Case Title: SINCLAIR OIL CORPORATION v. WYOMING PUBLIC SERVICE COMMISSION

Citation: 

Docket Number: 01-228

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-02-21T00:00:00Z

Document:
SINCLAIR OIL CORPORATION v. WYOMING PUBLIC SERVICE COMMISSION2003 WY 2263 P.3d 887Case Number: 01-228Decided: 02/21/2003
October Term, A.D. 2002

 
 

 

SINCLAIR 
OIL CORPORATION,

 

Appellant(Petitioner) 
,

 

v.

 

WYOMING 
PUBLIC SERVICE COMMISSION

and 
STEVE ELLENBECKER and KRISTEN N. LEE,

in 
their official capacities as Commissioners,

 

Appellees(Respondents),

 

and

                                                                                                

AMOCO 
PIPELINE COMPANY and CITATION

OIL 
AND GAS CORPORATION,

 

                 
Appellees(Applicant and Intervenor Below) 
.

 

 

W.R.A.P. 
12.09(b) Certification

 from the District Court of Laramie 
County

The 
Honorable Nicholas G. Kalokathis, Judge

 

Representing 
Appellant:

John 
A. Sundahl and Brian J. Hanify of Sundahl, Powers, Kapp & Martin, Cheyenne, 
WY.  Argument by Mr. 
Sundahl.

 

Representing 
Appellee Wyoming Public Service Commission:

Hoke 
MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; Harry 
D. Ivey, Assistant Attorney General; and Nancy E. Vehr, Assistant Attorney 
General.  Argument by Mr. 
Ivey.

 

Representing 
Appellee Amoco Pipeline Company:

Roger 
C. Fransen and Ian D. Shaw of Hickey, Mackey, Evans & Walker, Cheyenne, 
WY.  Argument by Mr. 
Fransen.

 

Representing 
Appellee Citation Oil & Gas Corp.:

Alvin 
Wiederspahn of Wiederspahn & Reese, P.C., Cheyenne, WY.  Argument by Mr. 
Wiederspahn.

 

Before 
HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, JJ.

 

*Chief 
Justice at time of oral argument.

 

LEHMAN, 
Justice.

 

[¶1]      Sinclair Oil 
Corporation (Sinclair) appeals an order entered by appellee Wyoming Pub­lic 
Service Commission (PSC).  After 
administrative hearing, PSC approved the applica­tion of appellee 
Amoco 
Pipeline Company (Amoco) seeking authority to abandon its crude oil gathering 
facilities known as the Little Buffalo Gathering System and to eliminate Little 
Buffalo Station as a point of origin.  
Upon our appellate review, we affirm.  

 

 

ISSUES

 

[¶2]      Numerous issues 
are presented to this court on appeal.  
Sinclair sets forth the follow­ing 
issues:

 

1.  Is 
it in accordance with the law for a public utility common carrier to fail to 
maintain its facilities, then abandon the facilities because they are in 
disrepair?

 

2.  Did 
the PSC fail to apply the correct legal standard applica­ble to 
abandonments, and was the PSC's determination that Amoco had upheld its 
evidentiary burden to abandon its facili­ties supported by substantial 
evidence?

 

3.  Did 
the PSC abuse its discretion by failing to apply its own regulations regarding 
Amoco's unilateral abandonment of the Little Buffalo Basin without prior PSC 
approval?

 

4.  Was 
the PSC's determination regarding the public interest supported by substantial 
evidence, or did the PSC abuse its dis­cretion by limiting the scope of the 
hearing and precluding the receipt of relevant, admissible evidence regarding 
the public interest?

 

5.  Did 
the PSC fail to apply the correct rule of law by refusing to determine whether 
Citation would operate the abandoned facilities as a public utility without the 
required certificate of public convenience and necessity?

 

PSC 
phrases the issues on appeal as:

 

1.  Whether the PSC followed its own rules and other 
pertinent law in considering and deciding the issues of this case. 

 

2.  Whether substantial evidence exists to support the 
PSC's factual findings when the evidence is viewed as a whole.            

 

3.  Whether the PSC's procedural rulings were in accordance 
with law.
 

4.  Whether the issue of Citation's status as a public 
utility was properly before the PSC.
 

5.  Whether the issue of late-filed exhibits was first 
raised on appeal. 
 

Amoco states the issues before this court as:
 

1.  Does Sinclair have standing to pursue this 
appeal?
 

2.  Was the [PSC's] decision to grant Amoco's application 
to abandon made using the proper legal standards and supported by substantial 
evidence?
 

3.  Was Amoco's attempt to prevent an environmental 
catastro­phe by suspending shipments on its gathering system a basis for the 
[PSC] to deny Amoco's application to abandon? 
 

4.  Did the [PSC's] evidentiary decisions constitute a 
clear abuse of discretion and, if so, were they prejudicial to Sinclair? 

 

Finally, 
appellee Citation Oil and Gas Corporation (Citation) enunciates its issues on 
appeal as:

 

1.  Does 
Sinclair have standing under the Administrative Proce­dure Act to bring this 
appeal?

 

2.  Was 
the decision of the [PSC] to grant the application of Amoco Pipeline to abandon 
the Little Buffalo Basin crude oil gathering facilities and to eliminate Little 
Buffalo Station as a point of origin on Amoco Pipeline's system in conformance 
with statutory requirements?

 

3.  Did 
the [PSC] render a proper weighing and balancing of the affected interests 
impacted by the abandonment such that the public interest was best served by the 
abandonment of the Little Buffalo Basin gathering 
facilities?

 

4.  Is 
the issue of whether Citation, by virtue of acquiring own­ership and 
commencing operation of the abandoned Little Buffalo Basin gathering system, is 
a public utility properly before this Court? or, in the alternative, does 
Citation's opera­tion of the abandoned gathering facilities render Citation 
a public utility?

 

 

FACTS 
AND BACKGROUND

 

[¶3]      On August 30, 
2000, Amoco filed an application with PSC seeking authority to aban­don its 
crude oil gathering facilities known as Little Buffalo Gathering System and to 
eliminate Little Buffalo Station as a point of origin.  Both Sinclair and Citation were allowed 
by PSC to intervene and originally opposed Amoco's application.  

