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Mr. REED. That is right.
Mr. MAPES. Mr. Chairman
The CHAIRMAN. Mr. Mapes.
Mr. MAPES. You say that 70 percent of the total amount of gas consumed in Cleveland comes from the West Virginia fields, from a Standard Oil controlled company, and 30 percent from the Ohio fields?
Mr. REED. Local fields.
Mr. MAPES. Do you obtain the gas from a separate company in the Ohio fields?
Mr. REED. Yes; from various companies. Some of that gas is purchased from individuals who have individual gas wells and farmers, independent producers, and quite a bit of it, probably 50 percent of that 30 percent, comes from wells owned by the East Ohio Gas Co. Mr. MAPES. So that you are now furnishing gas to the consumers of the city of Cleveland from more than one company?
Mr. REED. NO. We have just the East Ohio Gas Co., but they are furnishing us other companies' gas.
Mr. MAPES. The East Ohio Gas Co. is the Standard Oil Co.?
Mr. MAPES. And it buys gas from the West Virginia field and from the Ohio field both; is that the situation?
Mr. REED. That is right. It buys gas at the river.
Mr. MAPES. And you buy all of your gas from the East Ohio Gas Co.?
Mr. REED. That is right.
I want to thank you gentlemen for having an opportunity to appear here. If there are no other questions, that is all I have.
The CHAIRMAN. We thank you, Mr. Reed.
There was some desire on the part of the members not to have a session tomorrow because the House is not going to be in session and some members are going to be absent. There is an amendment coming up on an appropriation bill that probably a good many members of the committee will desire to vote on and desire to be on the floor when it is considered this afternoon. It is possible, however, that that amendment will be disposed of by 3 o'clock, so if agreeable to the committee, we might meet at 3 o'clock this afternoon instead of
Mr. COLE. Instead of tomorrow?
The CHAIRMAN. With the idea of not meeting tomorrow.
Mr. MAPES. What witnesses will appear before the committee this afternoon?
The CHAIRMAN. Mr. Dickey, city solicitor of Portsmouth, Ohio; Mr. Robert D. Garver, to make a statement in answer to a former witness; Mr. Hunt, of Syracuse, N. Y.; and Mr. Maltbie, chairman of the Public Service Commission of the State of New York.
Then, there is a statement to be filed by Mr. Gandy, representing the National Coal Association.
Mr. HALLECK. Are those proponents or opponents?
The CHAIRMAN. I think that they represent both sides.
Mr. MAPES. I have no objection to meeting this afternoon but I imagine that it will be difficult to get a very large attendance of committee members.
The CHAIRMAN. I doubt whether we will get much of an attendance tomorrow.
Suppose, then, that we meet at 2 o'clock with the understanding that when the amendment comes up on the floor we will recess.
(Thereupon, at 12:05 p. m., the committee took a recess until 2 p. m. of the same day.)
THURSDAY, MARCH 25, 1937. The committee reconvened, pursuant to the taking of recess, at 2 p. m.
The CHAIRMAN. The committee will come to order, please. I believe the next witness is Mr. Dickey. About how long do you want. to take, Mr. Dickey?
STATEMENT OF W. L. DICKEY, CITY ATTORNEY, PORTSMOUTH, OHIO
Mr. DICKEY. Mr. Chairman, I will try to be as brief as I can... The CHAIRMAN. First, give us your name for the record, and your official designation.
Mr. DICKEY. My name is W. L. Dickey. I am city attorney, Portsmouth, Ohio.
The CHAIRMAN. Thank you..
Mr. DICKEY. I would like to give you a brief history of the Portsmouth situation down there, which I think is a condition or set-up which if this bill passes will be applicable to those conditions as they exist.
I will try to be very brief, Mr. Chairman. I am the director of law of the city of Portsmouth, and stating the case, the United Fuel Gas Co., which is a subsidiary of the Columbia Gas & Electric Co., delivers the gas wholesale to the gate of the city of Portsmouth; the Portsmouth Gas Co. is a subsidiary of one of the other companies, the Associated Gas & Electric Co., and distributes this gas to the burner tips in the city of Portsmouth.
