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LEAVENWORTH-JEFFERSON ELEC. CO-OP v. KANSAS CORP COMM'N

August 30, 1990.

LEAVENWORTH-JEFFERSON ELECTRIC COOPERATIVE, INC., Appellant,
v.
KANSAS CORPORATION COMMISSION and KANSAS POWER AND LIGHT, Appellees.



The opinion of the court was delivered by

The parties, Leavenworth-Jefferson Electric Cooperative, Inc., (Leavenworth-Jefferson) and The Kansas Power and Light Company (KP&L), have appeared before us with the intention

[247 Kan. 269]

      of testing the constitutionality of a section of the Retail Electric Suppliers Act (RESA), K.S.A. 66-1,170 et seq. The focus of Leavenworth-Jefferson's claim of unconstitutionality centers on K.S.A. 1989 Supp. 66-1,176. Its route to this court included: (1) briefing and argument before the Kansas Corporation Commission (KCC), resulting in an order adverse to Leavenworth-Jefferson, the plaintiff-appellant; and (2) a trial to the district court of Shawnee County on judicial review of the KCC order also resulting in an order adverse to Leavenworth-Jefferson. The KCC found that it did not have authority to interpret constitutional issues. The district court upheld the constitutionality of K.S.A. 1989 Supp. 66-1,176.

The controlling question is whether we should resolve Leavenworth-Jefferson's constitutional challenge to K.S.A. 1989 Supp. 66-1,176.

The record discloses that Leavenworth-Jefferson, by its actions in settling its controversy with KP&L and in accepting benefits under the statute, is disqualified from asserting a constitutional challenge to K.S.A. 1989 Supp. 66-1,176. We decline to resolve the challenge. We dismiss the appeal.

  Facts

  KP&L, respondent-appellee, is an investor-owned utility which transacts the business of an electric utility in the city of Tonganoxie, Kansas. Leavenworth-Jefferson is a member-owned, rural electric cooperative. It operates under the laws of the State of Kansas and under the auspices and control of its lender, the Rural Electrification Administration, Department of Agriculture, Washington, D.C. Pursuant to the terms of RESA, K.S.A. 66-1,170 et seq., the KCC had previously granted Leavenworth-Jefferson a service territory that included the undeveloped tract annexed by the City of Tonganoxie by Ordinance No. 774. Prior to annexation, Perma-Span, a building manufacturer, became the owner of the undeveloped tract. This tract was then annexed by Tonganoxie on the petition of Perma-Span, the sole owner.

  KP&L was the franchise holder providing electric service in Tonganoxie. Immediately following the annexation of the undeveloped tract, Leavenworth-Jefferson submitted information on rates and applied to Tonganoxie for a franchise to serve the newly

[247 Kan. 270]

      annexed territory. KP&L also submitted rate information for the City's review. The City voted to allow KP&L to serve the newly annexed territory under KP&L's existing franchise.

  Approximately six months later on April 14, 1988, KP&L and Leavenworth-Jefferson executed an agreement for compensation to be paid to Leavenworth-Jefferson pursuant to K.S.A. 1989 Supp. 66-1,176.

  After the passage of more than 180 days from the date of the annexation by Tonganoxie, KP&L applied to the KCC for a certificate of convenience and authority to service the annexed area. Leavenworth-Jefferson protested KP&L's application. The KCC found that Leavenworth-Jefferson did not hold a franchise from the City to serve the annexed territory and granted the certificate to KP&L as required by K.S.A. 1989 Supp. 66-1,176.

  The Constitutional Claims

  Leavenworth-Jefferson asserts that K.S.A. 1989 Supp. 66-1,176 is unconstitutional because it violates:

  (1) the due process clause of the Fourteenth Amendment to the Constitution of the United States by taking property unreasonably without notice or an opportunity to be heard;

  (2) art. 2, § 1 of the Constitution of the State of Kansas by delegating matters of statewide concern to a political subdivision; and

  (3) the supremacy clause of the United States Constitution. U.S. Const., art. VI, cl. 2.

  Leavenworth-Jefferson also claims, as does amicus curiae Sunflower Electric Power Corporation, that the United States, which is not a party to ...


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