HANING ET AL., APPELLANTS, v. PUBLIC UTILITIES COMMISSION OF OHIO ET AL., APPELLEES.
No. 97-2267
SUPREME COURT OF OHIO
July 28, 1999
September 4, 1997
86 Ohio St.3d 121 | 1999-Ohio-90
Public Utilities Commission—Suppliers of liquid petroleum gas are not public utilities subject to commission oversight and regulation under
(No. 97-2267—Submitted April 20, 1999—Decided July 28, 1999.)
APPEAL from the Public Utilities Commission of Ohio, Nos. 97-32-GA-CSS, 97-33-GA-CSS, 97-97-GA-CSS and 97-268-GA-CSS.
{¶ 1} This appeal involves orders of the Public Utilities Commission of Ohio (“commission“) in complaint cases brought by the appellants against two suppliers of liquid petroleum (“LP“) gas (“respondents“). The orders complained of in the appeal dismissed the appellants’ complaints for lack of jurisdiction over the respondents on the ground that they were not public utilities subject to commission oversight and regulation under
{¶ 2} The causes are before this court upon an appeal as of right.
Gary M. Smith, Robert R. Romaker, James Daniels and Kalpana Yalamanchili, for appellants Rebecca Haning, Melvina Stephenson, Bernard Marshall, Rodney Reisinger, Larry Mick, and Dorothy Mick.
Betty D. Montgomery, Attorney General, Duane W. Luckey, Thomas W. McNamee and Tanisha L. Lyon, Assistant Attorneys General, for appellee Public Utilities Commission of Ohio.
J.B. Yanity, for appellee Rutland Furniture, Inc.
John S. Marshall, urging reversal for amici curiae, Ohio Partners for Affordable Energy and Ohio Association of Community Action Agencies.
Sowash, Carson & Ferrier and Jonathan B. Sowash, urging reversal for amici curiae, Rural Action, Inc. and Appalachian Peoples Action Coalition.
Nancy Brockway, pro hac vice, urging reversal for amicus curiae, National Consumer Law Center.
Means, Bichimer, Burkholder & Baker Co., L.P.A., Craig D. Leister and Matthew J. Markling, urging affirmance for amicus curiae, Ohio Propane Gas Association.
LUNDBERG STRATTON, J.
{¶ 3} Rebecca Haning and Melvina Stephenson brought suit against a supplier of LP gas in the Athens County Municipal Court for alleged violations of the Ohio Consumer Sales Practices Act (
{¶ 4} On September 30, 1996, the court of appeals affirmed the municipal court on the ground that the LP gas supplier, Rutland Furniture, Inc., d.b.a. Rutland Bottled Gas Service (“Rutland“), was a “natural gas company” under
{¶ 5} Rather, on January 10, 1997, Hanning and Stephenson filed a complaint with the commission, alleging that Rutland had provided inadequate service and had engaged in various wrongful business practices in violation of
{¶ 6} In the meantime, four other individuals filed complaints with the commission against another LP gas supplier, Level Propane Co., Inc. (“Level“), alleging that Level had provided inadequate service and had engaged in wrongful business
{¶ 7} Pursuant to
{¶ 8} The first issue we address is whether Rutland and Level are “gas compan[ies]” under
{¶ 9} With four stated exceptions,
“(5) A gas company, when engaged in the business of supplying artificial gas for lighting, power, or heating purposes to consumers within this state * * *.
“(6) A natural gas company, when engaged in the business of supplying natural gas for lighting, power, or heating purposes to consumers within this state. * * *”
{¶ 10} Both Rutland and Level are in the business of supplying LP gas to consumers. LP gas in common parlance has been called “propane,” but LP gas is not purely propane. In LP gas, propane is merely one, albeit the dominant, of several hydrocarbon compounds in a mixture that includes propylene, n-butane, and i-butane. In contrast, natural gas often contains no propane. Even when it contains a trace amount of propane, its dominant hydrocarbon compound is methane.
{¶ 11} Natural gas is “produced” by withdrawing it from the ground. It is then delivered to customers through pipes without further processing. It is delivered in its natural state. On the other hand, there is no natural state for LP gas,
{¶ 12} Based on the foregoing, the court of appeals was in error in finding that “propane is a ‘natural gas’ and that Rutland is a ‘natural gas company’ as used in
{¶ 13} Having determined that Rutland and Level are not “natural gas compan[ies]” under
{¶ 14} The commission argues that the LP gas product supplied by Rutland and Level is not an “artificial gas” because it is a liquid when it is supplied to customers. LP gas can be either in the form of a gas or a liquid. When it is manufactured by an oil refiner in the cracking process and when it is consumed by a customer to produce a flame, it is in the form of a gas. However, when possession of LP gas is delivered to an LP gas supplier, it is under pressure and is in the form of a liquid and remains a liquid at all times while the supplier transports it, stores it, and ultimately transfers possession and ownership of it to consumers.
{¶ 15} Upon delivery into their customers’ bulk tanks, the product which has been “supplied” by Rutland and Level is a liquid. It is only upon removal of the product from the bulk tanks by their customers that it is transformed into a gaseous state to be combined with oxygen for the purpose of combustion.
