Boggs v. Public Service Commission, 12903

• Decision Date: 15 May 1970
• Docket Number: No. 12903,12903
• Citation: 174 S.E.2d 331,154 W.Va. 146
• Court: West Virginia Supreme Court
• Parties: , 84 P.U.R.3d 174 Harry C. BOGGS v. PUBLIC SERVICE COMMISSION of West Virginia and Spencer Gas Company, a Corporation.

Page 331

174 S.E.2d 331

154 W.Va. 146, 84 P.U.R.3d 174

Harry C. BOGGS v. PUBLIC SERVICE COMMISSION of West Virginia and Spencer Gas Company, a Corporation.

No. 12903.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 11, 1970.

Decided April 21, 1970.

Dissenting Opinion May 15, 1970.

Syllabus by the Court

1. Jurisdiction of the Public Service Commission over a public utility will not be considered to be terminated unless the action of the Commission and the circumstances surrounding the case demonstrate clearly and unequivocally its intent to relinquish such jurisdiction.

2. 'Whenever any business or enterprise becomes so closely and intimately related to the public, or to any substantial part of a community, as to make the welfare of the public, or a substantial part thereof, dependent upon the proper conduct of such business, it becomes the subject for the exercise of the regulatory power of the state.' Point 5, Syllabus, Clarksburg Light & Heat Company v. Public Service Commission, 84 W.Va. 638 (100 S.E. 551).

3. Where the transmission line of a public utility has been used directly to serve retail rural consumers over a long period of time, such use constitutes a dedication of that line to the public service and such facility will continue to be so dedicated and the owner thereof will continue to operate as a public utility unless and until permission is obtained from the Public Service Commission to terminate such status.

4. The mere failure of a public utility to invoke the jurisdiction or the regulatory power of the Public Service Commission for a long period of time, or the mere failure of the Commission affirmatively to assert in any manner its jurisdiction with respect to the public service rendered does not divest the utility of its original status as a public utility.

5. 'The principle is well established by the decisions of this Court that an order of the public service commission based upon its finding of facts will not be disturbed unless such finding is contrary to the evidence, or is without evidence to support it, or is arbitrary, or results from a misapplication of legal principles.' United Fuel Gas Company v. Public Service Commission, 143 W.Va. 33 (99 S.E.2d 1).

Stone, Bowles, Kauffelt & McDavid, T. D. Kauffelt, Charleston, for petitioner.

John E. Lee, Cassius H. Toon, Charleston, for respondent Public Service Commission.

Charles E. Anderson, Charleston, for respondent Spencer Gas Co.

CAPLAN, Judge.

By its order dated October 1, 1969, the Public Service Commission of West Virginia required Harry C. Boggs 'to continue gas service to the Spencer Gas Company under the same rates and conditions heretofore agreed on by the parties until further order of this Commission or of a Court having jurisdiction.' It is from that order that Harry C. Boggs, sometimes hereinafter referred to as 'Boggs' or 'appellant', prosecutes this appeal.

This controversy began when Spencer Gas Company, on September 5, 1968, filed with the Public Service Commission its complaint against Boggs requesting the Commission to require Boggs to withdraw his demand for an increase in the price of gas being supplied to Spencer Gas and to adhere to the terms of a certain contract which was before the Commission in 1935, to which contract further reference will be made. In his answer to the complaint Boggs asserts that he is not a public utility and is therefore not subject to the jurisdiction of the Public Service Commission. This assertion fairly reflects the principal issue on this appeal--is Boggs, in the circumstances of this case, subject to the jurisdiction of the Commission?

In order to resolve this issue it is necessary to examine and consider the events which led to this controversy. Prior to and during the year 1935, a subsidiary of Commonwealth Gas Corporation, the Ohio Valley Gas Corporation, hereinafter sometimes called 'Ohio Valley', operated as a public utility, supplying and selling natural gas to consumers in Roane and Calhoun Counties, West Virginia. On November 15, 1935 Ohio Valley filed a petition with the Public Service Commission 'for the consent and approval to the sale of its franchises and natural gas distribution system serving domestic consumers in the city of Spencer, Roane County, West Virginia, and other domestic rural consumers situate in Roane and Calhoun Counties, West Virginia to SPENCER GAS COMPANY, a West Virginia corporation.' The petition set out the financial condition of the parties and designated in detail the properties to be conveyed.

