Court Opinion

ID: 4132550
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:27:53.229823+00
Date Added: 2024-06-11T14:37:38.805739
License: Public Domain

THE        ATNDRNEY                 GENERAL
                             OF~XAS

The Honorable Joe C. Banns                   Opinion    No. E-830
Chairmcm
Coeeaittee on Energy Reao*cea                lb:  Whether   a natural
Bourns of Representatives                    gam pipeline    is a common
P. 0. Box 2910                                carrier mubject to Rail-
Aumtin, Texar    18767                        road Coemiaeion regulation.
Dear Chairman   Henna:
     You have requested       our opinion    regarding       the authority
of the   Railroad Comiemion       to regulate    natural      gas pipelines.
Specifically,    you aekt
           1. Whether a nat)lrel gas pipeline    or
           a gas utiltity, es defined in a,rticle
           6950, V.T.C.S., is a common carrier.
           2. Whether the Railroad Commission may
           require a natural    gam pipeline   or a gas
           utility to transport    natural   gas for
           others.
Article   6050, on which your first          question   is   premised,       pro-
vides   in pertinent partr  ..
                The term ‘gas utility’        and 'public
           utility'    or 'utility,'      as used in this
           eubdivimion,      means ana includes        persona,
           companies and private        cerporatione,        their
           leeeeea,    trustees,     lna.receivere,        owning,
           managing,     operating,    leasing    or controlling
           within   this State any wells,         pipe linem,
           plant,   property,     equipment,     facility,      franchise,
           license,    or permit for either one or more of
           the following      kinds of bueineeer

                                   p. 3503
:     .                                                                         \.”

    The Honorable      Joe C. Banns,-    page     2 (H-830)

                       1. Producing or obtaining,            tranepor-
               ting,    conveying,     distributing      or delivering
               natural    gas:     (a) for public       use or
               service     for compensationi         (b) for sale
               to municipalitiee        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 ptreon      or firm or corporation          operating
               under franchise       or a contrac$       with any
               municipality      or other ltgal        subdivision
               of this Stattt       or, W for salt or
               delivery     of natural      gas to the public
               for domestic      or othtr use.
                      2.    Owning or operating         or managing
               a pipt lint     for tht transportation          or
               carriagt     of natural    gas, whether for
               public    hirt or not, if any part of the
               right of way for Said line has been
               acquired,     or may htrtafttr        be acquired
               by tht lxtrciee        of the right      of eminent
               domaint or if said line or any part
               thtreof    is laid upon, over or under any
               public    road or highway of this State,            or
               street    or alley of any municipality,            or
               the right of way of any railroad             of
               other public      utility;     including    also any
               natural    gas utility      authorized     by law to
               exerciet     the right of eminent domain.
                       3.  Producing or purchasing     natural
               gas and transporting      or cauming tht came
               to bt transported     by pipe lines    to or
               near tht Umita of any municipality          in
               which said gas is rectivtd and aietributtd
               or sold to tht public      by ano+htr public
               utility    or by said municipality,      in all
               caste whert such bueintee        is in fact the
               only or practically      exclueivt   agency of
               supply of natural     gas to such utility-or
               municipality,     is htreby declared     to be

                                                                           ..

                                        p. 3504
The Honorablt      Joe C. Banns - pagt        3 W-830)

             virtual  monopoly and a business     and
             calling  effected  with a public inttrtet,
             and tht said business    and property
             employed thertin   within this Statt shall
             be subject   to the provisions   of this law
             and to the jureidiction     and regulation
             of the Commieeion as a gas utility.
                    Rvery such gas utility           is   htreby
             aeclarta     to be afftctta      with    a public
             interest  and aubjtct   to tht  jurisdiction,
             control  and regulation   of the Comeieeion
             as provided herein.

       Oil pipelines    are by statute   expreeely   dtclartd   to bt
common carriers.      V.T.C.S. art. 6018.      There is no e,uch pro-
vision   rtgarding   either  natural   gas pipelinte    or gas utilities,
however, and their statue       as coxnon carritre    is therefore     deter-
mined by article     882, V.T.C.S.:
             The duties and lihbilitiee of carriers
             in this Statt and the remedicie against
             them, shall be the emne as art prescribed
             by the common law txctpt whtre otherwise
             provided by this  title.
In Producers Transportation            Corn an   v. Railroad         Commission
of California,      251 U.S. 218 *               Fiit  Unittd       States  Supreme
i%urt held that a Dimline            is a common carrier            where it "in
truth,   [carries]     oil-for    all producers       seeking       its    service;
in other words, for the public.' 251 U.S. at         232.     Whether
the actual     business     conducted    by a pipeline       is     that    of a
common   carrier    is a qutetion       of fact.

common carrier    if it holds itself     out as available    to trane-
port gas to all who may desire       its eervicee.     Otherwise,   it
is a private   carrier.