In 1932 we passed a rate ordinance, fixing rates to the consumer, at 40 cents per thousand. That action was appealed by the United Fuel Gas Co. to the Utilities Commission of Ohio. We have been wrestling around with that case before the utilities commission since that time.
We did not have many grievances to find with the Portsmouth Gas Co. other than some attempts that they contained in their cost of production, or delivery, and they were eliminated. The next question, however, arose as to the matter of costs. We at that time did pass some legislation in Ohio putting the United Fuel Gas Co. under the jurisdiction of the Utilities Commission of Ohio. They were ordered to submit their records to show that the gate rate as well as the Ohio River rate was reasonable and just, and that they refused to do, appealing the matter to the United States district court, where we have had 2 years on the matter, and it is still pending in that
They were objecting to the jurisdiction of the Utilities Commission of Ohio, given to the commission through the legislation that we had passed.
Now, the United Fuel Gas Co. is charging at the gate, to the distributing company, 37 cents. In the Columbia gas controversy, or rate case was a case in which the Columbia Co. carried its fight to the Supreme Court of Ohio, and will probably end in the United States Supreme Court, where the company was charging all the way from 18 to 24 cents, using the Ohio River rate charge. Now, regardless of whether that is a reasonable charge, they are selling, as I stated before, gas to the Portsmouth Gas Co. at 37 cents. At New Boston, a city of approximately 8,000, lying immediately east of Portsmouth proper, and is surrounded on three sides by the city, and the streets only separate the two cities, and across the street, the United Fuel Gas Co. is distributing at the burner tips gas at 40 cents per thousand. They are further selling to the Ironton Distributing Co., 30 miles east of Portsmouth, and on the Ohio River, gas at 40 cents. And right across the river they are selling gas at about 29 cents. And, a little farther west the rate to the
Mr. MARTIN (interposing). How do they cross the river?
Mr. DICKEY. They cross the river between Huntington and Ironton at one place and then they cross it again—
Mr. MARTIN. I mean how do they cross it?
Mr. DICKEY. By laying the line on the bottom of the river. Furthermore, the United Gas Fuel Co. is selling gas to the Wheeling Steel Corporation at Portsmouth at a rate less than 25 cents. I have not been able to verify that, but I have been told, informed by different sources that it is as low as 21 cents.
Those are some of the figures that I wished to give you gentlemen because in the passage of this bill, if this bill becomes effective, the application of this bill will apply specifically to our conditions there. This is probably one of the most outstanding cases in the country in which legislation of this kind will apply.
Mr. MARTIN. May I ask you a question?
Mr. DICKEY. Yes.
Mr. MARTIN. Do you claim that these different ranges in rates, from 25 to 40 cents, are under practically the same conditions as to production, transportation, and distribution?
Mr. DICKEY. Yes; they all come from the same line and is gathered from the same territory.
Now, this gas distributed in Portsmouth is gathered in some lines in West Virginia, extending into Kentucky. They have in those localities an abundant supply of natural gas. It comes north into Ohio and some of it goes East. And furthermore, we have considerable distress gas in that territory. Now they talk about consumption; they talk about the production, or the available supply of gas not being sufficient. These pipe lines come over there and gather that gas up and transport it across the river into Ohio and other places and are so arranged that a great many people in West Virginia and Kentucky cannot get their gas into the pipe lines. As an illustration, they make a contract with an individual, or with some small company, to take so much of their gas as the market will require or the industry may demand into the pipe line. The pressure has to be maintained at the higher pressure for them to get in their gas. That is my explanation of distress gas in this locality. Now, we have tried in every way that we can to reach an agreement with the United Fuel Gas Co. in order to get gas at a reason
able price and at rates this company is distributing it to other cities around Portsmouth. And I might say that the United Fuel Gas Co. distributed gas to Sciotoville, which lately came into the city of Portsmouth, and is only divided now by streets, and since Sciotoville came into the city of Portsmouth the United Fuel Gas Co. has sold its holdings to the Associated Gas & Electric Co., which is the Portsmouth company, in order to evade the jurisdiction of the Utility Commission of Ohio.
