Article XII Section 5 California Constitution
The resolution of a conflict between legislative regulation of a municipal public utility under article XII and municipal control under the municipal affairs doctrine is directed by the provision in article XII, section 5.
It provides that the Legislature has "plenary power, unlimited by the other provisions of this constitution . . . to confer additional authority and jurisdiction upon the commission . . . ." This direction is reiterated in article XII, section 8: "a city, county, or other public body may not regulate matters over which the Legislature grants regulatory power to the Commission except pursuant to a city charter existing on October 10, 1911 . . . ."
These directions make manifest that, with the exception noted, the specific regulatory power over public utilities granted under article XII supersedes a claim to the same power under the theory that it is a matter of municipal affairs. No other meaning can be ascribed to the language.
In City of Pasadena v. Railroad Commission (1920) 183 Cal. 526, the Supreme Court opined that the Legislature was not authorized under the predecessor of article XII, section 5, former article XII, section 23, to confer authority and jurisdiction on the Railroad Commission, the predecessor to the PUC, to regulate municipal utilities.
The Supreme Court reasoned that because section 23 applied only to "private corporations" and individuals it "does not include municipal corporations among the public utilities it deals with." 15 (183 Cal. at p. 530.)
In County of Inyo v. Public Utilities Com. (1980) 26 Cal. 3d 154, the Supreme Court disapproved this reasoning. " Article XII is not limited to common carriers and transportation companies, over which the commission has had jurisdiction since 1879, but deals with public utilities of all forms.
Thus possible legislation conferring PUC jurisdiction over municipally owned water companies, selling beyond municipal borders or even within such borders, would fall clearly within the scope of present article XII, section 5." (26 Cal. 3d at p. 164.)