                                       p. 3505
Tht Honorable    Jot C. Banns - 4 (H-830)

        However, the authority   of tht RailrOad Commieeion to
require    a pipeline  or a gas utility    to transport    natural gas
for others    does not depend upon its statue      as a common
carritr   . Article   6053, V.T.C.S.,   ptovidte    in per:inent
part:

                 Sec. 1.      Tht     Coeunieeion after aut
            notice shall        fix and eetablieh              and     enforce
            the adequate and rtaeonablt                   prict      of gas
            and   fair and reaeonablt                rates of chargte
            and regulatione           for traneporting,              producing,
            dietributing,         buying,        selling,      and de~ivtring
            gas by such pipt lines                 in this State;          and
            shall establish           fair and equitable               rules
            and   regulations         for tht full control                and
            eupervieion       of said gas pipt lines                   and
            all their holdings              pertaining        to the gas
            bueineem in all their relations                      to the
            public,    as the Commieeion may from time
            to time deem properr and tetablieh                         a fair
            and equitable         divieion         of tht ptocteda           of
            the sale of gas bttwten tht                   c~paniee
            traneporting        or producing tht gas and the
            companite dietributing                 or etlling        it; and
            preecri~        and enforct          rulte    and    rtgulatione
             for tht government and control                     of such
            pipe lines       in respect          to their gas pipe
             lines and producing,              rtctiving,         traneporting,
            and dietributing             facilitite;        end regulatt
             and apportion        the supply of gas between
             towns, cities,         and corporations,               and when
             the supply of gas controlltd                   by any gas
             pipe lint      shall bt inadtquate,                the Commieeion
             shall prescribe           fair     and reaeonablt           rules
             and regulations           requiring        such gas       pipe
             lines to augment their                 supply of gas,
             whtn in tht judgment of the Commission it
             is practicablt          to do sot and it shall
             txerciee     its power, whether upon its own                       ,
             motion or upon petition                  by any person,
             corporation,        municipal          corporation,
             county, or Comnieeionere                  precinct       showing
             a eubetantial         interest         in the subject,          or
             upon petition         of the Attorney             General,      or
             of any County or District                  Attorney        in any
              county wherein         such business          or any part
             thereof    may be carried              on.

                                         p. 3506
The Ronorablt     Jot C.. Eanna -     pagt   5 (H-830)

         In Railroad Coemiiemion of Texas                                 524
s.w.za     2Z2 (Tax. sup. 197IT,ThGTii+mm

             the Coeueieeion has jurieaiction      to
             regulatt    and apportion  tht  ealte and
             diepoeition    of gas owned.by each gas
             utility,    so as to protect   the public
             inttrtet.     524 S.W.2a at 280.
The Supreme Court htld that whilt tht               Commimeion lackm
juriediction      over the aiepoeition        of gas not owntd by the
gas utility     through whose pipelint         it is being tranexnitted,
it has full authority         over the pipelint       itself,        and it may
mrtquire     a utility     to deliver   gas to etvtral          cities    and
corporations      in amounts at variance         with their contracts."
Ia. at 281.       Thus, it Would appear that,           proviatcl      tht
ztr      of the gas is a gas utility,          the Commrieeion may require
a gas pipeline        to transport    natural    gas for othke.
      In momt inetancte,     such a pipeline    would be embraced
within the atfinition     of "gas utility"     in article   6050.    In
any evtnt,   by tht   terms of article    6053, the Couenieeion is
granted full authority     over piptlinee    regardless    of whether
they may be dttmed to be gae~utilitiem.          It is therefore     our
opinion that,   provided    the owner of the gas is a gas utility,
the Railroad   Cozmnieeion may requirt     a natural    gas pipeline
to transport   natural   gas for others.
                             SUMMARY
             Whethtr   a natural    gas pipeline     or a gas
             utility   is a coeeeon carritr       depends upon
             whether it holds itself        out as available
             to transport     gas to all who may deeire        its
             lervicte.     Providtd    the owntr of tht gas
             is a gas utility,      tht Reilroaa     Connnieeion
             is unpowered to require a natural          gas
             pipelint    to transport     natural   gas for others.

                                        Very truly    yours,

                                              L4&.
                                        Attornty   General     of Texas
                              ‘P

                                   p. 3507
-.            . .       .     ’
                                                                            II
     .   .*         .

                            Tht Ronorablt   Joe C. Banns - pagt'6 (H-830)

                            Opinion

                            jwb
                                      Committtt

                                                         p. 3508