person and by Counsel, Mr. Alexander Ross. The Protestants, Stowers

Transcription

1 OF WEST VRGNA CHARLESTON Entered April 8, 1983 M.C. CASE NO. 340 MLLER TRUCKNG, NC., a corporation, Spencer, Roane County. Application for an amendment of certificate. HEARNG EXAMNER'S DECSON PROCEDURE On December 9, 1982, Miller Trucking, nc., a corporation, Spencer Roane County, filed an application for an amendment of P.S.C. M.C. Certificate No. F-930, as follows: operation as a common carrier by motor vehicle in the transportation of commodities generally and household goods in Roane County; in the transportation of household goods between points and places in Roane, Calhoun, Wirt, Jackson, Ritchie, Gilmer and Clay Counties and points and places in West Virginia; in the transportation of livestock in Roane, Wirt, Wood, Pleasants, Ritchie, Calhoun, Clay, Gilmer, Lewis, Harrison, and Kanawha Counties; -- in the transportation of equipment, materials - and supplies --- used in the drilling7 cleaning, repairing, - and plugging of oil and gas wells in Koane, Calhoun, Jackson, Ritchie, Harrison, Lewis, Gilmer, Clay, Kanawha, Wirt, --- Wood, and Tyler Counties - and between points _ and places in said counties, on the one hand, and points and places - - in West Virginia, on the other hand; in the transportation of commodities generally between points and places in Roane County and the Cities of Parkersburg, Wood County; and Charleston, Kanawha County; in the transportation of petroleum products in drums, tubes, or boxes, and empty containers used in transporting petroleum products, between the City of Charleston, Kanawha County, and points and places in Roane, Clay, Jackson, Wirt, Calhoun, and Gilmer Counties; in the transportation of tobacco between points and places in Roane County and the City of Huntington, Cabell County; and in the transportation of lumber and lumber products from Richwood, Webster County, to points and places in Roane County. P_ By order entered on December 9, 1982, the Applicant was required to give notice of said application by publishing a copy of that order once in a newspaper duly qualified by the Secretary of State, published and of general circulation in each of the Counties of Roane and Ohio. Proper notice was given and protests were received. By order entered on January 4, 1983, this matter was set for a hearing to be held in the Commission's Hearing Room at the Capitol in the City of Charleston on February 1, The hearing was held as scheduled. The Applicant appeared in PUBLC SllRVlCL COMM88ON

2 ~ to ~ Trucking person and by Counsel, Mr. Alexander Ross. The Protestants, Stowers & Son Trucking Company, appeared in protest to said application by Counsel, Mr. J. A. Bibby, Jr. EVDENCE Mr. Clairmont Miller, the President and one of the family stockholders in Miller Trucking Company, nc., was the first witness to testify on behalf of the Applicant. He described the history of Miller Trucking Company as having 45 years experience in the transportation of oil field equipment and supplies. He stated that his father had operated the same business before he became president, and that he is breaking his son into the business at present. Before Miller Trucking Company, nc. got involved in the hauling of oil field rigs, it also hauled household goods and livestock. He stated that in 1950, the Company began servicing the needs of the gas industry. n answer questions posed by his Counsel, Mr. Miller elaborated that Miller Company, nc. has 15 trucks with three that serve as back up. He also explained that over the life of the Company, they have owned and operated some 45 pieces of equipment. He candidly admitted that in 1982, about 25% of the moves that his Company made were into or out of counties that were not included in the Company s original certificate granting authority. n explaining how this could happen, Mr. Miller stated that his father believed that the Company had authority for the entire state, and that he had not doubted his word and had never looked up the authority to confirm its parheters. He continued his testimony by stating that he became aware of this illegal activity when notified of such by the Public Service Commission at which time he had the records checked to verify his position. He explained that what he is applying for in this application on behalf of his Company is to obtain rights over no greater territory than his Company has historically been serving over the decades. Mr. Miller stated that other than himself and Stowers & Son Trucking Company and Robinson Trucking, which operates out of Elizabeth, he is not aware of any other common carriers of gas equipment and supplies in central West Virginia. He indicated that some of the equipment owned by the PUBLC servlc COMMSON m -2-

