Request By:
Hon. Junior McDole
McLean County Judge-Executive
P.O. Box 127
Calhoun, Kentucky 42327
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Thomas R. Emerson, Assistant Attorney General
Your recent letter raises a question concerning a municipal requirement that the purchaser of property pay the delinquent water bill before water service to the premises is restored. Apparently the property in question had previously been rental property and a prior renter had not paid for water received at the premises.
Most utility services are operated much like a commercial business with each customer contracting individually for the specific services actually used. We do not know the specific terms of the contract between the city water company and those persons to whom it provides water but that is not a critical factor here.
Generally, the consumer of public utility services is liable in contract for the charges for those services. See 64 Am.Jur.2d Public Utilities, § 60. Where a utility discontinues service for nonpayment of a disputed amount or liability, it does so at its peril, and, if in the wrong, is liable for compensatory damages in any event, and, under some circumstances, for punitive damages. 64 Am.Jur.2d Public Utilities, § 64. A public utility, under the generally recognized rule, has no right (in the absence of statutory authorization) to cut off service to the premises until the arrears from a former owner or occupant are paid. 64 Am.Jur.2d Public Utilities, § 67.
Under Kentucky case law, as set forth in Puckett v. City of Muldraugh, Ky., 403 S.W.2d 252 (1966), a city may, pursuant to an appropriate ordinance, require that the owner of the property be held accountable for the renter's unpaid utility bills. See OAG 82-493, copy enclosed. The Puckett case, supra, appears to still represent the law in Kentucky but, nationally it would be the minority view. Note, however, that the Puckett case was cited with approval in Morrical v. Village of New Miami, 16 Ohio App.3d 439, 476 N.E.2d 378 (1984). In the situation with which you are concerned, the city did not collect for the services rendered from either the prior property owner or the former renter.
In McQuillin Mun. Corp. (3rd Ed.), Vol. 12, § 35.35d, it is stated that termination of service is a reasonable remedy for nonpayment when invoked against a customer who contracted to pay for such services. In addition, many municipal utilities require deposits from persons with whom they contract before services are begun. Thus municipal utilities have remedies at their disposal relative to customers who do not pay their bills.
The court, in Myers v. City of Alcoa, 752 F.2d 196 (6th Cir. 1985), said that municipal public utilities in Tennessee are obligated to provide service to all inhabitants of the city without discrimination and without denial, except for good and sufficient cause. A recipient of electrical service in Tennessee has a property right in the continuation of that service. Once a property interest has been created, federal due process attaches to protect the interest from being extinguished without some type of pretermination hearing.
In OAG 82-256, copy enclosed, at page three, this office said in part as follows:
A public utility is, of course, under a legal obligation to serve the members of the public to whom its operations extend impartially and without unjust discrimination. 'A public utility must serve alike all who are similarly circumstanced with reference to its system, and favor cannot be extended to one which is not offered to another, nor can a privilege, given one be refused to another.' See 64 Am.Jur.2d, Public Utilities, § 38. Discrimination is not unjust if it rests on a classification based on substantial differences and as long as like service is rendered to consumers conducting like operations under like circumstances . . .
In conclusion, it is the opinion of this office that the city cannot deny municipal water service to an applicant on the grounds that neither the former owner of that property or a former renter have paid for water previously furnished to that premises. Each applicant and each application for water service have to be considered on his and its own merits with the same tests and standards being applied as are applied relative to other new applicants and applications.