Wednesday, September 6, 2017

WATER UTILITY SERVICE AND THE UNIFORM COMMERCIAL CODE

Article 2 of the Uniform Commercial Code ("UCC") governs the sale of "goods". A new Illinois Appellate Court decision has stated that natural gas is considered "goods" within the UCC, and that an oral contract for the sale of natural gas by a supplier to a business customer was not enforceable because the UCC requires such a contract to be in writing.*

Under Article 2 of the UCC, a "sale" is the passing of title to goods from seller to buyer at a price. "Goods" are all things movable at the time of identification to the sales contract.

Certain implied warranties can arise from a contract for sale of goods, including a warranty of merchantability (fitness for ordinary purposes for which such goods are used) and a warranty of fitness for a particular purpose.

Over the years, several courts have wrestled with the question whether water utility service is a "sale" of "goods" under the UCC that can give rise to a breach of an implied warranty. The rulings have been quite diverse. For example, an Oregon court held that water service was not a sale of goods. On the other hand, a Georgia court held that it was. In between these opposites, are a South Dakota court that held water service is a sale of goods, but no implied warranties arise; and a Pennsylvania court that held water service is a sale of goods but only an implied warranty of merchantability is created.

Finally, a Massachusetts court held that water utility service is both a sale of goods within the UCC and a provision of service, which is not within the UCC.** The court stated that "where a contract is for both sales ad services as here," to determine whether the UCC governs, the test is whether the predominate factor, thrust or purpose of the contract is the provision of service, with goods only incidental. In the case of water service, the court concluded that the provision of service was the primary factor and held that the UCC did not apply. It stated: "water is a unique product and is essential to human health and well-being. Here, the city did not create or manufacture the water. Rather, the city, by a system of reservoirs, captured the water from brooks,streams and rainfall. It treated the water and then distributed it to its citizens. Although the city charged a sum for the water, the rate reflected the cost of storage, treatment and distribution. Thus, it is clear that the predominate factor, thrust or purpose of the activity was the rendition of services and not the sale of goods.

Interestingly, these decisions generally have focused upon the issues of "goods" and "warranties." Unresolved, perhaps, is whether water utility service involves a "sale" of goods within the UCC. That is, is there a transfer of title to water from the water utility to the water user? Further,if so, when water then is used and becomes wastewater, does the user pass title in the water to the wastewater utility?

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* Vanguard Energy Services v. Shihadeh,
2017 IL.App.(2d)160909

** Mattoon v. City of Pittsfield,
775 N.E.2d 770 (2002)

© Daniel J. Kucera 2017

Sunday, August 20, 2017

PROPHETS

In early television days, a local weatherman always concluded his forecast with a cartoon figure called "the vice president in charge of looking out of the window." It was a classic juxtaposition of prediction and reality, almost metaphysical in nature. I have retained memory of that example as I consider the many speculations offered by many people regarding climate change and its assumed effects.

Recently, an article was published under the caption "Climate Change Could Exacerbate Inequality"* Since "inequality" is a hot button issue these days, my eyes perked up. The article reported that, using climate change simulation, researchers have predicted that by the year 2100 counties in the southern portion of the United States will have a greater risk of economic decline due to climate change than those in the north. Thus, they concluded, climate change will make worse wealth disparities.

The reality is that daily weather forecasts, which are based on models or simulations, frequently miss the mark on predictions of rain or snow or sunshine, for example. Likewise, longer term forecasts, several days or even a week forward, prove even less reliable or even speculative. So, how accurate are climate change predictions over the next 83 years to 2100 and resulting conclusions about economic and wealth conditions?

How are we to respond to climate change prophesies founded upon climate change simulation assumptions? Perhaps best have an umbrella and sunglasses handy and keep looking out of the window.