3 Company is covered by bank loans while others are owned free and clear. When asked specifically what the effect of a 25% loss in revenues would have to the operation of the business, he stated that it would have a drastic effect as they are only about breaking even at the present time. Going on, he stated that at a minimum, they would have to lay off about half of their drivers. He also explained that the main base of operations for Miller Trucking, nc. is in Spencer, Roane County, and that they have no other terminal facilities in other counties. With regard to the twelve Counties included on the original certificate, he opined that as to these Counties, he believed that he was actively serving the needs of customers in the central part of West Virginia. n concluding his direct examination, Mr. Miller stated that he had just assumed that the Company had statewide authority and that this is the only time that there has been any complaint lodged against him. (Tr., pp ). On cross-examination, Mr. Miller indicated that his original certificate gave authority to move in Roane, Calhoun, Jackson, Ritchie, Harrison, Lewis, Gilmer, Clay, Kanawha, Wirt, Wood and Tyler Counties. He further stated that he guesses that his Company has been operating illegally since 1952 when they began hauling oil and gas field equip- ment. He further stated that in 1982, not all of his 15 rigs were busy. (Tr., pp ). n answer to questions posed by the Hearing Examiner, Mr. Miller stated that his Company currently has some 18 employees. He elaborated that it was some two weeks ago that a field investigator came to his office to advise him of his illegal operations. Mr. Miller stated that when he received this information and it was verified by a check of the records, he ceased all of his illegal operations. out his testimony, Mr. Miller stated that he is Stowers & n closing Son Trucking Company's main competition. (Tr., pp ). Mr. Larry S. Grimm, a licensed Accountant in West Virginia, next testified that his firm has been providing services to Mr. Miller and his Company for some fifteen years. He continued his testimony by stating that in preparation for this hearing, he inspected the invoices PUBLC SgRVGC EOMMlSSlON

4 for every move made by Miller Trucking, nc. in From this inspection, he prepared several documents which included a summary of all 1982 moves including legal, illegal and CC moves, which were introduced as Applicant's Exhibits 1, 2, 3 and 4. He went on to testify concerning these Exhibits explaining that from Exhibit No. 2, it is shown that of the illegal moves that were made in 1982, it constituted shipments into or out of 15 counties in the state in which Miller Trucking, nc. did not have authority under its original certificate. Altogether, this Exhibit shows that there were 117 illegal moves made generating revenues of $226,000 for the Company. n preparin these lists, he explained the methodology as being that he personally looked at each invoice to determine if it was a proper move prior to this information being submitted to the computer operator. He opined that a loss of one-fourth of the business of Miller Trucking, nc. would cause the Company to make some drastic, sweeping changes in order to keep the Company operating. (Tr., pp ). To clarify a point, Mr. Clairmont Miller was recalled to the stand. n answer to a question posed by Counsel, Mr. Miller stated that if he should be granted the authority for the amendment as sought by this application, that every move made under this expanded authority must either originate or terminate in one of the twelve Counties that he would have authority for. Hypothetically, he would then not be able to go Lincoln County and pick up a load and take it to Raleigh County. (Tr., pp ). Mr. Kenneth Rainwater, the Assistant Drill Supertindent for FWA Drilling Company, was the next witness to testify on behalf of the lpplicant. He stated that in his position, he is familiar with the transportation needs of FWA Drilling Company. He indicated that Petitioner's Exhibit No. 2 reflects the fact that his Company has used Yiller Trucking, nc. numerous times in making hauls in Pleasants :ounty, and some six times in Wayne County. He further testified that nis Company continues to have a need for transportation services in Pleasants County. To meet this need in the past, they have used?towers & Son Trucking Company and J. 0. Coats out of Cambridge, Ohio, 8 * PUBLC SBRVCL COMMSSldN --

