# Appendix — Producer Coalition v. Federal Energy Regulatory Commission

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1163%3A04

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2003
- **Citation:** 540 U.S. 937

## Text

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APPENDIX A

TITLE 15. COMMERCE AND TRADE
CHAPTER 15B. NATURAL GAS

15 USCS § 717c (2003)

§ 717c. Rates and charges

(a) Just and reasonable rates and charges. All rates and
charges made, demanded, or received by any natural-gas
company for or in connection with the transportation or sale
of natural gas subject to the jurisdiction of the Commission,
and all rules and regulations affecting or pertaining to such
rates or charges, shall be just and reasonable, and any such
rate or charge that is not just and reasonable is hereby
declared to be unlawful.

(b) Undue preferences and unreasonable rates and charges
prohibited. No natural-gas company shall, with respect to
any transportation or sale of natural gas subject to the
jurisdiction of the Commission, (1) make or grant any undue
preference or advantage to any person or subject any person
to any undue prejudice or disadvantage, or (2) maintain any
unreasonable difference in rates, charges, service, facilities,
or in any other respect, either as between localities or as
between classes of service.

(c) Filing of rates and charges with Commission; public
inspection of schedules. Under such rules and regulations as
the Commission may prescribe, every natural-gas company
shall file with the Commission, within such time (not less
than sixty days from the date this Act takes effect) and in
sueh form as the Commission may designate, and shall keep
open in convenient form and place for public inspection,
schedules showing all rates and charges for any transportation
or sale subject to the jurisdiction of the Commission, and the

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classifications, practices, and regulations affecting such rates
and charges, together with all contracts which in any manner
affect or relate to such rates, charges, classifications, and
services.

(d) Changes in rates and charges; notice to Commission.
Unless the Commission otherwise orders, no change shall be
made by any natural-gas company in any such rate, charge,
classification, or service, or in any rule, regulation, or con-
tract relating thereto, except after thirty days’ notice to the
Commission and to the public. Such notice shall be given by
filing with the Commission and keeping open for public
inspection new schedules stating plainly the change or
changes to be made in the schedule or schedules then in force
and the time when the change or changes will go into effect.
The Commission, for good cause shown, may allow changes
to take effect without requiring the thirty days' notice herein
provided for by an order specifying the changes so to be
made and the time when they shall take effect and the manner
in which they shall be filed and published.

(e) Authority of Commission to hold hearings concerning
new schedule of rates. Whenever any such new schedule is
filed the Commission shall have authority, either upon
complaint of any State, municipality, State commission, or
gas distributing company, or upon its own initiative without
complaint, at once, and if it so orders, without answer or
formal pleading by the natural-gas company, but upon
reasonable notice, to enter upon a hearing concerning the
lawfulness of such rate, charge, classification, or service; and,
pending such hearing and the decision thereon, the
Commission, upon filing with such schedules and delivering
to the natural-gas company affected thereby a statement in
writing of its reasons for such suspension, may suspend the
operation of such schedule and defer the use of such rate,
charge, classification, or service, but not for a longer period
than five months beyond the time when it would otherwise go

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into effect; and after full hearings, either completed before or
after the rate, charge, classification, or service goes into
effect, the Commission may make such orders with reference
thereto as would be proper in a proceeding initiated after it
had become effective. If the proceeding has not been
concluded and an order made at the expiration of the
suspension period, on motion of the natural-gas company
making the filing, the proposed change of rate, charge,
classification, or service shall go into effect. Where increased
rates or charges are thus made effective, the Commission
may, by order, require the natural-gas company to furnish a
bond, to be approved by the Commission, to refund any
amounts ordered by the Commission, to keep accurate
accounts in detail of ali amounts received by reason of such
increase, specifying by whom and in whose behalf such
amounts were paid, and, upon completion of the hearing and
decision, to order such natural-gas company to refund, with
interest, the portion of such increased rates or charges by its
decision found not justified. At any hearing involving a rate
or charge sought to be increased, the burden of proof to show
that the increased rate or charge is just and reasonable shall
be upon the natural-gas company, and the Commission shall
give to the hearing and decision of such questions preference
over other questions pending before it and decide the same as
speedily as possible.

