GAS
Various legal issues arise concerning the use and
distribution of gas.
Supply
A MUNICIPAL CORPORATION does not have
the duty to supply gas to its population. In the
event that a city assumes the performance of
such function, it is acting merely as a business
corporation.
The charter of a gas company is a franchise
granted by the state. The manufacture of distribution
of gas for light, fuel, or power is a business
of a public character, and, therefore, a gas
company is ordinarily considered to be a public instances, enjoin the discontinuance of service
for a reasonable period—to circumvent undue
hardship and inconvenience to the residents of
the area.
A gas company has the duty to serve all those
who are within the franchise area who desire
service and subscribe to the reasonable rules
that it may set forth. A municipality or corporation
supplying gas may make reasonable rules
and regulations to secure the payment of bills,
such as eliminating service to the consumer. If
there is a genuine controversy about the amount
owed, a company is not permitted to discontinue
service. A gas company may not require
the owner or occupant of a building to pay overdue
and unpaid bills by a former owner or occupant
before it continues service to the building.
Some statutes require that gas companies install
a meter on the premises, in order to register the
consumption of gas by each customer; and
where a customer tampers with the meter and
uses a significant amount of unmetered gas, the
company can discontinue service and refuse to
restore it until the customer pays the amount
due for the unmetered gas taken.
A gas company that wrongfully refuses to
supply a customer with gas is liable for damages.
There are also statutory penalties in some states
for such wrongful refusal.
Injuries
A gas company is under the obligation to
exercise ordinary care in the construction of its
works and the conduct of its business in order to
protect life and property.
Gas has a highly dangerous and volatile
character and tends to escape. A gas company
must, therefore, exercise care to avoid harm to
others and is liable for its NEGLIGENCE that
results in injury to others by reason of the escape
or explosion of gas. It must exercise reasonable
care in the inspection of its pipes to ensure that
leaks may be discovered promptly; and if leaks
or defects in the pipes of the company occur due
to faulty construction or maintenance, the company
is liable for resulting injuries, even though
it did not know about the leak.
In the event that the company has taken due
care in the inspection of its pipes and a defect or
a break occurs through natural causes or by the
act of a third person, the gas company must be
given notice of the defect and reasonable time to
repair it before liability accrues. A gas company
subject to notice that gas is escaping is under an
obligation to shut off the gas supply until the
necessary repairs have been made.
A gas company has a property right in the
mains and pipes and other appliances, and
where there is unauthorized interference with,
or damage to, this property, the company is entitled
to recover damages and an INJUNCTION if
the circumstances so warrant.
Rates
A gas company has a legal obligation to
charge reasonable rates. One of the main purposes
of the regulation of gas companies is to
prescribe fair and reasonable rates for the selling
of gas to the public. Rate increases are permitted
only following an impartial and complete
investigation—with the object of doing justice to
the gas company as well as the public. Relief
can be sought in the courts if gas rates are
unreasonable—to determine whether the rate
making body acted beyond the scope of its power
or against the weight of the evidence. The courts,
however, cannot decide what rates are reasonable,
nor can they put those rates into effect.
CROSS-REFERENCES
Public Utilities.
