Untitled Texas Attorney General Opinion

R-458

45
t.WX?ICE OF

TEE AIYTORNEY GENERAL
Ausq~. TEXAS
PRICE DANIEL
ArTO*NeYGENERAL July 23, 19%

Eon. Ernest 0. Thompson Opinion No. V-309
chalrman
Railroad Commlssion~of Re: The necessity of
Texas approval by the
Au&in, Texas Railroad Commls-
slon of Texas of
a dlscontlnuance
of the supply of
gas to a munlcl-
pallty by a gas
utility, pursuant
to'contractbe-
tween the parties.
And related ques-
tions.
Dear Sir:
You have requested the opinion of this Depart-
ment In letters establishingthis factual situation:
"111May, 1928, the Mobeetlb Gas Company
made a contract with certain lndlvldtilsto
furnish-gasto-the alty'llmlts of Mkuul,
Roberts County, Texas; these l~lvlduals
having a franchise from the City running
for;a period of~20.years;the Mobeetle Gas
Company to construct a 4 Inch line and fur-
nishing gas to the city limits of the City
of Miami. This contract was .&lsofor a
period of 20 years. This contract ~111 ex-
pire in 1948.
"The Publio-SeFviceCorporationof Tex-
as is successor to the M6beetle Gas Com-
pany, and desires to dlscontln~e furnlsh-
lng 'gasto the ol$g llmlts of the city of
Miami at the explratXon of Its coatract for
the reason, 'amongothers, that itswill re-
quire the constructionof a new 15 Iidle
line since the old line Is not In condition
to coritlnueservice after the expiration
&ate.
 Hon. Ernest 0. Thompson - Page 2 v-309

46
". . . Public Service Cbrporatlonhas In
m,lndthat It will give notlce to the owners
of the franchise in the City of Miami and to
the said City In ample time for them to make
other arrangementsbefore the expirationof
the contract."
Your questions are as follows:
"Pleaseadvise If It Is necessary for
the Public Service Corporationof Texas to
apply for permission from the Railroad Com-
mission to discontinuethe service described
In the enclosed letters and If it is neces-
sary for a hearing to be held If such appll-
cation Is to be required.
"Also please advise us If notice to the
customers of the utility are required to be
given notlce,prlor to discontinuanceof
aervlce Ln the event applicationto the
CommlsslonIs not required."
The Public Service CorporationIs a "gas utll-
1ty" or 'public utility" as defined In Article 6050,
V.C.S.) as follows:
"The term 'gas utility' and 'publicutll-
ltys'or 'utility,*as used In this subdlvl-
sion, means and Includes persons, companies
and private corporations,their lessees,
trustees,and receivers, owning, managing,
operating,leasing Or controllingwithin
this State tinywells, pipe lines, plant;
property, equipment, facility, franchise,
license, dr permit for elther,one or more
of the following kinds of business:
"1. Producing or obtaining,transport-
ing, conveying distributingor delivering
natwal~gas: [a) for public use or service
for ccmpensatlon; (b) for sale to munici-
palities or persons or companies, In those
cases referred to In paragraph 3 hereof,
engaged in distributing or selling natural
gas to the public; (c) for sale or delivery
of natural gas to any person or firm or cor-
portatlon operating under franchise or a con-
tract with any municlpalltyor other legal
Ron..Ernest0. Thompson - Page 3 v-309 47

subdlvlslonof thls.State.; or, (a) for sale
or delivery of natural gas to the public for
domestic or other use.
"2. Owning or operating or managing a
pipe line for the transportationor car-
riage of natural gas, whether for public
hire or not, if any,part of the right of
way for said line haa been acquired, or may
hereafterbe acquired by the exercise of
the right of emInentdomaIn; or If said line
or any part thereof,.lslaid upon, over-or
under any public road or highway of this
State, or street or alley of any munlcl-
pality, or the right of way of any rall-
road or other,publicutility; Includingalso
any natural.gas~utilltyauthorize&by law
to exercise the right of eminent domain.
“3e Producing or purchasing natural gas
and transportingor causing the same to be
transportedby pipe .llnesto or near the
llmlts oftany munlclpallty ln~whlch.saSdgas
Is received ana dlstFlbuted or sold to the
public by another public utility or by said
munlclpallty,In all cases where such busl-
ness Is In fact that only or practically.ex-
cluslve agency of supply of natural gas to
such utility or municipality, is hereby de-
clared to be virtual monopoly and a business
and calling affected with a DubllC.interest.
and the said business and property employed-
therein within this State shall be subject
to the provisionsof this law and to the ju-
risdlctlonand regulation of the Commission
as a gas utility.
'%very such gas utllftg Is hereby de-
clared to be affected with a public interest,
and subject to the jurisdiction,control and
regulationof the Commission as provided
herein."
"Jurlsdlctlon,control and regulation"of.the
utility are vested In the Railroad Cominisslon
by Artl-
cle 6050, supra. 'This "j~urlsdlctlon"~and"conttiol"
may
not be divestedwlthotitthe.consent of,the Railroad Com-
mlsslon. For only the Railroad Commlsslonmay terminate
that "jui3sdlctlon"and ,control;"
48 Eon. Ernest 0. Thompson - Page 4 v-309

