                             No.     91-374
          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1991


YELLOWSTONE VALLEY ELECTRIC
                .
COOPERATIVE, INC ,
               Plaintiff and Respondent,


MONTANA POWER COMPANY,
               Defendant and Appellant.



APPEAL FROM:   District Court of the Thirteenth Judicial District,
               In and for the County of Yellowstone,
               The Honorable Maurice Colberg, Judge presiding.


COUNSEL OF RECORD:
          For Appellant:
               Donald L. Harris; Crowley, Haughey, Hanson, Toole         &
               Dietrich, Billings, Montana
          For Respondent:
               Paul G.     Olsen; Olsen        &   Christensen, Billings,
               Montana
          For Amicus       Curiae    Montana       Electric   Cooperatives'
          Association:
               Maxon R. Davis; Cure, Borer           &   Davis, P.C., Great
               Falls, Montana

                              Submitted on Briefs: October 31, 1991
                                              Decided: December 4, 1991
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.

       This is an appeal from the Thirteenth Judicial District

Court ' s order permanently enjoining the Montana Power Company (MPC)
from providing electricity to ZooMontana of Billings, Montana.
Involved is the District Court's interpretation of Montana's
Territorial Integrity Act.          The Territorial Integrity Act was
adopted in 1971 to aid in the resolution of disputes between
electric utilities and electric cooperatives in the event a
question arose over which company would provide electrical service
to new customers.      We affirm.
       The appellant, MPC, raises the following issue:
       Did the District Court err in enjoining MPC from providing
electricity to ZooMontana under Montana's Territorial Integrity
Act?
       This Court is revisited with a question thought long ago well
buried by the passage of the 1971 Montana Territorial Integrity
Act.   For some twenty years, commencing with Sheridan County Elec.
Coop. v. Montana-Dakota Util. Co. (1954), 128 Mont. 84, 270 P.2d
742, to Montana Power Co. v. Sun River Elec. Coop., Inc. (1971),
157 Mont. 468, 487 P.2d 307, this Court struggled with numerous
cases between the privately-owned electric companies and the
electric cooperatives in Montana.       The Territorial Integrity Act,
now codified as   §§   69-5-101 et seq., MCA, was enacted to settle and
bring to an end these types of cases in the courts of Montana.
Like many pieces of legislation, the Territorial Integrity Act was
a product of compromise, and seemed to serve that purpose for some
twenty years between the time when the last case was before this
Court and the present time with the instant case.
    The underlying facts of this case are the following:
     ZooMontana is a non-profit corporation formed to build and
operate a zoo on property located just west of the city limits of
Billings, Montana.   Following years of fund raising, ZooMontana
began the actual construction of the zoo by erecting the education
building on its land.   Eventually, ZooMontana intends to build a
number of buildings and animal exhibits on the property.       The
construction was to proceed in stages as the funding permitted.
     On May 3, 1991, MPC officials met with Yellowstone Valley
Electric Cooperative, Inc. officials (the Cooperative) to discuss
a number of issues.       During that meeting, MPC informed the
Cooperative that ZooMontana had requested MPC to provide three-
phase power for the education building. MPC stated it intended to
supply the power because it had the right to do so under the
Territorial Integrity Act of 1971.     The Cooperative officials
disagreed with MPC's interpretation of the Act.
     On May 8, 1991, the Cooperative's general manager sent a
letter to MPC which stated in part: "Our measurements show that our
Cooperative's electric facilities are closer to the proposed
education building than MPCols." There being no response to the
letter, on May 24, 1991, MPC began extending its three-phase line
to ZooMontana property.     This construction was observed by a
Cooperative official for nearly a week and when the line extension
was completed to ZooMontana, the Cooperative, on May 30, 1991,
obtained from the District Court an ex parte temporary restraining

                                 3
order and order to show cause which enjoined MPC from further
construction of its facilities to ZooMontana.
      The parties agree to the following: (1) that neither MPC nor
the Cooperative would master meter the entire ZooMontana property
at the entry point of each party adjacent to its respective three-
phase service; (2) that ZooMontana property would utilize in excess
of 400 kilowatts within two years and that the project eventually
would use over 800 kilowatts; (3) that ZooMontana is a llcommercial
and industrial premises;" and (4) that the basic issue is the cost
to each party of the three-phase line extension.
      The District Court heard this matter in two hearings.      After
the   first hearing   it was   agreed   by   both   parties   that the
engineering firm of Schmidt, Smith and Rush (SSR Engineers, Inc.)
would be appointed to determine the cost of the extension.         SSR
Engineers, Inc. submitted its report to the court dated June 14,
1991, wherein it set forth the estimated costs.
      The District Court found in its Findings of Fact No. 7 as
follows:
           7. Pursuant to Section 69-5-106(2) M.C.A. the
      parties agreed to an independent consultant engineer, SSR
      Inc. Engineers, to determine whether [the Cooperative] or
      MPC can extend its lines to the customer, ZooMontana, at
      the least cost. SSR's report (Plaintiff's Exhibit 3) was
      made with several presumptions and concluded that:
           (a) the cost to MPC to extend its three phase line
      prior [sic] from an extension of that line commenced by
      construction on May 24, 1991, and restrained by [the
      District Court] by order dated May 31, 1991, to the
      education building is $24,136.43;
           (b) the cost to MPC to extend its three phase line
      from the ending point after the extension referred to in
      paragraph 7(a) to the education building is $14,622.46;
         (c) the cost to MPC to extend its three phase line
    to the ZooMontana property line is $ 1 6 , 3 1 9 . 4 9 ;
         (d) the cost to [the cooperative] to extend its
    three phase line to the education building is $28,348.86;
         (e) the cost to [the Cooperative] to extend its
    three phase line to the ZooMontana property line is
    $6,092.45.

