R-458 

45 

t.WX?ICE OF 

TEE AIYTORNEY GENERAL 

Ausq~. TEXAS 

PRICE DANIEL 

ArTO*NeYGENERAL 

Eon. Ernest 0. Thompson 

chalrman 

Railroad Commlssion~of 

Texas 

Au&in, Texas 

July 23, 19% 

Opinion No. V-309 

Re: The necessity of 

approval by the 

Railroad Commlsslon of Texas of 

a dlscontlnuance 

of the supply of 

gas to a munlclpallty by a gas 

utility, pursuant 

to'contract between the parties. 

And related questions. 

Dear Sir: 

You have requested 

ment In letters establishing 

the opinion of this Departthis factual situation: 

"111 May, 1928, the Mobeetlb Gas Company 

made a contract with certain lndlvldtils to 

furnish-gas to-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 furnishing gas to the city limits of the City 

of Miami. This contract was .&lso for a 

period of 20 years. This contract ~111 expire in 1948. 

"The Publio-SeFvice Corporation of Texas is successor to the M6beetle Gas Company, and desires to dlscontln~e furnlshlng 'gas to the ol$g llmlts of the city of 

Miami at the explratXon of Its coatract for 

the reason, 'among others, that its will require the construction of a new 15 Iidle 

line since the old line Is not In condition 

to coritlnue service after the expiration 

&ate. 
Hon. 

46 

Ernest 0. Thompson - Page 2 v-309 

" . . . Public Service Cbrporatlon has In 

m,lnd that 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 arrangements before the expiration of 

the contract." 

Your questions are as follows: 

"Please advise If It Is necessary for 

the Public Service Corporation of Texas to 

apply for permission from the Railroad Commission to discontinue the service described 

In the enclosed letters and If it is necessary for a hearing to be held If such appllcation Is to be required. 

"Also please advise us If notice to the 

customers of the utility are required to be 

given notlce,prlor to discontinuance of 

aervlce Ln the event application to the 

Commlsslon Is not required." 

The Public Service Corporation Is a "gas utll1ty" or 'public utility" as defined In Article 6050, 

V.C.S.) as follows: 

"The term 'gas utility' and 'public utllltys' or 'utility,* as used In this subdlvlsion, means and Includes persons, companies 

and private corporations, their lessees, 

trustees, and receivers, owning, managing, 

operating, leasing Or controlling within 

this State tiny wells, 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, transporting, conveying distributing or delivering 

natwal~gas: [a) for public use or service 

for ccmpensatlon; (b) for sale to municipalities 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 corportatlon operating under franchise or a contract with any municlpallty or other legal 
Ron..Ernest 0. Thompson - Page 3 v-309 47 

subdlvlslon of 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 transportation or carriage 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 

hereafter be acquired by the exercise of 

the right of emInentdomaIn; or If said line 

or any part thereof,.ls laid upon, over-or 

under any public road or highway of this 

State, or street or alley of any munlclpality, or the right of way of any rallroad or other,public utility; Including also 

any natural.gas~utillty authorize&by law 

to exercise the right of eminent domain. 

“3 e Producing or purchasing natural gas 

and transporting or causing the same to be 

transported by pipe .llnes to or near the 

llmlts oft any munlclpallty ln~whlch.saSd gas 

Is received ana dlstFlbuted or sold to the 

public by another public utility or by said 

munlclpallty, In all cases where such buslness Is In fact that only or practically.excluslve agency of supply of natural gas to 

such utility or municipality, is hereby declared to be virtual monopoly and a business 

and calling affected with a DubllC.interest. 

and the said business and 

therein within this State 

to the provisions of this 

risdlctlon and regulation 

as a gas utility. 

property employedshall be subject 

law and to the juof the Commission 

'%very such gas utllftg Is hereby declared to be affected with a public interest, 

and subject to the jurisdiction, control and 

regulation of the Commission as provided 

herein." 

