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Northern States Power Co. v. Minnesota Metropolitan Council

August 19, 2003

NORTHERN STATES POWER COMPANY, D/B/A XCEL ENERGY, APPELLANT,
v.
MINNESOTA METROPOLITAN COUNCIL, RESPONDENT, MINNESOTA DEPARTMENT OF TRANSPORTATION, ET AL., RESPONDENTS.



Hennepin County District Court File No. 025709

Considered and decided by Schumacher, Presiding Judge, Hudson, Judge, and Forsberg, Judge.*fn1

SYLLABUS BY THE COURT

I. Dismissal of a utility's petition for a writ of mandamus is improper where there is a material factual dispute as to whether the construction and operation of a light-rail transit line will prevent reasonable access to the utility's subterranean power station.

II. A property owner need not wait until it is denied administrative permission to access its property before seeking a writ of mandamus, if the evidence shows that reasonable access to the property has been physically blocked.

The opinion of the court was delivered by: Hudson, Judge

Reversed and remanded

OPINION

Appellant Northern States Power, now known as Xcel Energy, challenges the district court's dismissal of its writ of mandamus. Xcel Energy argues the district court erred by holding that (1) there is no factual dispute in this matter; (2) Xcel Energy's claim is premature and speculative; and (3) Xcel Energy has an adequate legal remedy. Appellant also argues that the district court improperly considered evidence outside the four corners of Xcel Energy's verified petition. We reverse and remand.

FACTS

The Hiawatha Light Rail Transit project (LRT) is an 11.6-mile mass-transit system that will connect downtown Minneapolis to the Minneapolis/St. Paul International Airport and the Mall of America. Respondent Minnesota Department of Transportation (MNDoT) is overseeing the design and construction of the light-rail line, and co-respondent Minnesota Metropolitan Council (Met Council) will own and operate the transit system once it is operational.

LRT's current route through downtown Minneapolis takes the train down Fifth Street and in close proximity to the underground electrical substation owned by Xcel Energy.*fn2 The substation is comprised of four massive power transformers, each of which weighs 120 tons and is four stories tall. The transformers are housed in a subsurface vault under the plaza in front of Xcel Energy's office complex at Fifth Street and Nicollet Avenue. Xcel Energy operates this facility pursuant to a franchise agreement with the City of Minneapolis. The franchise agreement states that in exchange for an annual $18 million franchise fee, Xcel Energy has the right to use the city's "streets, alleys and public grounds" in order to distribute power in Minneapolis.

The substation is the source of 80% of downtown Minneapolis's energy. The transformers are designed in such a way that it would take a simultaneous failure of three transformers before there was a disruption in the downtown area's power supply. The roughly 1,000 similar transformers in service elsewhere enjoy a one percent failure rate. Although the transformers in Minneapolis have never needed to be replaced, statistical failure rates indicate that one transformer will need to be replaced every 25 years. Three of Xcel Energy's transformers were installed in the 1960's, and the fourth was put in place in the mid-1980's.

Replacing one of the transformers requires Xcel Energy to obtain a city permit to close Fifth Street so that it can be torn up in order to access the transformers. Because failed transformers cannot be repaired in place, two 300-ton capacity cranes must then be positioned on Fifth Street to lift the transformer out. With the construction of LRT, Fifth Street would still need to be closed off and torn up, but Xcel Energy would now need to position the two 300-ton capacity cranes on the LRT tracks in order to access the transformers. In addition, once the cranes are in place, the crane booms must be extended over the transformer vault to extricate the transformers; thus LRT's poles and overhead wires must be removed. The entire process would take approximately two months. Xcel Energy maintains that LRT's installation on Fifth Street will prevent the utility from setting up the equipment needed to access and replace their transformers. Without the Met Council's or MNDoT's permission to shut down train service and remove the train equipment from Fifth Street, Xcel Energy claims it could not access the transformers to perform these time-consuming and critical projects. Therefore, Xcel Energy argues, power supply dependability is seriously compromised, and its substation is rendered essentially worthless.

In 1999, the parties began trying to negotiate an agreement to ensure the utility's reasonable access to its substation. These initial discussions focused on moving the substation itself; however, the parties were unable to agree on their respective financial responsibilities for such an endeavor. The Met Council ultimately requested federal funding for the LRT initiative, but it did not seek funds to help offset the cost of moving the substation. Xcel Energy then refused to move its equipment without a guarantee of reimbursement. Xcel Energy brought suit against MNDoT, the Met Council, and the Federal Transportation Agency (FTA) in federal district court, seeking compensation for the cost of relocating its substation. However, in 2002, all three defendants were granted summary judgment.

Xcel Energy then filed a verified petition for alternative writ of mandamus in Hennepin County District Court seeking to compel MNDoT and Met Council to initiate inverse-condemnation procedures, arguing that the ability to access its substation is a property right, and that respondents' refusal to guarantee access renders the substation worthless. In lieu of an answer, the Met Council and MNDoT moved to dismiss for failure to state a claim.

In granting respondents' motion to dismiss, the district court concluded that (1)√°Xcel Energy did not have a right to unfettered access to its property; (2) the LRT project did not change the ultimate fact that in order to access its equipment, Xcel Energy would still need to acquire a permit from the city, and Xcel Energy had produced no facts to suggest the construction of the light-rail line would make the acquisition of this permit any more difficult; (3)√°injunctive relief provided Xcel Energy with an adequate legal remedy; and (4) Xcel Energy's petition was premature and speculative because the overhead wires are ...


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