[¶1] Nodak Electric Cooperative, Inc., appeals, and Otter Tail Power Company cross-appeals, from a district court judgment affirming the Public Service Commissions order relating to electric service in the City of Drayton. We reverse the judgment and vacate the PSCs order, concluding the PSC lacked jurisdiction to rule on Nodaks complaint.
I
[¶2] Otter Tail provides electric service to Drayton under a franchise agreement. In August 2019, Drayton annexed to the city property known as McFarlands Addition. In November 2019, an entity purchased a portion of McFarlands Addition with the intention of building a truck stop. In April 2020, Drayton passed a resolution requiring Otter Tail to provide electric service to McFarlands Addition.
[¶3] Nodak provides electric service to rural customers outside of Drayton. Nodak does not provide service to any customers in McFarlands Addition; however, it has a line running across the south side of McFarlands Addition. Nodak does not have a franchise from Drayton to provide electric service in the city.
[¶4] In July 2020, Nodak filed a complaint against Otter Tail, requesting the PSC to prohibit Otter Tail from extending electric service to McFarlands Addition. Nodak alleged Otter Tails service would interfere with Nodaks existing service and be an unreasonable duplication of services. In response, Otter Tail claimed the PSC lacked jurisdiction over Draytons decision on which provider could extend service within the city.
[¶5] Otter Tail moved to dismiss Nodaks complaint, arguing Drayton had a constitutional right to choose which service provider to use. Otter Tail claimed N.D. Const. art. VII, § 11, grants Drayton the exclusive authority to franchise electric service within the city. Otter Tail asserted Nodaks complaint with the PSC invited the PSC to invalidate the franchise between Otter Tail and Drayton for electric service within the city. Otter Tail argued the PSC lacked authority to grant Nodak its requested relief of providing electric service in Drayton because Nodak lacked a franchise to provide service in Drayton.
[¶6] After a hearing, the PSC denied Otter Tails motion to dismiss, denied the relief sought in Nodaks complaint and dismissed the complaint. The PSC concluded Otter Tails extension into McFarlands Addition would not cause interference with Nodaks service and would not result in unreasonable duplication of services. Nodak appealed the PSCs decision to the district court. Otter Tail cross-appealed. The court affirmed the PSCs decision. Nodak appeals and Ottertail cross-appeals the district courts judgment.
II
[¶7] An appeal from a decision of the PSC is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Cap. Elec. Coop., Inc. v. City of Bismarck, 2007 ND 128, ¶ 30, 736 N.W.2d 788. In an appeal to this Court from a district courts decision on an appeal from a PSC decision, this Court reviews the PSCs order in the same manner as the district court. N.D.C.C. § 28-32-49. Under N.D.C.C. § 28-32-46, the district court must affirm the PSCs order unless:
“1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agencys rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.”
The PSCs decision on questions of law is fully reviewable. Cap. Elec., at ¶ 31.
III
[¶8] Otter Tail and Drayton claim the constitution grants Drayton the exclusive authority to franchise electric service. They argue the PSC did not have jurisdiction to rule on the merits of Nodaks complaint because Nodak lacked a franchise to provide electric service in Drayton.
[¶9] Article VII, § 11, N.D. Const., provides, “The power of the governing board of a city to franchise the construction and operation of any public utility or similar service within the city shall not be abridged by the legislative assembly.” See also N.D.C.C. § 40-05-01(57) (stating municipalities have the power “[t]o grant franchises or privileges to persons, associations, corporations, or limited liability companies.”).
[¶10] The PSCs jurisdiction is limited to that provided by the legislature. Envt L. & Poly Ctr. v. N.D. Pub. Serv. Commn, 2020 ND 192, ¶ 11, 948 N.W.2d 838; Cap. Elec. Co-op., Inc. v. Pub. Serv. Commn of State of N.D., 534 N.W.2d 587, 589 (N.D. 1995). The term “jurisdiction” has three components in the administrative context:
“(1) personal jurisdiction, referring to the agencys authority over the parties and intervenors involved in the proceedings; (2) subject matter jurisdiction, referring to the agencys power to hear and determine the causes of a general class of cases to which a particular case belongs; and (3) the agencys scope of authority under statute.”
Envt L. & Poly Ctr., at ¶ 11. A party may raise the issue of subject matter jurisdiction at any time. Great Plains Royalty Corp. v. Earl Schwartz Co., 2021 ND 62, ¶ 12, 958 N.W.2d 128. When raised, the jurisdictional issue is predominant:
“Jurisdiction precedes adjudication. Before a court may say anything worth listening to regarding the (de)merits of a partys claim, that court must have authority to speak. That court has such authority only when the claim is one within the courts subject matter jurisdiction and after the court has acquired personal jurisdiction of the parties. If the court is without jurisdiction—subject matter or personal—no one is bound by anything the court may say regarding the (de)merits of the case.”
Smith v. City of Grand Forks, 478 N.W.2d 370, 373 (N.D. 1991) (quoting Petters v. Petters, 560 So.2d 722, 723 (Miss. 1990)).