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*Temming,Science News,August 5, 2017, p.13

© Daniel J. Kucera 2017

Thursday, August 10, 2017

`ANTIQUES HAVE THEIR PRIVILEGES

Probably the most common and most ongoing question among antiques dealers is "how do we induce more people, particularly younger ones, to purchase more antiques for their homes?" Of course, there is nothing new about this question. It has been asked and unanswered for decades since at least the 1970s. It has become a dealer's lament.

Over the years, many sages have offered a variety of reasons why people should buy antiques: for investment; for trendy design; for quality of wood, metal or workmanship; for historic value or interest; and for culture are some of the reasons. Sometimes one or more of these reasons will stimulate a sale or two, but not necessarily in the quantity that will sustain a dealer's business or interest.

By accident recently, I uncovered in my clutter a book published in 1889--itself an antique--that may offer some insight to answering this question.* The author's premise is : "man is an aesthetic being." Elaborating, man has an implicit duty to adorn and beautify his house. The author states: "The best characters and the noblest men come from the modest homes which taste, refinement, and labor have adorned and beautified."

The author adds: "But it is not alone in nature that beauty may minister to our souls...art may serve this purpose. Nature hangs no landscapes on our parlor walls, nor does she set bouquets in our windows....The beauty of art is not alone for the mansion of wealth. Artistic and tasteful adornments are the products of ingenuity and not of wealth."

Art, of course, is not limited to paintings. An antique by its design, or by its age and ancestry, or even by its placement within a home by itself or in conjunction with other antiques can be art.

So, there you have it. Perhaps the most important reason to buy antiques is to adorn and beautify one's home, so as to "minister to our souls."

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* Sargent, "Our Home", King, Richardson
& Co., 1889, pp. 287-290.

© Daniel J. Kucera 2017

Sunday, July 23, 2017

CLIMATE CHANGE AND A WATER UTILITY'S DUTY TO SERVE

Climate change prophets have been raining alarms as to predicted adverse impacts on economies, culture, the environment and human activity in general. Water public utilities have not escaped such climate change speculation. Numerous articles and conferences have addressed the need for water utilities to adopt reactive measures to deal with assumed effects of climate change.

Sidestepping questions whether climate change actually exists and, if so, what are its causes, one should ask whether such concerns about it--particularly in the case of water utilities--are ignoring the real elephant in the room.

Inherent in the concept of public utility is the common law duty to serve all demands for service from all actual and potential users within its service area. Generally, this duty has been codified in legislation and acknowledged in court decisions and administrative agency regulations. In some instances, satisfaction of customer demand has been interpreted as including peak day demand as well as safe and adequate service in general. Over time, the duty to serve has been expanded to include service on a nondiscriminatory basis and at reasonable rates.

In short, the obligation of a public utility is to satisfy, at all times, the public requirements for water service. Failure to do so can result in consequences, ranging from penalties to involuntary acquisition by another utility.

So, perhaps there is nothing new about climate change speculation regarding water utilities. Whether driven by concerns over global warming, or by customer or demand growth, or by aging infrastructure, or any other driver, a water utility's obligation remains the same. It is perceived to have a duty to satisfy its customer demand. Whether a utility's response to such drivers may be conservation, re-use, alternative sources of supply, interconnection with other utilities, purchased water, etc., the key to an appropriate response would seem to rest with the duty to serve.

As an aside, one is reminded of the hysteria over "Y2K" in 1999-2000. Predictions and speculations offered dramatic adverse consequences if computers could not adjust to the new century. When the new date actually arrived, the parade of horribles marched to a whimper.

Chicken Little may have cried "the sky is falling", but the sun still shines where it always has.


© Daniel J. Kucera 2017

Sunday, July 9, 2017

IS "OLD" WATER SUBJECT TO "NEW" CONTAMINATION?

According to a recent report, "ancient" deep groundwater is becoming contaminated.* Scientists tested approximately 6,500 wells world wide with the objective of determining which reached deep "old" water formed more than 1,200 years using radioactive carbon decay dating. They concluded that more than half of wells more than 250 meters (820 feet) deep produced mostly "old" groundwater.