Section 1 OS Article 6053, V.C.S., provides as
follows:
'The Commissionafter dtienotice shall
fix and establishand enforce the adequate
and reasonableprice of gas and fair and
reasonablerates of charges and Fegulatlons
for transporting,producling, dlstrlbutlng,
buying, selling,and delivering g a by such
pipe lines In this State; and sha11 estab-
llsh fair and equitable rules and regula-
tions for the full control and SupervIsIon
of said gas pipe lines and all their hold-
ings pertainingto the gas business in all
their relations to the public, as the Com-
mlsslon may frcm time to time deem proper;
and establish a fair and equitable dlvislon
of the proceeds of the sale of gas between
the companies transportingor protiualngthe
gas and the companies dlatrlbutlngor sell-
ing It; and prescribe and enforce rules and
regulatlonafor the governmentati control
of such pipe lines in respect to their gas
elpe lines and produalng, receiving,trans-
porting, and dlstrlbutlngfaOllitle8;and
regulate and apportion the supply of gas
between towns, cities, and corporations,
and when the supply of gas controlledby
any gas pipe line shall be Inadequate,the
Commlssloashall prescribe fair and rea-
sonable rules and regulationsrequiring such
gas-pipe lines to augment their supply of
gas, when-in-thejudgment cjfthe Commlsslon
it la practicableto do so; and It shall
exercise its power, whether upon Its own
motion or upon petition by any person, cor-
poration,munlclpkilcorporation,county, or
Commlsslonersprecinct showing a substantial
Interest. In the subject,~ortiponpetition of
the Attorney~G~neral;~or6f any County or
District Attbrneg in any county wherein such
business or any part thereof may be carried
on."
By virtue of Article-6053, 8.iipra,
the Commls-
sion Is empoweredwith'"full oontrol and~supervlslonof
said gas pipe lines and alltheir holdings pertaining
to the gas business In all their relations-m
to the &-
lie." It Is ft@her%szered ~1-5 overnmentand
Hon. Ernest 0. Thompson - Page 5 v-309 *9

control of such pipe lines In respect to theif gas pipe
lines and producing,receiving,transportingand dls-
trlbutlng facilities"and.empowered to "re&.ate and ap-
po;il$n the supply of gas controlledbynany gas pipe
. It may exercise Its power upon Its own motion
or upon petition."
It would be an empty "jurisdiction"and an emp-
ty "full control" if the Commissioncould not continue
a service by a utility. Otherwise the utlllty could
abandon at will and bargain on that basis. It Is stated
In State ex reL Public Service Commlsslonv. Mlssourl
Southern R. Co. (Sup. Ct. MO, lglg), 214 S. W. 381.: (pp.
384-385 I
11 Can appellant abandon this serv-
ice witio&, applying to the commissionfor
leave to do so? If so, any carrier can aban-
don any service without such leave, and,
doubtless,change fares and take oft equlp-
ment, whenever It comes to the conclusion
that the facts jtistlfysuch action.. If this
course be lawful, the ccaumlsslonwill became
little more than a figureheadso far as car-
riers are concerned,and Its powers can be
Ignored or Invoked as the carrier may desire.
In this case the carrier was operating In
submissionto'the commissionand under rates
on file. A rate was changed., Instead of
applying to the commlsslonfor an Increase
elsewhere,or for leave to abandon the serv-
ice, the carrier said, In effect, that It
would not submit to the change, but would
take up the track. It may be It is entitled
to an order permitting It to do so. It
should have applied to the connnlsslonfor
the leave. Unless the power of the commls-
slon to pass on this question Is conceded,
then~lt is apparent the exercise of 801118of
Its express powers is conditionedupon the
consent of the carHer. The express power
of the commission over facllltles,equlpent,
and honstructlon,and changes therein,and
over the operation of trains (sections49,
41, ~avs lg13), pp. 588, sgo), is of.no avail,
if appellant'scontention $8 sound. As .was
said by the Kansas SuprenieCourt:
"'If these utilitg~corporatlons~mag aban-
don this particular service without the'con-
sent of the commlssfon,may they not take
50 Hon. Ernest 0. Thompson - Page 6 v-309