5 who along with Miller Trucking, nc., are the only haulers that they have used. He indicated that the bulk of this transportation was done by Miller Trucking, nc. The services Crovided by Stowers & Son Trucking Company were fair. He stated that his Company used the services of Miller Trucking, nc. more than Stowers & Son Trucking Company, mainly, because there work is more in the direction of Miller Trucking, nc.'s terminal, thus, saving on travel time and costs. For them to have to pay for the traveling time from Hamlin, it would be an additional burden on his Company. He indicated that should this application not be successful, then the only proper fleet of trucks to handle his needs will be that of Stowers & Son Trucking Company. He closed his direct examination by stating that it would be to the advantage of FWA Drilling Company to have a choice of haulers, and that the use of Miller Trucking, nc., is primarily a cost-saving procedure. (Tr., pp ). On cross-examination, Mr. Rainwater testified that FWA Drilling Company is engaged exclusively in drilling oil and gas wells in West Virginia operating four rigs. Their rigs are currently located one each in Calhoun, Roane, Putnam and Pleasants Counties. He further stated that he can think of no time that they have called upon Stowers & Son Trucking Company for tranportation that they haven't received reasonably adequate service. n closing on cross-examination, he stated that should this amendment not be granted, FWA Drilling Company could receive adequate service to satisfy their needs from Stowers & Son Trucking Company although it would cost the Company more. This increase cost would have a bad effect on the economic health of FWA Drilling Company which is based in Texas. He further explained that in a move involving 50 miles, they generally would require 8 trucks consisting of 5 axles or tandems. Overall, he testified that their moves average 5 to 8 trucks. (Tr., pp ). Mr. Frank Matheny, an employee of Smith Drilling, next testified on behalf of the Applicant. He stated in his testimony that Smith Drilling has three rigs that operate in all of the State. n the past, his Company has been using Miller Trucking, nc. for at least two and one-half years, although they also used Stowers & Son Trucking Company, - = -5- PUBLC SERVCE COMMSSON

6 O' depending upon the location of the move to be made. He further stated that Smith Drilling will continue to use Stowers & Son Trucking Company in the same manner in which it has always done, and that by this support of this application, they are asking for the right to use Miller Trucking, nc. as they have in the past depending upon the location of the move to be made. He continued that on no occasion when they have needed the services of Stowers & Son Trucking Company, have his trucks not been available. (Tr., pp ). On cross-examination, Mr. Matheny stated that Smith Drilling has three rigs in this area but they are all shut down at this time. n closing his cross-examination, he indicated that both Stowers & Son Trucking Company and Miller Trucking, nc. have done good jobs for him in the past in moving his equipment. n answer to questions posed by the Hearing Examiner, Mr. Matheny stated that Smith Drilling only has two rigs presently in West Virginia as one was sent back to llinois. He further added that the two rigs in West Virginia are currently not working because there is nothing going on at this time of year. He further explained that this lull in work is a yearly occurence and that he expects to start back up in March. (Tr., pp ). Mr. Robert Fluharty, a Production Foreman employed by Pennzoil, next testified on behalf of the Applicant's application. He began by stating that the State of West Virginia is divided into three areas, for the purposes of the Company, and that he is in charge of the central area which includes parts of Lewis, Calhoun, Roane, Wirt and Jackson Counties. n carrying out his job, Mr. Fluharty indicated that he is in charge of some 60% to 70% of the supplies that go into Dther areas of the State. These supplies include casings, rods, tools, pump jacks, and tanks. The other warehouses that Pennzoil has in West Virginia are in Wolfe Summit& the northern< area and one in Spencer covering the central area, and, finally, one in Yawkee for the southern area. He indicated that a majority of the supplies for Pennzoil come into the central area because that is where most of their drilling activity is at the present time. He indicated that the casing supplies and tank and production supplies are distributed from the Spencer area and because of this, their location makes Miller Trucking, nc. more convenient for their use than Stowers & Son PUBLC SERVCE COMMSON

