Opinion
No. 2-138 / 01-0646.
Filed December 30, 2002.
Appeal from the Iowa District Court for Marshall County, STEPHEN CARROLL, Judge.
Bradley and Paula Rutherford and Bradley and Judith Price appeal from a district court ruling on judicial review affirming agency action granting IES Utilities a franchise to construct an electric transmission line. AFFIRMED.
Terrance Rutherford, of Rutherford, Trewet Knuth, Atlantic, for appellant.
Verle Norris, for appellee IES Utilities, Inc.
Allan Kniep and Gary Stump, of Iowa Utilities Board, Des Moines, for appellee.
Heard by VOGEL, P.J., and MILLER and VAITHESWARAN, JJ.
Bradley and Paula Rutherford and Bradley and Judith Price appeal from a district court ruling on judicial review affirming agency action granting IES Utilities a franchise to construct an electric transmission line. They contend the district court erred in finding (1) a discrepancy between the notice of the informational meeting and the petition for franchise was not fatal to the petition, (2) the line serves a public use and is reasonable in relationship to an overall transmission plan, (3) the franchise should not be restricted or the route or location of the line be modified, and (4) the proposed easement across their property is necessary for public use. We affirm.
I. BACKGROUND FACTS AND PRIOR PROCEEDINGS.
IES Utilities proposed to erect, maintain, and operate electric transmission lines in Marshall County. IES filed an informational notice in 1994, and a hearing in Marshall County proceeded shortly thereafter. IES filed a petition for franchise regarding the transmission lines in 1996. It subsequently amended its petition, requesting it be granted the right of eminent domain over a parcel of land owned by Bradley and Paula Rutherford and Bradley and Judith Price (collectively referred to as the petitioners). The Rutherfords objected to the petition for franchise. The original hearing on IES's petition, scheduled for October 31, 1997, was rescheduled to give Rutherford additional opportunity to prepare. The hearing was rescheduled for December 1, 1997. At the rescheduled hearing, Rutherford presented evidence and cross-examined witnesses. The presiding administrative law judge entered a proposed decision and order granting franchise on July 17, 1998. On appeal, the Iowa Utilities Board issued an order affirming the proposed decision and requiring the filing of an amended petition that redefined the eminent domain request. The request for rehearing made by the petitioners was denied. The district court remanded the case to the agency to clarify the width of the easement. On judicial review from the final agency decision, the district court affirmed. The petitioners appeal.
II. SCOPE AND STANDARD OF REVIEW.
Iowa Code section 17A.19(8) (1995) governs our review of administrative agency proceedings. S.E. Iowa Coop. Elec. Ass'n v. Iowa Utils. Bd., 633 N.W.2d 814, 818 (Iowa 2001). The principles underlying judicial review of an agency decision provide that when a district court exercises the power of judicial review conferred by Iowa Code section 17A.19 it is functioning in an appellate capacity to correct errors of law, as specified in section 17A.19(8). Harlan Sprague Dawley, Inc. v. Iowa State Bd. of Tax Review, 601 N.W.2d 66, 68 (Iowa 1999). Therefore, when we review a decision a district court rendered pursuant to section 17A.19 the sole question is whether the district court correctly applied the law. Id. To make that determination we apply the standards of section 17A.19(8) to the agency action to determine whether our conclusions are the same as those of the district court. Id.
In determining whether the district court applied the law correctly we inquire whether the agency's findings of fact are supported by substantial evidence when the agency record is viewed as a whole. Iowa Code § 17A.19(8)(f); West v. Employment Appeal Bd., Dep't of Inspections and Appeals, 489 N.W.2d 731, 733 (Iowa 1992). Evidence is substantial if a reasonable person would find it adequate to reach a given conclusion, even if we might draw a contrary inference. West, 489 N.W.2d at 733. If we determine the agency's findings of fact are supported by substantial evidence, we are bound by those findings. Id.
We afford considerable deference to the agency's expertise in the highly technical area of public utility regulation. Equal Access Corp. v. Utils. Bd., 510 N.W.2d 147, 151-52 (Iowa 1993). Accordingly, we typically defer to the agency's informed decision as long as it falls within a "zone of reasonableness." Id. Consequently, "nearly all disputes are won or lost at the agency level." Northwestern Bell Tel. Co. v. Iowa Utils. Bd., 477 N.W.2d 678, 682 (Iowa 1991) (citation omitted).
