While the Public Service Commission decision in favor of Capital Electric in its dispute with Montana-Dakota Utilities over Bismarck's Boulder Ridge surprised MDU and bolstered Capital's claims, the issue is far from settled.

At present MDU has asked for a stay of the PSC's decision which will be heard by District Court Judge Donald Jorgenson on July 21.

If the stay is granted, MDU will have time to appeal the PSC decision to the PSC.

"If it doesn't go our way there are two options," according to MDU spokesman Dan Sharp. "We can ask for another stay or we can take the case to the North Dakota Supreme Court and ask them to decide."

Also, MDU will have to cease and desist from providing electric service to Boulder Ridge and from further extending its electric service in that area, as ordered by the PSC.

The PSC also stipulated that, "MDU shall offer to sell to Capital and Capital shall purchase from MDU, at book value, the distribution facilities located in and used by MDU to serve Boulder Ridge, to the extent compatible with Capital's system and not constituting an unnecessary duplication of Capital's facilities."

Meanwhile, Boulder Ridge residents are protected and don't have to worry about having their electricity cut.

PSC president Tony Clark maintains it's an issue the courts will decide. Ultimately ending up with the state's Supreme Court. He's fairly certain the district court will grant the stay of the PSC's order.

Then MDU can ask the PSC to review its decision. By bringing it back, even if the same decision is rendered, MDU can claim it has exhausted all administrative relief if it seeks to take the issue to the courts, Clark explains.

Clark also thinks MDU can go straight to the courts without an appeal of the PSC.

"An appeal to the PSC may just be a formality or they may attempt to point out something obvious we totally missed," Clark says. "It provides the PSC one last opportunity to look at the issue."

According to Clark, two different issues are at odds and only the courts will be able to decide the matter.

MDU argues that to conclude there is a violation of the state's Territorial Integrity Act, as the PSC did, a utility has to have a city franchise. Without the franchise, Capital's complaint that MDU is interfering and wastefully duplicating service, doesn't matter because the cooperative doesn't have any standing, according to Clark.

Capital maintains the city of Bismarck's franchising process is flawed and the MDU is violating a section of state law prohibiting duplication of service in a wasteful way. The PSC oversees that section of law and Clark says its plain to him that MDU is in violation and didn't even attempt to provide testimony proving otherwise in its hearing with the PSC.

"It really boils down to the franchise is either everything or it's nothing," Clark observes. "The PSC has known all along it will ultimately be up to the Supreme Court to reconcile this. The PSC's order should move the process expeditiously along."

State legislator Dwight Wrangham, who chairs Capital's board of directors, agrees that the issue will likely end up with the Supreme Court if the stay is granted. He points out the cooperative does have a limited franchise with the city that was developed in 1973 and renewed in 1993.

Wrangham noted that the Territorial Integrity Act has been in place since 1965 and has worked very well. But it also has been taken up by the Legislature every session since it was put into law.

"The purpose of the TIA is to provide for the orderly build out of facilities," Wrangham says. "The only reason for the build out of systems is to keep rates low for customers, or in the case of Capital Electric, its customers. Duplication of services causes higher rates which is not good for any of us."

According to Sharp and MDU, the Territorial Integrity Act only applied to rural areas and doesn't apply inside the city of Bismarck.

While the issue only pertains to who serves Boulder Ridge, the implications are much greater, according to everyone involved.

In fact, Clark notes that Capital Electric has filed a similar complaint with the PSC over Bismarck's Promontory Point 3rd Addition. The issue will be taken up at the Wednesday meeting of the PSC.

Clark adds that while it sounds similar in content to the Boulder Ridge complaint, the facts may well be different.

(Reach reporter Gordon Weixel at 701-250-8255 or gordon.weixel@bismarcktribune.com.)