State v. Public Service Corporation of Texas, 8358.

• Citation: 88 S.W.2d 627
• Decision Date: 06 November 1935
• Docket Number: No. 8358.,8358.
• Parties: STATE et al. v. PUBLIC SERVICE CORPORATION OF TEXAS.
• Court: Court of Appeals of Texas

Page 627

88 S.W.2d 627

STATE et al. v. PUBLIC SERVICE CORPORATION OF TEXAS.

No. 8358.

Court of Civil Appeals of Texas. Austin.

November 6, 1935.

Rehearing Denied November 27, 1935.

Appeal from District Court, Travis County; C. A. Wheeler, Judge.

Suit by the Public Service Corporation of Texas against the State of Texas and others, wherein defendant Railroad Commission of Texas filed a cross-action. From a judgment dismissing the entire proceedings, the Railroad Commission of Texas appeals.

Reversed and remanded, with directions.

Wm. McCraw, Atty. Gen., Alfred M. Scott, Asst. Atty. Gen., and F. L. Kuykendall, of Austin, Chief Examiner, Gas Utilities Division, Railroad Commission of Texas, for appellant.

Slay & Simon, of Fort Worth, and Ben H. Powell, of Austin, for appellee.

BLAIR, Justice.

This litigation arose as follows: After notice and hearing the Railroad Commission of Texas promulgated an order which "Decreed * * * that from and after December 1, 1934, the Public Service Corporation of Texas shall not charge and/or set up on its books as an operating expense more than twenty-seven (27¢) cents per M.C.F., for domestic natural gas at the city gate of any towns in Texas served by it."

The order further provided that the cause be kept open, and subject to change after notice and hearing.

Appellee Public Service Corporation of Texas, herein called the Utility, instituted this proceeding against the members of the Railroad Commission and others, herein called the Commission, seeking a temporary restraining order, an interlocutory injunction, and ultimately a permanent injunction, restraining the Commission from attempting to enforce the provisions of said order; the Utility alleging that the Commission was without authority or jurisdiction to make the order, because its business consisted of a single unit, engaged in the production, transportation, and distribution of natural gas for domestic, industrial, and commercial purposes; and in which business only a burner tip charge or rate was collected, and no city gate rate was charged or carried on its books, except it does supply gas at a city gate rate to an independent distributing company serving the town of Spearman, under a contract made prior to the institution of its present single-unit system; and that the amount of gas delivered to Spearman is inconsequential. The Utility further alleged that the 27 cent rate was unjust and unreasonable and confiscatory, because the rate would not afford a reasonable return on the property used in the public service.

By answer and cross-action the Commission set up a general demurrer and sought to have the order complained of declared valid, just, and reasonable, and to perpetually restrain the Utility from violating it.

By supplemental petition appellee Utility addressed a general demurrer to the answer and cross-action of the Commission to the effect that the Commission had no authority or jurisdiction to fix the city gate rate; and that the order was not binding upon the Utility, and would not be res adjudicata in any future hearing to determine the fair burner tip rate to be charged in any city or town served with gas by it.

The trial court sustained both the general demurrer of the Commission and of the Utility, and, upon each declining to amend, dismissed the entire proceedings; from which action the Commission alone has appealed.

The facts alleged show that appellee Utility's business consisted of a single unit, under a single ownership, and was engaged in the production, transportation, and distribution of natural gas for domestic, industrial, and commercial purposes from the wellhead to the ultimate consumer or user, in several cities and towns in Texas; that in such business the Utility only charged burner tip rates, and did not carry on its books any city gate rate or charge, except it does supply gas under a contract made prior to the institution of its present single business system on a city gate rate basis to an independent distributing company servicing the town of Spearman with gas.

The Utility contends that the Commission had no authority, power, or jurisdiction to fix a uniform city gate rate for gas applicable to all cities and towns in Texas supplied with gas by the gas pipe line and distributing system of the Utility, particularly as to the cities and towns in which the pipe line and distribution system of appellee Utility serves gas to the burner tip consumer or user within the cities and towns, unless the Commission at the same time or in the same proceeding also fixes the burner tip rate. Differently stated: Does the Commission have the authority, power, or jurisdiction under its regulatory supervision of appellee Utility to require it not "to charge and/or set up on its books as an operating expense more than twenty-seven (27¢) cents per M.C.F. for domestic gas at the city gate of any town in Texas served by it," over the objection of the Utility that such gate rate would not be binding upon it and would not be res adjudicata in any future hearing to determine a fair burner tip rate to be charged in any city or town served with gas by it? We have reached the conclusion that the Commission had the authority, power, and jurisdiction to promulgate and enforce the order complained of; and that, until set aside or modified in a proper proceeding by the Commission or by the court on appeal, the rate order is binding upon appellee Utility, and res adjudicata of such matters in any hearing which may thereafter be had for the purpose of determining a fair and reasonable burner tip rate for any city or town served with gas by appellee Utility.

Article 6023, R.S.1925, confers full and complete authority, power, and jurisdiction upon the Railroad Commission to regulate and control and "to make all necessary rules and regulations for the government and regulation" of all persons, associations, or corporations owning or engaged in the common carrier or private gas pipe line business, or engaged in the drilling or the operation of gas wells; and to regulate and supervise the "operations" of all kinds of business engaged in the production, transportation, distribution, and sale of natural gas to the public for domestic or other use.

Articles 6050, 6051, 6052, and 6053 classify the various kinds of business engaged in producing, transporting, delivering, and selling natural gas to the public for domestic or other use, and declare each to be a public gas utility, affected with the public interest, and subject to the regulation and control of the Commission. Every such gas utility is required to keep "books, accounts, papers, records, receipts, vouchers, and other data required by the Commission," in an office in Texas. Gas pipe lines engaged in producing, buying, transporting, delivering, or otherwise dealing in natural gas are each declared to be a public utility, affected with the public interest, and in nature and...