III. PETITION FOR FRANCHISE.
The petitioners contend the district court erred in finding a discrepancy between the notice of the informational meeting and the petition for franchise was not fatal to the petition. They argue the notice does not comply with section 478.2. They assert that the petition for franchise should have been dismissed because the incomplete notice was fatal to the petition.
Any person or entity may file a verified petition for a franchise to erect, maintain, and operate an electric transmission line. Iowa Code § 478.2. Prior to the filing of a petition, the person or entity must hold informational meetings in each county in which real property or rights therein will be affected. Id. The person or entity seeking the franchise
shall give notice of the informational meeting to each person, company, or corporation determined to be the landowner affected by the proposed project and any person, company or corporation in possession of or residing on the property. . . .
The notice shall set forth the name of the applicant; state the applicant's principal place of business; state the general description and purpose of the proposed project; state the general nature of the right of way desired; provide a map showing the route of the proposed project; advise that the landowner has the right to be present at such meetings and to file objections with the utilities board; designate the place and time of the meeting; be served not less than thirty days prior to the time set for the meeting by certified mail with return receipt requested; and be published once in a newspaper of general circulation in the county at least one week and not more than three weeks before the time of the meeting and such publication shall be considered notice to landowners whose residence is not known.
The petitioners note that the notice of the informational meeting given by IES recites that IES proposed to construct, maintain, and operate a new double circuit, 69 kV transmission line in Marshall County, and that the line would in part be constructed parallel to the road right-of-way on private property and would consist of a line of single-pole, wood structures, carrying six phase wires, and one shield wire for protection against lightning. The petition for franchise proposes a double circuit line consisting of a 69 kV line, which would operate at a maximum of 72.5 kV, and a 161 kV line, which would operate at a maximum voltage of 169 kV.
The petitioners were given notice of the informational meeting. They were aware of the proposed transmission lines running over their property, as evidenced by the Rutherfords' objection to the petition for franchise and their participation in the hearing on the petition. They have not alleged they suffered prejudice due to the relatively minor discrepancy between the notice and the petition, nor do we find any prejudice to them. See Anstey v. Iowa State Commerce Comm'n, 292 N.W.2d 380, 385 (Iowa 1980) (finding that the objectors could show no prejudice resulting from the failure to notify all interested parties); see also Fischer v. Iowa State Commerce Comm'n, 368 N.W.2d 88, 94 (Iowa 1995) (citing with approval Golden Grain Macaroni Co. v. Federal Trace Comm'n, 472 F.2d 882, 886 (9th Cir. 1972), which held inadequacy of notice to those who appear and take part in administrative hearing does not vitiate proceedings in the absence of prejudice). We affirm the district court and agency decision on this issue.
IV. PUBLIC USE AND REASONABLE RELATIONSHIP TO OVERALL TRANSMISSION PLANS.
The petitioners assert that the district court erred in finding the proposed transmission line serves a public use and is reasonable in relationship to an overall transmission plan. They argue that IES failed to substantiate the relationship of the proposed project to the present and future economic development of the area. They also contend that IES has not developed a comprehensive electric utility plan, or if it has, it is a plan that is developed as they proceed with the project.
In the petition for franchise, the person or entity seeking to construct an electric transmission line must include allegations that the proposed line is "necessary to serve a public use" and "represents a reasonable relationship to an overall plan of transmitting electricity in the public interest." Iowa Code § 478.3. Before the Board may grant a petition for an electric transmission line franchise, it must find the proposed line is "necessary to serve a public use and represents a reasonable relationship to an overall plan of transmitting electricity in the public interest." Id. § 478.4; Fischer, 368 N.W.2d at 97.
Our legislature gave the Board discretion in making decisions involving electric transmission lines. S.E. Iowa Coop. Elec. Ass'n, 633 N.W.2d at 819. In enacting chapter 478, the legislature intended to entrust the Board with deciding whether a public use existed and the necessity of the proposed line to serve the public use. Id. The underlying purpose of that chapter is to serve the public interest. Id. The transmission of electricity to the public constitutes a public use as contemplated by section 478.4. Id. at 820. Thus, the remaining issues we must resolve are whether the lines proposed in this case were necessary to serve that public use and whether the lines represent a reasonable relationship to an overall plan of transmitting electricity in the public interest.