[¶11] Chapter 49-03, N.D.C.C., governs electric utility franchises and is known as the Territorial Integrity Act. Cap. Elec. Co-op., Inc., 534 N.W.2d at 588. As defined in the Act, Otter Tail is an “electric public utility,” and Nodak is a “rural electric cooperative.” N.D.C.C. §§ 49-03-01.5(2) and (6). Both entities are “electric providers” under N.D.C.C. § 49-03-01.5(1).
[¶12] Under the Act, an electric public utility must obtain a certificate of public convenience and necessity from the PSC before extending electric service outside a municipality. Cap. Elec. Co-op., Inc., 534 N.W.2d at 590; N.D.C.C. §§ 49-03-01 and 49-03-01.1. The Act “explicitly gives the PSC jurisdiction to hear and determine an electric public utilitys application for a certificate of public convenience and necessity to extend service to areas outside the corporate limits of a municipality.” Cap. Elec. Co-op., Inc., 534 N.W.2d at 591.
[¶13] An electric public utility need not obtain a certificate of public convenience and necessity to extend its electric service within a citys corporate limits where it has commenced lawful operations. N.D.C.C. § 49-03-01.3. However, a public utilitys extension within a citys corporate limits “shall not interfere with existing services provided by a rural electric cooperative or another electric public utility within such municipality; and provided duplication of services is not deemed unreasonable by the commission.” Id. If an electric public utility “interferes with or threatens to interfere with the service or system of any other electric public utility or rural electric cooperative,” the aggrieved party may file a complaint with the PSC. N.D.C.C. §§ 49-03-01.4(1) and 49-03-05. After notice and hearing, the PSC may restrain or enjoin the electric public utility “from constructing or extending its interfering lines, plant, or system.” N.D.C.C. § 49-03-01.4(1). The concluding sentence of N.D.C.C. ch. 49-03 provides, “Nothing in this chapter shall be construed to limit the authority of a governing board of a city to exercise its franchise authority under section 40-05-01.” N.D.C.C. § 49-03-06(8).
[¶14] Here, Otter Tail lawfully provides Drayton electric service under a franchise agreement. After the annexation of McFarlands Addition, Drayton passed a resolution stating “Otter Tail Power Company is obligated under its existing franchise agreement to provide electrical service to McFarlands Addition.” Nodak filed a complaint against Otter Tail, alleging Otter Tails proposed extension of service to McFarlands Addition would interfere with Nodaks existing service and be an unreasonable duplication of services.
[¶15] The PSC declined to address Otter Tails motion to dismiss and constitutional argument, concluding “[s]uch determination may be better suited for [the] judiciary to decide.” The PSC further concluded, “However, N.D.C.C. § 49-03-01.3 provides that the Commission has jurisdiction to prevent interference with existing services and unreasonable duplication caused by an electric utility extension.” The district court also declined to address Otter Tails constitutional argument, concluding “this Court reviews the Commissions Order and the Commissions Order does not address those issues.” The court concluded Nodaks appeal could be resolved on the merits without addressing the constitutional issue.
[¶16] Otter Tail and Drayton claim N.D. Const. art. VII, § 11 grants Drayton the exclusive authority to franchise electric service. They contend that because Nodak does not provide electric service to McFarlands Addition or have a franchise to provide electric service in Drayton, the PSC lacked authority to rule on the merits of Nodaks complaint. Otter Tail and Drayton do not argue the Territorial Integrity Act is unconstitutional; rather, the Act must be read in conjunction with a citys constitutional authority to franchise electric service. Otter Tail argues the PSC has jurisdiction to hear the complaint only if both Otter Tail and Nodak are authorized to provide electric service in the city. We agree.
[¶17] In Cap. Elec. Coop., Inc. v. City of Bismarck, 2007 ND 128, ¶ 5, 736 N.W.2d 788, Montana-Dakota Utilities Company (MDU), an electric public utility, and Capital Electric Cooperative, a rural electric cooperative, sought to extend electric service to an annexed area of Bismarck. Both electric providers had franchises to provide electric service within Bismarck. Id. at ¶¶ 2-3. Bismarck decided MDU was entitled to provide service to the annexed area. Id. at ¶ 6. Capital Electric filed a complaint with the PSC, seeking to enjoin MDU from providing service to the annexed area. Id. at ¶ 8. After a hearing PSC decided Capital Electric was entitled to provide service to the annexed area. Id.
