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Miss. River Fuel Corp. v. Commerce Com.





APPEAL from the Circuit Court of St. Clair County; the Hon. EDWARD F. BAREIS, Judge, presiding.


This is an appeal by the Illinois Commerce Commission from a judgment of the circuit court of St. Clair County, reversing an order of the commission, entered February 29, 1952, finding Mississippi River Fuel Corporation (hereinafter called Mississippi) to be a public utility within the meaning of section 10 of the Public Utilities Act of this State, and ordering it to comply with the provisions of that act with respect to its direct sales of natural gas to industrial customers in this State.

Mississippi was formed on February 8, 1928, under the laws of Delaware. It built and operates a natural gas pipeline system extending from the so-called Monroe natural gas field in the State of Louisiana and a natural gas field in Texas to the city of St. Louis, Missouri. Its pipeline system also crosses over into southern Illinois and extends through Randolph, Monroe, St. Clair and Madison counties. On June 29, 1929, it entered into a contract for the sale of natural gas in Illinois with a company known as Cahokia Manufacturers Gas Company for resale and delivery to industries in the East St. Louis area.

In the Cahokia contract, Mississippi agreed to sell to Cahokia the latter's requirements of natural gas for resale to such industries. Attached to the contract was a document marked "Exhibit A," entitled "Probable Consumers of the Mississippi River Fuel Corporation," which listed certain industries, twenty in number, located in and around Alton, Granite City, Madison and East St. Louis, Illinois. These represented customers with whom Mississippi had already negotiated contracts or was in the process of negotiation, and to which Mississippi by agreement reserved the right to make direct sales.

Later in 1929, Mississippi entered into contracts with several of the listed industries for the sale to them of natural gas for their own use, and deliveries of gas under such contracts were inaugurated during that year. In the succeeding six years, Mississippi entered into like contracts for the sale of natural gas to a number of additional industrial customers in the area. In the latter part of 1936, Mississippi made a contract with Illinois Power and Light Company, a gas distributing public utility company, now known as Illinois Power Company, to sell to the latter its requirements of natural gas, for mixture with manufactured gas then being delivered to the public by Illinois Power and Light Company. This contract provided that Mississippi would not sell natural gas in the territory to any other purchaser except industrial consumers, and would sell only to such reserved industrial consumers as were named on a list attached to the contract. Afterward the property of Cahokia Manufacturers Gas Company, mentioned above, passed into the ownership of Illinois Power and Light Company, with which it was affiliated.

In 1941, Mississippi made another contract with Illinois Power and Light Company for the sale to it of natural gas, in which it agreed not to sell natural gas to any other person within the district defined in the contract. However, it again reserved the right to sell directly to certain industries listed on an exhibit attached to the contract.

In the same year, Mississippi contracted with Union Electric Power Company to sell to the latter its natural gas requirements for resale to customers of all classes in the city of Alton and vicinity. To this contract was likewise appended a list of industrial customers to whom Mississippi reserved the right to make direct sales.

Pursuant to these reservations, Mississippi from time to time made individual contracts with most of the listed industrial customers, for sale to them of natural gas for their own use. It appears that it also at times made similar contracts with certain other industrial customers whose names did not appear on the reserve lists, and the Illinois Commerce Commission in its brief attaches importance to this circumstance. Except as it might have given the purchasing companies a right to bring an action for damages for breach of contract, this does not appear to us to be significant.

As a consequence of the several transactions described above, Mississippi now supplies natural gas in Illinois from its pipelines directly to twenty-three industries under individual contracts running for two years or less, for their own use, and also sells gas in Illinois to Illinois Power Company and Union Electric Company, in the latter two cases for resale to the general public. Requests by additional industries for gas have been refused by Mississippi. The two sales last named come directly under the terms of the Federal Natural Gas Act, and with respect to them Mississippi is regulated as a "natural gas company" by the Federal Power Commission.

The question before this court is whether its direct sales of gas to twenty-three industries in the industrial area extending from East St. Louis to Alton, and in St. Clair and Madison Counties, Illinois, render it a public utility within the meaning of the Illinois Public Utilities Act, so as to make it subject to the jurisdiction of the Illinois Commerce Commission.

Mississippi contends that the Commission is bound by an earlier order entered by it on January 14, 1949, in a proceeding docketed by it as No. 36,128, in which it found that Mississippi in making these industrial sales was not being conducted as a public utility, and that the sales in question were not for public use. This order was entered as a result of a citation issued by the commission on March 23, 1948. This citation was the first effort ever made by the commission to take jurisdiction over Mississippi. The commission, however, is not a judicial body, and its orders are not res judicata in later proceedings before it. It was so held in Illinois Power and Light Corp. v. Commerce Com. 320 Ill. 427, and in other cases. The concept of public regulation includes of necessity the philosophy that the commission shall have power to deal freely with each situation as it comes before it, regardless of how it may have dealt with a similar or even the same situation in a previous proceeding.

Whatever may be the moral obligation of the commission to adhere to the purpose and spirit of its own previous orders, it cannot be said that it is under a legal duty to do so.

The 1948 citation by the commission and the resulting order, though they do not have the binding effect sought by Mississippi, nevertheless illustrate the fact that for a period of almost 20 years, during which time the personnel and political complexion of the Illinois Commerce Commission repeatedly changed, that body, by its inaction continuously construed the Public Utilities Act as not applicable to Mississippi. The courts of this State are, of course, not bound by the construction which the commission places upon that statute, but still such a consistent and long-standing administrative interpretation cannot but have persuasive effect. The situation suggests the language in County of Cook v. Healy, 222 Ill. 310: "If it could be said that the language of the constitution was clear and free from any doubt, a contrary legislative and administrative construction would have no weight. (Jarrot v. Jarrot, 2 Gilm. 1.) But where the words of a constitutional provision admit of doubt, the court may and ought to consider a contemporaneous and practical construction given by the legislature and those concerned in the administration of the law, and also any injurious consequences which would follow a different construction. Where a particular construction has been given to a provision and it has been continued for a long term of years and acquiesced in by the public at large, such construction is entitled to great weight and may be equal in force to a judicial construction."

The fact that the natural gas which is sold by Mississippi to the industrial consumers in question comes into the State of Illinois in interstate commerce is not a material circumstance in view of the decision in Pennsylvania Gas Company v. Public Service Commission of New York, 252 U.S. 23. It was there held that natural gas brought into the State of New York by pipeline from the State of Pennsylvania and distributed to the general public in New York directly from the interstate pipeline, represented a situation which, in the absence of contrary regulation by Congress, was local in character and that such sales of gas were subject to control by the State of New York. The present case is therefore not governed by ...

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