Jurisdiction Resolved in Rate Dispute

Abstract

Sandpiper Homeowners Association (SHA) comprised homeowners living in Sandpiper Mobile Home Manor (SMHM), which obtained water from Lake Yale, a utility company owned by the SMHM owner. Since 1967, the residents paid a fixed monthly amount that included water services. In 1990, the SHA and SMHM agreed to attach any increase in the lot rental agreement to the consumer price index. Subsequently, the SMHM obtained a consumptive use permit from the local water district. The permit required that all homes be equipped with water meters and that homeowners be charged an inverted rate for water. Lake Yale then applied with the Public Service Commission (PSC) for water certificates to approve a new rate structure to implement the consumptive use permit. The application provided that the resident pay the inverted rate rather than the agreed flat charge. The SHA filed objections. The PSC ruled for Lake Yale. Lake Yale then installed meters and lowered the monthly rent by $20. The SHA sued, claiming Lake Yale had breached the lot rental and settlement agreements. Lake Yale objected, claiming that the question of water rates was a matter exclusively within the jurisdiction of the PSC, not the court. The trial court agreed and dismissed the SHA suit. The appellate court reversed the decision.