These properties consisted of the natural gas distribution system in the Town of Spencer and in addition thereto certain facilities for the distribution of natural gas to rural consumers who had tapped on Ohio Valley's transmission and gathering lines. At the time of the 1935 petition there were approximately 160 rural consumers. In the present proceeding the evidence reveals that this number has increased to approximately 400. In relation to the facilities serving these rural consumers, the properties sought to be conveyed were the meters, regulators, fittings and other appliances which connected the consumers' line to Ohio Valley's transmission and gathering lines. The rural consumers continue to be served directly from the transmission line, now the property of Boggs.

It was further alleged in the petition that the proposed sale of Ohio Valley's facilities for distribution at retail of natural gas would have no effect upon the service for the reason that the service formerly furnished by the petitioner would be carried on by Spencer Gas under the terms of 'an advantageous gas supply contract, insuring to the purchaser and its consumers adequate reserves of natural gas.'

After a hearing on the petition, the Public Service Commission, by its order dated November 27, 1935, consented to and approved, upon certain conditions, the proposed sale by Ohio Valley to Spencer Gas Company. Two of these conditions were that Ohio Valley and Spencer Gas Company enter into the proposed contract which was filed in that proceeding as Exhibit No. 1, and that said parties comply with and adhere to said contract and other commitments made at the hearing as reflected by the transcript of testimony taken at said hearing. It was found by the Commission, as noted in the aforementioned order, that the public would not be inconvenienced by the sale as prayed for in the petition, provided 'that said contract shall be binding upon any successor in title of the petitioner.'

In the recitals of the contract referred to above and in the Commission's 1935 order as Exhibit 1 in that proceeding, it is stated that Ohio Valley, with the consent and approval of the Public Service Commission, sold to Spencer Gas Company all facilities theretofore owned by it, used for the distribution at retail of natural gas; that Ohio Valley still owned and operated certain transmission lines which extended from its natural gas wells to the Town of Spencer; and that Spencer Gas Company owned and operated certain other facilities used for the distribution at retail of natural gas to rural consumers, which facilities were connected to the transmission lines of Ohio Valley Gas.

By the terms of the contract Ohio Valley agreed to sell natural gas to Spencer Gas Company in such quantities as were needed by the latter to service its retail customers, for such a period of time as Ohio Valley shall have natural gas available from its then sources of supply. The agreement contained and manner of payment for the gas so sold and purchased and provisions relating to deliverability, points of delivery and other pertinent matters.

From 1935 to 1964 Ohio Valley Gas and its successors, all affiliates of Commonwealth Gas Corporation, complied with the 1935 order of the Public Service Commission and adhered to the terms of the contract referred to therein. In 1964 Commonwealth, into which Ohio Valley had merged, conveyed to Boggs its production properties and pipeline system in Roane and Calhoun Counties. In the Deed and Assignment, dated April 1, 1964, by which this conveyance was made, Boggs agreed that he would 'keep and perform all of the covenants and agreements required to be kept and performed by the party of the first part.'

From the time of that conveyance on April 1, 1964, Mr. Boggs and Spencer Gas Company engaged in the business of selling and buying natural gas in the same manner as it had been carried on in prior years by Boggs' predecessors. Several increases in the price of natural gas had been agreed upon throughout the years, the last agreed price being 38cents per Mcf.

By letter dated July 12, 1968, Boggs notified Spencer Gas Company of an increase in the price of gas, as follows: 'Effective August 15, 1968 all gas delivered to the Spencer Gas Co. will be billed at the rate of $.60 per mcf and $.10 per mcf will be charged for the transportation and measurement of make-up gas.' The make-up gas referred to is gas which Spencer Gas Company purchases from Consolidated Gas Supply Corporation and which, when needed, is transported through Boggs' transmission line. This had formerly been permitted by Boggs and his predecessors as an accommodation to Spencer Gas, no charge therefor having been made. Alleging that Boggs has threatened to terminate deliveries of gas unless his demands were met, Spencer filed this complaint.

As herein noted, the question to be answered on this appeal is whether Boggs is subject to the jurisdiction of the Public Service Commission. Much testimony was adduced at the hearing of this matter which related to the deteriorated condition of the system purchased by Boggs. He testified that it would require the expenditure of large sums of money to transform this system, consisting principally of transmission and gathering lines, into a workable and profitable venture. Boggs related that in view of these considerations he was losing money at 38cents per...