Opinion
No. 76-632
Decided March 30, 1977.
Public Utilities Commission — Emergency interim order — Restricting service — Authority to promulgate, when — Contracts between public utility and customers affected — R.C. 4909.15 — Constitutionality.
Where it is necessary to protect the public health, safety and welfare, the Public Utilities Commission has the authority to promulgate an emergency interim order to restrict service claimed by a prospective customer pursuant to a contract with a public utility.
APPEAL from the Public Utilities Commission.
In 1972, the Public Utilities Commission of Ohio (commission) authorize Columbia Gas of Ohio, Inc., (Columbia) to refuse service to all new customers subject to certain conditions and exceptions. In the Matter of the Investigation of the Supply of Natural Gas within the State of Ohio, PUCO case No. 71-757-G (interim orders dated February 16, 1972, and June 23, 1972).
On August 1, 1975, Columbia filed an application with the commission seeking both clarification and modification of its existing natural gas restrictions and plans as prescribed by the orders of February 16, 1972, and June 23, 1972. In the Matter of the Application and Statement of Columbia Gas of Ohio, Inc. to Clarify Policies Relating to Gas Restrictions, PUCO case No. 75-584-GA-AGC. The relevant portion of the application as it relates to this cause is Columbia's request that the commission make it clear that the existing prohibition against taking any new residential customers, as contained in the order of the commission dated June 23, 1972, applies equally to applicants for service by reason of the right-of-way tap clauses in any existing agreements as it does to any other applicant for new service.
On August 25, 1975, Inland Steel Development Corporation (Inland), the holder of a right-of-way tap agreement with Columbia which would be affected by Columbia's application, filed with the commission a motion to intervene. Inland, subsequently, on September 3, 1975, initiated an action against Columbia in the Court of Common Pleas of Franklin County, case No. 75CV-09-3641, seeking a determination that the contract imposes a binding obligation upon Columbia to construct and install gas distribution lines and an injunction requiring Columbia to construct and install the lines and to provide gas service to an apartment development that Inland plans to build. The commission held a public hearing on the matters raised by Columbia's application. At the outset of the hearing, Inland specially appeared and moved that the commission dismiss, for lack of subject-matter jurisdiction, the portion of Columbia's application relating to the pipeline right-of-way tap agreement between Inland and Columbia.
The commission issued an order on February 18, 1976, which, in relevant part, denied Inland's motion to dismiss, found that an emergency continues to exist with respect to the supply of natural gas, and held that right-of-way tap agreements are not written commitments within the terms of the June 23, 1972, order. However, because of the uncertainty which arose due to the "written commitment" language in the 1972 order, the commission authorized Columbia to provide service to the holders of right-of-way agreements under certain circumstances.
The commission's order of February 18, 1976, reads, in part, as follows:
"It is, therefore,
"ORDERED, That Columbia Gas of Ohio, Inc., be, and hereby is, authorized to defer, for a period of eighteen months commencing March 1, 1977, or until the commission determines that the gas supply emergency has ended, should that occur before the end of the eighteen month period, all applications for new service pursuant to pipeline right of way agreements containing tap provisions, unless the persons making application are ready to receive full service on or before March 1, 1977. It is, further,
"ORDERED, That any new gas service provided pursuant to pipeline right of way agreements with tap provisions be limited to service classified as residential. It is, further,
"ORDERED, That Columbia limit any new gas service provided pursuant to such right of way agreements to one tap, if the instrument granting the right to the tap does not provide for a specific number of taps. It is, further,
"ORDERED, That Columbia be, and hereby is, authorized to terminate unexercised and outstanding commitments for gas service which came into existence as a result of this commission's order of June 23, 1972, in Case No. 71-757-G unless the holders of these commitments are ready to receive full service on or before March 1, 1977. Columbia shall, forthwith, notify all persons holding such unexercised commitments that the commitments will be terminated unless those persons are ready to receive full service on or before March 1, 1977. Such notification shall be in writing, by certified mail, return receipt requested. * * *"
Inland's application for a rehearing was denied by the commission on April 13, 1976, and the cause is now before this court as a matter of right.
Messrs. Lucas, Prendergast, Albright, Gibson, Brown Newman, Mr. Rankin M. Gibson and Mr. James E. Melle, for appellant.
Mr. William J. Brown, attorney general, Mr. Charles S. Rawlings and Mr. Ronald E. Prater, for appellee.
Inland assails the commission's order on the basis of lack of jurisdiction from two fronts:
(1) No section of the Ohio Revised Code empowers the commission to adjudicate controversies involving contract and property rights; and
(2) the commission is without jurisdiction to adjudicate the same subject matter presently before the Court of Common Pleas and must dismiss that part of the application filed with it that relates to the pending lawsuit.
R.C. 4909.16 reads, in pertinent part:
"When the Public Utilities Commission deems it necessary to prevent injury to * * * the public * * * in case of any emergency to be judged by the commission, it may temporarily alter, amend, or, with the consent of the public utility concerned, suspend any existing rates, schedules, or order relating to or affecting any public utility or part of any public utility in this state. * * *"
This section authorizes the commission, during the existence of natural gas supply shortages, to promulgate emergency orders prohibiting gas utilities from supplying new or additional volumes of gas to either present or prospective customers and authorizing gas utilities to curtail deliveries to their existing customers. Ohio Manufacturers' Assn. v. Pub. Util. Comm. (1976), 45 Ohio St.2d 86; Akron v. Pub. Util. Comm. (1948), 149 Ohio St. 347.