[¶18] On appeal, we recognized a citys constitutional and statutory franchise authority. Cap. Elec., 2007 ND 128, ¶ 12, 736 N.W.2d 788 (citing N.D. Const. art. VII, § 11 and N.D.C.C. § 40-05-01(57)). After recognizing both MDU and Capital Electric had franchises to provide electric service in Bismarck, we stated:
“Under North Dakota law, Capital Electric must have a franchise to serve Boulder Ridge after that area was annexed to Bismarck. See Montana-Dakota Utils. Co. v. Divide County Sch. Dist., 193 N.W.2d 723, 730-31 (N.D. 1971) (holding right of electric cooperative without franchise to provide electric service to area outside city terminated when area became annexed to city that required franchise to provide service within city). If both MDU and Capital Electric have franchises to provide electric service to Boulder Ridge, the PSC has authority to decide whether either entitys extension of services in Boulder Ridge will unreasonably interfere with and duplicate services of the other under N.D.C.C. § 49-03-01.3 and this Courts decisions culminating in Cass County Elec. Coop. v. N.S.P., 419 N.W.2d 181 (N.D. 1988), and N.S.P. v. P.S.C., 452 N.W.2d 340 (N.D. 1990). In Cass County Elec. Coop., 419 N.W.2d at 183, both a public utility and a rural electric cooperative were authorized by the City of Fargo to serve the South Pointe area that had been annexed to Fargo. This Court decided the PSC must look at both entities’ existing facilities in the entire surrounding area to determine whether the public utilitys extension of services into South Pointe would constitute an unreasonable duplication of capital-intensive facilities and services already provided by the rural electric cooperative and remanded for further proceedings. Id. at 187. After remand, this Court held that a preponderance of evidence supported the PSCs decision that the public utilitys extension of services into the South Pointe area was a duplication of the electric cooperatives facilities in the area. N.S.P., 452 N.W.2d at 345.
․
“We conclude the ‘non-exclusive’ franchises, when construed as a whole and in conjunction with the area service agreement, authorize both Capital Electric and MDU to provide electric service in Bismarck as ‘now, or hereafter constituted’ and Capital Electrics franchise does not preclude it from serving Boulder Ridge. The practical effect of interpreting the franchises to give both Capital Electric and MDU a franchise in the Boulder Ridge area is that the issue of unreasonable duplication is subject to the jurisdiction of the PSC under N.D.C.C. § 49-03-01.3 and this Courts decisions culminating in Cass County Elec. Coop., 419 N.W.2d at 181, and N.S.P., 452 N.W.2d at 340. In the absence of any explicit language providing otherwise, we believe that interpretation ultimately favors the publics interest in preventing unreasonable duplication of facilities, while recognizing a municipalitys constitutional authority to grant a franchise. That interpretation does not interfere with Bismarcks constitutional authority to issue a utility franchise; rather, that interpretation recognizes that Bismarck has granted both Capital Electric and MDU a franchise for Boulder Ridge.”
Cap. Elec., at ¶¶ 13, 27. This Court concluded both MDU and Capital Electric had a franchise to serve the annexed area of Bismarck, and the PSC had jurisdiction to hear Capital Electrics complaint and decide the issue of unreasonable duplication of services under N.D.C.C. § 49-03-01.3. Cap. Elec., at ¶¶ 13, 27. We interpreted the PSCs authority to decide disputes arising under N.D.C.C. § 49-03-01.3 to avoid conflict with Bismarcks constitutional authority to franchise public utilities. Cap. Elec., at ¶ 27.
[¶19] Under the Territorial Integrity Act, the PSC has jurisdiction when an electric public utility proposes to extend electric service outside the corporate limits of a municipality. Cap. Elec. Co-op., Inc. v. Pub. Serv. Commn of State of N.D., 534 N.W.2d at 591; N.D.C.C. §§ 49-03-01 and 49-03-01.1. However, when a public utility extends electric service within a citys limits, the PSCs jurisdiction is limited by the citys constitutional authority to franchise electric service. If the utilitys extension threatens to interfere with another electric providers authorized service within the city, the PSC has jurisdiction to decide whether there would be interference or an unreasonable duplication of services. Cap. Elec., 2007 ND 128, ¶ 27, 736 N.W.2d 788; N.D.C.C. § 49-03-01.3.
[¶20] Here, Drayton exercised its constitutional franchise authority and contracted with Otter Tail to provide electric service in the city. Nodak does not have a franchise to provide service in Drayton, nor did it provide service to McFarlands Addition. After Drayton annexed McFarlands Addition, Drayton passed a resolution obligating Otter Tail to provide service to McFarlands Addition under the existing franchise agreement. See Montana-Dakota Utils. Co. v. Divide Cty. Sch. Dist., 193 N.W.2d at 729 (stating a citys powers are extended to annexed property).
[¶21] Otter Tail is not extending its service outside Draytons city limits under N.D.C.C. § 49-03-01.1. Additionally, Otter Tails extension will not interfere with another existing lawful service nor be an unreasonable duplication of services under N.D.C.C. § 49-03-01.3 because Nodak does not provide electric service to McFarlands Addition or have a franchise with Drayton. Therefore, the PSC was without jurisdiction under N.D.C.C. ch. 49-03 to hear Nodaks complaint.
[¶22] Otter Tails motion to dismiss should have been granted because the PSC did not have jurisdiction to hear Nodaks complaint. The district court erred in affirming the PSCs order because the “order [was] not in accordance with the law.” N.D.C.C. § 28-32-46(1). Therefore, we reverse the judgment and vacate the PSCs order.
IV
[¶23] We have considered the parties’ remaining arguments and conclude they are either without merit or not necessary to our decision. We reverse the judgment and vacate the PSCs order.
Crothers, Justice.
[¶24] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte