moreover, section 40-3-106 prevents any type of preferential rate-making. See Mountain States Legal Found. v. Public Utils. Comm’n, 197 Colo. 56, 59, 590 P.2d 495, 498 (1979). In Mountain States Legal Foundation, this court held that the PUC could not charge lower rates to low-income users because the rates would be subsidized by the remaining ratepayers. See id. To do so would violate section 40-3-106 which prohibits preferential rates as well as section 40-3-102 which generally forbids rate discrimination. See Mountain States Legal Found., 197 Colo, at 59, 590 P.2d at 498. Requiring ratepayers statewide to subsidize the cost of Longmont’s relocation effects a rate discrimination in favor of Longmont citizens. The citizens of Longmont would enjoy a benefit not extended to state-wide ratepayers, but the state-wide ratepayers would be sharing the costs.

Similarly, there is the possibility that less affluent communities could be forced to subsidize their more affluent counterparts. For example, here the City of Longmont was willing to pay for some excavation and trenching costs associated with relocation. Other communities without the resources to front some of the costs necessary to initiate relocation might nonetheless be forced to pay, through rate increases, for their neighbors’ projects.

Hence, because I believe that the ordinance reflects a policy choice that should be financed by those who stand to benefit, and because I believe that the ordinance intrudes upon matters reserved to and, in fact, addressed by the PUC, I respectfully dissent.

MARTINEZ, J., joins in this dissent.

. Certainly the specter of regional rates set by a municipality is not an acceptable possibility. However, if we abrogate the notion that Tariff 4.6 has the force of state law, we undermine the filed tariff doctrine in a broader sense.

. One authoritative treatise on the subject notes that a municipality may not usurp the functions of a state public service commission under the guise of police regulation. 12 E. McQuillin, Municipal Corporations, § 34.74 at 180. (3d ed.1970).