Biddeford & Saco Gas Co. v. Portland Gas Light Co.

• Decision Date: 04 October 1967
• Citation: 233 A.2d 730
• Parties: BIDDEFORD AND SACO GAS COMPANY v. PORTLAND GAS LIGHT COMPANY.
• Court: Maine Supreme Court

Page 730

233 A.2d 730

BIDDEFORD AND SACO GAS COMPANY v. PORTLAND GAS LIGHT COMPANY.

Supreme Judicial Court of Maine.

Oct. 4, 1967.

Joseph E. Harvey, John J. Harvey, Biddeford, Edward N. Gadsby, Boston, Mass., William R. Connole, Washington, D. C., for Biddeford & Saco Gas Co.

Vincent L. McKusick, Gerald M. Amero, William S. Linnell, Franklin G. Hinckley, Caspar F. Cowan, Portland, Thomas Brosnan, Gallagher, Connor & Boland, Washington, D. C., for Portland Gas Light Co.

John G. Feehan, Augusta, for Public Utilities Commission.

George A. Wathen, Augusta, for Consumers.

Before WILLIAMSON, C. J., and WEBBER, TAPLEY, MARDEN, DUFRESNE and WEATHERBEE, JJ.

MARDEN, Justice.

On appeal by Biddeford and Saco Gas Company (Biddeford) from a majority decree of the Public Utilities Commission (Commission) consenting to Portland Gas Light Company's (Portland) furnishing and extending its distribution of natural gas throughout York County and the denial of Biddeford's petition for recognition of its alleged subsisting franchise and for cancellation of its authority granted by the Commission in 1960 to abandon gas distribution service.

The issues are framed by a petition on December 23, 1965, subsequently amended, by Portland for consent from the Commission to furnish and extend its services throughout York County. Biddeford was allowed to intervene in opposition to Portland's petition. On February 3, 1966 Biddeford filed a petition asking the Commission to recognize it as the holder of a subsisting franchise to distribute natural gas in York County and also asking an annulment of the Commission's order of July 14, 1960 by which Biddeford had been authorized to abandon manufactured gas distribution services in the cities of Biddleford and Saco. Biddeford's petition, for reasons discussed below, reserved the right to question the jurisdiction of the Commission in the premises. Portland, together with a subsidiary, Southern Maine Gas Company (Southern), later changing its name to Northern Utilities, Inc. (Northern), was allowed to intervene in opposition to the Biddeford petition.

Southern was organized under the general corporation law (13 M.R.S.A. §§ 71-79) January 20, 1966 with a purpose to manufacture and sell gas, both manufactured and natural, 'in any city or town within the State of Maine.' Southern's name was changed to Northern on April 29, 1966.

By agreement, the petitions were heard together and the record consolidated. The evidence presented by Portland was offered and received on behalf, also, of Northern.

After the close of the record, Portland filed a motion that the Commission note a merger of certain other corporations, including Northern and Lewiston Gas Light Company, into Portland, and the change of the name of Portland to Northern. This motion was opposed by Biddeford and is denied by this Court. The posture of Portland and Biddeford are considered as the companies existed when the proceedings were instituted and the record made.

Because, in discussing this case, there is a distinction between grants to a corporation created by special act of the Legislature and purposes declared in certificates of organization under the general corporation law, on the one hand, and consent, in appropriate cases, by the Commission for such corporations to exercise the grants from the Legislature and their declared purposes, on the other, we shall discuss 'grants' and 'purposes' as 'powers' and the Commission consent as 'authority' to exercise the purposes and powers.

The postures respectively of Portland and Biddeford were as follows.

Portland Gas Light Company originated by special act of the Legislature (Chapter 288, P. & S L 1849) for the 'manufacture and distribution of gas for the purpose of lighting the City of Portland' and empowered to provide this service for a term of thirty years. By successive legislative actions ¹ it was empowered from time to time to increase its capitalization, its period of franchise was extended without limit, its power of distribution extended to natural gas and its service area extended to the cities of South Portland, and Westbrook, and the towns of Cape Elizabeth, Scarborough, Gorham, Windham, Falmouth, Cumberland and Yarmouth all in Cumberland County. This was Portland's franchise stance as of December 23, 1965.