 

[¶4]      On November 16, 
2000, Amoco informed PSC operations at the Little Buffalo Gather­ing System 
had been suspended for reasons of environ­mental safety effective October 1, 
2000, because a storage tank within the system was in substantial 
disrepair.  On December 14, 2000, 
Amoco and Citation entered into a stipulated settlement agreement.  Sinclair was not a party to this 
settlement.  In the settlement 
agreement, Amoco and Citation agreed that should Amoco's abandonment application 
be granted by PSC, Amoco would sell the Little Buffalo Gathering System to 
Citation.  Citation would then have 
the opportunity to connect to a pipeline other than at Little Buffalo Station on 
Amoco's Big Horn trunk line (presumably Marathon Oil Company's Red Butte 
Pipeline) in order to transport the Little Buffalo production and avoid trucking 
this product for refinement.  Amoco 
and Citation further agreed that crude oil would never be sent through Little 
Buffalo Station on Amoco's Big Horn trunk line.1 

 

[¶5]      A public hearing 
was commenced on December 15, 2000, before PSC.  This hearing was ultimately continued 
and concluded on January 3, 2001.  
At hearing, Sinclair objected to the terms of the stipulated settlement 
agreement between Amoco and Citation.  
PSC issued its final order June 11, 2001.  This final order found 1) the gathering 
lines in the Little Buffalo Gathering System were sufficiently safe and in 
adequate condition to provide crude oil gathering services, 2) the storage tank 
used within the system needed to be replaced, 3) Amoco had sufficiently 
supported its assertion that replacement of the storage tank was not 
economically feasible, and 4) upon consideration of the public interests, 
Amoco's application should be granted.  
After entry of PSC's decision, Citation acquired the Little Buffalo 
Gathering System and negotiated an interconnect agreement with Marathon Oil 
Company's Red Butte Pipeline to transport to market the crude oil produced at 
the Little Buffalo Basin field. Sinclair appealed the decision of PSC to the 
district court.  This matter was 
then certi­fied for review by this court.  

 

 

STANDARD 
OF REVIEW

 

[¶6]      Our review of 
administrative decisions is guided by the standards set forth in Wyo. Stat. Ann. 
§ 16-3-114(c):

 

(c)  To 
the extent necessary to make a decision and when pre­sented, the reviewing 
court shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and deter­mine the meaning or applicability of the 
terms of an agency action.  In 
making the following determinations, the court shall review the whole record or 
those parts of it cited by a party and due account shall be taken of the rule of 
prejudicial error.  The reviewing 
court shall:

 

(i)  Compel 
agency action unlawfully withheld or unrea­sonably delayed; 
and

 

(ii)  Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

 

(A)  Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law;

 

(B)  Contrary 
to constitutional right, power, privilege or immunity;

 

(C)  In 
excess of statutory jurisdiction, authority or limitations or lacking statutory 
right;

 

(D)  Without 
observance of procedure required by law; or

 

(E)  Unsupported 
by substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute.  

 

See 
Newman v. State ex rel. Workers' Safety & Compensation Div., 2002 WY 
91, ¶9, 49 P.3d 163, ¶9 (Wyo. 2002) and McTiernan v. Scott, 2001 WY 87, 
¶11, 31 P.3d 749, ¶11 (Wyo. 2001).

 

[¶7]      We further 
enunciated in Powder River Coal Co. v. State Bd. of Equalization, 2002 WY 
5, ¶5, 38 P.3d 423, ¶5 (Wyo. 2002):

 

When 
we review cases certified pursuant to W.R.A.P. 12.09(b), we apply the appellate 
standards which are applicable to the court of the first instance.  State by and through Wyoming 
Department of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶5, 18 P.3d 1182, ¶5 (Wyo. 2001); see also Union Telephone Company, Inc. v. 
Wyoming Public Service Commis­sion, 907 P.2d 340, 341-42 (Wyo. 
1995).  Judicial review of 
administrative decisions is governed by Wyo. Stat. Ann. § 16-3-114(c) 
(LexisNexis 2001).  Buggy Bath 
Unlimited, Inc., ¶5; W.R.A.P. 12.09(a); Everheart v. S & L 
Industrial, 957 P.2d 847, 851 (Wyo. 1998).

 

In 
addition, in Powder River Coal Co., at ¶6 (citing Chevron U.S.A., Inc. 
v. State, 918 P.2d 980, 983 (Wyo. 1996) and State by and through Dep't of 
Rev. v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶6, 18 P.3d 1182, ¶6 (Wyo. 
2001)), we noted when this court reviews ques­tions of law posed in an 
administrative context, this court must conduct a de novo review.  We affirm an agency's conclusions of law 
when they are in accordance with the law.  
However, when the agency has failed to properly invoke and apply the 
correct rule of law, we correct the agency's error.  Id.  See also State ex rel. 
Workers' Safety & Compen­sation Div. v. Garl, 2001 WY 59, ¶¶8-9, 26 P.3d 1029, ¶¶8-9 (Wyo. 2001).

 

[¶8]      When issues are 
presented to us concerning whether there exists substantial evidence in the 
record to support the administrative decision, we have described substantial 
evidence as:  "relevant evidence 
which a reasonable mind might accept in support of the conclusions of the 
agency."   McTiernan v. 
Scott, at ¶11.  

 

The 
substantial evidence standard also requires that there be more than a scintilla 
of evidence.  It is not required 
that the proof attain such a degree of certainty as to sup­port only one 
conclusion to the exclusion of all others.  
Once the measure of evidence has surpassed the scintilla threshold, the 
possibility of drawing two inconsistent conclusions from the entire record does 
not mean that the conclusion drawn by the administrative agency is not supported 
by substantial evidence.  Even where 
this court, after reviewing the record, arrives at a different conclusion, the 
court cannot substitute its judgment for that of the agency's as long as the 
agency's conclusion is supported by substantial evidence.  

 

Joe 
Johnson Company v. Wyoming State Board of Control, 
857 P.2d 312, 314-15 (Wyo. 1993) (quoting Department of Employment, Labor 
Standards Division v. Roberts Construction Company, 841 P.2d 854, 857 (Wyo. 
1992)).  "For evidence to be 
sufficient to allow a reasonable mind' to accept an agency's conclusion, there 
must appear in the record evidence which allows either a definitive conclusion 
or a reasonable extrapola­tion based on the surrounding circumstances." 
GID v. Wyoming State Board of Control, 926 P.2d 943, 951 (Wyo. 
1996).

 

Id.  Therefore, 
when this court is charged with reviewing an agency's decision for substantial 
evidence pursuant to Wyo. Stat. Ann. § 16-3-114(c)(ii)(E), 

 

[t]hat 
duty requires a review of the entire record to determine if there is relevant 
evidence that a reasonable mind might accept in support of the agency's 
decision.  Joe Johnson 
Company, 857 P.2d  at 314-15.  
Occasionally, the process of review will neces­sarily require the 
reviewing court to engage in an assessment of the facts adduced during the 
administrative hearing.  That 
assessment does not usually involve a reweighing or reconsid­eration of the 
basic facts found by the agency.  
However, as a by-product of that process, the reviewing court may arrive 
at an ultimate conclusion derived from those basic facts that is differ­ent 
from the agency's.  A court will 
reach a different conclusion based on the evidence only in those situations 
where the agency's conclusion is clearly contrary to the weight of the 
evi­dence.

 

McTiernan, 
at ¶16 (footnote omitted).  We have 
further stated in Newman, at ¶12 (quoting State 
ex rel. Workers' Safety & Compensation Div. v. Jensen, 
2001 WY 51, ¶10, 24 P.3d 1133, ¶10 (Wyo. 2001)) 
that the substantial evidence test to be applied is as 
follows:

 

In 
reviewing findings of fact, we examine the entire record to determine whether 
there is substantial evidence to support an agency's findings.  If the agency's decision is supported by 
sub­stantial evidence, we cannot properly substitute our judgment for that 
of the agency and must uphold the findings on appeal.  Substantial evidence is relevant 
evidence which a reasonable mind might accept in support of the agency's 
conclusions.  It is more than a 
scintilla of evidence.  