Now, sometime ago, a year or so ago, when I was here in your city, I wase given the opportunity of writing a sentence or a clause into H. R. 12680, which was a bill to place the utilities under the jurisdiction or protection of the Interstate Commerce Commission. And I might say here that the natural-gas companies, as far as I am able to discover, are the only utilities that were not included in national or State legislation for the purpose of regulating interstate com
I do not know how that happened, but, nevertheless, they were not regulated by the Interstate Commerce Commission. And we are attempting to regulate them in Ohio through the utilities commission, and that is why we are in the United States court.
The CHAIRMAN. Before you leave that. Do I understand that the pipe line comes through the city of Portsmouth and goes on up into the State?
Mr. DICKEY. No; they dead-end into Portsmouth, but the line crosses the river east and comes into Ohio.
The CHAIRMAN. What is the length of that dead-end?
Mr. DICKEY. The dead-end from the source of supply or from the Ohio River?
The CHAIRMAN. The main line.
Mr. DICKEY. Well, that is the main line. There are two main lines; one crosses the river about 15 miles east of Portsmouth.
The CHAIRMAN. The point I had in mind was how far the gas was transported from the point of production to your city. That was what I was really trying to find out.
Mr. DICKEY. That would be 55 or 60 miles. Both lines; the one comes on the south side of the river and the other comes on the north side of the river.
The CHAIRMAN. Do they contend there is any distinction which justifies these different rates for different communitites?
Mr. DICKEY. I do not think so, Mr. Chairman. They have a very large consumer of gas with the Wheeling Steel Corporation; they have New Boston; they have Portsmouth and other consumers of gas in the immediate vicinity of Portsmouth and New Boston which runs very high.
Now, we have endeavored through the negotiations with different finance companies and different people that had distress gas to obtain and get additional gas into the city of Portsmouth. We have failed on numerous occasions through the fact that when these people look into it, as to whether they are going to be able to finance it or not, in some way, they are unable to do so; there is plenty of gas to supply us, but through lack of finance, or through interference, or for some other reason, it is not transported into that field.
Now, there have been some questions raised here as to section 7 (c) which was discussed rather extensively this morning. But, if any
company coming to the city of Portsmouth attempted to deliver us gas they would be forced to come before your committee, or come here to obtain the permission to bring that gas line into the city. My contention in this matter is that if they were forced today before they could get that done, they would be financially embarrassed from sources that work from the bottom, or in some way or place and is able to know about those things.
That is the one objection that I do have to section 7 (c). It would, in my opinion, place that company in a position where it would be practically forced into a rate case before they could even get in. Now, as an illustration, suppose a company makes an application to get a permit or certificate of convenience, the commission or the committee would be forced to go into the question of finances to see whether they would be capable, which would probably be a good thing. But then they would also be forced to go into the source of supply of the company and also go into the question of the cost of transportation because all of those things together make up the rate case. I am afraid we would have the trouble of a rate case before they could get a certificate of convenience and necessity. And, Mr. Chairman that is one of the reasons why we object to section 7 (c). Now, under the conditions there, people across the street
Mr. MARTIN (interposing). Before you go on from there I want to ask you a question.
Mr. DICKEY. Yes.
Mr. MARTIN. May I ask you where the ownership of this United Co. that supplies Portsmouth is? Where is the ownership and control? Is that an independent company?
Mr. DICKEY. No; that is a subsidiary of the Columbia Gas & Electric Co.
Mr. MARTIN. And is that an independent company, or is that a subsidiary?
Mr. DICKEY. Well, the Columbia Gas & Electric Co. is the parent company of the United and several other companies; they supply them gas which comes into Ohio and goes north, and also goes east from there. That is a very large company with headquarters, I believe, in New York.
Mr. MARTIN. Thank you.
Mr. PETTENGILL. Going back to section 7 (c): Among other things, do you not think that is with the idea of controlling the situation where others might want to go into a field that is already occupied? Mr. DICKEY. Yes.
Mr. PETTENGILL. So they certainly could not finance themselves until they got a certificate of convenience, showing public necessity. Mr. DICKEY. That is right.
Mr. PETTENGILL. And when they come down here asking for permission to do that they will be required to show where the money comes from?
Mr. DICKEY. Yes.
Mr. PETTENGILL. And will have to make a showing one way or another of their financial ability and the need for the service.
Mr. DICKEY. They probably would, due to the fact that if the finances were available at that time they could come down here and attempt to show the necessity of putting in additional lines, but they