Kenneth Cackoski, the team leader for engineering services and design for IES, testified that the proposed transmission lines would meet existing and future needs. The 69 kV lines would provide increased service reliability by providing back-up service when other existing power facilities are out of service. The double circuit would reduce the overall loading on each line and minimize outage minutes to customers. The 161 kV line will meet increased demands. It will reduce outages. IES plans to build a second 161 kV line to serve a nearby substation to improve reliability. The 161 kV line currently at issue will eliminate the need to build another one in the vicinity. Work was to begin on another rural feeder out of the substation in 1998. IES had a long-range plan to convert an existing 115 kV system to 161 kV and to provide back-up to the substation.
The Board determined that "the record evidence clearly supports a finding that the lines are necessary to serve a public use and represent a reasonable relationship to an overall plan of transmitting electricity in the public interest." Substantial evidence supports the Board's determination. We affirm the Board and district court on this issue.
V. RESTRICTION OF FRANCHISE OR MODIFICATION OF LINE ROUTE OR LOCATION.
The petitioners contend that the district court erred in finding the franchise should not be restricted or the route or location of the line be modified. They argue there are no existing lines on the part of the proposed route on their property and it is not along division lines. They maintain an alternate route should be used. They assert the proposed transmission lines will adversely impact present and future land use.
The Board "may grant the franchise in whole or in part upon the terms, conditions, and restrictions, and with the modifications as to location and route as may seem to it just and proper." Iowa Code § 478.4. Transmission lines
shall be constructed near and parallel to the right of way of the railways of the state or along the division lines of the lands, according to the government survey thereof, wherever the same is practicable and reasonable, and so as not to interfere with the use by the public of the highways or streams of the state, nor unnecessarily interfere with the use of any lands by the occupant thereof.
The north-south leg of the route proposed by IES is along a division line between two sections of land. The petitioners' complaint concerns the east-west leg, which lies immediately adjacent to the north side of new Highway 30 and parallel to it and does not follow a division line.
Deviations from division lines may occur when based on engineering considerations of practicality and reasonableness. Anstey, 292 N.W.2d at 388; Iowa Code § 478.18.
IES considered three alternative routes for the proposed transmission lines. Engineer Cackoski testified that the first alternative was not feasible and in the public interest because of the increased development along that route. Problems included substantial residential and business development along and in close proximity to the route, difficulty in securing the amount of land needed, and potential underground facilities and other obstructions. He stated that the second alternative considered, which would proceed along the south side of new Highway 30, would require that the highway be crossed twice, adding expense, and the crossings would make the transmission line more difficult and expensive to maintain after the completion of construction. Cackoski testified that the third alternative was rejected due to the lack of physical space to construct the lines. Larry Shi, an engineer with the Office of Consumer Advocate, testified that he did not have any suggestions to modify IES's proposed route.
The route and location proposed by IES would minimally interfere with the current agricultural use of the petitioners' land. By way of contrast, the first alternative considered by IES, a route along Iowa Avenue (old Highway 30) would interfere with and adversely affect several developed properties. Although the petitioners hope and expect to develop their land for other than agricultural use at some time in the future, such development remains somewhat speculative. The petitioners were unable to specify how the transmission lines would substantially interfere with the future development of their property, and they will be compensated for any resulting loss of value.
The record contains substantial evidence that the significant problems with the first alternative route considered by IES render it impractical and unreasonable, and that the third alternative is not physically possible and is thus also impractical and unreasonable. Substantial evidence indicates the second alternative route, which involves crossing new Highway 30 two times, is impractical and unreasonable because it extends the route, involves some unnecessary risks and dangers, greatly increases the cost, and nevertheless does not follow a division line of lands.
We conclude the agency did not err in declining to modify the route and location of the proposed transmission line. We affirm the district court and agency on this issue.
VI. EASEMENT.
The petitioners contend the district court erred in finding the proposed easement across their property necessary for public use. This argument is based on the petitioners' underlying argument that the record does not support a finding that the electric transmission lines serve a public use or that they are reasonable in relationship to an overall transmission plan. The record contains substantial evidence that the proposed transmission line is necessary to increase reliability of service, accommodate occurring and anticipated load growth, and reasonably assure the availability, quality, and reliability of service. The transmission line thus serves a public purpose. The proposed route is appropriate and the easement is necessary for the proposed route.
We conclude the agency did not err in finding the proposed easement necessary for public use and affirm the district court and agency on this issue.
VII. CONCLUSION AND DISPOSITION.
We find no merit to the petitioners' claims of district court error. We affirm the district court's ruling and the agency's decision.