In the meantime and prior to December 31, 1965, by Commission approved financing Portland brought, at an aggregate cost of approximately two and one-half million dollars, natural gas to its franchise area by the acquisition of a gas transmission company which had brought the gas from Massachusetts into the Portsmouth, New Hampshire area, and by the construction of transmission lines across the New Hampshire-Maine border and thence to Portland. It has also procured an allotment of natural gas from the Federal Power Commission.

A predecessor to Biddeford was Saco and Biddeford Gas Light Company, established by Chapter 387, P. & S L 1850, and empowered to manufacture and distribute gas 'for the purpose of lighting the towns of Saco and Biddeford.' By successive special enactments of the Legislature ² creating new companies, authorizing such new companies to take over the previous ones and extending their powers, York County Power Company (York), created by Special Act in 1913, by October 28, 1914, had authority to deal in gas within the County of York.

Cumberland County Power and Light Company (Cumberland) was created by Special Act (Chapter 256, P. & S L 1907) and empowered to deal in gas within the Counties of York and Cumberland, except the towns of Sanford and Bridgton, and to acquire the rights of other public service corporations doing business in York. Cumberland acquired the property and franchise of York on June 30, 1923.

Meantime Central Maine Power Company (Central Maine) created by Special Act (Chapter 129, P. & S L 1905), primarily for the generation and distribution of electricity, had been granted broadened purposes ³ and by instrument of merger dated June 30, 1942 and approved by the Commission November 30, 1942, absorbed Cumberland.

In addition to the approval by the Commission, Chapter 56, § 63 R.S. 1930, now 13 M.R.S.A. § 247, provided that such merger gave the surviving constituent corporation the franchise rights of the corporation merged into it.

Biddeford originated under the general corporation law in April of 1949 for the purpose of dealing with 'gas in any form * * * to public and private consumers in the cities of Biddeford and Saco and the towns of Kennebunk, Kennebunkport, North Kennebunkport, Wells, Sanford, York, Kittery, Eliot and Old Orchard Beach in the County of York, and the town of Scarborough, County of Cumberland.'

It is to be noted that the towns of Berwick, and North Berwick and South Berwick are not included.

By 35 M.R.S.A. § 2538 any company dealing in manufactured gas is empowered to deal in natural gas.

By joint petition of Central Maine and Biddeford, dated April 15, 1949 to Commission, Central Maine sought permission to transfer its gas properties and franchises, covering the manicipalities named above, to Biddeford, which petition was granted by the Commission by final decree of April 25, 1949, and authority was granted Central Maine to sell and Biddeford to acquire gas business and franchises as requested.

Assuming, without finding, that Central Maine acquired special charter rights by absorbing Cumberland through a merger agreement and the application of 13 M.R.S.A. § 247, previously referred to, the relationship between Central Maine and Biddeford was not one of merger but of vendor-vendee.

Biddeford in fact from 1949 until July, 1960, manufactured and distributed gas in the cities of Biddeford and Saco. In 1960, having converted its users from manufactured gas to liquified petroleum (bottled gas), Biddeford sought and was granted, by the Commission, permission to abandon its manufactured gas business. It transferred its bottled gas business to an affiliate company, transferred its real estate to another affiliate, retaining its network of underground distribution pipes, and the 'power' of its corporate purposes.

In 1957 Biddeford filed amendments to its certificate of organization to extend its powers to supply gas, manufactured, natural, or a combination of the two, anywhere within the State of Maine.

This was Biddeford's franchise stance as of February 3, 1966.

As against the legislatively granted powers and the corporate purposes declared in the respective certificates of organization stated above, the controversy among the parties is centered in applicable statutes. 35 M.R.S.A. § 294 in part ⁴ provides that:

'The commission may authorize any public utility organized by special Act of the Legislature to furnish or extend its service in, to or through any city or town notwithstanding any territorial limitations, express or implied, in the special Act of the Legislature by which it was organized, or in any special Act of the Legislature under which it is enfranchised, and the powers and limitations of the commission, made applicable hereunder, shall be those applicable by law in like cases concerning public utilities organized under Title 13, sections 71 to 79.' (general corporation law)

It is to be noted that the word 'authorize' as used here unquestionably refers to Commission granted 'authority,'-Commission consent, in the sense which we ascribe to it earlier in the opinion.

Section 201 provides:

'Corporations * * * for the purpose of making, generating, selling, distributing and supplying gas or electricity, * * *, for lighting, hearing, manufacturing or mechanical purposes, in any city or town, or 2 or more adjoining cities or towns, within the State, or for either or any of such purposes, may be organized under Title 13, sections 71 to...