In re Appication of McFayden

• Decision Date: 15 May 1931
• Docket Number: 5671
• Citation: 50 Idaho 651,299 P. 671
• Parties: In re Application of JOHN MCFAYDEN and L. B. DENNING for a Certificate of Convenience and Necessity and PUBLIC UTILITIES COMMISSION OF THE STATE OF IDAHO, Respondents, v. PUBLIC UTILITIES CONSOLIDATED CORPORATION, a Corporation, Appellant
• Court: Idaho Supreme Court

299 P. 671

50 Idaho 651

In re Application of JOHN MCFAYDEN and L. B. DENNING for a Certificate of Convenience and Necessity and PUBLIC UTILITIES COMMISSION OF THE STATE OF IDAHO, Respondents, v. PUBLIC UTILITIES CONSOLIDATED CORPORATION, a Corporation, Appellant

No. 5671

Supreme Court of Idaho

May 15, 1931

PUBLIC UTILITIES COMMISSION-POWERS OF-RULES-CERTIFICATE OF CONVENIENCE AND NECESSITY.

1. Compliance with or waiver of Public Utilities Commission's rules as to verification of applications for certificates of convenience and necessity and filing of maps is within commission's sound discretion (C. S., sec 2478).

2. Reception of testimony, offered by applicants not verifying application for certificate of convenience and necessity nor filing map pursuant to Public Utilities Commission's rules, held not abuse of its discretion (C. S., sec. 2478).

3. Application for certificate of convenience and necessity disclosing that proposed service would be provided by corporation to be organized by applicants, held not contrary to statutory requirements (C. S., sec. 2476).

4. As between two public utilities companies with like ability to furnish like service, company already serving field has right to preference.

5. Corporation supplying manufactured gas held not entitled to protection from competition with natural gas service.

6. Protection of existing investments from wasteful competition must be treated by Public Utilities Commission as secondary to adequate public service.

7. Granting or withholding of certificate of convenience and necessity is exercise of state's power to determine whether general public's interests will be advanced by proposed enterprise.

8. State regulates municipal public utilities through Commission to avoid wasteful competition without necessary regulation and expense of duplication.

9. Public Utilities Commission cannot force parties desiring to sell natural gas at retail to furnish it through company already supplying manufactured gas or to purchase latter company's plant as condition precedent to granting certificate of convenience and necessity.

10. Grant of certificate of convenience and necessity for natural gas service held within Public Utilities Commission's authority and not violation of constitutional rights of company already supplying manufactured gas (Laws 1921, chap 72, sec. 3).

APPEAL from the Public Utilities Commission of the State of Idaho.

Appeal from order granting certificate of convenience and necessity. Affirmed.

Order of the Public Utilities Commission affirmed. Costs to respondents.

Merrill & Merrill, for Appellant.

Where a public utility is occupying a given field and rendering satisfactory service and is controlled by a Public Utilities Commission, such utility is entitled to protection against ruinous competition, and to grant a writ of public convenience and necessity to another utility of like character invades the constitutional right of the existing utility by taking its property without due process of law. (Pond on Public Utilities, 3d ed., sec. 901; Bartonville Bus Line v. Eagle Motor Coach Line, 326 Ill. 200, 157 N.E. 175; Gilmer v. Public Utilities Com., 67 Utah 222, 247 P. 284; Kansas Gas & Electric Co. v. Public Service Com., 124 Kan. 690, 261 P. 592; United Fuel Gas Co. v. Public Service Com., 103 W.Va. 306, 138 S.E 388; People v. Public Service Com., 195 N.Y. 562, 88 N.E. 261; Choate v. Illinois Commerce Com., 309 Ill. 248, 141 N.E. 12; Weld v. Gas & Elec. L. Com., 197 Mass. 556, 84 N.E. 101; Idaho Power Co. v. Blomquist, 26 Idaho 222, Ann. Cas. 1916E, 282, 141 P. 1083.)

If the Commission was justified in granting a certificate in any event in this case it should have limited its scope by omitting the field served by the existing utility and requiring the sale of gas to appellants if public necessity required the product. (C. S., sec. 2474; Re Mutual Telephone & Electric Co., (Ida.) P. U. R. 1917E, p. 399; Kansas Gas & Elec. Co. v. Public Service Com., 124 Kan. 690, 261 P. 592.)

