[Vol. 15] Public Service Commission, First District In the Matter of the Hearing on the Motion of the Commission on the Question of the Extension of the Gas Mains of the NEW YORK AND QUEENS GAS COMPANY to such Extent as may be Necessary to Serve Residents of Douglaston, Douglas Manor and Little Neck, in the Borough of Queens, City of New York Case No. 1856 (Public Service Commission, First District, February 1, 1918) A public service corporation which has. delayed for years to comply with its franchise requirements and an order of the Commission cannot be permitted to still further delay such compliance. The New York and Queens Gas Company, upon the unanimous affirmance of this Commission's order by the New York Court of Appeals and the Supreme Court of the United States, now comes before this Commission again for a rehearing as to the order so affirmed. The order in question called for the early extension of gas mains and service within the petitioner's franchise area in conformity to its franchise obligations. Such extension of mains is greatly needed by the communities affected. Held, that the Commission should not countenance the company's unconscionable effort to obtain further delay without recognition of its legal obligations and that for the most part the allegations of the present petition are vague and insufficient, much more indefinite and inadequate, in fact, than those of the petition already passed on adversely by the Commission. Application for rehearing denied and an order made fixing new dates for the beginning and completion of performance, the dates fixed by the order of March 19, 1915, having expired while the matter was in the courts. The fixation of new dates is without prejudice to a further application by the company if it deems the facts warrant an extension beyond the dates now fixed. HERVEY, Commissioner. Following the unanimous affirmance of this Commission's order by the New York Court of Appeals and the Supreme Court of the United States, the New York and Queens Gas Company comes for a second time to this Commission to ask for a re-hearing as to the order so affirmed. The Commission's denial of the first application for re-hearing was a part of the record passed upon by the courts, and the refusal of that application has been sustained by the highest court of the State and the Nation. Public Service Commission, First District [Vol. 15] I am of the opinion that this second effort to obtain a reconsideration of the propriety of requiring this company to live up to its franchise obligations should be denied, and steps taken to bring about early compliance with the Commission's order or to punish non-compliance. The early extension of gas mains and service, within the petitioner's franchise area, as called for by the Commission's order of March 19, 1915, is greatly needed by the residents of the communities affected, and the Commission should not countenance the company's unconscionable effort to obtain. further delay without recognition of its legal obligations. When this matter was acted upon by the Commission in the fall of 1915, the opinion adopted by the Commission said, in part: "If the people in this section of the borough of Queens are to be benefited by the transfer of control to the Consolidated Company, it would seem that this is an opportune moment. It is surprising that so soon after the decision permitting the Consolidated Company to acquire control of the New York and Queens Gas Company, that company should refuse to make extensions to Douglaston unless it is assisted financially by the consumers themselves, for the company states that it is willing to build the new main, provided the consumers or some one will advance the money and will accept repayment month by month to the extent of 25 per cent of the gas bills. "When the company accepted franchises for the whole of the third ward, it assumed certain obligations. The company may not have obligated itself to lay drains throughout the entire area regardless of the density of population, but it certainly can not go to the other extreme, select, the most profitable parts and leave the less profitable areas to look out for themselves. At present, however, it assumes very much such an attitude towards the Douglaston area. The company is supplying gas to other areas which are populous and easily supplied. Even Bayside, a suburban development immediately to the west of Douglaston, receives gas. It will always be expensive to lay mains to serve the Douglaston area, for Alley Creek and the bay intervene, and the gas works have been located by the company far from this section. [Vol. 15] Public Service Commission, First District The existing distribution system is not adequate to supply Douglaston in addition to the other areas now being supplied, and long mains must be built not merely from the ends of the mains to the west of Douglaston, but far back to the gas works. "Apparently, these conditions will continue. The topographical situation can not be changed, and the distribution system is not likely soon to be rebuilt. If the company's position is sound, the residents of the Douglaston area can not obtain gas until their district becomes so populous that the new business will earn 6 per cent on the cost not only of the mains in their own territory but of the mains clear back to the works. If the works are located far enough away, this day will be very far distant; and yet the company in the meantime holds franchises in reserve, building upon them as it wishes. Is it fair for a company to select the most profitable areas