United Fuel Gas Co. v. Public Service Commission

• Decision Date: 01 March 1927
• Docket Number: 5905.
• Citation: 138 S.E. 388,103 W.Va. 306
• Parties: UNITED FUEL GAS CO. v. PUBLIC SERVICE COMMISSION et al.
• Court: West Virginia Supreme Court

138 S.E. 388

103 W.Va. 306

UNITED FUEL GAS CO. v. PUBLIC SERVICE COMMISSION et al.

No. 5905.

Supreme Court of Appeals of West Virginia.

March 1, 1927

Submitted February 15, 1927.

Rehearing Denied May 27, 1927.

Syllabus by the Court.

The Public Service Commission has jurisdiction, when right and justice require it, and it would be unreasonable and unjust to do otherwise, to deny the application of patrons of one utility to compel another to duplicate the service and to also serve the applicants.

When a patron of one natural gas utility is being satisfactorily and amply served by it, it would be an unreasonable, unjust and arbitrary exercise of the power of the Public Service Commission to compel another utility to duplicate the service at great expense not called for by the facts and circumstances of the service.

And when an order of the Public Service Commission requiring such duplication of service is based on a mistake of law and amounts to an unreasonable, unjust and arbitrary exercise of its powers, this court has jurisdiction by statute and will in the interest of right and justice, set aside and annul such order, and dismiss the petitions of the applicants for such duplication.

Appeal from Public Service Commission.

Petition by the Huntington Brick & Tile Company against the United Fuel Gas Company, in which the Huntington Development & Gas Company intervened. From an order of the Public Service Commission, requiring the United Fuel Gas Company to furnish the complainant with a supply of natural gas, the United Fuel Gas Company appeals. Order set aside, reversed, and annulled and petition dismissed.

Hatcher P., and Woods, J., dissenting.

Harold A. Ritz, of Charleston, for petitioner.

F. M. Livezey, of Huntington, for Public Service Commission.

Philip P. Gibson, of Huntington, for Huntington Brick & Tile Co.

W. C. W. Renshaw, of Huntington, for Huntington Development & Gas Co.

Paul W. Scott and George S. Wallace, both of Huntington, amici curiae.

MILLER J.

The relief sought by the petitioner, the United Fuel Gas Company, is the indefinite suspension of the order of the Public Serivce Commission promulgated December 4, 1926, upon the petition of the Huntington Brick & Tile Company against the United Fuel Gas Company, and the dismissal of the former's petition. In the proceeding in which that order was made, the Huntington Development & Gas Company intervened to protect its interests therein as a public service corporation.

The order was made by a divided commission, two of three concurring therein, one being against it. It required, for the reasons set forth in the written report to this court, that the United Fuel Gas Company should furnish the complainant, upon its compliance with the authorized rules and regulations of the utility, with a supply of natural gas at its plant at or near the city of Huntington.

And it further ordered that upon the installation of such service by the United Fuel Gas Company, the intervenor, the Huntington Development & Gas Company, if it so desired, to discontinue its service to the complainant, the last being a polite but unwelcome invitation to an ignominious death, for without patrons its death would be assured.

Historically, the United Fuel Gas Company was first upon the ground, before the advent of the Public Service Commission, with exclusive contracts with the industrial and private consumers to insure it against ruinous competition in the service of natural gas. The Huntington Development & Gas Company was later, and after the Public Service Commission was created by law, organized by some of the industrial and private consumers and others who were ready and willing to breach their contracts with the United Fuel Gas Company, to enter the same field as a competitor, particularly for the supply of industrial gas, and was given a franchise for that purpose by the city of Huntington, and entered the field as a competitor, receiving the patronage of practically all consumers of industrial gas, at a reduced schedule of rates from those fixed by the United Fuel Gas Company, and as the undisputed evidence shows, forcing the latter out of the market for such industrial gas and much of the domestic gas, and at great expense to seek a market in Kentucky and Ohio cities. The Huntington Brick & Tile Company was and continues to be served by this competitive company, and it has made no complaint of that service. The supply of gas, it is admitted, is ample and persistent; and the only complaint lodged with the Public Service Commission was that the rates fixed by the commission for the United Fuel Gas Company were considerable lower than those fixed as reasonable and just by the commission for the Huntington Development & Gas Company, and that it desired the advantage of the lower rates of the former company.