off their pass6nger trains, take up and aban-
don unprofitablebranch lines, change the
fares and rates of transportation for pas-
sengers and freight, or raise the charge for
telegraphmessages without the consentof
the'commlsslon? These questionsanswer them-
selves. To yield approval to the contention
of defendants Is to concede that the state's
program for the regulationand controlof
public service corporations1s Ineffective;
that the Public UtllltlesAct has been enact-
ed In vain.' State ex rel. v. PostalTel.
co., supra."
It Is further stated in State v. Kansas Postal-
Telearauh-CableCo. (Sup. Ct. Kans. 1915),15CP. 544:
'(P.5471
II
. . . In view of all these, can there
be any doubt of the duty of the defendant,
before dismantlingIts stationat Syracuse
and abandoning Its business thereat,t@ se-
cure the approval of the ConmIssionfor such
an Important change in Its mode of service?
How Is the Public lJtllltlesCommissionto
discharge Its importantduties if the pnb-
llc service companiesmay quit businesshere,
there, or anywhere In the state vlthout 811
opportunityfor the %omisslon to detezi:ne
the propriety of such a course?
"It Is clear that, If the defendantmy
forego Its business In Syracusevithotithe
sanction of the Commlsslon,it can close its
office in Topeka, Wichita, or Kensas CLtr,
without the consentof the Comlsslon. Jf
this public utility,'& telegraphcompsv, can
close one of its offices and qult bus'3ess
without the-consentof the Commlsslon,6~
dther'ptibllc utility, like the Santa P? Zall-
w&y, So* exempl6; could close Its depct at
DMg6 City, Htitchlnson, or Emporiavitt?zt
the consent of the Cominli~sloh. Where r--nld
this end? If these utility corporatlozsgay
abandon this partlculsrservicewlthorr. :he
consent of the Commlssion;may they net -zke
off their passenger trains,take up ati sban-
don unprofitablebranch lines, change t%
fares and rates of transportation for 1Ji'-
sengers and freight, or raise the c-e for
Ron. Ernest 0. Thompson - Page 7 v-3.09
51

telegraphmessages without the consent of the
CCmmlSslon?'These questldns answer themselves.
To yield approval to the contentionof the de-
fendant Is to concede th8t the state's program
for the regulationand control of public serv-
ice corporationsis Ineffective;that the pub-
lic utllltles act has been enacted In vain."
Further reason dictates that this jurisdiction
may not be terminatedwithout the consent of the Rall-
road Commission. For, If the conversebe true, a util-
ity, against the will of the State, could abandon Its
pipe line, tear up the line and sell it before replace-
ment could be made. The possible effects of such a
claimed power could be utter disaster to the great ln-
terests of the community. Destructionof private prop-
erty, in which the entire community Is Interested,could
result. The life of the citizen as well as the property
could be jeopardized.
It Is well establishedthat "as a general rule,
the proprietor of a public utility or service Is bound
to continue the business until such time as he shall
have been granted permission to discontinueIt." 34
Tex. Jur., "Public Utllltles and Services,"Section 15,
p. 717; 43 Am. Jur., "Public Utllltlesand Services,"
Section 78, p. 621; 5 Corpus Jurls, "PublicUtllitles,"
Section 17, p. 8. See 5 P. U. R. Digest, "Service,"
Section 215, pp. 4611-4614.
Moreover, this has been the practice and con-
struction of the Railroad Coxnlssionover a period of
years. During this period of years, utllltles have made
applicationto the Railroad Commissionfor permission to
discontinuetheir service. The constructionand lnter-
pretation of a statute by the Departmentcharged with
its administrationIs entitled to great weight and will
be adhered to unless clearly erroneous or unsound. 39
Tex. Jur., "Statutes,"Section 126, pp. 235-237.
In answer to your first question, therefore,
the Public Service Corporationmust have the consent of
the Railroad Commission to discontinuethe furnishingof
gas to the dfstPlbutor for the City of Miami.
Section 1 of Article 6053, supra, provides, in
part, as follows:
"The Commissionafter due notice shall
fix and establish . . .'I
sf2 Hon. Ernest 0. Thompson - Page 8 v-309 '

Section 14 of Article 6053, v.c.s., provides as
follows:
"Rotice of 8ny hearing,and of the time
and place thereof, shall be given by regls-
tered'mallnot less than ten (10) claysex-
clusive of the day of mailing before such
hearing, addressed to all parties whom the
Comml~slonmay deem to be interestedIn the
subject matter of such hearing. Any llcen-
see against whom a complainthas been filed
shall be notified of the hearing on such com-
plaint as herein provided,and shall have the
right to appear at such hearing, file answer,
Introduce evidence, and be heard both in p,er-
son and by counsel."
In answer to your second question, It Is our
opinion that the statutes contemplatea hearing by the
Railroad Commlsslonupon applicationfor discontinuance
of service, because the Commissionmust enter an order
upon such applicationunder Article 6053, supra, which
must be after "due notice." Section 14, supra, provides
that "notice of any hearing" shall be qlven to "lnter-
ested" parties, not less than 10 days before such hear-
ing."
In view of this opinion, your third question
does not require an ansver.
SWMARY
1. It Is necessary for the Public Serv-
ice Corporation,a "gas utility" as defined
bg~our statutes (Article6050, V.C.S.), to
have the consent of the Railroad Conrmlsslon
to discontinuethe furnishingof gas to the
distributor for the City of Miami. State ex
rel. Public Servfce Commissionv. Mlssourl
Southern R. Co; (Sup. Ct. MO. lglg), 214
3~.W: 381, 384; State v. Kansas Postal-Tele-
graph-cable Co. (Sup.
p. 544, 547.
2. A hearing must be held by the Com-
mlsslon on an 8ppllcatlon of a "gas utility"
for requested permission to discontinue
 53
Hon. Ernest 0. Thompson - Page 9 v-309

service to a municipality. Article 6053,
V.C.S.
Yours very truly
A!l3!ORNEYGElW3ALOFTEXAS

BY

EMH:jt