OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 
*?ihen Articles 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?slission i-23 riot 5;ten 

entanded to coviw -zare ~roiucars of .zxi 71F.o 

sell their product at the point of origin.* 

1.?!8 s.;i'. (xi) at p-p. 14 tnij 15, (IJildarscoring ours). 

The court olemly holds thrlt rats Z,Akbg jcrisdictio2 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 3lrl3le control 

ea.;oged elso in diotributioh of WA to the 2ublia. other 

i&tutes dealing v&tk jdricdlctional L?a%ters wore Rot 

canaidertd by the oourt. The opin20~~1, Werufora, does 

mt pur;iort to 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.lfc1e 6098 

uk;~s a ruquirestnt of "such pipe 1h93m to r%e rapoztn 

11s the Cxxtnsion nay doem pertFnent. T!lo question t:~e;l 

is &~mtltar a 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 ~LXI io a buaimss which iz 

its nature end accordiz3 to the estiibbliehed 

nsthod of coriIuctin?; the bustie is.a mx~opoly 

and six111 not b8 conducted unless such 2~s :jIse 

lizo co used in conncc';ion ??ith such Lmsi;ie%s 

be s*&jcct ts tho jurisdiction ?xrcin cotii"erred 

upon 'tha Comlssion. Toe nttors.ay ikclsrej 

~hal.1 enforce this ?rovisim by icjumtiox 01 

other re;72cdy;w 
lien. Cll.sto~ ows1ey, 3frcctor, psrje 5 

hrtlcle 6056 provides: 

";irt. E356. O?;i!L;'iORt.r, FJ:cETs 

The Co~i3sio~ miy require of all per1503s or csr:orotions o_oeratin&, ovoing or coutrolling such gcs pips llms 571ozn regort3 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;ldor the stat&e for the CEJFA~SS~OZ to 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 purcl: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-ce to pap a %urnar tlpe rcte 532bi9cir?g an 

WIxaaonable %eil hcaa" or ~roauctiO% prive for the 

gg,YS: 

"At t&S5 2oiL3t z9c ~;buse to call ottcntcctioa to tho.f-ot that our hclalng to the 

cfx-act t!let the Cdsoion is without jc*isaiction to tell 3 mra gas prohcer w';tst price 

ha met chmge for his product rilen ssla on 

210 praxises of ?roauction to 5 public 35s 

utllitr does not man th5t the Comission. in 

511 in&nccs fina unaor all cfrcuxstsnoe5; in 

fisici; g:H.s utilit r'atcs, mc.t ellon tho ;:ns 

Utility s-rfeoted H ull credit for the pzomse 
iX2l. Clinton Oxslsy, Director, pg.a 4 

price 0r t5e ;;ns purchased byit. 1.n regma 

to that mttar, ws thiuk that, ia firiiis ~RS 

utility ratas, it is not only the ~miior but 

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. 2:85 G. 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 ~ths iMl,-osa 

~~~~~io5lon~~~~offlcallp aelega~Me the duty upon th8 

CoxAssion, in 1Fxe with the SUggeStion Or the COUIZ% 

00nt3iosa in the quotation rr03t its o_ninion shove, to 

wmblish a toir ana equitable division of tiio procoeas of the ssle of 68s betwom the ocm?aniss trsnsporting, or prcxhtcfng the. 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:s6rktSS to oxercir;e this 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 13qtreSsly Given 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 bt3 izgliod: 

"1~ seeA~s~ti, be crg,usd that our ~3s 

utility otututes, by nooesxtry inglicstfon, 

confer the pne3r 03t the Comissfon to fix the 

price or’gm mare It Ss sold by the. poduoar 

0n the piii~+3~ 0r pwuOti03 t0 a py4il0 gas 

utility. C:‘o think tht the povier t 0 “fix 

~ricad aaa m&e rates by a board or co.xii~sion 

is cot to be taken es oo~nforr~a by izgM.cation. 

Cuch Foaar mst ba cormwroa unaor stntutory 

or coLx,tii;irtionalanguage that is rroe from 

awbt, ma that admits of no othar roasomble 

CSmtruotio~.~ 228 3.3. (zna) nt .pnz;e Ii. 
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