With the North Dakota Supreme Court having made its decision regarding electrical service to Bismarck's Boulder Ridge, Montana-Dakota Utilities and Capital Electric Cooperative are in a position to work out an Area Service Agreement that will benefit each of them and their customers.

The Supreme Court, on Friday, announced its unanimous decision that service to Boulder Ridge subdivision in north Bismarck belonged to Capital Electric. It took more than seven months for the decision to be handed down. Meanwhile, two other Bismarck subdivisions will likely be disputed before the Public Service Commission - Sonnet Heights and Promontory Point III.

Public Service Commissioner Kevin Cramer said that the complaints regarding the two subdivisions are similar in nature, and the PSC had put them on a back burner until a decision was returned by the Supreme Court. When the PSC meets in August, the two cases likely will be put on the calendar for hearings.

The Supreme Court's decision did little to change the role of the PSC, Cramer said, which will continue to look to the Territorial Integrity Act to guide its decisions.

"What would have changed our role is if the decision had gone the other way," Cramer said. "What will likely change is what the parties involved - the two utilities and the city - will do."

There had been some expectations that the court would address the apparent conflict between the cities' right to provide franchises and the Century Code's Territorial Integrity Act prohibiting wasteful duplication of services aimed at protecting rural cooperatives.

"What the court did not do, it did not settle any constitutional questions about the Territorial Integrity Act," Cramer said. "There were people at some levels of government hoping they (judges) would do that."

Cramer said the Bismarck City Commission took the hardest hit. The commission's decision to award Boulder Ridge's electrical service to MDU was called arbitrary, capricious and unreasonable.

"Basically, the judges said the city's decision was just plain wrong," Cramer said. "To me, the most surprising part was the overturning of the city's decision. How will the city respond?"

Bismarck Mayor John Warford said he also was surprised by the court's decision.

"But we have to respect the court's decision," Warford said. "I hope both companies can move on and find some type of agreement that is equitable in dividing up the power users in a manner both companies can benefit."

In fact, all parties involved - the city, MDU, Capital Electric and the PSC - agree that an Area Service Agreement needs to be developed by the two utilities.

Cramer said the city missed an opportunity to force the issue when it renewed franchises for the utilities. Part of that renewal could have contained provisions for an Area Service Agreement.

But the mayor said he doesn't want to force either business into anything. The city commission has strongly recommended that MDU and Capital negotiate an agreement that spells out what areas the companies serve.

"We've said all along that it was sad that this had to turn into a legal battle," Warford said. "That is over now. If they still want to negotiate an Area Service Agreement, we are open to that. We can't tell businesses how to operate."

MDU spokesman Dan Sharp said the two companies have been negotiating an Area Service Agreement for the past two years, though they have been waiting on the court decision.

"Both parties agreed they have to do something that makes sense while serving the customers' best interest,"Sharp said. "We haven't arrived at a decision since we've been waiting on the Supreme Court's ruling. We'll continue meeting and intend on coming to an agreement.

The court's decision provided some leverage for Capital, Sharp said, but it was expected that whichever side the court's decision fell on, that company would be in a better position to negotiate the Area Service Agreement.

The agreement is necessary, and neither company can afford to continue to dispute service through the legal system, Sharp said.

"It's costly for both companies and doesn't do either company's public relations in the community any good," he said. "We both provide good service at about the same rates. This just leaves the people of Bismarck scratching their heads. An Area Service Agreement would serve both utilities and the consumer, and it will also satisfy the direction the city commission has given us."

Capital Electric attorney Carol Larson also said that the utilities have been meeting regularly to negotiate a new agreement.

"The city asked for that, and we are taking it to heart," Larson said. "Throughout the litigation, we have been willing to meet and have been. We are negotiating in good faith and hope to have a long-term resolution."

MDU and Capital Electric have coexisted for a long time and are partners in many respects, both Sharp and Larson said.

"Our facilities are connected all around town, and we share joint electric lines," Sharp said. "MDU is joined at the hip with Capital Electric all around Bismarck, and this assures reliability and the least possible cost if we share and cooperate with each other. That's good news for everyone."

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