and then contend before this Commission that it should not be required to build elsewhere unless the new business will earn 6 per cent on the cost of construction? This principle has been rejected by the Commission in the case of street railways, and the Commission's decision has been approved by the courts." The Commission's action in the matter was unanimously upheld by a clearly reasoned opinion in the New York Court of Appeals, in the course of which it was said: 66 The public service commissions are authorized by law to order reasonable improvements and extensions of the works, wires, poles, lines, conduits, ducts and other reasonable devices, apparatus and property of gas corporations, electrical corporations and municipalities. (Pub. Serv. Com. Law [Cons. Laws, ch. 48], sec. 66.) "Under the authority of this statute the public service commission for the first district made the order requiring the relator to extend its gas mains and services to meet the reasonable requirements of Douglaston and Douglas Manor. * * * "The public service commissions were created by the legislature to perform very important functions in the community, namely, to regulate the great public service corporations of the state in Public Service Commission, First District [Vol. 15] the conduct of their business and compel those corporations adequately to discharge their duties to the public and not to exact therefor excessive charges. It was assumed perhaps by the legislature that the members of the public service commissions would acquire special knowledge of the matters intrusted to them by experience and study, and that when the plan of their creation was fully developed they would prove efficient instrumentalities for dealing with the complex problems presented by the activities of these great corporations. * * * "The question now is whether or not there was any evidence to show that the order of the public service commission was an unlawful and arbitrary exercise of power. There was no dispute as to the basic facts of the case. There was some variation in the estimates of the witnesses as to the cost of iron pipe and the expense of engineering supervision and like matters, but there was no real disagreement as to the cost of the extension of the relator's system of gas distribution, and the increase in revenue that the relator would probably receive therefrom. "The court at the Appellate Division in its opinion summed up the proof on the subject. The court said that the cost of the extension would be between $60,000 and $70,000, and that the increased return to the relator from the consumption of gas would be about $1,660 per year, which is only one-half of the interest at five per cent upon the extension. "This is very far from showing that the order of the public service commission was simply an arbitrary and capricious exercise of power * * The Supreme Court of the United States likewise sustained with a unanimous voice the action of the State tribunal. The notable opinion read by Mr. Justice Clarke expressed views which apply with great force to many of the allegations of the company's second petition for a re-hearing: 66* * * The case is now in this court for review of the judgment entered upon the decision of the Court of Appeals and it is presented upon a single assignment of error, viz: 'That the [Vol. 15] Public Service Commission, First District order of the Public Service Commission was illegal and void in that it deprived the gas company of its property without due process of law and denied to it the equal protection of the laws, in violation of the Fourteenth Amendment to the Constitution of the United States, in requiring the company to extend its distributing system under great physical difficulties and at enormous expense to an independent and remote community which the company was under no present duty to supply with gas when it appeared that the gas company would not obtain an adequate return from the expenditure required to make such extension.' "More compactly stated, this assignment of error is, that the order deprived the gas company of its property without due process of law, because obedience to it would require an expenditure of money upon which the prospective earnings would not provide an adequate return. "The Court of Appeals of New York decided that the Public Service Commission was created to perform the important function of supervising and regulating the business of public service corporations; that the State law assumes that the experience of the members of the Commission especially fits them for dealing with the problems presented by the duties and activities of such corporations; that the courts in reviewing the action of the Commission have no authority to substitute their judgment as to what is reasonable in a given case for that of the Commission, but are limited to determining whether the action complained of was capricious or arbitrary and for this reason unlawful; and that it was clearly within the power of the Commission to make the order which is here assailed. "This interpretation of the statutes of New York is conclusive, and the definition, thus announced, of the power of the courts of that State to review the decision of the Public Service Commission, based as it is in part on the decision in Interstate Commerce Commission v. Illinois Central R. R. Co., 215 U. S. 452, 470, differs but slightly, if at all, from the definition of this court of its own power to review the decisions of similar administrative bodies, arrived at in many cases in which such decisions have been under |