 

[¶9]      Speaking specifically 
of PSC, we have said that PSC is required to give para­mount consideration 
to the public interest in exercising its statutory powers to regulate and 
supervise public utilities.  The desires of the utility are secondary.  Tri County Telephone Ass'n, Inc. v. Public Serv. Comm'n, 
11 P.3d 938, 941 (Wyo. 2000) (citing Mountain Fuel Supply 
Co. v. Public Serv. Comm'n, 662 P.2d 878, 883 (Wyo. 1983)).  Additionally, in 
rec­ognition of the limited nature of our review, we have explained that the 
judicial function is exhausted when we can find from the evidence a rational 
view for the conclusions of the PSC.  Tri County Telephone 
Ass'n, at 941 (citing Telstar Communications, Inc. v. 
Rule Radiophone Servs., Inc., 621 P.2d 241, 246 (Wyo. 1980)).

 

 

DISCUSSION

 

 

[¶10]   Both Amoco and Citation assert Sinclair 
lacks standing to pursue this appeal because Sinclair cannot show that it is 
"aggrieved or adversely affected in fact" or, conversely, can show that it has 
incurred a "perceptible, rather than a speculative harm" as a result of the 
decision rendered by PSC.

 

[¶11]   We recently stated in Jolley v. State Loan & Investment Board, 2002 WY 7, 
¶¶6-7, 38 P.3d 1073, ¶¶6-7 (Wyo. 2002):

 

            
Standing is a legal concept designed to determine whether a party is 
sufficiently affected to insure that the court is presented with a justiciable 
controversy.  Roe v. Board of County Commissioners, Campbell County, 
997 P.2d 1021, 1022 (Wyo. 2000) (quoting Memorial 
Hospital of Laramie County v. Department of Revenue and Taxation of State of 
Wyoming, 770 P.2d 223, 226 (Wyo. 1989) and Washakie 
County School Dis­trict Number One v. Herschler, 606 P.2d 310, 316 (Wyo. 
1980)).  

 

"The doctrine of standing is a jurisprudential rule of 
jurisdictional magnitude.  At its most elementary level, the standing 
doctrine holds that a decision-making body should refrain from considering 
issues in which the liti­gants have little or no interest in vigorously 
advocating.  
Accordingly, the doctrine of standing focuses upon whether a litigant is 
properly situated to assert an issue for judicial or quasi-judicial 
determination.  
A litigant is said to have standing when he has a personal stake in the 
outcome of the controversy.'   This personal stake requirement has been 
described in Wyoming as a tangi­ble interest' at stake.  The tangible 
interest requirement guarantees that a litigant is sufficiently interested in a 
case to present a justiciable controversy."  

 

State ex rel. Bayou Liquors, Inc. v. City of 
Casper, 906 P.2d 1046, 1048 (Wyo. 1995) (quoting Schulthess v. Carollo, 832 P.2d 552, 556-57 (Wyo. 1992) 
(citations omitted)).  

 

Roe, 997 P.2d  at 1022-23.

 

            
Judicial review of an agency action is authorized by Wyo. Stat. Ann. § 
16-3-114(a) only for those persons "aggrieved or adversely affected in fact" by 
the challenged action.  

 

An aggrieved or adversely affected person is one who has a 
legally recognizable interest in that which will be affected by the action.  Hoke v. Moyer, 865 P.2d 624, 628 (Wyo. 1993).  A potential litigant 
must show injury or potential injury by "alleg[ing] a perceptible, rather than a 
speculative, harm resulting from the agency action." Foster's, Inc. v. City of Laramie, 718 P.2d 868, 872 
(Wyo. 1986).  
"The interest which will sustain a right to appeal must generally be 
substantial, immediate, and pecuniary.  A future, contingent, or merely 
specula­tive interest is ordinarily not sufficient.'"  L Slash X Cattle Company, Inc. v. Texaco, Inc., 623 P.2d 764, 769 (Wyo. 1981) (quoting 4 Am.Jur.2d Appeal and Error § 180).  

 

Roe, 997 P.2d  at 1023.

 

[¶12]   In State ex rel. 
Bayou Liquors, Inc. v. City of Casper, 906 P.2d 1046, 1048 (Wyo. 1995), we 
also recognized: 

 

            
The concept of "standing to sue" refers to a right to relief that goes to 
the existence of a personal claim for relief.  Matter of Various Water 
Rights in Lake DeSmet Reservoir, 623 P.2d 764, 767 (Wyo. 1981).  

 

. . . The tangible interest requirement guarantees that a 
litigant is sufficiently interested in a case to present a justiciable 
controversy.  Laramie Rivers [Co. v. 
Wheat­land Irr. Dist.], 708 P.2d [20,] at 27 [Wyo. 1985] (quot­ing 
Int'l Ass'n Fire Fighters v. Civil Serv. Comm'n, 702 P.2d 1294, 1297-98 (Wyo. 1985)).

 

Schulthess v. Carollo, 832 P.2d 552, 556-57 (Wyo. 1992).

 

[¶13]   In Foster's, Inc. 
v. City of Laramie, 718 P.2d 868, 872-73 (Wyo. 1986) (quoting from Matter of Various Water Rights in Lake DeSmet Reservoir, 
623 P.2d 764 (Wyo. 1981)), we clarified that a potential litigant must show 
injury or potential injury: 

 

"Standing to sue' is a right to relief and goes to the 
existence of a personal claim for relief.  It includes a legal disability, such as 
insanity or infancy, but it is more.  It involves a sufficient stake in an otherwise 
justi­ciable controversy to obtain judicial resolution of that 
controversy.  It 
is closely related to the doctrine of moot­ness.  It requires 
sufficient personal interest in the outcome of litigation by way of injury or 
potential injury to warrant consideration by the court."  623 P.2d  at 767.

 

To establish the requisite injury, a petitioner must allege 
a perceptible, rather than a speculative, harm resulting from the agency 
action:

 

"[A] party is not considered aggrieved' when there is only 
a remote possibility of injury.

 

. . .

 

"[P]leadings must be something more than an ingenious 
academic exercise in the conceivable.  A plaintiff must allege that he has been or 
will in fact be perceptibly harmed by the challenged agency action, not that he 
can imagine circumstances in which he could be affected by the agency's 
action.  . . 
.'   United States v. Students Challenging Regulatory Agency 
Procedures (SCRAP), 412 U.S. 669, 93 S. Ct. 2405, 2416, 37 L. Ed. 2d 254 
(1973)."  
(Citation omitted.)  623 P.2d  at 769.

 

[¶14]   Amoco and Citation profess the record 
reflects Sinclair does not have the type of sub­stantial, immediate, and 
pecuniary interests required to support Sinclair's standing to appeal.  In particular, they 
argue Sinclair acknowledged it had not purchased any production from the 
Little Buffalo Basin field for a three-year period 
prior to April of 2000 and Sinclair had not been a shipper on the Little Buffalo 
Basin Gathering System since September 1996.  More­over, Amoco and Citation claim 
that even after the decision of PSC approving the abandonment, ultimately 
allowing Little Buffalo crude oil to be transferred to the Red Butte Pipeline 
for shipment, Sinclair is still able to use Little Buffalo crude oil at its 
Sinclair, Wyoming refinery or, alternatively, Sinclair could effectively manage 
its crude oil supply by back hauling on its own pipeline or by making crude oil 
trades.  