"Jurlsdlctlon, control and regulation" of.the 

utility are vested In the Railroad Cominisslon by Artlcle 6050, supra. 'This "j~urlsdlctlon"~and "conttiol" may 

not be divested wlthotit the. consent of,the Railroad Commlsslon. For only the Railroad Commlsslon may 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 Commission after dtie notice shall 

fix and establish and enforce the adequate 

and reasonable price of gas and fair and 

reasonable rates of charges and Fegulatlons 

for transporting, producling, dlstrlbutlng, 

buying, selling, and delivering g a by such 

pipe lines In this State; and sha 1 1 establlsh fair and equitable rules and regulations for the full control and SupervIsIon 

of said gas pipe lines and all their holdings pertaining to the gas business in all 

their relations to the public, as the Commlsslon 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 transporting or protiualng the 

gas and the companies dlatrlbutlng or selling It; and prescribe and enforce rules and 

regulatlona for the government ati control 

of such pipe lines in respect to their gas 

elpe lines and produalng, receiving, transporting, and dlstrlbutlng faOllitle8; and 

regulate and apportion the supply of gas 

between towns, cities, and corporations, 

and when the supply of gas controlled by 

any gas pipe line shall be Inadequate, the 

Commlssloa shall prescribe fair and reasonable rules and regulations requiring such 

gas-pipe lines to augment their supply of 

gas, when-in-the judgment cjf the Commlsslon 

it la practicable to do so; and It shall 

exercise its power, whether upon Its own 

motion or upon petition by any person, corporation, munlclpkil corporation, county, or 

Commlssloners precinct showing a substantial 

Interest. In the subject,~or tipon petition of 

the Attorney~G~neral;~or 6f 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 Commlssion Is empowered with' "full oontrol and~supervlslon of 

said gas pipe lines and alltheir holdings pertaining 

to the gas business In all their relations to the &- 

lie." It Is ft@her%szered ~1-5 

-m 

overnment and 
Hon. Ernest 0. Thompson - Page 5 v-309 *9 

control of such pipe lines In respect to theif gas pipe 

lines and producing, receiving, transporting and dlstrlbutlng facilities" and. empowered to "re&.ate and appo;il$n the supply of gas controlled bynany gas pipe 

. It may exercise Its power upon Its own motion 

or upon petition." 

It would be an empty "jurisdiction" and an empty "full control" if the Commission could 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 Commlsslon v. Mlssourl 

Southern R. Co. (Sup. Ct. MO, lglg), 214 S. W. 381.: (pp. 

384-385 I 

11 Can appellant abandon this service witio&, applying to the commission for 

leave to do so? If so, any carrier can abandon any service without such leave, and, 

doubtless, change fares and take oft equlpment, whenever It comes to the conclusion 

that the facts jtistlfy such action.. If this 

course be lawful, the ccaumlsslon will became 

little more than a figurehead so far as carriers are concerned, and Its powers can be 

Ignored or Invoked as the carrier may desire. 

In this case the carrier was operating In 

submission to'the commission and under rates 

on file. A rate was changed., Instead of 

applying to the commlsslon for an Increase 

elsewhere, or for leave to abandon the service, 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 connnlsslon for 

the leave. Unless the power of the commlsslon to pass on this question Is conceded, 

then~lt is apparent the exercise of 801118 of 

Its express powers is conditioned upon 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 (sections 49, 

41, ~avs lg13), pp. 588, sgo), is of.no avail, 

if appellant's contention $8 sound. As .was 

said by the Kansas Suprenie Court: 

"'If these utilitg~corporatlons~mag abandon this particular service without the'consent of the commlssfon, may they not take 
50 Hon. Ernest 0. Thompson - Page 6 v-309 

off their pass6nger trains, take up and abandon unprofitable branch lines, change the 

fares and rates of transportation for passengers and freight, or raise the charge for 

telegraph messages without the consent of 

the'commlsslon? These questions answer themselves. To yield approval to the contention 

of defendants Is to concede that the state's 

program for the regulation and control of 

public service corporations 1s Ineffective; 

that the Public Utllltles Act has been enacted In vain.' State ex rel. v. Postal Tel. 

co., supra." 

It Is further stated in State v. Kansas PostalTelearauh-Cable Co. (Sup. Ct. Kans. 1915),15C P. 544: 

'(P. 5471 

II . . . In view of all these, can there 

be any doubt of the duty of the defendant, 

before dismantling Its station at Syracuse 

and abandoning Its business thereat, t@ secure the approval of the ConmIssion for such 

an Important change in Its mode of service? 

