Appeal of Pennichuck Water Works, Inc. and another (New Hampshire Public Utilities Commission)

Summary

The New Hampshire Supreme Court reviewed a New Hampshire Public Utilities Commission order approving the City of Nashua's condemnation and acquisition of Pennichuck Water Works, Inc.'s assets. The court upheld the finding that the acquisition was in the public interest, affirmed conditions imposed on the municipal operation, and agreed that the City's authority did not extend to separately incorporated affiliates that did not serve Nashua residents. The court also upheld the Commission's valuation and mitigation-fund requirements.

Holdings

1. RSA chapter 38 permits a municipality to take by eminent domain only a privately owned water utility that was engaged, at the time of the confirming vote, in distributing water for sale in the municipality. Because Pennichuck East Utilities and Pittsfield Aqueduct had never served Nashua residents, Nashua could not condemn their assets.
2. The presumption under RSA 38:3 that a municipal acquisition of a privately owned utility is in the public interest is a Morgan-theory presumption. Opponents must rebut it by demonstrating, by at least a preponderance of the evidence, that the proposed taking is not in the public interest.
3. The PUC adequately considered the evidence bearing on whether the taking served a public purpose and would produce a probable net benefit to the public. The provision of a public water supply is a constitutionally sufficient public purpose, and the court would not reweigh the PUC's balancing of the evidence.
4. RSA 38:11 authorizes the PUC to impose conditions on a municipality's acquisition of a privately owned water utility, even if the municipality will not qualify as a regulated public utility under RSA chapter 362 after the acquisition.
5. The PUC's imposition of the nine conditions did not violate the utilities' state or federal procedural due process rights because the PUC was presumed impartial and the utilities had a meaningful opportunity to address the concerns underlying the conditions.
6. The PUC's determination that the fair market value of Pennichuck Water Works' assets was $203,031,079 was supported by the record and was not legally erroneous.
7. The PUC did not err in requiring Nashua to establish a $40 million mitigation fund for customers of Pennichuck Water Works' affiliates.

Questions Presented

1. Whether RSA chapter 38 authorized Nashua to acquire by eminent domain the assets of Pennichuck East Utilities and Pittsfield Aqueduct, which had not distributed water for sale in Nashua.
2. Whether the opponents rebutted the statutory presumption that the acquisition of Pennichuck Water Works' assets within Nashua was in the public interest.
3. Whether the PUC adequately conducted the constitutionally required public-purpose and probable-net-benefit analysis under Part I, Article 12 of the New Hampshire Constitution.
4. Whether RSA 38:11 authorized the PUC to impose conditions on Nashua's acquisition even though Nashua would not ordinarily be a PUC-regulated public utility after the acquisition.
5. Whether the PUC's conditions violated the utilities' procedural due process rights.
6. Whether the PUC properly determined the fair market value of Pennichuck Water Works' assets.
7. Whether the PUC properly required Nashua to establish a $40 million mitigation fund for customers of Pennichuck Water Works' affiliates.

Disposition

affirmed