208 P. 622 (Kan. 1922), 24,307, State v. The Kansas Natural Gas Company

Docket Nº:24,307
Citation:208 P. 622, 111 Kan. 809
Opinion Judge:MARSHALL, J.:
Party Name:THE STATE OF KANSAS, ex rel. A. E. HELM, as Attorney for the Public Utilities Commission, Plaintiff, v. THE KANSAS NATURAL GAS COMPANY, Defendant, THE WYANDOTTE COUNTY GAS COMPANY, Intervenor
Attorney:A. E. Helm, of Topeka, for the plaintiff. H. O. Caster, and Robert D. Garver, both of Bartlesville, Okla., for the defendant. J. W. Dana, of Kansas City, Mo., for the intervenor.
Case Date:July 08, 1922
Court:Supreme Court of Kansas
 
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Page 622

208 P. 622 (Kan. 1922)

111 Kan. 809

THE STATE OF KANSAS, ex rel. A. E. HELM, as Attorney for the Public Utilities Commission, Plaintiff,

v.

THE KANSAS NATURAL GAS COMPANY, Defendant,

THE WYANDOTTE COUNTY GAS COMPANY, Intervenor

No. 24,307

Supreme Court of Kansas

July 8, 1922

Decided July, 1922.

Original proceeding in mandamus.

SYLLABUS

SYLLABUS BY THE COURT.

JURISDICTION--Public Utilities Commission--Power to Regulate Sale of Gas Transported from Another State. The state through the public utilities commission has the power to regulate the sale of natural gas in this state by fixing a reasonable price therefor where the gas is produced in Oklahoma, transported through pipe lines into this state, and here sold to distributing companies that in turn sell the gas to the consumers thereof in a large number of cities in this state.

A. E. Helm, of Topeka, for the plaintiff.

H. O. Caster, and Robert D. Garver, both of Bartlesville, Okla., for the defendant.

J. W. Dana, of Kansas City, Mo., for the intervenor.

OPINION

MARSHALL, J.:

Plaintiff seeks to compel the defendant to reestablish and maintain a rate of thirty-five cents a thousand for gas delivered by it to distributing companies operating in a number of cities in the eastern part of the state. The defendant has filed its return and answer to the petition of the plaintiff. To that return and answer the plaintiff has filed a combined reply and demurrer. The cause is presented on the demurrer to the answer.

The facts disclosed by the pleadings, so far as necessary to state them for the consideration of the matters presented, are as follows: The defendant is producing gas in Oklahoma and Kansas and transmitting it from Oklahoma through Kansas and into Missouri and is supplying towns and cities in Oklahoma, Kansas, [111 Kan. 810] and Missouri with natural gas. The defendant does not furnish gas to the consumers; it sells gas to the distributing companies in various cities, and these companies deliver the gas to the consumers. The pipe lines conveying the gas are continuous from the wells to the place of consumption. The rate, fixed by order of the federal court and approved by the public utilities commission, has been thirty-five cents per thousand cubic feet of gas to companies distributing and selling gas in various cities in this state. That was the legal rate. On April 1, 1922, defendant notified the various distributing companies that after the April 1, 1922, meter reading the rate charged would be forty cents per thousand cubic feet. Upon that notice being given, this action was commenced to compel the defendant to deliver gas to the distributing companies for thirty-five cents per thousand cubic feet.

The plaintiff argues--

"1. That the defendant is a public utility under the laws of Kansas, and that its business of selling natural gas, transported in interstate commerce, is subject to regulation by the Public Utilities Commission of the state of Kansas.

"2. That the business of selling natural gas by the defendant to the distributing companies at the gates of the cities served by said distributing companies is local and not national in character.

"3. That until congress asserts its jurisdiction over the subject and provides for the regulation of the sale of natural gas in interstate commerce, the states may enact laws providing for the reasonable regulation of the business."

The defendant contends that--

"The business of The Kansas Natural Gas Company is national in character and not subject to direct regulation by the state."

The controversy revolves around this question: Does the state of Kansas have power to regulate the price at which gas shall be sold by the defendant to the distributing companies? It is admitted by all the parties that the business of the defendant in transporting natural gas is interstate commerce. In The State, ex rel., v. Flannelly, 96 Kan. 372, 152 P. 22, it was said:

"Assuming that the sale of natural gas produced in Oklahoma, from there transported into this state through pipe lines and here sold to consumers throughout the state is interstate commerce, it is not national in its nature, it does not admit of one...

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