7 Trucking Company. He opined that there is a need for a carrier to handle the type of moves that his Company makes. He further elabo- rated that the reason for calling either Stowers & Son Trucking Company or Miller Trucking, nc. depends on the location of the move to be made. He went on to state that he could not make as expeditious deliveries if he had to use Stowers & Son Trucking Company and wait for them to come from Hamlin. (Tr., pp ). On cross-examination, Mr. Fluharty stated that his Company has not used Robinson Trucking, which is based in Elizabeth, Wirt County. He went on to state that he does not think that Stowers & Son Trucking Company or any other reputable common carriers situate in Lincoln County can service the needs of his Company or any other drilling company located in Roane County. Mr. Fluharty, in answer to a question posed by the Hearing Examiner, indicated that the storage yard in Spencer is used for all of the State wherein the supplies come into Spencer and then are distributed out to the various locations around the State. He indicated that if Miller Trucking, nc. did not exist, lis Company could make other arrangements for their hauling, but this qould be more time consuming for them. (Tr., pp ). Mr. Sam Ruben, the President of Blue Creek Gas Company, testified in behalf of the Applicant that his Company is a drilling and produc- :ion company currently with about 135 wells in 8 counties in West Tirginia including Jackson, Lewis, Upshur, Braxton, Kanawha, Clay and Jicholas Counties. He indicated that his Company has need for the xansportation ranging from big items such as rigs to smaller things.ncluding materials and supplies that go to drill sites..nclude casings and tanks that would have to be taken to the well ;ite..igs. These would Blue Creek Gas Company currently owns no rigs but hires their Mr. Ruben indicated that up until about ten years ago, his lompany provided its own transportation in that they had smaller ;putters which were smaller drilling rigs, but they have since disposed if them and gone into rotary drilling in 1960 and this eliminated.heir trucks and drivers. n the past, he indicated that they have -.sed Stowers & Son Trucking Company at times and Miller Trucking, nc. PUBLC $ERVlCE COMMSBON -7- OF W m l N l A D

8 and Jackson Trucking. The services they have received from Miller Trucking, nc. have been good in the past. He indicated that the reason that they have not used Stowers & Son Trucking Company much in the past is because he is in an area where they have not operated. He indicated that a majority of their activity is in Clay and Kanawha Counties. When asked by his Counsel, Mr. Ruben stated that he thought that there was a need for a common carrier to be centrally located in and around Spencer, Roane County area, and that a common carrier located in Lincoln County would not be as convenient. On cross- examination, Mr. Ruben did indicate that on those times that he has used Stowers & Son Trucking Company, they have received reasonably adequate service from them. He indicated that if they did not have Miller Trucking, nc. upon which to rely, they would have to get someone else. Although he is sure that there are some other truckers svailable, he is not familiar with all of the trucking companies in the area. n answer to a short question posed by the Hearing Examiner, Mr. Ruben indicated that time is an element in most of his hauls since if they are renting a rig, it can be costly if the items needed are not delivered promptly. (Tr., pp ). Mr. Michael Yoak, the Supply Manager for Petro Services, nc. in Spencer, testified for the Applicant that his Company has a complete line of sales and services to the oil and gas fields. He also indicated that only when all of their trucks are busy and delivery must be made, nust they call upon someone else to do their hauling. The customers Df his Company are primarily located in central West Virginia, that 2eing, in Ritchie, Monroe, Calhoun and Jackson Counties. n the past, \ ie indicated that for transportation needs, they have always called ililler Trucking, nc. because he is only some twenty minutes away. ias been able to pick up a load at their yard in Spencer and deliver He it. He indicated that if they would have to call to Lincoln County Eor their transportation needs, it would not be as fast. ;he essence in a large number of his hauling situations. Time is of t was only recently that he became aware of Robinson Trucking located in W i r t Zounty, but it is located on the far end of the County. On cross- Zxamination, Mr. Yoak indicated that his Company has four trucks, two five-axles, a tandem and a single axle. He indicated that normally PUBLC EPRVCL COMMSSON

