Could a Louisiana gas utility district give senior citizens a lower rate for the same service?

Plain-English summary

Gas Utility District No. 1 of East Baton Rouge Parish asked whether it could set lower gas rates for senior citizens. The 1998 attorney general opinion said the proposed discount would charge nonsenior customers more for the same service solely because of age. In the office's view, that violated the Louisiana Constitution's protection against unreasonable age discrimination.

The opinion recognized that a utility could charge different rates for different services. The district's proposal did not turn on a difference in service. It turned only on the customer's age.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Gas utility districts at the time

The opinion treated the district's statutory power to set gas rates as subject to the state constitution. It concluded that a lower rate for one age group, with no service difference, was impermissible.

Utility customers at the time

The opinion's concern was the higher price charged to customers outside the senior category for the same service. It did not address discounts tied to different services.

Common questions

Q: Could the district give seniors a lower gas rate just because of their age?
A: The attorney general's office said no. On the facts presented, age was the only basis for the rate difference among customers receiving the same service.

Q: Did the district have power to set its own gas rates?
A: Yes. The opinion quoted La. R.S. 33:4305 C. as granting rate-setting power, but said that power remained subject to the Louisiana Constitution.

Q: Did the opinion forbid every difference in utility rates?
A: No. It quoted a Louisiana Supreme Court statement that varying rates for varying services could be reasonable. The proposal before the office offered different rates for the same service.

Q: Why did the opinion discuss an older water-rate opinion?
A: It cited Opinion No. 77-869, which had reached the same conclusion about a Zachary ordinance giving senior citizens a lower water rate. The older opinion is reproduced as an attachment in the source.

Background and statutory framework

La. R.S. 33:4305 C. gave the gas district power to fix its rates and charges. The opinion read that power alongside Article I, Section 3 of the 1974 Louisiana Constitution, which barred arbitrary, capricious, or unreasonable discrimination based on age. It also quoted a Louisiana Supreme Court discussion of utility rates: customers may be charged differently for different services, but unequal charges for the same service are impermissible.

The office applied those principles to the proposed senior discount. Because the district offered no rate criterion besides age, it concluded the proposal would discriminate against customers who did not qualify as seniors.

Citations and references

• La. R.S. 33:4305 C. (gas district's rate-setting authority, as quoted in the opinion)
• Article I, Section 3 of the 1974 Louisiana Constitution (age discrimination)
• Attorney General Opinion No. 77-869 (earlier water-rate opinion, attached to the source)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/98-0141

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

~t~te o~
One American Place
301 Main Street, Sutte 600
DEPARTMENT OF JUSTICE
P.O. Box 94005
CIVIL DIVISION
TEL.: (504) 342-7013
BATON ROUGE
FAX: (504) 342-2090

RICHARD P. IEYOUB
70804-9095
ATTORNEY GENERAL

AUGUST 03 1998

OPINION NUMBER 98-141

167-B - Utilities, Public
LSA-R.S. 33:4305C
Mr. William R. Aaron
Aaron & Turner, L.L.C.
For Gas Utility Distdct to charge lower rates for senior citizens for the
13424 Hooper Road
same service provided to other customers in the District would
violate anti-discrimination provisions of 1974 Const. Art. I, §3.
Baton Rouge, LA 70818

Dear Mr. Aaron:

On behalf of Gas Utility District No. 1 of East Baton Rouge Parish (District) you have asked for an opinion from this office regarding the legality of the District setting discounted fees for senior citizens.

Under the provisions of La. R.S. 33:4305 C., the District has "the right and power to fix the rates and charges at which it will supply gas". It is clear that this grant of authority to the District by the Legislature is subject to compliance with the state constitution.
Article I, Section 3 of the 1974 Louisiana Constitution states:

No person shall be denied the equal protection of the laws. No law shall discriminate against a person because of race or religious ideas, beliefs, or affiliations. No law shall arbitrarily, capriciously, or unreasonably discriminate against a person because of birth, age, sex, culture, physical condition, or political ideas or affiliations.

