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New Jersey Power & Light Co. v. Borough of Butler

Decided: June 27, 1949.

NEW JERSEY POWER & LIGHT COMPANY, A CORPORATION, DEFENDANT-APPELLANT, AND THE SMOKE RISE COMPANY, INC., A CORPORATION, AND J. ALDEN TALBOT, INTERVENERS-APPELLANT,
v.
THE BOROUGH OF BUTLER, A MUNICIPAL CORPORATION OF NEW JERSEY, PLAINTIFF-RESPONDENT, AND BOARD OF PUBLIC UTILITY COMMISSIONERS, RESPONDENT



Jacobs, Eastwood and Bigelow. The opinion of the court was delivered by Jacobs, S.j.a.d.

Jacobs

This is an appeal from an order of the Board of Public Utility Commissioners which, in primary effect, allocated the disputed Smoke Rise section of the Borough of Kinnelon for utility servicing by the electrical distribution plant of the Borough of Butler rather than the New Jersey Power and Light Company.

In 1915 the Borough of Butler began operating its own plant for the generation and distribution of electricity. It supplied electricity to its own residents and in the following year began supplying electricity to residents in the adjacent community of Bloomingdale. In 1925, it contracted with the

Jersey Central Power and Light Company for the purchase of electricity for distribution through Butler's facilities. Shortly thereafter, Butler ceased operating its generating plant but continued its distribution facilities through which it supplied electricity purchased from the Jersey Central Power and Light Company. In 1926, Butler began furnishing electricity to residents of the neighboring Borough of Kinnelon and an ordinance was duly adopted by Kinnelon authorizing Butler's extension of its electrical distribution system and its erection of poles, wires, and other appurtenances on public streets within the territorial limits of Kinnelon.

When it originally entered Kinnelon, Butler's services were limited to twenty-seven consumers. Thereafter, it expanded from time to time until in 1947 it serviced 476 consumers in Kinnelon. In 1933, at the request and expense of Morris Kinney, owner of a tract of 4,800 acres in Kinnelon, a line was extended to his homestead and outbuildings and Butler has supplied electricity to those premises since that time. Upon Mr. Kinney's death, the property was devised to Mr. J. Alden Talbot who occupies the homestead and has transferred 1,600 of the 4,800 acres to The Smoke Rise Company, Inc., which he organized for development purposes. Most of the acreage is rocky, wooded terrain and about fifty acres have been cleared. Although Smoke Rise was organized in 1946, its sales did not begin until May, 1947. Between May, 1947, and December, 1948, nineteen houses were completed and four others were under construction. In October, 1947, the first house was completed and occupied.

A representative of Smoke Rise testified that in March, 1947, he conferred with Mayor Mace of Butler and Mr. Chaudoin, whom he described as chairman of its electric committee, for the purpose of advising them of the plans for developing Smoke Rise and inquiring whether Butler would be interested in servicing Smoke Rise. He states that following this conference he heard nothing further from the Butler officials. However, Mayor Mace and Mr. Chaudoin testified that they were never requested to service Smoke Rise and

that, on the contrary, its representative had conferred with them to advise that it had made arrangements with one of the utility companies whose rates were cheaper than Butler's to supply the needed electricity. They further testified that they expressly advised the Smoke Rise representative that Butler had "jurisdiction" to supply the Smoke Rise area and would not waive it.

Thereafter, Smoke Rise entered a servicing agreement with New Jersey Power & Light Company. Smoke Rise installed the necessary poles and lines at a cost of over $16,000 and is to be reimbursed by the Power Company. The lines constructed by Smoke Rise have been connected with the Power Company's distribution system which is located nearby and the Power Company has spent $3,253.25 connecting its main lines with the Smoke Rise development's facilities.

In September, 1947, Butler filed a petition with the Board of Public Utility Commissioners, which named the New Jersey Power & Light Company, as respondent, and which sought a determination of the dispute as to servicing the Smoke Rise area pursuant to R.S. 48:7-5, which reads as follows:

"The board of public utility commissioners shall have power, after hearing, upon notice, to determine between public utilities supplying electric light, heat or power, questions in dispute as to territories to be served. Pending the hearing the board may enjoin the construction of facilities for such supply.

"Upon finding and determination that the construction is not necessary and proper for the public convenience and will not properly conserve the public interest, ...


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