    The District Court in its Conclusions of Law Nos. 3 and                     4

stated:
         3. Since the parties agree that the ZooMontana
    property is a commercial premises with a need of 4 0 0
    kilowatts or larger within two years and since either
    party can extend its lines to the user without any cost
    for the extension, the issue is whether MPC as an
    electric utility is entitled to priority because it can
    under the statute      "..
                        .extend its lines to such industrial
    or commercial premises at less cost to the electric
    utility...".
           4.   Section 69-5-102 (7) M.C.A. defines llpremisesll
                                                              as:
           "Premiseso means a building, residence,
           structure, or facility to which electricity is
           being or is to be furnished; provided, that
           two or more buildings, structures, or
           facilities which are located on one tract or
           contiguous tracts of land and are utilized by
           one electric consumer for farming, business,
           commercial,     industrial,    institutional,
           governmental, or trailer court purposes shall
           together constitute one premises, except that
           any such building, structure, or facility,
           other than a trailer court, shall not,
           together with any other building, structure,
           or facility, constitute one premises if the
           electric service to it is separately metered
           and the charges for such service are
           calculated independently of charges for
           service to any other building, structure, or
           facility.
     The premises of the ZooMontana property within the
     meaning of this statute is the property line of the
     property. For this reason the appropriate comparisons of
     cost for [the Cooperative] and MPC to extend their lines
     to the property line of ZooMontana are the costs referred
     to in paragraphs 7(c) and 7(e) of the Findings of Fact
     herein such costs being $ 1 6 , 3 1 9 . 4 9 to MPC and $ 6 , 0 9 2 . 4 5
     to [the Cooperative]. Since the cost of extension of the
     lines to the premises is greater to MPC than [the
     Cooperative], [the Cooperative] is entitled to provide
     the electric power to ZooMontana.
     On appeal, MPC contends that the correct comparison to be made
was MPC's cost of extending the three-phase power extension to the
education building in the amount of $24,136.43, as compared to the
Cooperative's cost to extend its power to the same building in the
amount of $28,348.86. The Cooperative contends that the premises
involved here is the entire ZooMontana property so that the cost
comparison to be made is the cost of extending three-phase power to
the ZooMontana property line.    That comparison shows that MPC's
cost would be $16,319.49 as compared to the Cooperative's cost of


     Section 69-5-102(7), MCA, defines premises as applicable in
this case:
          "Premisesu means a building .       . . to which
     electricity is being or is to be furnished; provided,
     that two or more buildings, structures, or facilities
     which are located on one tract  ...and are utilized by
     one electric consumer for .    .. institutional    . . .
     purposes shall together constitute one premises    . . .
     [with an exception for separate metering which is not
     here applicable].
     On this issue, the District Court's Findings of Fact No. 8 is
pertinent:
          8. The intent of ZooMontana is to utilize its
     entire parcel of property for development of its zoo for
     various buildings, parking areas, exhibits, displays and
     other uses. Although the education building would be the
     first place or building located within the total property
     for which three phase electric power may be needed such
     power will ultimately be required for the entire zoo.   .
There is no dispute between the parties as to the foregoing planned
utilization of the entire parcel. Both parties utilize such future
developments to arrive at the         400    kilowatts of power needed within
two years, and referred to in the statute.
     We conclude that such facts establish that the District Court
is correct in its conclusion that the premises for this purpose is
the property line of the property and not the education building.
     We therefore affirm the holding of the District Court that the
appropriate cost comparison of the costs of               $16,319.49   to MPC and
$6,092.45    to the Cooperative; and since the cost of extension is
greater to MPC than the Cooperative, the Cooperative is entitled to
provide     the   electric      power.       We   affirm    the   court's   order
permanently       enjoining     MPC   from    providing     electric power     to
ZooMontana.
     Affirmed .




We concur:


                           R-
          Chief ~ u s t i c d
                                   December 4, 1991

                             CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:


Donald L. Harris
CROWLEY LAW FIRM
P.O. Box 2529
Billings, MT 59103-2529

Paul G. Olsen
Olsen & Christensen
P.O. Box 1596
Billings, MT 59103-1596

Maxon R. Davis
Cure, Borer & Davis
P.O. Box 2103
Great Falls, MT 59403-2103


                                               ED SMITH
                                               CLERK OF THE SUPREME COURT
                                               STA~MONTANA

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