 

[¶15]   In addition, Amoco and Citation contend 
the record establishes that even if Sinclair was able to utilize the entire 
crude oil production of Little Buffalo, which is approximately 2,200 barrels per 
day, this loss would not be material to Sinclair's operation which consumes 
approximately 80,000 barrels of crude oil every day.  Further, Amoco and 
Citation assert their position is enforced by the fact Sinclair had never been 
able to obtain 2,200 barrels per day from Little Buffalo.  Sinclair's most 
recent indirect purchase in the second half of 2000 from Koch Oil Company 
amounted to only 500 barrels per day.  Accordingly, Amoco and Citation aver that even 
if Sinclair was allowed continued access to Little Buffalo crude oil, there is 
no assurance Sinclair would use this crude oil as Sinclair has not historically 
been the low bidder for such crude oil, Sinclair has not purchased a large 
portion of this production, and Sinclair has only used this crude oil on a 
seasonal basis.  
Amoco and Citation further point out Sinclair has no contractual right to 
any of the Little Buffalo crude oil and has never offered a bid for, or 
purchased, Little Buffalo crude oil from Citation.  

 

[¶16]   Also in support of its position, Amoco 
and Citation cite Sinclair's admission that should it choose to do so, it can 
operate successfully without access to the Little Buffalo crude oil by obtaining 
its crude oil supply from North Dakota, Montana, Canada, and other fields in 
Wyoming.  
Further, Sinclair has not had difficulty in obtaining the crude oil that 
it needs for its operation over the past three years when no Little Buffalo 
crude oil was avail­able, and Sinclair cannot identify any adverse economic 
impact arising out of the abandon­ment for which Amoco applied. 

 

[¶17]   In response to these contentions, 
Sinclair counters it has purchased Little Buffalo crude oil for the past 50 
years and has purchased Little Buffalo crude oil from Conoco during the three 
years prior to 
April of 2000.  
In addition, when Sinclair bought crude oil, it shipped this crude oil on 
Amoco's pipelines pursuant to both a Federal Energy Regulatory Commis­sion 
tariff and a PSC tariff.  Sinclair also claims it has bought Little 
Buffalo crude oil when such oil has been available and intends to continue 
purchasing this crude oil, if allowed to do so.  

 

[¶18]   Finally, Sinclair asserts two reasons 
why it is aggrieved or adversely affected by the inability to have access to 
Little Buffalo crude oil at its Casper, Wyoming refinery.  First, Little 
Buffalo crude oil represents a low-cost crude oil from a transportation 
standpoint because the cost to transport a barrel of Little Buffalo crude oil to 
Sinclair's Casper, Wyoming refinery is one dollar less than the cost to 
transport a barrel of crude oil from Canada.  Further, in response to a direct question from 
PSC at the hearing as to why the 500 barrels of crude oil per day that Sinclair 
was purchasing for its Casper, Wyoming refinery was such an important factor to 
Sinclair's ability to operate that refinery, Sinclair responded that a $10.00 
per barrel profit margin for these 500 barrels per day amounted to a significant 
amount of money to Sinclair.  Therefore, Sinclair argues the amount of crude 
oil Sinclair has purchased from Little Buffalo Basin is very significant from 
the standpoint of profit margins. 

 

[¶19]   Secondly, Sinclair argues it is 
aggrieved and adversely affected by the ruling of PSC because Little Buffalo 
crude oil is classified as Wyoming asphaltic crude oil, and its Casper, Wyoming 
refinery was designed to refine this type of asphaltic crude oil when making 
asphalt.  
Sinclair, on average, refines 8,000 barrels per day of this type of oil 
with this amount increasing to 12,000 to 14,000 barrels per day in the summer 
when demand for asphalt is higher.  Therefore, although Sinclair has contracted 
for 4,700 barrels per day of production from another Wyoming asphaltic crude 
field, Little Buffalo crude oil is a primary source in the summer months.  Further, Sinclair 
posits the loss of 2,200 barrels of Little Buffalo crude oil or the 500 barrels 
Sinclair was purchasing at the time of the abandonment is very significant when 
compared to the amount of Wyoming asphaltic crude oil that is refined by 
Sinclair.

 

[¶20]   Upon our review of the record, we 
conclude Sinclair has appropriate standing to bring this appeal.  Specifically, under 
the facts presented by Sinclair, we are convinced Sinclair is sufficiently 
affected to guarantee this court is faced with the determination of an actual 
justiciable controversy.  Certainly, while Amoco and Citation try to 
minimize Sinclair's involvement, Sinclair is properly situated with sufficient 
pecuniary, personal, and tangible interests at stake.  Such involvement 
assures Sinclair is properly motivated to vigorously advocate its position.  Sinclair has also 
shown potential injury or harm is readily perceptible resulting from the action 
taken by PSC, rather than merely speculative as argued by Amoco and 
Citation.   
As such, Sinclair is entitled to judicial review of the issues it has 
raised before this court.

 

[¶21]   Sinclair raises numerous issues 
regarding the determination by PSC to approve the appli­cation of Amoco to abandon its crude oil gathering facilities.  After boiling down 
the issues raised by Sinclair, Sinclair essentially asserts 1) PSC erred as a 
matter of law in failing to apply the proper legal standard applicable in an 
abandonment matter; 2) PSC's determina­tion the abandonment was in the 
public interest was unsupported by substantial evidence; and 3) PSC erred as a 
matter of law concerning Amoco's duty to maintain its facilities.  We address each of 
these issues in turn.

 

1.  Legal Standard

 

[¶22]   Sinclair declares PSC applied an 
improper legal standard in determining the applica­tion for abandonment 
filed by Amoco.2  Therefore, Sinclair concludes PSC's approval 
of the abandonment must be set aside.  Ironically, Sinclair agrees, along with the 
remaining parties and this court, the proper legal standard to be applied in 
abandonment cases is expressed in the case of Union 
Pacific Railroad Co. v. Public Serv. Comm'n, 518 P.2d 23, 24-25 (Wyo. 
1974).  In that 
case, this court stated:

 

The appellant strenuously argues that the profitability of 
the station is not a governing or major factor to be considered but is only one 
of some seven mentioned as important: (1) the volume and nature of the business 
transacted at the station; (2) the cost of furnishing such service; (3) the 
ratio of the cost of maintaining the station agency (including both 
out-of-pocket and overall expense) to revenues received from the station; (4) 
the nature of the transportation service remaining or to be sub­stituted; 
(5) the proximity and accessibility, including public telephone service, to 
other stations; (6) the inconvenience to the entire shipping and traveling 
public and not merely to an indi­vidual or a few shippers resulting from 
removal of the agent; and (7) the probabilities of future development.

 

While it is true that the profitability aspect, covered 
indi­rectly in the first three mentioned factors, is not controlling but 
merely one element to be viewed along with various others, we think that, 
reasonably interpreted, the commission's findings so indicate; and it would seem 
that the commission considered profitability as only one of three factors on 
which the order was based.

