OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN*?ihenArticles 0053 end 6354, cup-3, are

read either tozdther or sepmateiy they doxmntrote beyond any doubt that the rste ;:sX,o~ jurledictlox OL

- the Co?slissioni-23riot5;ten entanded to coviw -zare~roiucars of .zxi71F.o sell their product at the point of origin.* 1.?!8 s.;i'. (xi) at p-p. 14 tnij15, (IJildarscoring ours).

The court olemly holds thrltrats **Z,Akbg jcr**  isdictio2 as to %ere producers" has not bee3 cmerr3a upcm the Co%issi.m, erce~t,that such producer be a’ gzt of en integrated enterprise under a 3lrl3lecontrol ea.;ogedelso in diotributioh of WA to the 2ublia. other i&tutes dealing v&tk jdricdlctional L?a%terswore Rot canaidertd by the oourt. The opin20~~1, Werufora, does mt pur;iortto control tfx question belore us zc~:ncd2r.g i;h?c jurisdiction of the Cor;tisnlOn to*raquI.ze armual rep9rta of n%ere i)rtiucer*. Eouever, h3.lfc1e6098 uk;~s a ruquirestnt of "such pipe **1h93m** to r%e rapoztn 11sthe Cxxtnsion nay doem pertFnent. T!loquestion t:~e;l is &~mtltara mre 631)producer, math RB Yazoua, is a aipo line within the contcn~lstiou of this stetute. Ve bcllwR?it is. %ile it has been held not to be n utflit,o,the 

### mre producer oXearly **exercisea** funatiozs deTked to be thzt of a pipe line. Article GO51 prooldes:

Sellic&, .trmx3_70rting, producicg or 

### othrn:lr?e dealing 

### in nsturnl ~LXIio a buaimss which iz its nature end accordiz3 to the estiibbliehed nsthod of coriIuctin?; the bustie is.a mx~opoly 

### and six111not b8 conducted unless such 2~s :jIse lizo co used in conncc';ion ??ithsuch Lmsi;ie%s be s*&jcct ts tho jurisdiction ?xrcin cotii"erred upon 'thaComlssion. Toe nttors.ay ikclsrej 

### ~hal.1 enforce this ?rovisim by icjumtiox 01 other re;72cdy;wlien.Cll.sto~ows1ey, 3frcctor, psrje5



### hrtlcle 6056 

### provides:

";irt.E356. O?;i!L;'iORt.r, FJ:cETs The Co~i3sio~ miy require of all per1503sor csr:orotions o_oeratin&,ovoing or coutrolling such gcs pips llms 571oznregort3 of 

### th3 tot51 gmntities 

### of ~9s aietributaa by SUCK pipe lines **and of**  

### that **held** by the= in storage,
cna also of their source oi supply, t>~ rmxber of aslls trcn which they arm their reply, the **mount** of ?rasoure neintainad, end the mount and chnmctor and assor:ption of the quipnent eqAoyea, cud such othar mttero pcrtnlnl.og to the business a5 tha Cozi~ssion my ace= p6rtinent.*

The Suprem Court recognize5 th0 necessity u;ldorthe stat&e for the CEJFA~SS~OZto inquire into the price of 

### the gas oold to the utility. -Ghilo the seller, if s acre proaucer;canoot 35 reguktad, iron tic 5tanapoiS or rate makink, navorthelcos the **pur** cl:nsl~~g

utility my bo directaa rot to ckmse sxre ulon its **bo&s** the5 a re~ao~ble price. 19 thAt event the utility vmuld, or cmrse, absorb the excess price found %I ba paSd t.:, the prociucer,and would be arobibited Prox peesing it 03 to the 2ublio. **Iio>mdr,** ia **n3kLir.g**
e actarzinetion Oi ths reasonsblene3s of the arice, the Ccx&53133 tr0ttla necessarily hsve to izquire into the co5trSct5, books ena recorda or the ;rcaucer. In t1:i5 comoction the court olcsrly infers thet the consutbar '::ill not he-ceto 

### papa %urnar tlpe rcte 532bi9cir?g an WIxaaonable %eil hcaa" or ~roauctiO% prive for the gg,YS:

"At t&S5 2oiL3tz9c~;buseto call ottcntcctioa to tho.f-ot that our hclalng to the cfx-actt!letthe Cdsoion is without jc*isaiction to tell **3** mra **gas prohcer**  w';tst price ha met 

### chmge for his product rilenssla on 210 praxises of ?roauction to 5 public 35s utllitr does not man th5t the Comission. in 511 in&nccs finaunaor all cfrcuxstsnoe5; in fisici;g:H.s

utilit r'atcs,mc.t ellon tho ;:ns Utility s-rfeotedHull credit for the pzomseiX2l.Clinton Oxslsy, Director, pg.a 4



### price0r t5e ;;nspurchased byit. 1.nregma to that mttar, ws thiuk that, ia firiiis~RS utility ratas, it is not only the ~miiorbut th3 

### duty 0r the Ccmnission to inquire 2~20 t&e rwsona3leness or unreasozmbleness of the gas utility gas controets. C'eot*rn Cistribut- $I$-Cogyty vs. Fublio Se:YlCe Coat. 2:85G. S,

- .. . za. 655; efth **VB.** 11lmis mophone Co., 282 u. s. 133, 73 L. xa. 255.~

fxticle 6053 referred to by the court t<a aorining rate nnkiqg jurisdiction ot ~thsiMl,-osa ~~~~~io5lon~~~~offlcallp aelega~Me the duty upon th8 CoxAssion, in 1Fxe with the SUggeStion Or the COUIZ% 

### 00nt3iosa

in the quotation 

### rr03tits o_ninionshove, to wmblish a toir ana equitable division of tiio

### procoeas of the ssle of 68s betwom the ocm?aniss trsnsporting,or prcxhtcfngthe.FJs oha the ooqmr.ias aistrL but& or selli?.?g it*. In addition to,our belief that tlx proaucor of gas has been included s$ocirically 2s a "glpe lirm* writhi.the omtenglation 0r the statute, requiring regorta, we believe also it exlats 03 cn iz@ied powr. The Cowzission, of course, would ba 

### pO:s6rktSSto oxercir;ethis duty, cxoupt that it hma pmor to squire mports on its business actititics. me power to require regorta is therafore inpliea 33 ir?ciclent

to the p2Lmisy povmr 13qtreSslyGiven to t.h,o Co:&.ssion to quitably divlae procaeds botneen th8 gx&ucsr ana tha dlstxibutor. It is txme that 8 zrimry pomr such ss rate noking caxot bt3izgliod:

"1~ seeA~s~ti,



### be crg,usd that our ~3s utility otututes, by nooesxtry inglicstfon, confer 

### the pne3r 03tthe Comissfon to fix the price 

### or’gm mare It Ss sold by the.

### poduoar 0nthe piii~+3~ 0r pwuOti03 t0 a py4il0 gas utility. C:‘o

think tht the **povier** 

### t0“fix ~ricad aaam&e rates by a board or 

### co.xii~sion is cot to be taken es oo~nforr~aby izgM.cation. Cuch Foaar mst ba cormwroa unaor stntutory
or coLx,tii;irtional anguage that is rroe from awbt, ma that admits of no othar roasomble CSmtruotio~.~ 

### 2283.3. (zna) nt.pnz;eIi.**i A?**  **Cl co**  **0.,**