The defense to the application interposed by the United Fuel Gas Company was that it did not have the gas with which to serve the applicant as desired; that it would cost it to make the connections desired with its mains at least $750.00, and $550.000.00 to equip itself to supply gas to complainant, and about $1,160,000.00 to supply gas to all the consumers of the Huntington Development & Gas Company; and that then it would be able to furnish no better supply of gas than was being obtained from the other company.

The commission was no doubt greatly influenced in reaching its conclusion by the facts elicited from officers of the United Fuel Gas Company respecting the present relationship of both utilities to the Columbia Gas & Electric Company, a holding company, now the owner of 51 per cent. of the capital stock of the United Fuel Gas Company, and 49 per cent. of the stock of the Ohio Fuel Supply Company, and of a controlling interest in the Huntington Development & Gas Company; wherefore, it was considered that they might with right and justice relieve the one utility and cast its burdens on the other without substantial injury to the rights and interests of either company, which we think can hardly be justified upon any principles applicable to public utilities subject to its control and supervision. There is no community of interest, so far as the record shows, between the utilities involved here. The Columbia Gas & Electric Company was not before the commission, and the commission's order could not directly affect the rights of that company. And what has become of the rights of the minority stockholders of the utilities involved here? The directors are bound to administer the properties for the benefit of all stockholders, minority as well as majority.

But the principal ground for the relief granted seems to have been that the commission was without jurisdiction to deny the relief prayed against the United Fuel Gas Company, being one of the two utilities operating under franchises granted by the municipality; that being a public service corporation it is bound to supply all applicants regardless of all the circumstances and conditions relied on as a defense against such enforced service. These matters of defense relied on were presented by demurrer and answer of the United Fuel Gas Company, the petition of the intervenor, and the demurrer and answer of the complainant thereto. There are no material facts in dispute. The facts established are:

First. That complainant is now being served with a satisfactory supply of gas by the intervening petitioner, and that the United Fuel Gas Company would not be able to render any better service.

Second. That petitioner made complaint, not because of any failure of service by the intervening company, but for the sole purpose of getting the service at a lower rate, to which the United Fuel Gas Company had been limited by the commission.

Third. That the applicant is not personally in a position to serve the complainant without the expenditure of large sums of money for increased supply and facilities, and that other industrial and domestic consumers, as evidenced by at least one application already filed, and other portended by the several groups of counsel who have intervened with briefs as amici curiae, will be demanding like service, and for no better reason, and with like result to the intervenor.

The question of the commission's jurisdiction to deny the relief sought by complainant will be first disposed of. Sections 4, 5, 10 and 11, of chapter 15-O of the Code, give the commission almost unlimited power and authority to control the facilities, charges and services of all public service corporations and to hear the complaints of those entitled to the services. The only limitation upon this authority is that the requirements shall not be contrary to law, and that they shall be "just and fair," "just and reasonable," and "just and proper;" and the jurisdiction of this court to review the orders of the commission, as provided by section 16 of said chapter, and within the proper limitations which we have prescribed, is to "decide the matter in controversy as may seem to be just and right." We will not undertake to interpose our judgment against the finding of facts by the commission, nor to judge as to what is the better policy, if left to its discretion and judgment.

It is very manifest from the state and federal statutes on the subject, that the principal purposes of all commission regulation of public service corporations is to require uniformity in rates, prevent unjust discrimination in rules and practices by them, and unnecessary duplications of plants and facilities, and unjust burdens upon the public resulting therefrom, or ruinous competition between persons and corporations employed in the public service; and certainly we can find no justification in statute law or judicial decisions, for such...