Hawley & Worthwine, Jones, Pomeroy & Jones and Fred J. Babcock, Attorney General, and M. H. Greene, Assistant Attorney General, for Respondents.

As to pleading, it is generally, held that no strictness is required in proceedings before a Public Utilities Commission. In the case of Southern Ry. Co. v. Railroad Com., 42 Ind.App. 90, 83 N.E. 721, the appellate court of Indiana said:

"No strictness of pleadings is required in proceedings before the Railroad Commission, and the commission is vested with ample power to frame its orders as the substantial justice of the case may require, irrespective of the relief asked for in the petition."

Similarly the Supreme Court of Missouri, in the case of State v. Public Service Com., 277 Mo. 175, 210 S.W. 386 said:

"The technical exactness of court pleadings is not required in complaints filed before the commission; it is not a court, but . . . . a committee created by the legislature to make findings of fact and orders based thereon. . . . "

The relative rights of an applicant and a utility occupying the field have been more clearly determined in the state of Idaho than in any other state in the Union. In In re Idaho Light & Power Co., P. U. R. 1915A, p. 2, this Commission said:

"It certainly is true that where a territory is served by a utility which has pioneered in the field, and is rendering efficient and cheap service and is fulfilling adequately the duty which, as a public utility, it owes to the public, and the territory is so generally served that it may be said to have reached the point of saturation as regards the particular commodity in which such utility deals, then certainly the design of the law is that the utility shall be protected within such field; but when any one of these conditions is lacking, the public convenience may often be served by allowing competition to come in."

McNAUGHTON, J. Budge, Givens and Varian, JJ., concur.

OPINION

McNAUGHTON, J.

This is an appeal from an order of the Public Utilities Commission of Idaho granting to John McFayden and L. B. Denning a certificate of convenience and necessity to construct, maintain and operate gas transmission lines, distribution lines and systems, and to supply gas for light, heat, power and other purposes in the counties of Franklin, Oneida and Bannock, in the state of Idaho, and to the cities of Preston, Malad and Pocatello, and the towns of Downey, McCammon and Franklin in the state of Idaho, and to the inhabitants thereof.

The proceeding is narrowed to a contest between a utility furnishing manufactured gas and a utility offering to furnish natural gas for the field at Pocatello and its suburb. The appellant Public Utilities Consolidated Corporation now occupies, and it and its predecessors for twenty years have occupied, the Pocatello field furnishing manufactured gas.

The applicants offer to procure an extension of the natural gas pipe line now serving Salt Lake City and Ogden, in which they are interested, into Idaho, and offer to construct, maintain and operate gas transmission lines and systems for the purpose of supplying natural gas for light, heat, power and other purposes in the communities referred to.

After a full and exhaustive hearing before the Public Utilities Commission the application was granted.

The Public Utilities Consolidated Corporation appeals, questioning the right of the Commission to grant the certificate as to Pocatello and its suburb Alameda, now being served manufactured gas by appellant.

The appeal is predicated upon eleven specifications of error. However, chap. 72 of the 1921 Session Laws provides:

"The review on appeal shall extend no further than to determine whether the commission has regularly pursued its authority, including a determination of whether the order appealed from violates any rights of the appellant under the constitution of the United States or of the State of Idaho."

Appellant's assignments are grouped and treated under these two general heads, and will be so considered by us.

It is claimed, first, the Commission did not regularly pursue its authority in receiving the testimony offered by respondents pursuant to their petition because the application did not conform in several particulars pointed out to rules 5 and 6, promulgated by the Commission.

Rule 5 provides: "Every application must be verified by the applicant. If the applicant is a corporation or association any officer or director thereof may verify the application." In this case it appears neither the application of petitioners nor the remonstrance of appellant is verified personally by the individual or officers of the corporation on account of absence from the state, but both are verified upon personal knowledge by their respective attorneys.

Objection also was made that no map of the contemplated new construction was filed as required by rule 6. It appeared the respondents had no such maps, intending to avoid the expense of detailed surveys and maps unless they could secure a certificate of necessity from the Commission authorizing them to enter Pocatello. However, respondents offered to make and file such maps before beginning construction, should certificate of necessity be granted them, and they were ordered to do this. Other less specific defects were pointed out.

Rule 10 provides: "In special cases, for good cause shown, the Commission may permit deviations from these rules in so far as it may find compliance therewith to be impossible or impracticable."

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