This court has recognized that individual contracts between a public utility and its customers may be affected where such action is reasonably necessary to protect the public health, safety and welfare. As stated by this court in paragraph four of the syllabus in Akron v. Pub. Util. Comm., supra:
"The provisions of the state and federal constitutions, inhibiting laws impairing the obligation of contract, do not affect the power of the state to protect the public health or the public safety. The rights and privileges arising from contract are subject to regulations for the purposes stated in the same sense and to the same extent as is property owned by natural persons or by corporations."
This appeal does not present an attempt by the commission, through its order of February 18, 1976, to adjudicate contract rights. New Bremen v. Pub. Util. Comm. (1921), 103 Ohio St. 23. The appeal does present the proper utilization of the commission's jurisdiction to determine if an emergency exists with respect to the supply of natural gas and whether it is necessary to restrict the services received by a prospective customer pursuant to a right-of-way agreement in order to protect the public health, safety and welfare.
The refusal of service by a public utility is a matter which is in the exclusive jurisdiction of the commission, subject to an appeal to this court. State, ex rel. Northern Ohio Telephone Co., v. Winter (1970), 23 Ohio St.2d 6; Engel v. Columbia Gas of Ohio (Ct.App. Clark County, unreported, No. 1020, decided June 14, 1976), motion to certify overruled October 14, 1976.
This court held, in paragraph one of the syllabus in State, ex rel. Northern Ohio Telephone Co., v. Winter, supra:
"The General Assembly, by the enactment of statutory provisions requiring a public utility to file and adhere to rate schedules, forbidding discrimination among its customers, prohibiting free service, and providing a detailed procedure for service and rate complaints, has lodged exclusive jurisdiction in such matters in the Public Utilities Commission, subject to review by the Supreme Court." (Emphasis added.)
Inland filed its action in the Court of Common Pleas more than one month after Columbia filed its application with the commission. Inland's contention of lack of jurisdiction because of the pending lawsuit relies on New Bremen v. Pub. Util. Comm., supra. Paragraph two of the syllabus in New Bremen states:
"When it is properly shown to the Public Utilities Commission that an order prayed for in an application filed with it will affect rights which are involved in an action pending in a court of general jurisdiction at the time of the filing of the application, it is the duty of the commission to dismiss the application." (Emphasis added.)
The rule espoused in New Bremen, supra, is clearly inapplicable in this situation. Furthermore, acceptance of Inland's argument permits Inland to file an action in the Court of Common Pleas seeking an order to compel Columbia to provide gas service. The eventual result is a review of the commission's order by the Court of Common Pleas, a function reserved solely for the Supreme Court.
Inland asserts a plethora of other arguments, touching upon three basic issues: (1) the finding of an emergency was not supported by the evidence; (2) the order did not conform with R.C. 111.15; and (3) R.C. 4909.16 is unconstitutional on its face and in its application. Most of these propositions require only brief consideration.
Inland argues that the order of the commission is not supported by evidence which would justify the finding that an emergency exists. This contention, in light of the testimony adduced during the hearing that Columbia is facing a deficiency in the supply of natural gas requiring substantial curtailment of deliveries to existing customers, appears to be without merit.
Secondly, the commission's order modifying the order of June 23, 1972, is not required to conform with R.C. 111.15. In Ohio Manufacturers' Assn. v. Pub. Util. Comm., supra ( 45 Ohio St.2d 86), this court ruled that emergency interim orders issued pursuant to R.C. 4909.16 need not comply with the procedures in R.C. 111.15. There it was stated, at page 90:
"* * * It is clear that the February 5th and 6th orders were emergency interim orders and, under R.C. 4909.16, the commission has authority to temporarily alter or amend an existing order affecting any public utility in case of emergency without following the procedures in R.C. 111.15 for amendment of rules. * * *"
Finally, Inland attacks the constitutionality of R.C. 4909.16, claiming a deprivation of due process and equal protection. R.C. 4909.16 has been held to be a valid delegation of police power. Akron v. Pub. Util. Comm., supra ( 149 Ohio St. 347). Judge Taft, writing for this court in Benjamin v. Columbus (1957), 167 Ohio St. 103, stated, in the fifth paragraph of the syllabus:
"Although almost every exercise of the police power will necessarily either interfere with the enjoyment of liberty or the acquisition, possession and production of property, within the meaning of Section 1 of Article I of the Ohio Constitution, * * * or deprive a person of property within the meaning of Section 1 of Article XIV of the Amendments to the Constitution of the United States, an exercise of the police power having such an effect will be valid if it bears a real and substantial relation to the public health, safety, morals or general welfare of the public and if it is not unreasonable or arbitrary."
Furthermore, a legislative decision that an exercise of police power does bear a real and substantial relationship to the public health, safety, morals or general welfare will not be invalidated unless the decision appears to be clearly erroneous. In this instance, the means — restriction of new service — does bear a real and substantial relationship to the end — prevention of additional curtailment. Furthermore, the commission's temporary interference with contractual obligations, in light of the present gas emergency and the inevitable result if new service is compelled, does not appear either unreasonable or arbitrary. Inland has thus failed to clearly demonstrate that R.C. 4909.16 is unconstitutional on its face or by its application.
The order of the Public Utilities Commission, being neither unreasonable nor unlawful, is affirmed.
Order affirmed.
O'NEILL, C.J., HERBERT, CELEBREZZE, W. BROWN, P. BROWN and SWEENEY, JJ., concur.