Court grants EPUD, not SUB, right to serve rural area.

Byline: Joe Harwood The Register-Guard

The Oregon Supreme Court last week settled a turf dispute between two local utilities that disagreed over who was eligible to provide service to a 900-acre swath of land southeast of Springfield.

The court ruled that the Emerald People's Utility District, which serves much of the rural area surrounding Eugene-Springfield, could not be expelled from a state-allocated exclusive service territory that includes the Jasper-Natron area, even when that tract is annexed by a city.

The spat dates back to 2001, when the Springfield Utility Board filed a lawsuit seeking to prevent EPUD from serving new homes on 12 acres northeast of Jasper Road recently annexed to the city.

Springfield has long designated the Jasper-Natron area for a mix of residential, commercial and industrial development. Redmond-based home builder Hayden Watson began opening up the area with the 50-home first phase of his Jasper Meadows subdivision, which will eventually include 380 homes.

SUB officials contended that they have the right to provide service to all development that occurs within the city limits of Springfield. SUB alleged its charter and the city's charter gave it exclusive rights to exclude or eject other utilities from serving property in the city. As development occurs in the Jasper-Natron area, it is annexed into the city.

For its part, EPUD argued that the Oregon Public Utility Commission granted it an exclusive service territory that includes the Natron area in 1983. Under that argument, state law trumped city law.

SUB also claimed that under the Oregon Constitution's "home rule" provisions, the state PUC could not interfere with the authority of a municipal electric utility to serve all customers in a city, because the utility is an "organ" of the city government.

But the court sided with EPUD, finding that local authority must bow before state jurisdiction "when a local enactment is found to be incompatible with a state law in an area of substantive policy."

Frank Lambe, EPUD's general manager, said plans are in the works to meet with SUB officials to work out a transition arrangement The two utilities decided in 2001 that SUB would serve the area until the litigation ran its course.

Bob Linahan, general manager of SUB, said he was disappointed with the ruling, but that SUB would work to make a smooth transition.

"We were formed to serve the people of Springfield," Linahan said. "We weren't looking to expand our boundaries outside the city limits."

Customers already in the court-defined Natron area won't pay more for electricity after the transition, Lambe said.

EPUD, with about 18,000 customers, charges about 37 percent more than SUB for residential services using the average of 1,500 kilowatt-hours of electricity, Linahan said.

"The customers there won't be charged a higher rate," Lambe said. "We always honor the lower rate." But those homeowners coming in after the transition will pay EPUD's regular rate, he said.