Wilhite v. Public Service Commission

• Decision Date: 15 July 1966
• Docket Number: No. 12562,12562
• Parties: , 64 P.U.R.3d 505 Marvin E. WILHITE et al., etc., and Wilhite-McGahee Pipe Line, Inc., a corporation, v. PUBLIC SERVICE COMMISSION of West Virginia and Consolidated Gas SupplyCorporation, a corporation, etc.
• Court: West Virginia Supreme Court

Page 273

149 S.E.2d 273

150 W.Va. 747, 64 P.U.R.3d 505

Marvin E. WILHITE et al., etc., and Wilhite-McGahee Pipe Line, Inc., a corporation, v. PUBLIC SERVICE COMMISSION of West Virginia and Consolidated Gas SupplyCorporation, a corporation, etc.

No. 12562.

Supreme Court of Appeals of West Virginia.

Submitted May 12, 1966.

Decided July 15, 1966.

Syllabus by the Court

1. A corporation which lays its own pipeline to transport natural gas produced or purchased in a gas field and to deliver the same to two large industrial consumers with whom it has negotiated private contracts, and which has not dedicated itself or held itself out to public service and seeks no other customers, is not upon that state of facts a public utility, even though the effect of this is to take a substantial amount of patronage from an existing public utility. However, changes in the type of service rendered or the number of customers served might cause an opposite result in a future proceeding.

2. The Public Service Commission of West Virginia has no jurisdiction and no power or authority except as conferred on it by statute and necessary implications therefrom, and its power is confined to the regulation of public utilities. It has no inherent power or authority.

3. The test as to whether or not a person, firm or corporation is a public utility is that to be such there must be a dedication or holding out either express or implied that such person, firm, or corporation is engaged in the business of supplying his or its product or services to the public as a class or any part thereof as distinguished from the serving of only particular individuals; and to apply this test the law looks at what is being done, not to what the utility or person says it is doing.

4. The mere fact that a product which is usually dispensed by or sold by a utility to the public is being furnished does not make every person, firm, or corporation selling such product a public utility. If such product is sold under private contract and the seller does not hold himself out to sell such product to the public or render some service to the public he is not a public utility.

5. The mere transportation of its own gas by a company does not make it a public utility, nor does the furnishing by it of such gas to an industry under a privately negotiated contract to furnish 'firm' (uninterruptible) gas make it a public utility.

6. A public utility is protected by its certificate of public convenience and necessity from unauthorized encroachment by other public utilities but is not protected from competition by individuals or corporations acting in their private capacity.

7. 'A final order of the Public Service Commission, based upon findings not supported by the evidence, or based upon a mistake of law, will be reversed and set aside by this Court upon review.' Point 3, syllabus, Atlantic Greyhound Corp. v. Public Service Commission, et al., 132 W.Va. 650 (54 S.E.2d 169).

Homer W. Hanna, Jr., T. D. Kauffelt, Charleston, for petitioners.

Robert Hart, Jr., P.S.C., Charles E. Anderson, Charleston, Thomas A. White, David E. Weatherwax, Harold M. Garrett, Clarksburg, for respondents.

Jackson, Kelly, Holt & O'Farrell, William T. O'Farrell, Charleston, W. J. Carter, South Charleston, amicus curiae on behalf of Union Carbide Corp.

Steptoe & Johnson, W. F. Wunschel, Charleston, W. F. Swanson, Jr., Pittsburgh, Pa., amicus curiae on behalf of Pittsburgh Plate Glass Co.

BERRY, Judge.

This case is before the Court for a suspension and review of the final order entered by the Public Service Commission of West Virginia of January 6, 1966 and the order of January 26, 1966, denying rehearing and reconsideration of the January 6, 1966 order, which reads as follows: 'The defendant, Wilhite-McGahee Pipeline, Inc., a corporation, is hereby ordered to cease and desist from the construction and operation of a gas pipeline to furnish gas, and from the sale of such gas, to industrial customers in the Clarksburg area of Harrison County, West Virginia, unless and until it shall have applied for and received a certificate of public convenience and necessity from this Commission authorizing such construction, operation and sale.' Upon petition of Wilhite-McGahee Pipe-Line, Inc., a corporation, and Marvin E. Wilhite and Francis M. McGahee, the case was docketed on March 14, 1966, and was heard and submitted on May 12, 1966, at the April Special 1966 Term of this Court on arguments and briefs.

Marvin Wilhite and Francis M. McGahee, individual parties herein, originally composed a partnership which appears to have been converted into a corporation at some date during the pendency of these proceedings, but is still referred to in most of the papers by its original name. The partnership, and later the corporation, was established for the purpose of procuring natural gas by drilling its own wells, by collecting gas from other wells and by operating wells in conjunction with persons not members of the partnership or corporation. In addition to the procuring of gas Wilhite and McGahee also organized a corporation called Wilhite-McGahee Pipe-Line Inc., the purpose of which was stated to be to buy the gas and furnish it to two customers in the Clarksburg area. Inasmuch as the names are used interchangeably in the various papers and the persons are engaged in similar matters they will be ordinarily referred to as 'Wilhite'. The other major party to this proceeding is the Consolidated Gas Supply Corporation, a corporation, which was formerly known as the Hope Natural Gas Company, and for the sake of brevity will be referred to hereinafter as 'Consolidated' or 'Hope'.

The proceeding which led up to the matter before this Court was actually begun in another form by Wilhite when it submitted to the Public Service Commission of West Virginia on March 30, 1965, a petition to determine if Wilhite was subject to the jurisdiction of the Commission with reference to a proposed pipeline project. The proposal submitted by Wilhite was to originate a natural gas line in the Rangoon area of Union District in Barbour County, West Virginia, and to furnish gas to two industrial plants and to convey that gas by a 10-inch natural gas pipeline through portions of Barbour County and Harrison County, West Virginia, to Nutter Fort and Anmoore, West Virginia, near the outskirts of the City of Clarksburg, at the terminus of which the line was to furnish gas to the Pittsburgh Plate Glass Company which is actually at Stonewood, adjacent to Nutter Fort, and to the National Carbon Company at Anmoore which is now known as Union Carbide Corporation.

The proposal further stated: 'The name of other public utilities with whom the proposed construction may compete: Hope Natural Gas Company, Cumberland and Allegheny Gas Company, and Delaware Gas Company.' It appears from the transcript of the evidence taken at the hearing that the Delaware Gas Company does also furnish gas to customers of Consolidated and is not a public utility and no complaint has ever been filed against it to have it declared as such. No further information seems to be in the record concerning the Delaware Gas Company and it appears not to have seriously affected Consolidated. Therefore, Hope, a certificated public utility which serves the Clarksburg area, has taken such action as involved in this case only against Wilhite. By the Wilhite proposal it was stated that the rate to be charged to the two plants would be $.35 per thousand standard cubic feet of natural gas and the estimated cost of the construction would be $750,000.

The Wilhite proposal ended with this statement: 'A ruling is respectfully requested by the Commission to the effect that a certificate of convenience and necessity is not required by your Petitioners.'

On April 28, 1965 this application made by Wilhite for a ruling was set for hearing on May 14, 1965, before the Public Service Commission. On May 10, 1965 Consolidated filed an application to intervene in the proceeding. Immediately thereafter Wilhite withdrew the application and on May 26, 1965, it was dismissed by the Commission without prejudice over the objections of Consolidated. Thereupon, Consolidated reopened the matter by filing a complaint on June 3, 1965, against Wilhite alleging that the proposed project was an illegal invasion of the gas market in the Clarksburg area served by Consolidated and that the operation of the same without first obtaining a certificate of public convenience and necessity would be a violation of the public utility laws of this state and that such certificate should not be issued and that Consolidated believed Wilhite intended to seek and serve other markets and to take substantial amounts of revenue from Consolidated to such extent that its other customers would be materially and adversely affected by a rise in cost and that the proposal would result in the duplication of gas utility services in the Clarksburg area. The petition of Consolidated asked for an order commanding Wilhite to cease and desist from the violation of the public utility law. This petition of Consolidated invoked the provisions of Rule 9--Interrogatories, of the Commission's Rules of Practice and Procedure and submitted therewith thirty-one interrogatories which Consolidated asked that Wilhite be made to answer under oath as 'necessary to and required for the prosecution of this complaint and the consideration and disposition thereof by this Commission.'

Consolidated referred to itself in this petition as 'Complainant' and proceeded under Rule 6 of the Commission which provides in part (b) thereof that an aggrieved party '* * * may complain to the Commission by petition substantially in the form hereinafter prescribed * * * of any thing done or omitted to be done by any public utility in violation of any of the provisions of the public service commission law of West Virginia.'

Rule 9, referred to above, in the material...