Court Opinion

ID: 9850561
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:59:17.246623+00
Date Added: 2024-06-11T09:20:39.271502
License: Public Domain

STUART, Justice
(dissenting).
I respectfully dissent. We are concerned here with contractual direct line sales of natural gas. As appellee concedes the State of Iowa has the right to regulate such sales if it so desires, the question is whether such right was exercised when the legislature defined a public utility as: “Any * * * corporation * * * owning or operating any facilities for * * * furnishing gas by piped distribution system * * * to the public for compensation”. Section 490A.1(1).
In my opinion the key phrase is “to the public”. The majority interprets the phrase to mean “sales to a sufficient of the public to clothe the operation with a public interest and does not mean willingness to sell to each and every one of the public without discrimination”. This definition is not in accord with the commonly accepted meaning of public sales or public services and I do not believe the legislature intended to so define “to the public”.
After stating the issue to be: “whether the legislature has exercised its admitted right to regulate” agreements between contracting parties, the majority fails to distinguish between cases in which the issue was the right to- regulate and those in which the issue was the legislative intent to regulate. The cases upon which the majority rely for authority for their definition of “to the public” were not concerned with the meaning of such phrase or legislative intent. The issue in all instances was the right to regulate contractual sales under a definition of public utility clearly intended to include them.
The statute involved in Industrial Gas Co. v. Public Utilities Commission, 135 Ohio St. 408, 21 N.E.2d 166; 29 P.U.R.,N.S., 89, defined public utilities as corporations “engaged in the business of supplying natural gas for lighting, power or heating purposes to consumers within the state”. “To consumers” is much broader than “to the public”. Those with whom appellee privately contracted here were consumers and the rates would be subject to regulation if our statute read as the Ohio statute.
The question in Industrial Gas Co. was whether it was “in reality a public utility”. The court held it was a public utility even though the public had no right to' demand and receive services saying: “The question whether a business enterprise constitutes a public utility is determined by the nature of its operations. * * * A corporation that serves such a substantial part of the public as to make its rates, charges and methods of operations a matter of public concern, welfare and interest subjects itself to regulation by duly constituted governmental authority.”
The case turns upon the right to regulate, which right is conceded here, not upon whether the legislature exercised the right.
In Natural Gas Service Co. v. Serv-Yu Cooperative, Inc., 70 Ariz. 235, 219 P.2d 324, it was decided Serv-Yu Corporation Inc. was “a public service corporation, subject to the jurisdiction and regulation of *120the Corporation Commission”. The Arizona Constitution provided:
“All corporations other than municipal engaged in * * * furnishing gas * * * for fuel light and power; * * * shall be deemed public service corporations.”
“The present statute 69-201 ACA 1939, subjects public service corporations to regulation where the products are disposed of ‘for sale’ or ‘for conpensation’.” 219 P.2d at 329.
There is no question but what Arizona sought to regulate Serv-Yu. The question again was the right to regulate where sales were restricted to members. The case is authority for what may be classified as a public utility but it does not aid us in determining whether the Iowa legislature intended to regulate private contractual direct line gas sales.
The statute, Laws 1945, c. 53, § 1, involved in Public Service Commission v. Panhandle Eastern Pipeline Co., 224 Ind. 662, 71 N.E.2d 117, defined a gas utility as “any public utility selling or proposing to sell or furnish gas directly to any consumer or consumers within the State of Indiana for his, its or their domestic, commercial or industrial use”. The court commented: “Certainly appellee is selling or proposing to sell gas directly to consumers in Indiana.”
Appellee was within the definition of a public utility. The question was the right to regulate direct line sales to large industrial customers.
These cases are authority for the proposition that a corporation can be regulated as a public utility even though it does not hold itself out as serving the general public. They are not authority for the proposition that private contractual sales are sales to the public, for which they are cited by the majority.
It is one thing to say a corporation can be classified as a public utility without the public having the right to demand and receive its services. It is a far different thing to say contractual sales to individual customers are sales “to the public”. It may very well be the public has an interest in these contractual sales and they should be regulated. That is a matter of public policy for the legislature, not us, to decide. I believe the legislature excluded such sales by limiting the authority of the commission to the furnishing of gas “to the public”.