 

Doubtless there is validity in each of the seven factors 
indicated by appellant to be of importance in determining whether or not a 
railroad agency should be maintained or dis­continued.  However, the matter 
varies as to existing situations.  Our research leads us to believe that for 
practical purposes the correct rule is that if the public good, its convenience 
and neces­sity, outweighs the expense of the railroad in continuing such 
agency the commission is justified in denying the request for closing.  Erie-Lackawanna Railroad Company v. Pennsylvania Public 
Utility Commission, 202 Pa.Super. 511, 515, 198 A.2d 383, 385; Louisiana and Arkansas Railway Company v. Arkansas Commerce 
Commission, 235 Ark. 506, 360 S.W.2d 763, 764; 74 C.J.S. Railroads § 
402(2).

 

. . . Accordingly, the paramount question before 
us is whether or not the public convenience and necessity require that the 
agency station remain at Burns; and it is basic that the bur­den of proving 
lack is upon the carrier seeking discontinuance of the agency.  Application of Chicago & North Western Rail­way 
Company, 79 Wyo. 343, 334 P.2d 519, 521.

 

In the companion case to Union 
Pacific Railroad Co. v. Public Serv. Comm'n, 518 P.2d 23, Union Pacific Railroad Co. v. Public Serv. Comm'n, 518 P.2d 17, 18-19 (Wyo. 1974), this court further recognized:

 

In that connection, it is argued, inter alia, that the basic 
concept, or factor, to be kept in mind in determining whether an agency station 
should be closed or kept open is the public convenience and necessity, that the 
courts have held the public convenience and necessity to be considered in 
granting or denying an appli­cation to close an agency station mean the 
convenience and necessity of the public and not of an individual or individuals, 
and that in the absence of public convenience and necessity the maintenance of a 
railroad agency station primarily involves a question of business policy with 
which regulatory bodies should not interfere. 

 

. . .

 

Considering the burden of the carrier to prove the lack of 
the public's necessity and convenience in order to justify the closing of the 
station, we conclude that the district court was correct in affirming the 
commission's order.

 

More recently, this court again certified this is the proper 
legal standard that must be applied in abandonment cases in Burlington Northern Railroad Co. v. Public Serv. Comm'n, 
698 P.2d 1135 (Wyo. 1985).

 

[¶23]   Sinclair further asks this court to 
adopt purported additional standards of review as expressed in 1 David J. Muchow 
& William A. Mogel, Energy Law and Transactions 
§ 2.01[2][b][i] (2002) and 73B C.J.S., Public 
Utilities § 9(a) (1983).  1 Energy Law and 
Transactions § 2.01[2][b][i] espouses a rule of law that: "A utility may 
request to abandon services when consumer demand diminishes and the costs of 
providing service increase so that it is no longer profitable for the utility to 
continue providing service."  The standard set 
forth in 73B C.J.S., Public Utilities § 9(a) 
states:

 

The devotion of property to a public use carries with it the 
duty to serve the public, and such duty must be performed by a public utility or 
its privileges and franchise must be surren­dered.  As a general rule, 
it has no right to discontinue or abandon its service on any part of its 
property devoted to public use or to impair its ability to perform its public 
duties except with the consent of the state; and the mere fact that the 
enter­prise or a particular service is not profitable does not justify the 
utility in ceasing or refusing to perform its duties.

 

In the absence of a statute or contract, however, a utility 
is not bound to continue operation at a loss if there is no reason­able 
prospect of profitable operation in the future, or if such continuance will 
require a considerable investment from which no return can reasonably be 
expected.

 

(Footnotes omitted.)  This section goes on to express a state may 
compel performance of the public utility's duties when no adequate excuse for 
nonperformance is shown.

 

[¶24]   Initially, upon our consideration of the 
standards which Sinclair asks us to adopt, we recognize Sinclair admits the 
standard set forth in C.J.S. is substantially similar to the standard set forth 
for railroads already adopted in our holdings in both Union Pacific Rail­road Co. v. Public Serv. Comm'n, 
518 P.2d 23 and Union Pacific Railroad Co. v. Public 
Serv. Comm'n, 518 P.2d 17, 18-19 and confirmed in Burlington Northern Railroad Co. v. Public Serv. Comm'n, 
698 P.2d 1135.   
In addition, the standard set forth in 1 Energy 
Law and Transactions § 2.01[2][b][i], in essence, enumerates only one 
element which our already adopted standard expresses through these 
holdings.  
Hence, we refuse to adopt those stan­dards proffered by Sinclair 
because we find them to be too limiting.  Rather, we find the better rule of law to be 
that already expressed in Wyoming which requires a more global review and 
balancing of each of those factors as set forth in Union 
Pacific Railroad Co. v. Public Serv. Comm'n, 518 P.2d 23, 24-25 and the 
subsequent opinions issued by this court.

 

[¶25]   Upon our review of the record, we hold 
PSC applied the appropriate legal standard with respect to the abandonment 
application of Amoco.  
In its decision PSC stated:

 

84.  In making a determination as to whether to 
grant the abandonment of public utility facilities and the cessation of public 
utility service the Commission must be guided by public interest 
considerations.  
In this present case, the public interest was identified as consisting of 
the interests of the lease and roy­alty holders in the Little Buffalo Field, 
including the State of Wyoming through the Office of State Lands and 
Investments; Citation, as the producer and marketer of production in the field; 
Sinclair, as a prior purchaser of production from the Little Buffalo Basin 
Field; and Amoco, as the owner of the gathering facilities proposed to be 
abandoned.  The 
Commission notes that, although Koch Oil Company and Conoco have been 
identi­fied as prior purchasers of Little Buffalo Basin crude oil, neither 
entity expressed any position regarding the proposed abandon­ment.  In weighing and 
balancing the common, and in some instances the conflicting, interests of these 
various entities it is important to consider their past utilization of these 
public utility gathering facilities and the future impact on these entities 
should the abandonment be granted.

 

PSC also found, through evidence comprised of actual 
operating results for the most recent three-year period, Amoco had supported its 
assertion that  
replacement of the storage tank was not economically feasible.  However, PSC 
specifically noted this issue was not the primary consideration or factor upon 
which it relied in making its final decision.  

 

[¶26]   PSC recognized Citation was responsible 
for marketing all of the oil produced in Little Buffalo Basin on behalf of its 
limited partners, as well as the remaining leaseholders that retained the 
remaining 2% of the working interest in the leasehold.  In addition, PSC 
observed Citation's purchase and operation of the gathering line facilities and 
its agreement not to utilize the Little Buffalo Basin point of origin giving 
access to the Amoco Big Horn trunk line provided Citation with a greater number 
of possible markets and potentially better sales prices for the Little Buffalo 
Basin production, to the greater benefit of Citation and the lease and royalty 
holders in the field.  
Finally, PSC acknowledged Sinclair had not purchased any of the 
production from the Little Buffalo field for the three-year period prior to 
April of 2000 and, only recently toward the second half of 2000, had an 
opportunity to purchase some of this crude oil from Koch Oil Company.  

