Iroquois Gas Corp. v. Maltbie

Hill, P. J.

Petitioner is a New York State corporation engaged in producing gas which it distributes in Buffalo and the surrounding cities and villages. It also distributes gas produced by United Natural Gas Company, a Pennsylvania corporation. Each company is wholly owned by the National Fuel Gas Company. By the order appealed from, the Public Service Commission directed the Iroquois Company to carry in its accounts and to report the receipts from gas produced by the United Company and delivered to the Iroquois as receipts from the sale of gas purchased from the United. The terms of the contract between these companies make the transaction one of agency, the Iroquois acting for the principal, the United.

From the briefs the real issue seems to be a secret. No disclosure is made as to why the Commission is interested in having the accounts and reports indicate a sale, or why the company so strenuously objects to making the entries. No showing is made by the company that financial loss will result to it by observing the order. In determining the real relation, the language of a contract between two wholly owned subsidiaries of one holding company is of much less importance than the facts surrounding the transaction. It is hardly to be assumed that the Commission has made this order for the purpose of marching the Iroquois up the hill and then to march it down again. Rather I would assume that the Commission believes the transaction to be a purchase and sale, and that the written contract indicating agency would befuddle the issue in a proceeding to fix a fair and reasonable rate to be charged consumers. Separate corporations, with common stock ownership, should not be treated as individual entities if thereby reasonable regulation is hampered.

The determination should be confirmed.

Rhodes, Bliss and Heffernan, JJ., concur; Crapser, J., dissents, with an opinion.