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Various legal issues arise concerning the use and distribution of gas.


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 or quasi-public corporation or a business affected with a public interest. A state may regulate gas companies for the protection of the public and may delegate its regulatory powers to municipal corporations in which gas companies operate. In a number of states, gas companies are subject to a public service commission or other such agency. The jurisdiction of the commission ordinarily includes the power to establish rates and to set forth rules and regulations affecting the service, operation, management, and conduct of the business.

Consumer Supply

Upon obtaining a franchise to supply gas to a particular geographic area, a gas company is bound to fulfill its obligation; it cannot withdraw its service from an area merely because it is dissatisfied with the rates permitted there. Once the franchise of a company has expired, it may withdraw the service. A court may, in certain 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 over-due 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.


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.


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.


Public Utilities.

References in periodicals archive ?
According to ABG s balance sheet, sustained expansion in business has a constructive impact on income, with $676m in overall operating income in the first nine months of 2013, up 5% over the January- September period in 2012.
AGB president and chief executive Adnan Ahmed Yousif said he was happy at ABG being rated yet again as investment grade - a feature that has been consistent since 2007 when the rating was first done by S&P.
The S&P rating review has reconfirmed the effectiveness of ABG's ability to turn in a consistent performance in all these years despite the trying times that we have experienced,' ABG president and chief executive Adnan Ahmed Yousif said.
5, 2014 /PRNewswire/ -- On November 3, 2014, more than two years after the first lawsuit was filed against Stryker, a global settlement program involving Stryker's Rejuvenate and ABG II modular hip implants was executed before and announced by Superior Court Judge Brian R.
ABG Shipyard had been facing tight liquidity, triggered by postponement in receiving milestone-linked payments from clients, for the past one year.
Such innovative contributions by BFX and ABG will result in the further development of the Islamic finance industry.
I am sure that the announcement will be received well by the markets as this further endorses that ABG is an institution that is strong and is on the move towards expanding its presence in the different markets as well as entering new ones,' he noted.
ABG Engineering formed a management team locally to run ABG Motors.
Last month, ratings agency India Ratings & Research downgraded ABG Shipyard Ltd's Rs 200 crore non-convertible debenture programme to default from 'IND BB-' earlier, citing delayed payments.
The first nine months of the year saw the completion of the launch of the new identity of ABG, the last of which was completed in Sudan, Egypt and Jordan, and as a result all the banks of the group now carry the ABG logo and identity," said president and chief executive Adnan Ahmed Yousif.
He further elaborated that the MoU includes clauses that facilitate entering into arrangements to finance a number of projects in cooperation with ABG or the issuance of Sukuks for certain projects by ABG subsidiary units.
ABG is a local and regional digital signage advertising sales company that operates in five markets: Miami Metro and Orlando Metro in Florida; and Austin Metro, Dallas, and San Antonio in Texas.