{¶ 16} The appellees point out that there are a number of products that are sold and delivered in the liquid state and consumed by customers in a gaseous state to produce heat or light. Among them are gasoline, diesel fuel, fuel oil, methanol, ethanol, kerosene, acetylene (in tanks used for welding), and butane (in cigarette lighters). The fact that these liquids are consumed in their gaseous forms to produce heat or light does not make their suppliers “gas compan[ies]” under
{¶ 17} The appellants argue that it is irrelevant that the product delivered by Rutland and Level to their customers is a liquid, because it is a gas when it is consumed by them. However,
{¶ 18} The appellants and the amici curiae in support of reversal argue that, even though Rutland and Level supply their product in liquid form, it is commonly thought of as a gas, and not being a “natural gas” under
{¶ 19} In the first place, appellants’ argument leads to an absurd result. If all products other than “natural gas” that are consumed in gaseous form to supply heat, light or power are included in the term “artificial gas,” then
{¶ 20} Second, we must interpret the meaning of the statute as it was intended by the legislature. The term “gas,” as used in the statute, is not to be interpreted in its present-day sense. As we said in Circleville Light & Power Co. v. Buckeye Gas Co. (1903), 69 Ohio St. 259, 270, 69 N.E. 436, 439, “[w]hile the word ‘gas’ may be in one sense a generic term, it is quite plain that, as used in the statute, it does not embrace every species of gas discovered or manufactured in modern times. There are numerous gases, manufactured or generated, which are used in art and manufacturing, none of which was contemplated in the enactment of [General Code] section 3551.”2 (Emphasis sic.)
{¶ 21} As used in
{¶ 22} Later, we recognized that Cincinnati Gas & Electric Company provided “artificial gas” service between 1837 and 1905, under several franchises from the city of Cincinnati,5 a fact doubtless known to the General Assembly in 1911. Cincinnati v. Pub. Util. Comm. (1940), 137 Ohio St. 437, 439, 19 O.O. 143, 144, 30 N.E.2d 797, 798. This “artificial gas” was known as “illuminating gas” and was used in gas lamps. It was made by heating coal in retorts and sometimes was a byproduct of the production of coke. See Cincinnati Gas Light & Coke Co. v. Ohio (1868), 18 Ohio St. 237, 1868 WL 22; Cincinnati Gas & Elec. Co. v. Johnston (1907), 76 Ohio St. 119, 81 N.E. 155; Cincinnati, 137 Ohio St. at 439-440, 19 O.O. at 144, 30 N.E.2d at 798; and Indianapolis v. Domhoff & Joyce Co. (1941), 69 Ohio App. 109, 23 O.O. 547, 36 N.E.2d 153.
{¶ 23} The illuminating gas known as “artificial gas” to the General Assembly in 1911 preceded “natural gas” as a commercially viable product. For example, in 1901, this court observed in a discussion of an ordinance that became effective February 11, 1895, that the ordinance “was enacted long before natural gas became an article of commerce * * *.” Logan Natural Gas & Fuel Co. v. Chillicothe (1901), 65 Ohio St. 186, 208, 62 N.E. 122, 124. In 1903, this court remarked that natural gas “was not known as an article of commercial use in Ohio * * * in 1874 * * *.” Circleville Light & Power Co., 69 Ohio St. at 269, 69 N.E. at 438. In 1907, the court noted that natural gas was neither used, nor believed to be suitable, for lighting and did not become available for such use until 1896 or 1897. Columbus v. Columbus Gas Co. (1907), 76 Ohio St. 309, 81 N.E. 440.
{¶ 24} Therefore, from a historical perspective, it is evident that the General Assembly in 1911 intended that its newly established Public Service Commission would regulate providers of the already familiar illuminating gas, as well as the newcomer, natural gas. Both were delivered to consumers through pipes. LP gas, which is delivered to consumers by tank truck, could not have been included; it did not yet exist as a product of commerce.
{¶ 25} The
{¶ 26} On the other hand, after LP gas was developed into a commercial product, the General Assembly enacted legislation referring to “[l]iquefied petroleum gas” and “propane” in a number of statutory provisions or schemes that contain one or both of those terms. See, e.g.,
{¶ 27} While the General Assembly has not amended
{¶ 28} LP gas/propane is not a “natural gas” under
{¶ 29} Even if LP gas/propane is considered arguendo to be a gas, there is no indication that the General Assembly in 1911 or thereafter intended it to be within the comprehension of “artificial gas” under
{¶ 30} The appellants concede that a business enterprise must be a public utility under
{¶ 31} As authority for their claimed common-law determination of public utility status, the appellants cite our decisions in Marano v. Gibbs (1989), 45 Ohio St.3d 310, 544 N.E.2d 635, Ohio Power Co. v. Attica (1970), 23 Ohio St.2d 37, 52 O.O.2d 90, 261 N.E.2d 123, and Indus. Gas Co. v. Pub. Util. Comm. (1939), 135 Ohio St. 408, 14 O.O. 290, 21 N.E.2d 166.
{¶ 32} However, none of the cited cases supports the appellants’ argument. None of them stands for the proposition that, alternatively to and independently from qualifying as a statutory public utility, a business enterprise will be considered a public utility for the purpose of application of
{¶ 33} Both the appellants and the appellees have identified the common law characteristics of business enterprises that have been determined to be public utilities by this and other Ohio courts for purposes other than regulation under
{¶ 34} Case law authority does not support a finding that an LP gas/propane supplier is a “public utility” under
{¶ 35} There is neither statutory nor case law authority that would support a finding that Rutland and Level are “public utilities” under
Orders affirmed.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER and COOK, JJ., concur.