9 z,

10 has gone to using Miller Trucking, nc. Having been in business some fourteen years, he stated that other than Miller Trucking and Stowers & Son Trucking Company, there are not really any other trucks available to haul rigs in the area, therefore, as a person familiar with the industry, he feels that the public convenience and necessity would be served if there was another carrier in the area. He also thinks that it would be a benefit for there to be competition between carriers in this area. On cross-examination, Mr. Pinkerton stated that he has three rigs, two operating in the Skate of Virginia and one currently in Kanawha County, which will be completed with its job in a couple of days after which he has no more contract work set up for it in West Virginia. He indicated that while he has used Stowers & Son Trucking Company on occasion, there have been times when they were unexplainably delayed in making deliveries. His purpose in appearing at this hearing is that he feels that he should have a choice between Stowers & Son Trucking Company and Miller Trucking, nc. On redirect, Mr. Pinkerton indicated that the frequency of the moves of his equipment depends upon bhe contracts that he has entered into and where he is drilling; that is, if he is drilling north of Kanawha County, he can drill a hole every seven or eight days, while in Mingo County, it might be fourteen to sixteen days between holes. (Tr., pp ). W. Larry Stonestreet, a Drilling Contractor operating as L. V. Stonestreet, nc., next testified for the Applicant stating that he grills basically in the central part of the State and northward. As 3 drilling contractor, he indicated that he has his equipment moved by zommon carrier. He indicated that Miller Trucking, nc. does most of nis hauling and that he has not used Stowers & Son Trucking Company primarily because Miller Trucking, nc.'s location is in closer proximity to his drilling sites. He again indicated that Miller Trucking, nc. zharges $35.00 per hour and that Stowers & Son Trucking Company charge is $ He further indicated that even if Miller Trucking, nc.'s?rice was somewhat higher, he would still use him strictly due to the fiifference in road time. As he pointed out, it purely boils down to?is not wanting to pay for the extra road time, plus the fact that qiller Trucking, nc.'s service is top of the line. He further indicated that he is familiar with Robinson Trucking in Elizabeth, but that he PUBLC BLRVlCL COMMSON -10-

11 does not feel that he is big enough to take on several contractors should the situation arise. t is his opinion and he believes that there is a need for a carrier to haul gas field equipment and supplies to be based in the Spencer area. On cross-examination, Mr. Stonestreet indicated that he is presently operating one rotary drilling unit in Ritchie County and that in 1982, every time that he had to have his rig moved, he used Miller Trucking, nc. (Tr., pp ). With the testimony of Mr. Stonestreet, the Applicant rested his case. The principal Protestant to appear at the hearing in opposition to the application of Miller Trucking, nc. was Mr. Wiley Stowers. Mr. Stowers began his testimony by stating that he is in the trucking, excavating business based in Hamlin, Lincoln County, being primarily engaged in the movement of oil and gas field equipment. He went on to testify that he has authority to perform this service in every county in which the Applicant is now seeking additional authority. Mr. Stowers indicated that he has been continuously operating under the certificates that he received from the Public Service Commission. Recently, he indicated that he purchased the heavy hauling equipment and authority from Nelson Transfer & Storage which now gives him authority to transfer all types of heavy equipment including mine machinery, oil and gas field machinery through out the entire State of West Virginia. n conducting his business, Mr. Stowers stated that he has 39 trucks, all of which are geared for the purpose of hauling oil and gas field equipment. Mr. Stowers further testified that last January, he spent between $600,000 and $700,000 to buy additional "uipment to allow him to adequately take care of the public need. He?ow is able to move anything that is needed to satisfy the oil and gas vel1 drilling through out the State of West Virginia. The corporation :hat he now heads is worth approximately 7 million dollars. He is zppearing as a Protestant in this case strictly for business reasons iecause of the fact that in 1982, his business was down some 80%. n January, he stated that he averaged only about 4 1/2 trucks per day rorking. With a rate of $48.60 an hour, he lost money this year :harging that rate. Mr. Stowers then went on to comment concerning, ;everal of the witnesses that had earlier appeared at the hearing. L,,.',,,.

12 -12- e indicated that he had worked for Mr. Rainwater for as many years as ie has been in the State, but that his rigs have been out of the State lor the biggest part of the year. He is ready to service Mr. Matheny if Smith Drilling any time that he calls. As for Mr. Yoak of Spencer, 4r. Stpwers stated that he did not know him at all. He indicated that 1 ;hey had worked for Falcoln Drilling for several years. On the other land, Mr. Stowers stated that he has not had any dealings with Mr. Stonestreet. n referring to Mr. Pinkerton, Mr. Stowers indicated :hat his CC authority would allow him to move the rigs of Mr. Pinkerton Erom Vtrginia back to McDowell County if called upon to do so. He 2ontinued his testimony by stating that even during this decline in msiness, he has been endeavoring to keep up his level of service. 4r. Stpwers indicated in concluding his direct examination, that if he uere not making money in the trucking business, he would not continue Decause he has other places he could make a few dollars. On cross- 3xamination, Mr. Stowers indicated that the excavation part of his msiness consists mainly drilling site preparation. He also has a Land company, a drilling company and a tank rental and leasing companies 4s mentioned earlier, he had recently purchased Nelson Transfer and Storage mainly to obtain its heavy equipment rights. (Tr., pp )., Mr. Johnny Archer, who is in the drilling contract business asso- ciated with Clint Hurt & Associates, made protest to the application of Miller Trucking, nc. He began his protest by stating that he has had dealings with Stowers & Son Trucking Company in hauling drilling equipnlent and has used them for some eighteen years, and that they have provided good service for him. He operates seven rigs and has eight available at the present time. On cross-examination, Mr. Archer indicated that in the past, he has used the services of Miller Trucking, nc. and received adequate service. He further stated that in arriving at which trucking company he calls, it is determined upon who is closest and more convenient. (Tr., pp ). Mr. Steven Fox, who is engaged in the oil and gas well supply businqss in Huntington, was next to give testimony in protest to the application of Miller Trucking, nc. n his testimony, Mr. Fox stated 1 -,, ' ",, '

