Without much deliberation, the Bismarck City Commission awarded electrical franchise rights for the Boulder Ridge subdivision to Montana-Dakota Utilities Co.

While this ended months of speculation on which company the city commission would choose - Capital Electric Cooperative or MDU - the decision doesn't necessarily mean the dispute is ended. The Public Service Commission has scheduled a Dec. 13 hearing based on a complaint filed by Capital Electric against MDU.

At Monday's special city commission meeting, originally set to specifically address the franchise issue, the commissioners allowed no outside input in their discussion, other than questions asked of city attorney Charlie Whitman.

"We, as a commission, had been hopeful the parties would have gotten together and come up with an agreement," Mayor John Warford said. "Seeing and hearing that they haven't, it's this board's decision in regards to Boulder Ridge."

Warford provided commissioners with a draft report from the city attorney summarizing the issue. Boulder Ridge, located in north Bismarck, is a 75-lot development belonging to Jack Knutson. Both utilities have lines in place to provide service to Boulder Ridge. Capital Electric said that a past area service agreement gives it franchise rights to the recently annexed area until 2013, while MDU said it effectively ended the agreement, freezing Capital Electric's limited franchise rights, with a memo sent to the cooperative in June 2002.

In researching the issue, Warford said he believed it was the intent of the 1973 commission, and the later 1993 commission, that provided and renewed the Capital Electric franchise that Capital Electric is limited to those customers already being served as they are annexed into the city.

"It was their (commissions) intentions that Capital Electric and MDU meet and make amendments to the area service agreement as the city grew, with MDU as the primary franchise," Warford said. "The intent of the original franchise provided Capital Electric - my interpretation - is that it does not give them everything outside the (area service agreement) line."

Commissioner Bryce Hill said it needs to be stressed that Capital Electric's is a "limited" franchise, with areas of service specifically laid out.

"I think we have to move on, and the bottom line is we need to work this out," Hill said. "The whole issue dealing with Boulder Ridge, from my perspective, is something that MDU should have."

Commissioner Connie Sprynczynatyk pondered the question of whether the franchise issued Capital Electric was intended to be restrictive or expansive.

"I went back through all the information that was provided and just looked for language that seemed limiting or expansive," Sprynczynatyk said. "I found all sorts of language that was restrictive, none that was expansive. I'd be hard-pressed to believe that the action taken by the city commission was to create two franchises operating at the same level."

Commissioner Dave Jensen, absent from the hearing held in October, said it was the intention of the earlier commissions to allow utilities to serve anyone they could serve, providing a more competitive atmosphere. Whitman said that, for companies to compete within the city, infrastructure would have to be duplicated, making it inefficient and uneconomical for a newcomer.

Hill made the motion to award the Boulder Ridge franchise rights to MDU, seconded by Commissioner Sandi Tabor. The motion passed 4 to 1, with Jensen voting against.

"As we studied this issue, we felt this is the only decision that could have been made,"MDU spokesman Dan Sharp said. "If you read the franchise agreements, it is clear that MDU's franchise is general for the city, and Capital's is limited."

Should the PSC hear the complaint as scheduled for Dec. 13, MDU will make the argument that the PSC does not have jurisdiction in the matter.

"The North Dakota Constitution and Century Code make it very clear the state Legislature cannot pass any laws that abridge a municipality's right to award a franchise," Sharp said. "Our argument is that it's a local issue, Bismarck has ruled and the PSC had no jurisdiction."

Capital Electric general manager Lars Nygren said the utility is greatly disappointed in the action taken by the commission. Nygren said that no decision has been made on whether to pursue the complaint through the PSC.

"We're reviewing all of our options at this time. We want to sit down and review the finding of the city commission, and we've made no decisions relative to this decision,"Nygren said. "We've made a huge investment predicated on that area service agreement and the franchise with the city of Bismarck. We're not sure what this all could mean."

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