PAGE, Justice.
This action arises out of respondent Minnesota Power's construction of a natural gas pipeline within the Cohasset city limits. Appellant City of Cohasset commenced an action for declaratory and injunctive relief against Minnesota Power seeking to require Minnesota Power to obtain a franchise from Cohasset to operate the pipeline. The district court concluded that Cohasset did not have franchise authority over Minnesota Power's pipeline and dismissed the matter. The court of appeals affirmed the district court, which we now reverse.
Cohasset is a statutory city with a population of approximately 2,500 people located in Itasca County. Minnesota Power, an operating division of Allete, Inc., provides electric service to 141,000 retail customers in northeastern Minnesota, including to residents of Cohasset. Minnesota Power's largest electric generating facility, the Boswell Energy Center, is located in Cohasset.
The Boswell Energy Center is a coal-fired electric plant that historically relied on fuel oil as an ignition source. In 2008, Minnesota Power applied to, and obtained from, the Minnesota Public Utilities Commission (MPUC) a permit for routing and construction of a pipeline to deliver natural gas to the Boswell Energy Center for use as an ignition source. Cohasset filed comments with the MPUC on Minnesota Power's permit request, reserving all rights to object to the operation of the pipeline under Cohasset's franchise power but making no objection to the route proposed by Minnesota Power for the pipeline. MPUC staff recommended that the issue of Cohasset's authority to require a franchise for operation of the pipeline was independent
About the time the MPUC granted Minnesota Power's routing permit, Cohasset commenced an action for declaratory and injunctive relief in Itasca County District Court seeking to require Minnesota Power to obtain a franchise from Cohasset to operate the pipeline. Cohasset also promulgated an ordinance requiring operators of certain gas pipelines to be subject to a franchise and to pay a franchise fee. Minnesota Power's pipeline nominally falls within the pipelines subject to the Cohasset ordinance.
The district court dismissed Cohasset's claims and denied Cohasset's motion for injunctive relief.
A divided court of appeals affirmed. City of Cohasset v. Minn. Power, 776 N.W.2d 776 (Minn.App.2010). The court's majority opinion characterized Minnesota Power as an "electric public utility" and concluded that the pipeline is not subject to Cohasset's franchise power because the pipeline itself "is not `furnishing' electricity to the public." Id. at 780. The court also concluded that Cohasset's franchise ordinance was expressly preempted by Minn.Stat. § 216G.02, subd. 4 (2010), which provides that a pipeline routing permit "supercedes and preempts all zoning, building, or land use rules, regulations, or ordinances." 776 N.W.2d at 781. The dissent argued that Minnesota Power is subject to Cohasset's franchise authority because Minnesota Power itself "is plainly furnishing utility services." Id. at 785 (Stoneburner, J., dissenting). The dissent also disagreed with the majority's conclusion that Minn.Stat. § 216G.02, subd. 4, preempted Cohasset's authority to franchise the pipeline because, in the dissent's view, the statute pertains only "to site approval and route designation," not to a municipality's franchise authority. 776 N.W.2d at 785. Cohasset petitioned for further review, which we granted.
Cohasset argues that it has franchise authority over Minnesota Power's pipeline pursuant to two Minnesota statutes—
Cohasset argues that it has the authority to require Minnesota Power to obtain a franchise under two provisions of Minnesota law—Minn. Stat. § 301B.01 and Minn. Stat. § 216B.36—both of which grant authority to municipalities to franchise certain activities within their borders. We consider each of these statutes in turn.
Cohasset relies in part on its historical franchise authority
Minn.Stat. § 301B.01. Under the plain language of the statute, Minnesota Power is obligated to obtain a franchise from Cohasset: Minnesota Power is a corporation organized to supply the public with light or power, and it has constructed, maintained, and operated a pipeline on public property within the City of Cohasset.