 

[¶27]   Therefore, we conclude PSC applied the 
appropriate legal standard as originally set forth in the seminal case of Union Pacific Railroad Co. v. Public Serv. Comm'n, 518 P.2d 23 and properly considered the public good, convenience, and necessity with 
respect to its determination concerning the abandonment application of 
Amoco.  Indeed, 
the record reflects PSC took a very deliberate, conscientious, and systematic 
approach in its analysis to ensure its determination was appropriately based 
upon the specific criteria previously enumerated by this court. 

 

2.  Substantial Evidence

 

[¶28]   Along with its numerous complaints that 
PSC applied the incorrect legal standard in determining the application for 
abandonment filed by Amoco, Sinclair through a "shot-gun" approach argues PSC's 
determination was not supported by substantial evidence.  In taking such an 
approach, Sinclair merely cites this court to its own facts and arguments 
presented at the PSC hearing and performs little analysis detailing why PSC's 
determination was unsup­ported by the evidence garnered at hearing.  In fact, we are 
inclined to agree with the characterization of each of the appellees that 
Sinclair simply attempts to re-try its case before this court, rather than 
present this court with foundation that PSC's ultimate conclusion was not 
supported by substantial evidence.

 

[¶29]   Initially, Sinclair claims PSC's 
conclusions that a new storage tank would cost $691,000 and replacement of the 
storage tank was not economically supported were errone­ous and not 
supported by evidence presented at hearing.  Certainly, as admitted by PSC in its final 
order, these issues were each highly contested.  Nevertheless, sufficient evidence was 
submitted to PSC to support its ultimate determination.

 

[¶30]   Amoco, Sinclair, and Citation presented 
evidence at the hearing concerning the esti­mated costs associated with the 
replacement of the subject tank.  Amoco's witness, Tom Boslett, district manager 
for the Rocky Mountain Business District of Amoco, testified the cost of the 
tank, itself, along with any related material and assembly costs, constituted 
only a portion of the total cost in replacing the tank and other costs such as 
foundation work, dirt work, electrical work, and site preparation among other 
possible costs needed to be factored into the cost of replacement of the 
tank.  At the 
hearing, Sinclair pointed out Citation, in responding to discovery, estimated 
the cost of erecting a storage tank was $200,000, yet it is unclear whether this estimate included all costs 
associated with the total endeavor of replac­ing the tank.  In fact, Citation 
went on to indicate it had expended considerable time, effort, and expense in 
designing and obtaining cost estimates to install a new gathering system at 
Little Buffalo Basin.  
However, it remains questionable if these costs are included in the 
$200,000 storage tank figure.  Sinclair also provided PSC with bid 
estimates for replacement of the tank which varied from $103,000 to $130,000.3  Nevertheless, Sinclair admitted these 
estimates only included the cost for materials and labor to install the tank 
shell and did not include other costs which would also have to be incurred in 
replacing the tank, such as site preparation costs, earthwork, foundation for 
the tank, floating roof, electrical instrumenta­tion, valves, piping, tank 
coatings, engineering design, construction management, and inspection.  Accordingly, 
comparison of the cost estimates received by PSC to replace the tank becomes 
virtually impossible.

 

[¶31]   Sinclair also criticizes PSC for 
allegedly not requiring Amoco to meet its burden of proof with respect to the 
economic realities associated with its proffered abandonment.  Review of the record 
indicates Amoco presented actual operating results for a three-year period and 
estimated costs for replacement of the tank in support of its argument that 
replacement of the tank would not be economically feasible.  Sinclair argues Mr. 
Boslett, on behalf of Amoco, admitted there existed no foundation for this 
documentation and, therefore, PSC relied on data that was admittedly unsupported 
to reach its conclusion.  A more careful review of Mr. Boslett's 
testimony reveals the operating results presented constituted accurate figures 
available to Amoco regarding net revenues for the applicable period of 
time.  
Criti­cally, Mr. Boslett testified Amoco's analysis was primarily 
supported by the actual operating revenue and expenses incurred.  In addition, Mr. 
Boslett testified on numerous occasions upon rigorous cross-examination by 
Sinclair's counsel that the economic analysis performed by Amoco concerning its 
calculated rate of return was a rough estimate, however, even sub­stantial 
changes in the numbers utilized would not significantly change the outcome. 

 

[¶32]   Sinclair also argues Amoco must 
demonstrate no return can be reasonably expected from the investment in the new 
tank and therefore, because Amoco submitted evidence that a return of at least 
5.5% might be realized, PSC erred in making its determination.  This assertion by 
Sinclair as to Amoco's required burden of proof is patently incorrect.  As noted above, the 
proper legal standard that must be applied requires seven distinct factors to be 
considered with the primary consideration ultimately being public good, 
convenience, and necessity.  The established law in Wyoming simply does not 
require Amoco to demonstrate absolutely no return can be reasonably expected 
from any anticipated investment in the system.

 

[¶33]   Further, Sinclair asserts PSC's 
conclusion that approving the requested abandonment was in the public's best 
interest is unsupported by substantial evidence.  As foundation for this contention, Sinclair 
again avers that it was significantly adversely affected by the deci­sion of 
PSC given the positioning of Sinclair in the market as previously set forth in 
our discussion regarding standing.  Primarily, Sinclair argues under the allowed 
abandonment it is now unable to easily obtain crude oil for its Sinclair, 
Wyoming refinery.  
Sinclair also takes the position that Citation's interests in the 
requested abandonment are insignificant because the determination of PSC, one 
way or another, did not affect Citation's ability to market its product.

 

[¶34]   The record evidences PSC's painstaking 
analysis of all interests affected in this case.  In particular, PSC assessed the potential 
effects of its determination on each of the lease and royalty holders in the 
Little Buffalo field, including the United States government; the State of 
Wyoming; Citation, as the producer and marketer of the oil produced; Amoco, as 
the owner of the facilities proposed to be abandoned; and Sinclair, as a 
previous and recent pur­chaser of oil.  In addition, PSC gave notice to prior 
purchasers of oil such as Koch Oil Company and Conoco, but these entities chose 
not to participate in this matter.  Finally, PSC considered the effects its 
decision might have on the public at large. 

 

[¶35]   The evidence establishes Citation is the 
sole operator of the Little Buffalo field and with its limited partners owns 
over 98% of the working interests in the Little Buffalo lease­hold 
estate.  In 
addition, no owners or operators other than Citation transport crude oil through 
the gathering system, and Citation is exclusively responsible for the marketing 
of crude oil produced at Little Buffalo Basin on behalf of its limited partners 
and the owners of the other 2% of the working interests.  Therefore, Citation 
clearly possessed a direct and sub­stantial interest in the Little Buffalo 
field.

 

[¶36]   Citation further showed that its 
purchase and operation of the gathering facilities and its agreement to not ship 
through Amoco's Big Horn trunk line provided Citation with access to a greater 
number of markets and a potential for better sales prices.  These consequences 
obviously enure to benefit, not only Citation, its limited partners, the 
remaining working interest owners, but potential purchasers and governmental 
interests, as well as the public at large.  In addition, it is logical for Citation to own 
and operate the gathering system thereby ensuring Citation is committed to the 
fullest possible continued development of Little Buffalo Basin resources.

