Facing budget shortfalls, King County passed a plan to charge utilities rent to use public rights of way. A judge struck down the plan.
King County utility customers will avoid increases to their bills thanks to a Superior Court judge’s ruling.
In a written ruling Tuesday, Judge Samuel Chung struck down a King County ordinance that would have charged rent to utility companies that lay electric, sewer, gas and other utilities in public rights of way in unincorporated parts of the county. Chung first issued the ruling orally in a telephone hearing on Aug. 1.
King County plans to appeal to the state Supreme Court.
The Metropolitan King County Council passed the rent plan in 2016 as the county faced budget shortfalls. County staff estimated the plan would collect about $10 million a year for the general fund, about half from electric utilities and the rest from gas, water and sewer utilities. No other county in the state has attempted a similar scheme, according to court filings.
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Electric, gas, water and sewer utilities sign franchise agreements with King County allowing them to use public rights of way like roads. Under the ordinance, each franchise agreement would have included requirements that the utilities pay the county “reasonable compensation” in return for using the right of way. That amount would have been determined by factors like the land values, size of the area and households the utility serves.
County Council members said charging utilities was a fair trade-off for access to public land. Utility companies threatened to sue and warned they would pass the increased costs on to their customers.
In a January complaint naming 21 mostly suburban water and sewer districts, King County asked the court to issue a declaratory judgment clarifying that it could charge utilities rent. The county agreed not to charge the companies under the plan while it waited for a ruling.
In court documents, lawyers for King County argued the county has broad authority under state law to regulate county roads. Chung ruled that state law does not allow the county to impose the rent without negotiation.
“The county, despite its valiant efforts and all the hard work by many smart people, cannot compel its terms unilaterally on the utilities,” Chung said in the oral ruling, according to a transcript.
The utilities are “very pleased” with the ruling, said their attorney, Eric Frimodt.
“Given we already have a right to be there, they don’t have the right to charge us rent,” said Blair Burroughs, interim executive director of the Washington Association of Sewer and Water Districts, a trade group that lobbies on behalf of utilities across the state.
King County “believes it has clear authority” to charge the rent, according to a statement provided by Cameron Satterfield, a spokesman for the county’s Department of Executive Services.
“To say we can’t do anything unless the other party agrees is to say they have absolute veto power,” said King County Councilmember Claudia Balducci, who co-sponsored the ordinance.
In 2016, county staff estimated that the rent could cost individual rate payers $3.29 a month in a “worst-case scenario” where someone is a gas, electric, water and sewer customer. Ahead of the County Council vote, Councilmember Dave Upthegrove, who co-sponsored the plan, called the charges “modest, fair and reasonable,” according to video of the meeting.
In legal filings, utilities challenged those estimates. Cynthia Lamoth, general manager of Skyway Water and Sewer District, said in a declaration that King County told the utility it planned to charge about $436,000 per year for sewer use and about $112,000 for water. Those charges would result in per-month increases of about $8.16 for sewer and $2.10 for water per customer, Lamoth said. That would “far exceed” the utility’s past rate hikes, she said.
The ordinance stated that franchises gave utility companies a “valuable property right” and that “it is in the best interests of the public to require a utility to provide reasonable compensation in return for its use of the right-of-way of county roads.”