Minnesota Power argues that section 301B.01 does not apply here because the
Cohasset argues that it also has authority to require a franchise and payment of a franchise fee under a more recent statute, Minn.Stat. § 216B.36, specific to public utilities. Section 216B.36 permits a municipality to require a franchise of a public utility that furnishes utility services or occupies public property within the municipality and to require the payment of fees by the utility "to raise revenue or defray increased municipal costs accruing as a result of utility operations." The relevant part of section 216B.36 provides:
Minn.Stat. § 216B.36. Minnesota Statutes § 216B.02, subdivision 4, defines "public utility" and the services a public utility provides as
The plain language of section 216B.36 therefore provides that a public utility is subject to the franchise power of a municipality if the public utility (1) furnishes any of the utility services enumerated in section 216B.02 or (2) occupies streets, highways, or other public property within the municipality.
Minnesota Power contends that, because it does not furnish natural gas service to the public, its pipeline is not subject to Cohasset's franchise ordinance under section 216B.36. The question under section 216B.36 is not whether Minnesota Power provides natural gas service to the public. Rather, the question is whether Minnesota Power is a "public utility furnishing the utility services enumerated in section 216B.02." Minn.Stat. § 216B.36. There is no question that Minnesota Power furnishes electric service—one of the utility services enumerated in section 216B.02—to the public, including to customers within the City of Cohasset. Because Minnesota Power is a public utility within the meaning of section 216B.02, it is subject to Cohasset's franchise pursuant to section
Moreover, Minnesota Power's pipeline runs under three public roads (County Road 88, County Road 87, and U.S. Highway 2) within Cohasset city limits, a second basis under section 216B.36 on which Cohasset may impose a franchise. See Minn.Stat. § 216B.36 ("Any public utility. . . occupying streets, highways, or other public property within a municipality may be required to obtain a license, permit, right, or franchise. . . ."); Vill. of Blaine v. Indep. Sch. Dist. No. 12, Anoka Cnty., 265 Minn. 9, 17, 121 N.W.2d 183, 190 (1963) (noting that a franchise must be obtained "to lay pipes to conduct gas across or over the boundaries of the village, or over its streets, alleys, and public grounds if necessary"). But cf. City of St. Paul v. N. States Power Co., 462 N.W.2d 379, 385 (Minn.1990) (discussing, but ultimately distinguishing Village of Blaine in holding that two gas marketing companies, engaged only in the sale of gas, were not public utilities because they did not lay pipes or do other activities necessary to operate a utility).
Accordingly, we hold that Minnesota Power is subject to Cohasset's franchise ordinance pursuant to both Minn.Stat. § 216B.36 and Minn.Stat. § 301B.01.
Minnesota Power argues that Cohasset's franchise authority is preempted by another statute—Minn. Stat. § 216G.02, subd. 4—which provides that the issuance of a pipeline routing permit preempts "all zoning, building, or land use rules, regulations, or ordinances" promulgated by local governments. Subdivision 4 provides:
Minn.Stat. § 216G.02, subd. 4. Minnesota Power contends that section 216G.02, subdivision 4, preempts "any other local action to regulate Minnesota Power's pipeline."
We reject the argument that, by section 216G.02, subdivision 4, the Legislature intended the MPUC's issuance of a pipeline routing permit to preempt all land use rules, regulations, and ordinances related not just to the siting of the pipeline, but also to its operation and maintenance. We need not decide here the precise scope of local governments' authority to regulate the operation and maintenance of pipelines. Nor need we decide the limits of the preemptive effect under section 216G.02 of a pipeline routing permit. Rather, for purposes of our decision in this case, it is sufficient for us to conclude that the limited preemptive effect of a pipeline routing permit under section 216G.02 does not reach Cohasset's franchise ordinance, which is not a land use ordinance and which does not burden the pipeline routing permitting process.
Minnesota Power's argument also fails for two other reasons. First, section
Second, the pipeline routing permit issued to Minnesota Power by the MPUC for construction and operation of the gas pipeline at issue here specifically obligates Minnesota Power to "comply with all federal, state, county, and local rules and regulations." Therefore, even if Minnesota Power's interpretation of section 216G.02, subdivision 4, were correct—a proposition that, as discussed above, we reject—Minnesota Power is nevertheless obligated to comply, under the terms of the pipeline routing permit itself, with Cohasset's franchise ordinance.
Reversed and remanded.
PAGE, J., Concurring, GILDEA, C.J., and MEYER, J.
GILDEA, Chief Justice (concurring).