 

[¶37]   Furthermore, PSC considered Sinclair's 
involvement as a crude oil purchaser.  The evidence presented established Sinclair 
had not purchased crude oil produced at Little Buffalo Basin for the three-year 
period prior to April of 2000; Sinclair purchased only a small amount of crude 
oil from Koch Oil Company since that time; Sinclair had not been a shipper on 
the gathering system since 1996; Sinclair had other sources for obtaining crude 
oil in North Dakota, Montana, Canada, and other fields in Wyoming; Sinclair had 
never offered to bid for, or purchased, Little Buffalo crude oil from Citation; 
and Sinclair had no existing contractual right to purchase Little Buffalo Basin 
crude oil.  
Finally, PSC recognized, even upon approval of the abandonment of Amoco 
facilities and utilization of the Red Butte Pipe­line as contemplated by 
Citation, Sinclair could still receive Little Buffalo Basin crude oil at its 
Sinclair, Wyoming facilities. 

 

[¶38]   We readily admit the record before us 
does reflect some evidence that is contrary to the ultimate decision made by 
PSC.  However, 
this evidence is not sufficient to convince us the determination of PSC was 
incorrect.  We, 
therefore, determine the findings and rulings reached by PSC were based on 
substantial evidence and within established law.  We hold the record provides a rational basis 
for PSC's ultimate findings of fact and conclusions of law.   As such, we 
hold these findings of fact and conclusions of law were not clearly contrary to 
the overwhelming weight of the evidence.  Further, we recognize, as we have on numerous 
other occasions, that we will not substitute our judgment for that of an agency 
when substan­tial evidence supports the decision rendered by the agency 
involved.  Elk Horn Ranch, Inc. v. Board of County Comm'rs, 2002 WY 
167, ¶13, 57 P.3d 1218, ¶13 (Wyo. 2002) (citing Newman v. 
State ex rel. Workers' Safety & Compensation Div., 2002 WY 91, ¶12, 49 P.3d 163, ¶12 (Wyo. 2002)).  

 

[¶39]   In tangentially related assertions to 
Sinclair's sufficiency of the evidence argument, Sinclair further repines PSC 
improperly refused to allow Sinclair to inquire additionally into the public 
interest issues by making evidentiary rulings against Sinclair and through PSC's 
request for and acceptance of late filed exhibits after the hearing was 
concluded.  
Sinclair also contends PSC erred when it refused to allow Sinclair to 
admit Citation's pre-filed testi­mony of Forrest Harrell.

 

[¶40]   With respect to PSC's evidentiary 
rulings, Sinclair asserts it was improperly prevented from completely delving 
into the effects of the settlement agreement reached between Amoco and Citation 
with respect to issues regarding alternative transportation of the crude oil and 
the existence and sufficiency of those markets available under the terms of the 
agreement.  
Furthermore, Sinclair proffers it was unfair for it to be averted from 
inquiring into these areas while at the same time Amoco and Citation were 
allowed to utilize the terms of the settlement agreement entered into between 
them to support Amoco's requested abandonment.  

 

[¶41]   It is well established in Wyoming that 
with regard to an agency's decision on the admis­sion or exclusion of 
evidence and testimony, such is left within the sound discretion of the 
agency.   
Judicial discretion is a composite of many things, among which are 
conclusions drawn from objective criteria; it means a sound judgment exercised 
with regard to what is right under the circumstances and without doing so 
arbitrarily or capriciously. In re: Worker's Compensation 
Claim of Shryack, 3 P.3d 850, 855 (Wyo. 2000) (quoting Vaughn v. State, 962 P.2d 149, 151 (Wyo. 1998)).  An abuse of 
discretion has also been said to have occurred only when the decision shocks the 
conscience of the court and appears to be so unfair and inequitable that a 
reasonable person could not abide it.  Hall v. Hall, 2002 
WY 30, ¶12, 40 P.3d 1228, ¶12 (Wyo. 2002); Everheart v. S 
& L Industrial, 957 P.2d 847, 853 (Wyo. 1998); Goddard v. Colonel Bozeman's Restaurant, 914 P.2d 1233, 
1238 (Wyo. 1996).

 

[¶42]   PSC limited Sinclair's inquiry into the 
effects of the settlement agreement reached between Amoco and Citation with 
respect to those issues regarding alternative transportation of the crude oil 
and the existence or sufficiency of those markets available under those terms 
based primarily upon its determination that PSC should not inquire into and make 
decisions concerning private entities over which the PSC had no control.  This court has 
previously cautioned PSC that it is not authorized to meddle in the private 
sector's contractual affairs.  Union Telephone Co., 
Inc. v. Public Serv. Comm'n, 910 P.2d 1362, 1365 (Wyo. 1996). 

 

[¶43]   Furthermore, PSC allowed Sinclair some 
latitude with these subjects yet drew the line at Sinclair's attempt to obtain 
specific details in these areas.  Moreover, we recognize the terms of the 
agreement between Amoco and Citation were fully disclosed to PSC; and 
testi­mony from a Citation witness, Gary C. Johnson, was received by PSC 
regarding these topics.  Indeed, in its determination, PSC explicitly 
observed that under the agreement Citation had agreed not to transport crude oil 
via Amoco's Big Horn trunk line, which would result in Sinclair being precluded 
from direct access to Little Buffalo field crude oil at its Casper, Wyoming 
refinery.  PSC 
further properly intimated Sinclair's intended inquiry into these areas was 
cumulative and, in any event, outside the direct abandonment application being 
considered at the hearing.  Finally, Sinclair had the opportunity at the 
hearing to present its own evidence and testimony into these areas without 
directly attempting to elicit Citation's particular business plans given its 
agreement with Amoco, but chose not to do so.   We hold, therefore, PSC did not abuse 
its discretion when it precluded detailed inquiry into the specific manner in 
which Citation intended to transport crude oil given its decision to enter into 
the agreement with Amoco.   

 

[¶44]   As to Sinclair's asserted error 
concerning PSC's acceptance of exhibits from the parties after hearing, we reach 
a similar result.  
First, Sinclair did not object to Citation's submission of evidence as 
requested by PSC and, therefore, impliedly waived any issue regarding these 
exhibits.  Under 
long standing precedent, this court has also clearly estab­lished it will 
not consider those issues on appeal not previously raised.  State v. Campbell County Sch. Dist., 2001 WY 90, ¶35, 32 P.3d 325, ¶35 (Wyo. 2001); Cooper v. Town of 
Pinedale, 1 P.3d 1197, 1208 (Wyo. 2000); R.O. Corp. 
v. John H. Bell Iron Mountain Ranch Co., 781 P.2d 910, 913 (Wyo. 1989).  Secondly, Sinclair 
was also allowed by PSC to submit exhibits after hearing and even requested that 
certain information contained within the late-filed exhibits be submitted by the 
parties.  
Therefore, it is disingenuous for Sinclair to com­plain Citation was 
given this same opportunity and now object after its own requests have been 
satisfied.  

