STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

September 16, 1975

Mr. Gerald Andrews, Commissioner
Bureau of Administration
Capitol Building
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 75-158

SDCL 49-34A (Senate Bill 261) is not applicable to Bureau of Administration, purchase of electric power for the state cement plant.

Dear Mr. Andrews:

You have requested an official opinion from this office based on the following facts:

State law gives the commissioner of administration the authority and responsibility to negotiate for electric power service to state institutions. Generally, the state cement plant is exempt from mandatory compliance with the state purchasing statutes. The cement plant has, however, recently requested that the bureau of administration negotiate for future electric power delivery contracts.

Presently Black Hills Light and Power is the wheeling agent to the cement plant for bureau of reclamation electric power. In seeking competitive bids for a future power supplier to the state cement plant for the time when bureau of reclamation power is no longer available, Black Hills Light and Power contends the state of South Dakota is acting contrary to Senate Bill 261, passed by the 1975 Legislature.

Based on the above facts you ask:

Can the Bureau of Administration proceed to seek competitive proposals for supplying power to the state cement plant?

The question you raise necessarily involves an analysis of how territorial power rights granted under SDCL 49-34A relate to the competitive bid provisions of SDCL 5-23. The question is not an easy one to answer, but it does appear to me that the better view is that SDCL 49-34A in effect nullifies competitive bidding as an option in the fact situation you present.

SDCL 49-34A-6 provides that the Public Utilities Commission is empowered, authorized and directed to regulate all rates, fees and charges for the public utility service of all public utilities. SDCL 49-34A-1(l2) defines public utility as being:

Any person operating, maintaining or controlling in this state equipment or facilities for the purpose of providing gas, or electric service at retail to or for the public or its members, in whole or in part, in this state; provided however the term shall not apply to a municipally owned electric utility for the purpose of § 49-34A-2 to 49-34A-4, inclusive, 49-34A-6 to 49-34A-41, inclusive, 49-34A-62, and 49-34A-63;

To the degree that SDCL 5-23 conflicts with SDCL 49-34A in the matter of requiring bids for electric service at the cement plant, the provisions of SDCL 49-34A must control. Not only is SDCL 49-34A the most recent expression of the legislative intent here, but the breadth and scope of SDCL 49-34A in the field of utility "rate" and "service area" regulation require this conclusion.

Our courts clearly maintain the position that they abhor repeal of statutes in whole or in part by implication. Baird v. Mall, 57 S.D. 309, 232 N.W. 47 (1930); Brookings County v. Sayer, 53 S.D. 350, 220 N.W. 918 (1928). Nonetheless, our state Supreme Court has recognized that when a later statute contains similar enactments and there is an unavoidable repugnancy between the two, repeal by implication is effected. Argo Oil Corp. v. Lanthrop, 72 N. W. 2d 431 (1955). It is my opinion that such a repugnancy exists here between SDCL 5-23 and SDCL 49-34A insofar as the matter of competitive bids for state cement plant electric power is concerned. For this reason, therefore, 1 cannot conclude that SDCL 5-23 has any controlling effect relating to the question you raise which would require the opposite result.

I do not intend to imply that it is my judgment that SDCL 5-23 has been repealed. It is my opinion, however, that SDCL 49-34A in effect constitutes a limitation upon the scope and the breadth of the application of SDCL 5-23.

SDCL 49-34A-42 provides:

Each electric utility shall have the exclusive right to provide electric service at retail at each and every location where it is serving a customer as of March 21, 1975, and to each and every present and future customer in its assigned service area and no electric utility shall render or extend the electric service at retail within the assigned service area of another electric utility unless such other electric utility consents thereto in writing; provided, that any electric utility may extend its facilities through the assigned service area of another electric utility if the extension is necessary to facilitate the electric utility connecting its facilities or customers within its own assigned service area.

It appears to me that the state cement plant is a customer within the scope of SDCL 49-34A. The facts available to this office clearly indicate that the cement plant has in fact used standby power provided by Black Hills Power and Light and, in fact, is also billed regularly for such standby service.

SDCL 49-34A-1(3) defines a customer as being "any person contracting for or purchasing gas or electric service at retail from a utility." A person is defined in SDCL 49-34-1(11) to include any political subdivision or agency. This, in my view, would include the state cement plant or the Bureau of Administration.

A customer is also, pursuant to SDCL 49-34A-I(3), a person who purchases gas or electric service at retail. The obvious thrust of this provision is to exclude from the definition of customer such persons who purchase gas or electric service on a wholesale basis. Obviously, therefore, one needs to consider the term "retail."

SDCL 49-34A does not contain an explicit definition of "retail." Subdivision 6 of SDCL 49-34A, however, does give an implicit definition of what the Legislature understood "retail" to be. Subdivision 6 of SDCL 49-34A-1 provides:

"Electric service," electric service furnished to a customer at retail for ultimate consumption, but not including wholesale electric service furnished by an electric utility to another electric utility for resale.

It is my judgment that "retail" as used in SDCL 49-34A refers to sales to a customer for ultimate consumption, the exception being wholesale sales to another utility for resale. I believe both SDCL 49-34A as well as the legislative history and intent of the chapter support this view.

In view of the above arguments and authority it is my conclusion that the state cement plant is not free to contract for power from a supplier other than the supplier for its assigned service area. SDCL 49-34A-42, 43, and 44 lead to the inescapable conclusion that as of the present time, purchase of future state cement plant power is to be from Black Hills Power and Light Company.

This office deeply regrets the loss of the full benefits of healthy competition guaranteed by competitive bidding procedures. In view of what the Legislature has provided in SDCL 49-34A, however, it is my regretful conclusion that the state no longer enjoys the benefits of healthy competition provided for in SDCL 5-23 in relation to the purchase of power for the state cement plant.

Respectfully submitted,

William Janklow
Attorney General

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