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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 ?
Lokhman said that to keep the operation of the gas transport system's facilities from destabilization, Ukrtransgaz is mobilizing internal resources.
If a compromise solution is not accepted, the Sarajevo Gas, East Sarajevo has announced that it will suspend natural gas transport, but it has also asked for understanding because it has been left with no other way of resolving the problem,' said the company in the press statement.
This reference for professionals and advanced students in engineering provides an introduction to the field of gas transport planning, covering technical and mathematical aspects as well as the regulatory framework in Germany and Europe.
1, 2008 by Galsi and Snam Rete Gas (50% owned by ENI), the latter was to do the engineering and obtain the main permits for the project as well as build the pipeline and subsequently manage the gas transport activities.
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Random gas transport poses a serious threat to other road users and may cause a disaster and tragic human losses as the cylinders could explode in the event of a collision, said the Traffic and Patrols Directorate.
Ukraine's state gas transport company Ukrtransgaz said the explosion did not appear to affect the westward flow of Russian gas.
Although gas transport activities do not have to be separated until 3 April 2017, separation of the operator's accounts by type of activity must start this year, according to the legislative amendments.
A potential purchase would be in line with the company's strategy to expand its gas transport network in Europe.
The Qatari news Agency (QNA) reported Friday that the LNG carrier, Al Mafyar, of Qatar Gas Transport Company Limited (Nakilat), sailed from Ras Laffan port laden with an LNG shipment to Egypt after the completion of loading processes and departure procedures.
The loan will help co-finance the natural gas transport network project whose overall cost is 880 MTD.
The Minister informed the representatives of the energy company that the Ministry of Economy supports natural gas transport schemes along the Asia - Europe route that could also run across Romania's territory.