Pennsylvania Gas Co. v. Public Service Commission

Argued May 6, 1924. Upon full consideration of the report of the commission in connection with the evidence produced in this case, we have arrived at the following conclusions:

1. Appellant has the right under its charter and extensions thereto to supply natural gas to the territory annexed to the City of Erie and to enter upon the streets and highways of such annexed territory for that purpose. The obligation to furnish gas, if reasonably obtainable, to consumers in such territory is correlative to such right and may be enforced by the Public Service Commission.

2. For that purpose the commission may reasonably require the company to extend its lines, within such territory. The provisions of the Act of May 29, 1885, P.L. 29, are not repugnant thereto.

3. The company, or the commission, may, in the event of a supply of gas insufficient to serve all classes of consumers, discriminate in favor of domestic as against industrial users.

4. Where the company itself is making use of a large quantity of gas industrially, the commission may, for the benefit of domestic consumers, require the discontinuance of such industrial use, if it is reasonably possible to secure a satisfactory substitute fuel.

5. We are not satisfied that under existing laws the company or the commission may discriminate as between domestic consumers, and declare the use of gas for cooking or water heating to be superior to other forms of domestic heating. In case of general shortage the quantity reasonably to be used by domestic consumers may be limited.

6. If a greater quantity of gas is not reasonably obtainable, and the present supply is insufficient for present domestic use, the commission may not require the company to extend its lines into additional or annexed territory even for domestic use. Such an order requires the expenditure of the company's capital without the hope of an adequate return and amounts to confiscation; is unreasonable and not in conformity with law.

7. The fact that the supply of natural gas is dependent on nature and limited and cannot be increased by the work of man necessarily distinguishes natural gas companies from public service companies supplying the public with a product which may be manufactured or taken from a practically inexhaustible supply.

8. The figures in the commission's report as to the proportionate amount of natural gas used for industrial purposes are incorrect and misleading. There is no reason why the company should not furnish to industrial consumers gas not required for domestic use. In the summer months the domestic use falls off and the industrial consumption increases. Figures and percentages based on such industrial consumption when the supply is greater than required for domestic use should have no place in our calculations.

9. Calculations with respect to the industrial use of gas during the winter or peak load months should be based on the consumption in the whole field of the company in Pennsylvania and not merely the City of Erie. We are unable to determine from the evidence in the record, whether if the industrial use of gas were reasonably curtailed during the winter months, throughout the whole of the appellant company's field of supply in Pennsylvania, there would be sufficient gas to justify the extension of appellant's lines here sought for by the petitioners. It is undisputed that under present conditions the supply of gas is insufficient to meet the requirements of present domestic consumers; and that it is not reasonably possible to increase the supply of gas sufficient to meet such present requirements, much less enlarge them by extensions into new territory. The law does not require the company to expend additional capital in the extension of its lines in order that it may divide among an increased number of users a diminishing supply of gas already insufficient for present domestic use in the winter months. On the other hand, if by curtailing the industrial use throughout the whole field during the winter months, the increased supply for domestic use would justify such extension it should be made. On the evidence now before us, we are not impressed by the theory that a rigid enforcement by the company of its rules as to domestic use would effect a saving in gas which would warrant the extensions sought. Such action, to have the desired effect, would place on the company a burden of expense in connection with the investigation of the use of gas by domestic consumers, and the enforcement of penalties against offenders of such rules, incommensurate with the results to be obtained.

The report of the commission is accordingly reversed and the record is remanded to the commission with directions to take additional testimony as to the amount of gas used for industrial purposes during the winter or peak load months throughout the appellant company's field; as well as the amount of gas used industrially by the company itself during such months; and to reconsider the matter and determine whether a discontinuance of such uses during said months would afford such an additional supply of gas for domestic use as would justify the extension of the company's lines prayed for, in the light of the conclusions above announced.