Case Information
*1 THE ATNDRNEY GENERAL
OF~XAS The Honorable Joe C. Banns Opinion No. E-830
Chairmcm lb: Whether a natural
Coeeaittee on Energy Reao*cea Bourns Representatives gam pipeline is a common P. 0. Box 2910 carrier mubject to Rail- road Coemiaeion Aumtin, Texar regulation.
Dear Chairman Henna:
You have requested our opinion regarding the authority 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 is a common carrier.
6950, V.T.C.S.,
2. Whether the Railroad Commission may
require a natural gam pipeline or a gas gas for others. premised, Article 6050, on which your first question pro- vides in pertinent partr .. 'public The term ‘gas utility’
utility' 'utility,' used in this
eubdivimion, means ana includes persona,
companies and private cerporatione, their trustees, na.receivere,
leeeeea, owning,
managing, operating, leasing or controlling
within this State any wells, linem,
plant, property, equipment, facility, franchise, permit either one more license, following kinds of bueineeer *2 \. ” : 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) gas
for sale or delivery of natural any ptreon or firm corporation operating or a contrac$ with any
under franchise
municipality or other ltgal subdivision
of this Stattt salt or or, W
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 not, if any part the
right of way for Said line has been
acquired, or may htrtafttr be acquired the right of eminent
by tht xtrciee
domaint or if said line or any part laid upon, over or under any
thtreof is
public road or highway of this State, or or alley any municipality,
street or
the right of way 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 near lines tht Umita of any municipality in
which said is rectivtd aietributtd
or sold to tht public by ano+htr public or by said municipality, in all
caste whert such bueintee in fact the
only or practically exclueivt agency supply of gas to such utility-or htreby declared to be
municipality,
. .
The Honorablt Joe C. Banns - pagt 3 W-830)
virtual monopoly and a business effected with a public calling inttrtet,
and tht said business and property
employed thertin within this Statt shall of this be subject to the provisions law and regulation
and to the jureidiction
of the Commieeion as a gas utility.
Rvery such gas utility is htreby aeclarta to be afftctta with a public interest and aubjtct 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- gas utilities, vision rtgarding either natural gas pipelinte therefore however, and their statue as coxnon carritre deter- mined by article 882, V.T.C.S.:
The duties and lihbilitiee carriers
in this Statt the remedicie against
them, shall be emne 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 is a common carrier where i%urt held that a Dimline 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 a pipeline is that of a common carrier is a qutetion fact.
common carrier if it holds itself out as available to trane- port gas to all who may desire its eervicee. Otherwise, is a private carrier.
p.
Tht Honorable Jot C. Banns - 4 (H-830)
However, the authority of tht RailrOad Commieeion require a pipeline or a gas utility gas for others does not depend upon its statue as a common carritr Article 6053, V.T.C.S., in per:inent ptovidte part: Tht Coeunieeion after aut
Sec. 1. notice shall fix and eetablieh and enforce prict gas
the adequate and rtaeonablt
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 time deem properr and tetablieh a fair
and equitable divieion tht ptocteda
the sale of gas bttwten c~paniee tht or producing traneporting gas and the or etlling companite dietributing it; and
preecri~ and enforct rulte rtgulatione tht government and control such
pipe lines in respect to their gas pipe
lines 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 to augment their supply of gas, lines
whtn in tht judgment of the Commission is practicablt to do sot and it shall its power, whether upon its own , txerciee motion or upon petition by any person, corporation, municipal corporation,
county, Comnieeionere precinct showing
a eubetantial interest in the subject, Attorney General, or
upon petition
of any County District Attorney in any
county wherein such business or any part
thereof may be carried on.
The Ronorablt Jot C.. Eanna - pagt 5 (H-830)
In Railroad Coemiiemion of Texas
s.w.za 2Z2 (Tax. sup. 197IT,ThGTii+mm
the Coeueieeion has jurieaiction
regulatt and apportion ealte and tht diepoeition of gas owned.by each gas
utility, so as to protect the public 524 S.W.2a at 280.
inttrtet. The Supreme Court htld that whilt tht Commimeion lackm juriediction over the aiepoeition of gas not owntd by the gas utility through whose pipelint is being tranexnitted, over the pipelint it has full authority itself, and it may mrtquire a utility to deliver gas to etvtral cities
corporations in amounts at variance with their contracts." Ia. at 281. Thus, it Would appear that, tht proviatcl ztr 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 "gas utility" in article 6050. In any evtnt, terms of article 6053, the Couenieeion granted full authority over piptlinee regardless whether they may be dttmed to be gae~utilitiem. It is therefore our opinion that, provided the owner the gas is a gas utility, the Railroad Cozmnieeion may requirt a natural gas pipeline transport gas for others.
SUMMARY Whethtr a natural gas pipeline or a gas is a coeeeon carritr depends upon
whether it holds itself out available
to transport gas to all who may deeire its owntr of tht gas Providtd ervicte.
is a gas utility, tht Reilroaa Connnieeion unpowered to require a natural gas
pipelint natural others.
Very truly yours, L4&
Attornty General Texas ‘P
I I -. . . . ’ .* .
Tht Ronorablt Joe C. Banns - pagt'6 (H-830)
Opinion Committtt
jwb
p. 3508