How Is the Public lJtllltles Commission to 

discharge Its important duties if the pnbllc service companies may quit business here, 

there, or anywhere In the state vlthout 811 

opportunity for the %omisslon to detezi:ne 

the propriety of such a course? 

"It Is clear that, If the defendant my 

forego Its business In Syracuse vithoti the 

sanction of the Commlsslon, it can close its 

office in Topeka, Wichita, or Kensas CLtr, 

without the consentof the Comlsslon. Jf 

this public utility,'& telegraph compsv, can 

close one of its offices and qult bus'3ess 

without the-consent of the Commlsslon, 6~ 

dther'ptibllc utility, like the Santa P? Zallw&y, So* exempl6; could close Its depct at 

DMg6 City, Htitchlnson, or Emporia vitt?zt 

the consent of the Cominli~sloh. Where r--nld 

this end? If these utility corporatlozs gay 

abandon this partlculsr service wlthorr. :he 

consent of the Commlssion;may they net -zke 

off their passenger trains, take up ati sbandon unprofitable branch 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 

telegraph messages without the consent of the 

CCmmlSslon?' These questldns answer themselves. 

To yield approval to the contention of the defendant Is to concede th8t the state's program 

for the regulation and control of public service corporations is Ineffective; that the public utllltles act has been enacted In vain." 

Further reason dictates that this jurisdiction 

may not be terminated without the consent of the Rallroad Commission. For, If the converse be true, a utility, against the will of the State, could abandon Its 

pipe line, tear up the line and sell it before replacement could be made. The possible effects of such a 

claimed power could be utter disaster to the great lnterests of the community. Destruction of private property, 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 established that "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 discontinue It." 34 

Tex. Jur., "Public Utllltles and Services," Section 15, 

p. 717; 43 Am. Jur., "Public Utllltles and Services," 

Section 78, p. 621; 5 Corpus Jurls, "Public Utllitles," 

Section 17, p. 8. 

Section 215, pp. 

See 5 P. U. R. Digest, "Service," 

4611-4614. 

Moreover, this has been the practice and construction of the Railroad Coxnlssion over a period of 

years. During this period of years, utllltles have made 

application to the Railroad Commission for permission to 

discontinue their service. The construction and lnterpretation of a statute by the Department charged with 

its administration Is 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 Corporation must have the consent of 

the Railroad Commission to discontinue the furnishing of 

gas to the dfstPlbutor for the City of Miami. 

Section 1 of Article 6053, supra, provides, in 

part, as follows: 

"The Commission after 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 reglstered'mall not less than ten (10) clays exclusive of the day of mailing before such 

hearing, addressed to all parties whom the 

Comml~slon may deem to be interested In the 

subject matter of such hearing. Any llcensee against whom a complaint has been filed 

shall be notified of the hearing on such complaint as herein provided, and shall have the 

right to appear at such hearing, file answer, 

Introduce evidence, 

son and by counsel." 

and be heard both in p,erIn answer to your second question, It Is our 

opinion that the statutes contemplate a hearing by the 

Railroad Commlsslon upon application for discontinuance 

of service, because the Commission must enter an order 

upon such application under Article 6053, supra, which 

must be after "due notice." Section 14, supra, provides 

that "notice of any hearing" shall be qlven to "lnterested" parties, 

ing." 

not less than 10 days before such hearIn view of this opinion, your third question 

does not require an ansver. 

SWMARY 

1. It Is necessary for the Public Service Corporation, a "gas utility" as defined 

bg~our statutes (Article 6050, V.C.S.), to 

have the consent of the Railroad Conrmlsslon 

to discontinue the furnishing of gas to the 

distributor for the City of Miami. State ex 

rel. Public Servfce Commission v. Mlssourl 

Southern R. Co; (Sup. Ct. MO. lglg), 214 

3~. W: 381, 384; State v. Kansas Postal-Telegraph-cable Co. (Sup. 

p. 544, 547. 

2. A hearing must be held by the Commlsslon on an 8ppllcatlon of a "gas utility" 

for requested permission to discontinue 
Hon. Ernest 0. Thompson - Page 9 

53 

v-309 

service to a municipality. Article 6053, 

V.C.S. 

Yours very truly 

A!l3!ORNEYGElW3ALOFTEXAS 

BY 

EMH:jt