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In re Green Brook Flood Control Project

June 22, 2004; as amended July 1, 2004

IN THE MATTER OF GREEN BROOK FLOOD CONTROL PROJECT


On appeal from New Jersey Board of Public Utilities.

Before Judges Skillman, Wells and C.S. Fisher.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 18, 2004

The issue presented by this appeal is whether the cost of relocation of public utility facilities necessitated by a flood control project constructed under the State Flood Control Act, N.J.S.A. 58:16A-1 to -17, must be paid by the State or the public utility. We conclude that the directive of N.J.S.A. 58:16A-8, that the total cost of any relocation of utility facilities required under the Act"shall be considered as a part of the cost of the work," reflects a legislative intent that the State pay the cost of such relocations.

By enactment of § 401 of the Water Resources Act of 1986 (Pub. L. No. 99-662), Congress authorized the construction of the Green Brook Flood Control Project within a sixty-five square mile watershed that encompasses parts of Union, Somerset and Middlesex counties. The project envisions the creation of 66,540 feet of levees, 11,220 feet of floodwalls, 10 bridge replacements, a bridge removal, interior drainage facilities and non-structural measures, and 8 closure structures, to provide a 150-year level of flood protection. The Water Resources Act authorizes the expenditure of $237,053,000 as the federal share of this joint federal-state project.

The State Flood Control Act (the Act), which was first enacted in 1948, L. 1948, c. 351, provides the requisite authorization for the State to participate in such a federal- state flood control project. Under this legislation, the Commissioner of the Department of Environmental Protection (DEP) is authorized"to carry out the State's participation in a Federal program of flood control." N.J.S.A. 58:16A-5. The Commissioner's powers include determining whether a flood control project requires the removal, relocation and reconstruction of public utility facilities. N.J.S.A. 58:16A-8. However, an order by the Commissioner for the relocation of public utility facilities must be approved by the Board of Public Utilities (BPU) before it becomes effective. Ibid.

In 1999, the DEP entered into a project cooperation agreement with the United States Army Corps of Engineers for construction of the Green Brook Flood Control Project. The agreement requires the State to contribute at least 25% of the total project structural costs.

To carry out this agreement, the Commissioner issued a determination order on May 24, 2001, which required various public utilities, including appellants, to remove, relocate and/or reconstruct specified facilities located within the project area. Around the same time, appellants entered into agreements with the DEP under which they reserved their rights to seek recovery of the costs associated with the relocation of their facilities from the State. The DEP took the position in both agreements that appellants were responsible for those costs.

As required by the Act, the Commissioner's order requiring the removal, relocation and reconstruction of public utility facilities in the area of the Green Brook Flood Control Project was submitted to the BPU for approval. While the matter was under review by the BPU, the Attorney General rendered a legal opinion that the costs of the relocation of such facilities must be borne by the public utilities and not by the State. In accordance with this opinion, by order dated January 17, 2002, the BPU approved the Commissioner's relocation order, and required the public utilities to bear the costs, subject to recoupment in future ratemaking proceedings.

Appellants filed separate appeals from the part of the order that requires them to bear the cost of the removal, relocation and reconstruction of their facilities necessitated by the flood control project, which we consolidated.

In their joint brief, appellants argued not only that the BPU, based on the Attorney General's advice, had incorrectly construed the Act to impose responsibility upon them for the costs of relocation of their facilities, but also that the BPU had acted beyond its jurisdiction in deciding this legal issue and had violated the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -25, and requirements of due process by deciding the issue without notice to affected parties. However, appellants agreed at oral argument that this court has jurisdiction to decide whether the Act requires public utilities or the State to pay the cost of the relocation of public utility facilities necessitated by a flood control project, and that we should decide this legal issue now rather than remanding the case to the BPU or DEP.

The common law rule is that a public utility must bear the cost of any relocation of its facilities necessitated by the construction of a public improvement project. Pine Belt Chevrolet, Inc. v. Jersey Cent. Power & Light Co., 132 N.J. 564, 572-73 (1993); Port of New York Auth. v. Hackensack Water Co., 41 N.J. 90, 97-98 (1963). However, the legislation authorizing a public project may alter this common law rule and place the financial responsibility for any required relocations of public utility facilities upon the government agency that is constructing the project. Id. at 101, 108. Therefore, the question is whether the Act reflects a legislative intent ...


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