 

[¶45]   We also find the exhibits submitted by 
Citation were somewhat cumulative to the testi­mony given by its witness, 
Mr. Johnson, concerning the areas of alternative transporta­tion of the 
crude oil and the existence or sufficiency of those markets available.  Finally, we believe 
that the request for and acceptance of the late-filed exhibits by PSC was done 
in order to obtain all the necessary information needed by PSC to make a 
complete and informed determination in this matter and was appropriate in such 
regard.  See Majority of Working Interest 
Owners In Buck Draw Field Area v. Wyoming Oil & Gas Conservation Comm'n, 
721 P.2d 1070, 1078 (Wyo. 1986) (holding an administrative agency may admit 
documentary evidence in a contested case after hearing).

 

[¶46]   Lastly, Sinclair grieves that PSC 
improperly deterred it from admitting the pre-filed testimony of Mr. Harrell, 
Citation's witness.  
However, upon our review, we find that this testimony was summative to 
live testimony given by Citation's witness, Mr. Johnson.  Additionally, 
Sinclair was granted leeway in its cross-examination of Mr. Johnson to explore 
the areas expressed by Mr. Harrell prior to hearing.  Further, Sinclair 
did not subpoena Mr. Harrell to testify at hearing.  Therefore, we find 
that PSC again did not abuse its discretion in rendering its decision and, in 
any event, PSC's ruling proved harmless to Sinclair.

 

3.  Duty to Maintain

 

[¶47]   Sinclair also contends Amoco had a duty 
to maintain its facilities as a public utility under both statutory and 
regulatory authority and PSC failed to make a determination regarding this 
issue.  
Moreover, Sinclair contests it was improper for PSC to grant Amoco's 
abandonment application predicated on Amoco's contention the subject storage 
tank was in a dilapidated condition.

 

[¶48]   Initially, this court recognizes that 
PSC did make a review as to whether there existed a connection between what had 
previously transpired leading up to the deterioration of the system and the 
proposed abandonment sought by Amoco.  This was expressly detailed by PSC at the 
hearing.  
Furthermore, the evidence presented at the hearing showed that the only 
unusable portion of the facilities was the 55-year-old storage tank.  Indeed, at the 
hearing Citation admitted that it intended to con­tinue to use the 
facilities with the exception of the storage tank.  This fact was 
expressly detailed by PSC in its order:  "the gathering lines serving the Little 
Buffalo Field remain in a sufficiently safe and adequate condition to provide 
crude oil gathering service."  

 

[¶49]   Upon our review of the record, we must 
also agree with the conclusions of PSC expressed in its order that:

 

The evidence of record reflects the parties' concurrence 
that the storage tank needs to be either repaired or replaced.  Although the 
gathering lines and the existing 10,000 barrel storage tank are not cathodically 
protected and are of similar vintage, the Commission concurs with the opinions 
expressed by Amoco and Citation that the current condition of the storage tank 
precludes its continued use.  Amoco witness Boslett described the storage 
tank as having a crumbling foundation, serious corrosion, bowed stop parts, and 
being in service beyond its useful life.  Mr. Boslett further testified that recent 
cleaning of the tank resulted in leaks.

 

Simply stated, the evidence presented supports the 
conclusion that the storage tank had reached the end of its useful life.

 

[¶50]   Sinclair also challenges Amoco's efforts 
to maintain the storage tank and alludes that Amoco had received PSC approved 
higher rates in order to better service and maintain its facilities, yet failed 
to do so in this case.  
Nevertheless, the evidence presented at the hearing confirmed that Amoco 
had taken specific maintenance steps with respect to the storage tank over the 
years and had kept the storage tank in use over a substantial number of years 
with­out accident, injury, or spillage.  The evidence also supported the fact that 
Amoco, to its credit, has and abides by an extremely stringent internal policy 
with respect to leaks and spills.  

 

[¶51]   Sinclair also contends that PSC should 
have reprimanded Amoco for having shut down the gathering system prior to PSC's 
determination regarding Amoco's application for abandonment.  We hold Sinclair's 
argument in that regard lacks merit.  As related above, on November 16, 2000, prior 
to hearing, Amoco informed PSC the Little Buffalo Gathering System had been 
suspended effective October 1, 2000, for reasons of environmental safety because 
a storage tank within the system was in substantial disrepair.  Amoco suspended 
operation because cleaning the tank resulted in leaks, and Amoco was concerned 
that contin­ued use of the storage tank might result in spillage.  Amoco also confirmed 
at the hearing that should PSC rule that Amoco's requested abandonment be 
denied, Amoco was prepared to move forward as directed by PSC and place the 
storage tank again into service after mak­ing the required steps to insure 
the tank's safety.  

 

[¶52]   Further, common sense dictated the 
actions of Amoco in taking steps to remove the storage tank from service.  Presumably, had 
Amoco not taken these steps and simply awaited the determination by PSC, which 
was ultimately rendered many months later, a realized and actual environmental 
catastrophe may have resulted.  Finally, upon its review, PSC certainly has 
the authority to adequately deal with the actions of Amoco in the event PSC 
found them to be unsupported and not taken in good faith.  See Williston Basin Interstate Pipeline Co. v. Public Serv. 
Comm'n, 996 P.2d 663, 667 (Wyo. 2000).

 

[¶53]   Finally, Sinclair disputes PSC's refusal 
to address whether Citation became a public utility when it entered into the 
settlement agreement with Amoco.  Upon our review, we hold that this issue was 
not properly before PSC, as the only issue to be addressed in this proceeding 
was Amoco's application for abandonment.  Citation's status is clearly distinct and 
squarely separate in nature.  We also further recognize that although the 
issue of Citation's status as a public utility may certainly be properly brought 
before PSC, it is most appropriate that this issue be addressed in a separate 
proceeding so as to allow the full devel­opment of the facts and to afford 
all parties an opportunity for an independent, fair, and equitable hearing 
concerning this issue.  

 

[¶54]   We also must point out that PSC's 
refusal to address or render a determination on Citation's status as a public 
utility did not preclude PSC from making its ultimate decision upon Amoco's 
abandonment application.  As set forth above, we hold that PSC took a 
very deliberate, conscientious, and systematic approach in its analysis to 
ensure its determination was appropriately based upon the specific criteria 
previously enumerated by this court and that PSC's ultimate determination to 
grant Amoco's application is supported by substantial evidence.   

 

 

  
                 CONCLUSION

 

[¶55]   Upon our review 
and analysis, we affirm the action of PSC in granting the application of 
Amoco seeking authority to abandon its crude oil gathering facilities 
known as Little Buffalo Gathering System and to eliminate Little Buffalo Station 
as a point of origin. 
 

FOOTNOTES

1Although the Red Butte Pipeline provides a connection to 
Sinclair's refinery located in Sinclair, Wyoming, it does not connect to 
Sinclair's Casper refinery.  Amoco's Big Horn trunk line through Little 
Buffalo Station provides access to crude oil to both Sinclair's refineries 
located in Sinclair and Casper, Wyoming.

2Coupled with this issue, Sinclair also argues PSC's analysis 
incorrectly focused on unsupported economic figures, and Amoco failed to meet 
its burden of demonstrating that no return could be reasonably expected from its 
investment in a new tank. These arguments will be addressed subsequently by this 
court upon its consideration of whether or not substantial evidence supported 
PSC's determination.  

3Some of this evidence was presented to PSC via post-hearing 
documentation filed by Sinclair.