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In re Formal Complaint of Borough of Glen Rock Against Village of Ridgewood Water Rates Allegedly Established

Decided: October 24, 1957.


On appeal from the Board of Public Utility Commissioners.

For affirmance -- Chief Justice Weintraub, and Justices Oliphant, Wachenfeld, Burling and Jacobs. For reversal -- Justices Heher and Francis. The opinion of the court was delivered by Wachenfeld, J. Francis, J. (dissenting).


[25 NJ Page 244] In 1921 the Village of Ridgewood purchased the Bergen Aqueduct Company, a privately owned public utility supplying water to the inhabitants of the Borough of Glen Rock as well as to those of Ridgewood. Since then, Ridgewood has continued to furnish residents of Glen Rock with water from its municipal facilities. From 1921 until 1955, Ridgewood made no increases in its charges to individual consumers. On November 8, 1955, however, it adopted an ordinance providing for rate increases to become effective as of January 1, 1956. They were the same for users in both municipalities.

The officials of Glen Rock objected to the proposed rates, and since a compromise was not forthcoming, they filed a complaint with the Board of Public Utility Commissioners alleging the increases were arbitrary and discriminatory and should be set aside. The Board was asked to determine fair and reasonable rates.

Instead of deciding the dispute on its merits, the Board dismissed the complaint of Glen Rock, concluding it had no jurisdiction to regulate the rates charged by a municipally owned water utility even when that utility furnished water to consumers in an adjoining community. The Board also declined to arbitrate the dispute pursuant to the terms of an agreement between the Borough of Glen Rock and the Glen Rock Water Works, Inc., a corporation subsequently consolidated with the Bergen Aqueduct Company, which the Borough maintained was binding on the Village of Ridgewood as the successor to the Aqueduct Company.

Glen Rock appealed to the Appellate Division under R.R. 4:88-8, but before the appeal could be heard below we certified the cause on our own motion.

Appellant relies on a goodly number of statutory provisions to support its contention that the Board has jurisdiction in the premises, and we will consider them individually. Nevertheless, it must be borne in mind that a comprehensive understanding of the chronology and interrelationships among these various statutes is important in endeavoring to ascertain the legislative intent.

Glen Rock first refers us to R.S. 48:2-13, which was enacted in 1911 and outlines the general jurisdiction of the Board of Public Utility Commissioners. This section states the Board shall have "general supervision and regulation of and jurisdiction and control over all public utilities," and proceeds to define a "public utility" as any "individual, copartnership, association, corporation or joint stock company, their lessees, trustees or receivers appointed by any court whatsoever, that now or hereafter may own, operate, manage or control within this state any * * * water * * * system * * * under privileges granted or

hereafter to be granted by this state or any political subdivision thereof." Appellant argues that municipal corporations are embraced by the term "corporation."

We conceive from the context in which the word is used that it applies only to private corporations. A municipal corporation is of an entirely different nature, and it is probable that the Legislature would have expressly specified municipal corporations if it had intended to give the Board jurisdiction over them. The record indisputably discloses that over a period of 46 years the Board has consistently declined to regulate water rates charged by a municipality, and its administrative interpretation is entitled to great weight if there be any ambiguity in the statute under which it operates. Lane v. Holderman, 23 N.J. 304 (1957); State Dept. of Civil Service v. Clark, 15 N.J. 334 (1954); Swede v. City of Clifton, 39 N.J. Super. 336 (App. Div.), affirmed 22 N.J. 303 (1956); Kaske v. State, 34 N.J. Super. 222 (App. Div. 1955); Walsh v. Dept. of Civil Service, 32 N.J. Super. 39 (App. Div. 1954). One hundred and twenty-three municipalities throughout the State operate their own water supply systems and have never been subjected to administrative regulation. Rate-making is a prodigious task, and we are unwilling to impose this enormous burden upon the Board without an unequivocal declaration by the Legislature expressly so stating.

Glen Rock insists we can find such a declaration in R.S. 40:62-24, a section of the Home Rule Act adopted in 1917, which reads:

"Every municipality in supplying electricity, gas, steam or other product beyond its corporate limits is hereby declared to be a public utility. The board of public utility commissioners shall have the same supervision and regulation of, and jurisdiction and control over such municipality in respect to its acts in supplying electricity, gas, steam or other product beyond its corporate limits, and of and over the property, property rights, equipment, facilities and franchises used in supplying electricity, gas, steam or other product beyond its corporate limits as over other public utilities. Every such municipality shall be subject as to its * * * rates * * * to the jurisdiction of the board of public utility commissioners to the same extent as other public utilities." (Emphasis supplied)

Returning for the moment to consider R.S. 48:2-13 and the argument that municipal corporations operating utilities are included thereunder, we note that if this contention were valid there was no need to enact R.S. 40:62-24 in 1917. R.S. 48:2-13, adopted six years previously, applies to a "corporation" supplying "gas, electric light, heat [and] power," as well as water, and if "corporation" as used therein were intended to cover municipal corporations, the Board would already have had the jurisdiction purportedly conferred for the first time by R.S. 40:62-24. The fact that the enactment of R.S. 40:62-24 was deemed necessary is confirmation of our conclusion that the word "corporation" in R.S. 48:2-13, defining general jurisdiction, was not intended to embrace municipal corporations owning public utilities.

Glen Rock maintains, however, that in any event the Board was given power to regulate the rates charged by Ridgewood under the phrase "or other product" as contained in R.S. 40:62-24. It argues that water is one of the products contemplated by the statute. We cannot agree.

The principle of ejusdem generis affords some aid, even if in interpreting this section we consider it in isolation. The general reference to "other product" takes its meaning from the specific terms preceding it, "electricity, gas, steam." Denbo v. Moorestown Twp., 23 N.J. 476 (1957); Salomon v. Jersey City, 12 N.J. 379 (1953); Studerus Oil Co. v. Jersey City, 128 N.J.L. 286 (Sup. Ct. 1942). Therefore, "other product" includes only those products which might be developed and supplied beyond the boundaries of the municipality for light, heat or power purposes. Potable water is not one of them.

But even more important is the meaning vouchsafed by the setting in which R.S. 40:62-24 is found. This statute does not stand by itself; it is the next to the last section in an article dealing exclusively with "Power, Heat and Light Plants." The preceding sections clearly establish the meaning intended for "other product."

R.S. 40:62-12 allows municipal acquisition of property for the manufacture, generation and transmission of "gas, electricity, steam, or other product * * * for supplying light, heat or power. * * *" R.S. 40:62-21 contains the same qualifying phrase, making it apparent from an examination of all of the sections of the article that the "other product" referred to means one, like gas, electricity or steam, which can be utilized to produce light, heat or power. See also R.S. 40:62-15 (no municipality shall acquire or construct any "light, heat or power plant" without the authorization of a majority of its legal voters).

The supplying of water is so important in its own right that presumably jurisdiction over it would have been given to the Board in specific terms, if at all, and not in an offhand manner by use of the general phrase "or other product." But there was no reason for the Legislature to deem that water was covered by "other product," for also as a part of the Home Rule Act it adopted a series of statutes which in a comprehensive fashion specifically regulate municipalities supplying water to ...

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