Peoples Natural Gas Division of Northern Natural Gas Co. v. Public Utilities Commission

698 P.2d 255, 1985 Colo. LEXIS 419, 1985 WL 1083567
CourtSupreme Court of Colorado
DecidedApril 15, 1985
DocketNo. 83SA269
StatusPublished
Cited by19 cases

This text of 698 P.2d 255 (Peoples Natural Gas Division of Northern Natural Gas Co. v. Public Utilities Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peoples Natural Gas Division of Northern Natural Gas Co. v. Public Utilities Commission, 698 P.2d 255, 1985 Colo. LEXIS 419, 1985 WL 1083567 (Colo. 1985).

Opinions

LOHR, Justice.

The Public Utilities Commission of the State of Colorado (PUC) and the Farmers Association for Rate Maintenance (FARM), a group representing certain farmers in Baca and Prowers Counties in southeastern Colorado, appeal a district court judgment reversing the PUC’s award of reparations to irrigation ratepayers of Peoples Natural Gas Division of Northern Natural Gas Company (Peoples) in those counties.1 The district court concluded that, because no complaints were filed with the PUC by the aggrieved ratepayers, the PUC lacked authority to award reparations as a remedy for overbillings by Peoples. See § 40-6-119, 17 C.R.S. (1984). The district court also concluded that the evidence did not support the reparations award. We hold that section 40-6-119 does not preclude the PUC from initiating an investigation and awarding reparations at its own instance. However, because the PUC’s findings concerning the temporal and geographical extent of the gas pressure problems that resulted in overbillings to Peoples’ customers are fatally inconsistent, the district court’s judgment reversing the PUC decision must be affirmed.2 The case must be remanded to the PUC for resolution of the inconsistencies in its findings and entry of a decision consistent with such revised findings as it may adopt.

I.

We summarize the procedural history of this matter and the facts as found by the PUC. Peoples is a public utility engaged in the purchase, transmission, distribution and sale of natural gas in certain parts of Colorado, including Baca and Prowers Counties in the southeastern part of the state. With respect to those activities, Peoples is subject to the jurisdiction of the PUC.

One of the uses for natural gas in Baca and Prowers Counties is to fuel internal combustion engines that are used as power sources for irrigation well pumps. A separate classification has been established for irrigation customers in determining the just and reasonable rates to be charged by Peoples for its natural gas service. Peoples serves more than 600 customers in this classification in Baca and Prowers Counties. Service to irrigation users constitutes Peoples’ largest customer load in the two counties and causes a summer peak demand for natural gas in the area.

Certain irrigation customers of Peoples began experiencing difficulties with their gas supplies from Peoples in 1973 or 1974. A number of these persons appeared and testified at a PUC hearing in Springfield, Colorado, on March 20, 1975, held in connection with a proposed rate increase schedule filed by Peoples. As a result of that hearing, the PUC issued the following order:

Peoples Natural Gas Division of Northern Natural Gas Company shall immediately start to formulate a plan to eliminate gas pressure problems [in] its southeast rate area, and shall within ninety (90) days from the effective date of this Order file said plan with this Commis[258]*258sion, and shall thereafter keep this Commission advised of the progress being made on implementing said plan and shall advise this Commission whether or not said plan is effective in eliminating the problem, and shall advise this Commission when the plan has been completed and the problem is eliminated.

In response, Peoples formulated a plan, filed it with the PUC, and began implementing it. Further organized complaint concerning the system was not heard until September 29, 1977, in Lamar, Colorado, at a hearing in connection with another proposed rate increase schedule filed by Peoples. The complaints from Peoples’ customers prompted a staff investigation by the PUC. As a result of information gained from that investigation, on October 25, 1977, the PUC issued to Peoples an order to show cause, initiating the present proceedings.

The show cause order alleged that Peoples had engaged in practices that may have violated the statutes and regulations under which the PUC regulates the rates charged and services provided by public utilities. See §§ 40-3-101 to -113, 17 C.R.S. (1984). The order outlined the questioned practices and required that Peoples show cause why the PUC should not enter a further order, as follows:

a. Requiring Respondent [Peoples] to cease and desist from supplying gas which is not substantially free of impurities;
b. Requiring Respondent to supply gas which is not below the heating value which is on file with the Commission as part of Respondent’s schedule of rates;
c. Requiring Respondent to cease and desist from supplying gas below the normal pressure of gas which Respondent has proposed to maintain, pursuant to its tariffs[,] and requiring Respondent to maintain a pressure base equal to or above that upon which its billings to customers are made.
d. Requiring Respondent to make appropriate reparations to customers who have been charged for gas not received in an amount and in a manner to be determined by the Commission.

FARM filed a petition to intervene in the proceeding on December 8, 1977, and the PUC allowed intervention. In the petition, FARM stated that it was composed of most of the irrigation farmers operating within Baca and Prowers Counties. All members of FARM were alleged to be customers of Peoples.

Hearings were held before a PUC hearings examiner in January, February and April of 1978. Testimony, exhibits and position statements were presented on behalf of Peoples, FARM, and the PUC staff. On October 23, 1978, the hearings examiner issued a recommended decision. The examiner found that impurities, including water, oil (possibly compressor oil), drip gas, sand, dust, rust, alkali, welded metal and salt, had been found in the gas supplied by Peoples in certain specified areas in southeastern Colorado. These impurities had been introduced into the system before the gas reached the customers’ sides of the meters. The contaminants had damaged motors and, through the freezing of liquids, had plugged lines. The examiner also found that as many as twenty-four of Peoples’ customers in the Stonington-Walsh area had received gas below the 900 BTU level required in Peoples’ schedule of rates and service, due primarily to the use by Peoples of two inferior sources of supply. Peoples had since discontinued using one of those sources of supply.

The examiner next found that Peoples’ customers in the Holly, Two Buttes and Walsh areas began experiencing low pressure problems in 1973, and that the problems spread to the Stonington, Vilas and Springfield areas by 1975. The examiner then found:

After 1975, however, this problem subsided as a result of the improvements made by Peoples to the system. Some problems still occurred in 1976, but the evidence in this proceeding shows few instances after 1976. Some of the instances of low pressure problems in 1977 [were] characterized as not too signifi[259]*259cant by the witnesses experiencing them. For instance, one witness indicated that he had a “little” problem in 1977, and that a new line installed by Peoples had cured it. This was after a more widespread shortage had occurred during the Spring for a short period of time.

The examiner noted that low gas pressures can damage the internal combustion engines used by the irrigators. When the pressure is low enough, the engines will not run at all.

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Bluebook (online)
698 P.2d 255, 1985 Colo. LEXIS 419, 1985 WL 1083567, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peoples-natural-gas-division-of-northern-natural-gas-co-v-public-colo-1985.