Utah Gas Service Co. v. Mountain Fuel Supply Co.

Decision Date16 January 1967
Docket NumberNo. 10624,10624
Partiesd 310, 68 P.U.R.3d 53 UTAH GAS SERVICE COMPANY, a corporation, Plaintiff, v. MOUNTAIN FUEL SUPPLY COMPANY, a corporation, and Public Service Commission of Utah, Defendants.
CourtUtah Supreme Court

Gustin & Richards, Salt Lake City, for appellant.

B. Z. Kastler, Jr., John Crawford, Jr., Glen M. Hatch, Phil L. Hansen, Atty. Gen., Salt Lake City, for respondent.

CROCKETT, Chief Justice.

Utah Gas Service Company seeks reversal of an order of the Public Service Commission which grants defendant Mountain Fuel Supply Company authority to extend its natural gas distribution system to serve Bonanza, Uintah County, and rejects the counter-petition of plaintiff that it be allowed to prove this service.

Bonanza is a small mining town about 45 miles southeast of Vernal, near the Colorado border. American Gilsonite Company owns all of the buildings and other facilities therein, about 52 units, all of which are used in mining gilsonite and in housing and servicing the workers stationed there. There had been some interest in obtaining natural gas service since 1952, when it was first discovered near there, but nothing was done about acquiring it until just before this proceeding was initiated. It seems to have been sparked by the fact that Mountain Fuel Supply Company was building a pipeline and facilities co-ordinate thereto for the transportation of natural gas from Rangely Field in western Colorado to Utah, which pipeline passed within about a mile of Bonanza. Inquiries were made by officials of the American Gilsonite Company by telephone and by letters to the Public Service Commission dated September 22 and November 16, 1965. Meanwhile, between those dates, on October 19, 1965, Mountain Fuel Supply filed an application with the Commission for authority to serve Bonanza and vicinity. The plaintiff filed its objection and counter-petition, requesting that it be given the right to render such service and that the Commission order Mountain Fuel Supply to furnish it gas at wholesale, which it would in turn retail through a distribution system it would establish at Bonanza.

Plaintiff complains about the lateness of the time and the manner of notice it received. In regard thereto we make these observations:

In proceedings before an administrative agency what a party is entitled to is to be treated with fairness: to have the opportunity to prepare and present his case and his contentions with respect thereto; 1 and to have an adjudication in conformity with the law; and the decisions of the Commission will not be overturned because of irregularities of procedure from which there is no substantial prejudice or adverse effect. The matters plaintiff complains of are not of any such consequence. It in fact received notice, filed its protest and counter-petition; and was in no way limited or prevented from full participation in the proceedings.

The distribution and sale of natural gas for heating and other domestic and commercial uses is comparable to electrical, telephone, transportation and certain other services where duplication of facilities would be so wasteful and impractical that the law provides for the granting of monopolistic franchises, 2 as a consequence of which such utilities are deemed to submit to regulation by public authority, which in a measure, substitutes for the controls usually imposed upon business by free competition. Under our law the Public Service Commission is charged with the responsibility of granting franchises and regulating such utilities in the public interest. It is necessarily endowed with considerable latitude of discretion to enable it to accomplish that purpose.

The plaintiff's challenge to the Commission's order here as an abuse of discretion is grounded primarily upon its contention that the right to distribute gas to Bonanza is included in an order made by the Commission in March of 1956 granting it the authority ot provide natural gas service to the cities of Moab, Monticello and Vernal in the same general area in eastern Utah and that the order contained the following recital:

IT IS FURTHER ORDERED, That Utah Gas Service Company, a corporation, without...

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