13 that he knows of Stowers & Son Trucking Company as they have done a majority of his business in the past. This service has been excellent. He indicated that in the last six months, he has used Stowers & Son Trucking Company some 35 to 40 times and that he would continue to use their service in the future. On cross-examination, Mr. Fox indicated that the location of Mr. Stowers in proximity to his business in Huntington made his use reasonably convenient and adequate. He concluded by stating that all of his needs were currently being met by Stowers & Son Trucking Company. (Tr., pp ). FNDNGS OF FACTS AND CONCLUSONS OF LAW The Hearing Examiner is of the opinion and finds that: 1. The Applicant is the holder of P.S.C. M.C. Certificate No. F-930, which originally gave authority to operate as a common carrier by motor vehicle in the transportation of equipment, materials and supplies used in the drilling, cleaning, repairing, and plugging of oil and gas wells in Roane, Calhoun, Jackson, Ritchie, Harrison, Lewis,l Gilmer, Clay, Kanawha, Wirt, Wood and Tyler Counties and between points and places in said Counties and points and places in Ohio County. 2. n 1952, the Applicant began transporting oil and gas field equipment in Counties for which it had no authority. 3, This illegal hauling continued until Mr. Miller was advised of the illegality by a Public Service Commission Field nvestigator at which time, he ceased said operations. 4, Although the Applicant has engaged in prior illegal activity, the illegality of past-willful operations does not ipso facto bar the granting of a certificate by the Commission. Company,, --- et a1 v. United States, 326F. Sapp. 938 (1971). -- St. Johnsbury Trucking 5. The Applicant presented at the hearing sufficient evidence independent of its illegal activities to show a public need and conven- ience for additional oil and gas field equipment hauling authority in central West Virginia, so as to minimize the cost to those companies having need of such authority, therefore, the amendment, as applied for, should be granted. PUBLC 8ERVCE COMMPON OF :mna -13-

14 . ORDER T S, THEREFORE, ORDERED that P.S.C. M.C. Certificate No. F-930 be, an,d it hereby is, amended to authorize operation as a common carriex by motor vehicle in the transportation of equipment, materials and supplies used in the drilling, cleaning, repairing, and plugging of oil l and gas wells in Roane, Calhoun, Jackson, Ritchie, Harrison, Lewis, Gilmer, Clay, Kanawha, Wirt, Wood and Tyler Counties and between points and places in said Counties, on the one hand, and points and places in West Vlirginia on the other hand; provided that operation under said amended certificate shall commence within sixty (60) days of the date this order becomes final or said amendment shall be null and void. The Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written excep- tions supported by a brief with the Executive Secretary of the Commissio within fifteen (15) days of the date this order is mailed. tions are filed, the parties filing exceptions shall certify to the Execut'ive Secretary that all parties of record have been served said?xcept,ions. f no exceptions are so filed this order shall become the f excep- order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless' it is ordered stayed or postponed by the Commission. Any party may request waiver of the right to file exceptions to a Hearing Examiner's Order by filing an appropriate petition in sriting with the Secretary. No such waiver will be effective until 3pproved by order of the Commission, nor shall any such waiver operate ;o mak'e any Hearing Examiner's Order or Decision the order of the 2ommis'sion sooner than five (5) days after approval of such waiver by ;he Commission. PUBLC SERVCO! CC)hMSON Or ' Rb7G:ias d4-