However, more than one-half of the "fossil" groundwater wells showed elevated levels of tritium, said to be a radioactive isotope of hydrogen resulting from nuclear bomb testing. This finding suggested that some of the water in these wells originated after the nuclear tests in the 1950s decade.

The researchers concluded that "younger" water containing contaminates could mix with "old" water in an aquifer or a well itself could mix the waters. Thus, "old" water could become polluted by "young" water, essentially bridging "generation gaps".

What this report appears to suggest is that recharging of even deeper aquifers can introduce contaminates into those waters. In other words, deep waters are not necessarily immune from the polluted impacts of surface waters, shallow ground waters and earth excations.

Age may have its privileges, but it also may have its consequences.

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*Sumner,"Pollution Reaches Old Groundwater,"
Science News, May 27,2017, p.12

© Daniel J. Kucera 2017

Saturday, July 1, 2017

THE INCREDIBLE SHRINKING MAMMALS

I now know why I am getting shorter. I thought it was an aging thing. No--it is because of global warming!

According to a recent article, mammals on Earth have shrunk on at least two occasions when carbon dioxide levels and temperatures rose as part of "a natural warming."* In one example, about 54 million years ago, a compact horse shrunk to the size of a cat due to global warming. (Think of a cowboy saddling up on a cat and hitting the prairie to herd cats.) About 56 million years ago, it is said that mammals also experienced a shrinking.

The studies reportedly were based on fossils found in Wyoming. Interestly, the article stated that smaller animals are better adapted for warm climates because they have more skin per pound of body. Larger animals are more adapted for colder climates because they have less skin per pound.

Well, now I realize why I am shrinking, and understand that I should lose weight in order to confront climate change. But, I wonder--if this trend continues how much will mammals shrink? For example, will cows become so small that they can give only evaporated milk?

What are we to do? Cry global warming! and make way for the Lilliputians?

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*Associated Press, "Fossils show Mammals
Shrinking When Earth Heats Up, Study
Says," Rapid City Journal, March 16,
2017, P. A4

© Daniel J. Kucera 2017

Sunday, June 18, 2017

IS THIS THEORY IN HOT WATER?

Apparently, there is much we do not understand about water, including how and when it freezes. One uncertainty is whether the so-called "Mpemba effect" really exists.

In the 1960s, a Tanzanian student named Erasto Mpemba is said to have noticed that very hot ice cream firmed up more quickly when placed into a freezer.* It is not clear whether the ice cream was vanilla, chocolate or fruit or nut flavored. Mr. Mpemba's name has become attached to an extrapolated phenomenon that hot water can freeze faster than cold water.

According to a recent article, the Mpemba effect is the focus of much research and debate.* A new study suggests that hydrogen bonds in water change, with weaker bonds breaking, as water is heated , causing molecules to form fragments that can realign to initiate freezing. Cold water requires weak hydrogen bonds to be first broken to enable molecule realignment and freezing to take place.

However, some throw cold water on the hot water theory. The article quotes some sources which question whether the Mpemba effect actually exists. It cites experiments with hot and cold water which allegedly resulted in no observation of the effect.

However, a chemist criticized these experiments because they did not observe the time of initiation of freezing. He allegedly acknowledged that because freezing of water is a complex process which is difficult to control, it is hard to verify. However, he is quoted as being convinced that hot water can freeze quicker than cold water.*

One thing of which I am sure--my ice cream cone melts more quickly when it is hot outside than when it is cold. The smudges over my face and the drips on my shirt prove this. I call it the "Kucera effect". Can we extrapolate that ice melts more quickly in hot weather than cold weather? More research may be needed.

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*Conover, "Fast-freezing Hot Water Spurs Debate",
Science News, February 4, 2017, p. 14

© Daniel J. Kucera 2017