I agree with the majority that Minnesota Power's natural gas pipeline is subject to the franchise authority of the City of Cohasset. Specifically, I agree that the City's franchise authority is not preempted by the pipeline routing statute. See Minn. Stat. § 216G.02, subds. 2-3 (2010) (requiring "a pipeline routing permit" for the construction of certain pipelines and authorizing the Public Utilities Commission to "adopt rules governing the routing of pipelines"). Nonetheless, because the majority's discussion of the preemption issue is limited, I write separately to make clear that we have not altered our established framework for analyzing preemption issues.
Minnesota Power argues that the City's franchise authority is preempted by the pipeline routing statute, which provides that the issuance of a pipeline routing permit by the Minnesota Public Utilities Commission preempts all local "zoning, building, or land use rules, regulations, or ordinances":
Minn.Stat. § 216G.02, subd. 4 (2010). Because the pipeline routing statute contains a specific preemption clause, our analysis should focus on "the language of the statute." City of Morris v. Sax Invs., Inc., 749 N.W.2d 1, 6-7 (Minn.2008) (stating the factors we consider when the Legislature has "impliedly declared" an area to be "a matter solely of state concern" and explaining that this analysis does not apply when a statute "contains specific language as to the extent of permissible municipal regulation" (citation omitted) (internal quotation marks omitted)).
By its express terms, the pipeline routing statute "preempts all zoning, building, or land use rules, regulations, or ordinances." Minn.Stat. § 216G.02, subd. 4. Therefore, the issue here is whether the
In this case, the City's ordinance requires a franchise for the operation of a designated natural gas pipeline within the City. Cohasset, Minn., Ordinance No. 44, § 2 (2008). The franchise ordinance provides that no person shall "[o]wn, construct, maintain, or operate" a pipeline or "[f]urnish services within the City" without a franchise granted by the City. Id. The franchise ordinance also requires the payment of a franchise fee for operating a pipeline within the City. Id. § 3.
I conclude that the franchise ordinance is not a "zoning, building, or land use" ordinance within the meaning of the pipeline routing statute. Minn.Stat. § 216G.02, subd. 4. First, the franchise ordinance is not a zoning ordinance, because the franchise ordinance does not regulate the location of pipelines within the City. See Calm Waters, LLC v. Kanabec Cnty. Bd. of Comm'rs, 756 N.W.2d 716, 723 (Minn.2008) (explaining that "zoning" generally means the legislative division of an area "`into separate districts with different regulations within the districts for land use, building size, and the like'" (quoting Black's Law Dictionary 1649 (8th ed.2004))). Next, the franchise ordinance is not a building ordinance, because the franchise ordinance does not regulate the construction or design of pipelines. See City of Minnetonka v. Mark Z. Jones Assocs., Inc., 306 Minn. 217, 220, 236 N.W.2d 163, 165 (1975) (construing the term "building code" to encompass regulations that affect the "construction and design" of structures). Finally, the franchise ordinance is not a land use ordinance, because the franchise ordinance does not regulate the specific use or development of land within the City. See Peter W. Salsich, Jr. & Timothy J. Tryniecki, Land Use Regulation: A Legal Analysis and Practical Application of Land Use Law 1 (2d ed.2003) (explaining that land use regulations generally focus on different aspects of the use and development of land, such as types and density of use).
By limiting the scope of the preemption clause to matters of zoning, building, and land use, it is clear that the Legislature intended to preempt only ordinances that purport to regulate the location and routing of pipelines. Furthermore, Minnesota Power's broad reading of the preemption clause creates a conflict between the pipeline routing statute and other statutes that expressly authorize cities to impose a franchise on public utilities. See Minn.Stat. § 301B.01 (2010) (barring the construction, maintenance, or operation of a pipeline on public property without a franchise from the city); Minn.Stat. § 216B.36 (2010) (providing that a public utility "may be required to obtain a license, permit, right, or franchise in accordance with the terms, conditions, and limitations of regulatory acts" of a municipality). For these reasons, I conclude that the City's franchise ordinance is not preempted by Minn.Stat. § 216G.02, subd. 4.
MEYER, Justice (concurring).
I join in the concurrence of Chief Justice Gildea.