Other sections of 490A support this construction of the statute. Section 490A.9 provides in part:
“2. Every public utility engaged directly or indirectly in any other business than that of the production, transmission or furnishing of heat * * * to the public shall,” [keep separate accounts of such business] and “all profits and losses may be taken into consideration by the commission if deemed relevant to the general fiscal condition of the public utility.”
Here the legislature recognized that corporations classified as public utilities may have some other business which is not subject to regulation. Eighty-five per cent of appellee’s retail business is regulated by the commission and covered by the definition. The 15% in issue here would be “other business” which the commission could consider in computing the overall profit of the public utility.
Section 490A.21 states: “The jurisdiction and powers of the commission shall extend as hereinbefore provided to the utility business of the public utilities operating within this state to the full extent permitted by the constitution and laws of the United States.”
This section shows the legislature intended to regulate only the utility business of the public utility, and recognized it could have other business which it did not intend to regulate.
Cases which have considered legislative intent from the use of phrases similar to “to the public” in defining a public utility support the conclusion herein reached.
*121Public Utilities Commission v. Colorado Interstate Gas Co. (1960), 142 Colo. 361, 351 P.2d 241, involved a statute similar to ours. There a public utility was defined in part as “a pipeline gas corporation operating for the purpose of supplying the public” with gas.
It determined direct sales by the pipeline company to its commercial and industrial users did not fall within the definition of public utility saying “ * * * [I]t does say in no uncertain terms that one must be ‘supplying the public’. It is well settled that those words mean all of the public within its capacities — it means indiscriminately.” 351 P.2d at 248.
The Colorado court distinguished the cases cited by the majority. In referring to Industrial Gas Company v. Commission, supra, the court said: “The question before the court was not whether Industrial Gas Company came within the terms of the statute but whether the statute was valid. No one could or did contend that Industrial Gas Company was not a public utility as defined by the Ohio Statute.”
In Drexelbrook Association v. Pennsylvania Public Utilities Commission, 418 Pa. 430, 212 A.2d 237, plaintiff proposed to furnish water to the tenants of its apartments by including charges for the water in the rent. Remetering at a profit was contemplated only for tenants of its stores and swimclub. The commission sought to regulate its rates under a statute similar to ours.
The court stated: “The question presented is whether the services which appellant proposes to furnish to its tenants would be service to or for the public within the meaning of the statute." The court cited cases which made the test of “a public” enterprise whether it was open to the use of all members of the public who may require it.
The court said: “[Here] * * * those to be serviced consist only of a special class of persons — those tt> be selected as tenants — and not a class open to the indefinite public. Such persons clearly constitute a defined, privileged and limited group and the proposed service to them would be private in nature.”
In referring to public policy argument as to why such sales should be regulated the court said:
“Such reasoning disregards the express formulation of public policy by the Legislature embodied in the statutory definition of the term ‘public utility’. That provision confers jurisdiction on the commission only where the service involved is rendered ‘to or for the public’. The controlling consideration is not whether regulation is desirable, but whether appellant is subject to regulation under the Public Utility Law. * * * If the legislature did not deem it necessary to confer jurisdiction on the commission with respect to the service proposed by appellant * * * then the absence of such jurisdiction as a result * * * could not contravene public policy.” p. 243.
See also Mississippi River Fuel Corp. v. Illinois Commerce Commission, 1 Ill.2d 509, 116 N.E.2d 394, 399.
In my opinion the legislature knew what it was doing when it used the phrase “to the public”. It meant to the public. I do not believe it intended to include contractual sales to individual customers within the term. If this construction is wrong, the legislature can easily change the definition of a public utility to include such sales. It did not do so in 1967 although the commission proposed such a bill. It is less harmful to delay regulation of such sales until the legislature has clearly expressed the intention to subject them to regulation, than to make a policy decision by putting a strained construction on the phrase “to the public”.
GARFIELD, C. J., and SNELL, J., join in this dissent.