The only issue posed in your request is age discrimination. Lower rates for senior citizens, however that is defined, would naturally discriminate against non-senior citizens on the basis of age by charging them higher rates. In State of Louisiana ex re/.
Guste v. Council of the City of New Orleans, 309 So.2d 290 (La. 1975), a suit dealing with a ten percent late charge, brought by the Attorney General on behalf of the consumers of gas and electricity in the City of New Orleans and on behalf of state agencies who were consumers themselves, the Supreme Court stated, at page 294:

"...because public utilities enjoy monopoly status and are not subject to the competitive forces of the marketplace, public regulation of their affairs must act as a substitute to prevent a utility from dealing unfairly with its customers. Included in this public regulation is the prevention of unreasonable discrimination by the utility among its customers through

Page 2

~Mr. William R. Aaron- "
OPINION NUMBER 98-141
Page -2-

various business practices (E.g., rebates, preferential charges, and service inequalities.) While public utilities may reasonably distinguish among classes of customers by charging varying rates for varying services, any discrimination among customers as to the rate charged for the same service is uniformly considered impermissible. (citations omitted)

Based on the facts you have provided, the District is considering a different rate for one class of customers for the same service, which, based on the language of the above case, is impermissible.

This office issued Opinion No. 77-869 (June 16, 1977), a copy of which is attached, that dealt with a similar fact situation. In that instance, the City of Zachary passed an ordinance that effectively provided lower rates for senior citizens for the first 3,000 gallons of water provided by the utility. We opined that such an ordinance was discrimination against those customers who were not in the defined class of elderly users and based that opinion on the provisions of the state constitution cited above and State of Louisiana ex reL Guste v. Council of the City of New Orleans, supra.

Since the District is not basing the rate variance on any criteria other than the age of the customer, such discrimination against the customers not included in the class of senior citizens is, in our opinion, an impermissible act in violation of the letter and spirit of the state constitution.

We hope this is responsive to your request, however if you should have any further questions or comments, please contact the undersigned at your convenience.

Yours very truly,

RICHARD P. IEYOUB
Y GENE~L

By: ~ROBERT B. BARBOR
Assistant Attorney General

RPI:RBB:glb

Page 3

/~TILITIES, Public-167-B
MUNICIPALITIES ..... 71
La. 1974 Constituticm, Art.l,~2
The City of Zachary ordi- nance prescribing a much lower water rate for senio: citizens is unlawful in that it is discriminates
~0804 against those customers who are not elderly ¢iti-
June 16, 1977 = ens.

OPINION NO. 869

Honorable Jack L. Breaux
Mayor, City of Zachary
P.O. Box 310
Zachary, Louisiana 70791
Dear Ma~6r Breaux:
"In your opinion request of June 6, 1977, you ask our opinion of an ordinance recently passed by the Zachary City Council by which senior citizens would receive their firEt 3,000 gallons of water per month for a fee of $.50. The ordi- nance states any water used per month in excess of 3,000 gal- lons shall be charged on the regular rate basis with credit for the $.50. The regular rate for the first 3,000 gallons is $4.38.
Article I, Section 3 of the 1974 Louisiana Constitution states:
No person shall be denied the equal protection of the laws. No law shall discriminate against a person because of race or religious ideas, beliefs, or affiliations. N° law..sh~ll arbitrarily, capriciously, or unreasona~.ly dis- criminate a~ainst a Rerson because of birth, a~e, sex, culture, physical ondition, or political ideas or affi- liations. Slavery and involuntary servitude are prohib- lted, except in the latter case as punishment for crime.
(Emphasis added)
Additionally, the question of whether a municipal utility may charge different rates to its customers was most recently dis- cussed at the Louisiana Supreme Court in State of Louisiana vs. City of New Orleans and New Orleans Public Service, Inc., 309 So. 2d 294 (1975). In this case the Supreme Court said the courts of this state have adopted the generally prevailing rule that a utilities rate structure must be nondiscrimatory. The court further stated, "While public utilities may reasonably distinguish among classes of customers by charging varying rates for varying services, any discrimination among customers as to rates charged for the same service is uniformly considered impermissible." To the same effect see Hicks vs. City of Monroe Utilities Commis- sion, 112 So. 2d 635 (1959).

Page 4

H’on. Jack L. Breaux
" "" O~inion No. 869
¯ ~n~_ 16, 1977
Page 2

In accord with Article I, Section 3 of the 1974 Louis- iana constitution and these Louisiana Supreme Court decisions, it is the opinion of this office the above described ordinance of the City of Zachary is unlawful as it discriminates against those customers who are not elderly citizens.
If we can be of further assistance, please ~ontact us.
Sincerely,
WILLIAM J. GUSTE, JR.
ATTORNEY GENERAL

BY :
TOMMY D. TEAGUE
STAFF ATTORNEY
TDT:bms