Chugach Electric Ass'n v. City of Anchorage

FOLTA, District Judge. The plaintiff, a cooperative organized to obtain the benefits of the Rural Electrification Act of 1936, 7 U.S.C.A. § 901, et seq., is engaged in the generation, distribution and sale of electricity in the suburbs of the City of Anchorage. By this proceeding plaintiff challenges the City’s right to extend its transmission and distribution lines beyond its corporate limits, as well as those of the Eastchester Public Utility District, into territory which plaintiff serves or is prepared to serve under loans financed by the Rural Electrification Administration. After the denial of a preliminary injunction, a hearing was had on the merits upon the plaintiff’s second claim. The fourth sub-division of 16-1-35, A.C.L.A. 1949, so far as pertinent to this controversy, provides: “That any municipality which owns and/or ■ operates plants for the use, sale or distribution of light, power, heat, water or telephone service to the residents of the city may also sell and distribute such light, power, heat, water and telephone service to the residents of contiguous and adjacent districts outside the limits of the city”. Plaintiff contends that the territory involved is not contiguous and adjacent. The Court ruled, however, during the course of the hearing that the conjunctive “and” must be read as “or” and that the precise question upon which the controversy turns, in view of the evidence and stipulations, is as to the meaning of the term “adjacent” as used in the Act. The Eastchester Public Utility District, with thousands of inhabitants, lies between the corporate limits of Anchorage and the area sought to be served. At its closest point to the corporate limits, this area is approximately one and one-half miles distant. The City has not extended its distribution system into the Eastchester Pub8 lie Utility District, although'this district is but the natural growth of Anchorage which has extended beyond its corporate limits on all sides but that bordering on Cook Inlet. I am of the opinion that under the statute quoted a municipality is authorized to extend its distribution system into any non-contiguous area within a reasonable distance of its corporate limits, provided that the intervening territory is unsettled, and uninhabited or virtually so, but that it was never intended by the use of the term “adjacent” to permit a municipality to leapfrog a settled area, particularly where, as here, such area is, from all appearances, a part of the metropolitan area, and extend its distribution system into the territory beyond. Cf. United States v. Chaplin, C.C., 31 F. 890. Had the City extended its distribution system into the Eastchester Public Utility District, the areas here involved would now clearly be adjacent. State v. Kansas City, 360 Mo. 374, 228 S.W.2d 762, 773. The case of Booth v. City of Minneapolis, 163 Minn. 223, 203 N.W. 625, cited by the defendant, is readily distinguishable upon the facts. Obviously, no valid reason could be advanced for limiting a municipality in establishing parks, to areas immediately adjacent to its corporate limits. I conclude, therefore, that the acts of the City in the instant case do not constitute a valid exercise of the right granted by Section 16-1-35. Bayliss v. Mayor and Council of Borough of North Arlington, 80 N.J.L. 124, 76 A. 1024. This conclusion, however, is limited solely to the extension of the facility involved.