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PANHANDLE CO. V. MICHIGAN COMM'N, 341 U. S. 329 (1951)

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U.S. Supreme Court

Panhandle Co. v. Michigan Comm'n, 341 U.S. 329 (1951)

Panhandle Eastern Pipe Line Co. v.

Michigan Public Service Commission

No. 486

Argued April 23, 1951

Decided May 14, 1951

341 U.S. 329


Appellant is engaged in the transportation of natural gas by pipeline from other states into Michigan, and is subject to regulation by the Federal Power Commission under the Natural Gas Act. Appellee gas company is a Michigan public utility which distributes natural gas, obtained entirely from appellant, to domestic, commercial and industrial consumers in the Detroit area, and a substantial portion of its revenues is derived from sales to large industrial consumers. Appellant seeks to make direct sales of natural gas to large industrial consumers in Michigan, and in its operations would use streets and alleys in the Detroit area.

Held: an order of the Michigan Public Service Commission requiring appellant to obtain from that Commission a certificate of public convenience and necessity before selling natural gas direct to industrial consumers in a municipality already served by a public utility is not in conflict with the Natural Gas Act or the Commerce Clause of the Federal Constitution. Pp. 341 U. S. 330-337.

(a) The sale to industrial consumers as proposed by appellant is clearly interstate commerce, but the sale and distribution of gas to local consumers by one engaged in interstate commerce is "essentially local" in aspect, and is subject to state regulation. P. 341 U. S. 333.

(b) The Natural Gas Act applies only to such sales of gas in interstate commerce as are for resale, and does not apply to sales made direct to consumers, the latter being left to state regulation. P. 341 U. S. 334.

(c) There are in this case no conflicting claims between state and federal regulation. P. 341 U. S. 336.

(d) To require appellant to secure a certificate of public convenience and necessity before it may enter a municipality already served by a public utility is regulation, not absolute prohibition. Hood & Sons v. Du Mond, 336 U. S. 525, distinguished. Pp. 341 U. S. 336-337.

328 Mich. 650, 44 N.W.2d 324, affirmed. chanroblesvirtualawlibrary

Page 341 U. S. 330

A cease and desist order issued against appellant by the Michigan Public Service Commission was affirmed by the State Supreme Court. 328 Mich. 650, 44 N.W.2d 324. On appeal to this Court, affirmed, p. 341 U. S. 337.

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