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APPENDIX B

TITLE 15. COMMERCE AND TRADE
CHAPTER I5B. NATURAL GAS

15 USCS § 717d (2003)

§ 717d. Fixing rates and charges; determination of cost of
production or transportation

(a) Decreases in rates. Whenever the Commission, after a
hearing had upon its own motion or upon complaint of any
State, municipality, State commission, or gas distributing
company, shall find that any rate, charge, or classification
demanded, observed, charged, or collected by any natural-gas
company in connection with any transportation or sale of
natural gas, subject to the jurisdiction of the Commission, or
that any rule, regulation, practice, or contract, affecting such
rate, charge, or classification is unjust, unreasonable, unduly
discriminatory, or preferential, the Commission shall deter-
mine the just and reasonable rate, charge, classification, rule,
regulation, practice, or contract to be thereafter observed and
in force, and shall fix the same by order: Provided, however,
That the Commission shall have no power to order any
increase in any rate contained in the currently effective
schedule of such natural-gas company on file with the
Commission, unless such increase is in accordance with a
new schedule filed by such natural-gas company; but the
Commission may order a decrease where existing rates are
unjust, unduly discriminatory, preferential, otherwise unlaw-
ful, or are not the lowest reasonable rates.

(b) Costs of production and transportation. The Commis-
sion upon its own motion, or upon the request of any State
commission, whenever it can do_so without prejudice to the
efficient and proper conduct of its affairs, may investigate and

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determine the cost of the production or transportation of
natural gas by a natural-gas company in cases where the
Commission has no authority to establish a rate governing the
transportation or sale of such natural gas.

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APPENDIX C

TITLE 43. PUBLIC LANDS
CHAPTER 29. SUBMERGED LANDS
OUTER CONTINENTAL SHELF LANDS

43 USCS § 1334 (2003)

§ 1334. Administration of leasing

(a) Rules and regulations; amendment; cooperation with
State agencies; subject matter and scope of regulations. The
Secretary shall administer the provisions of this Act relating
to the leasing of the outer Continental Shelf, and shall
prescribe such rules and regulations as may be necessary to
carry out such provisions. The Secretary may at any time
prescribe and amend such rules and regulations as he
determines to be necessary and proper in order to provide for
the prevention of waste and conservation of the natural
resources of the outer Continental Shelf, and the protection of
correlative rights therein, and, notwithstanding any other
provisions herein, such rules and regulations shall, as of their
effective date, apply to all operations conducted under a lease
issued or maintained under the provisions of this Act. In the
enforcement of safety, environmental, and conservation laws
and regulations, the Secretary shall cooperate with the
relevant departments and agencies of the Federal Government
and of the affected States. In the formulation and promul-
gation of regulations, the Secretary shall request and give due
consideration to the views of the Attorney General with
respect to matters which may affect competition. In consider-
ing any regulations and in preparing any such views, the
Attorney General shall consult with the Federal Trade
Commission. The regulations prescribed by the Secretary

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under this subsection shall include, but not be limited
to, provisions—

(1) for the suspension or temporary prohibition of any
operation or activity, including production, pursuant to any
lease or permit (A) at the request of a lessee, in the national
interest, to facilitate proper development of a lease or to allow
for the construction or negotiation for use of transportation
facilities, or (B) if there is a threat of serious, irreparable, or
immediate harm or damage to life (including fish and other
aquatic life), to property, to any mineral deposits (in areas
leased or not leased), or to the marine, coastal, or human
environment, and for the extension of any permit or lease
affected by suspension or prohibition under clause (A) or (B)
by a period equivalent to the period of such suspension or
prohibition, except that no permit or lease shall be so
extended when such suspension or prohibition is the result of
gross negligence or willful violation of such lease or permit,
or of regulations issued with respect to such lease or permit;

(2) with respect to cancellation of any lease or permit—

(A) that such cancellation may occur at any time, if
the Secretary determines, after a hearing, that—

(i) continued activity pursuant to such lease or
permit would probably cause serious harm or damage to life
(including fish and other aquatic life), to property, to any
mineral (in areas leased or not leased), to the national security
or defense, or to the marine, coastal, or human environment;

(ii) the threat of harm or damage will not disappear
or decrease to an acceptable extent within a reasonable period
of time; and

(iii) the advantages of cancellation outweigh the
advantages of continuing such lease or permit in force;

(B) that such cancellation shall not occur unless and
until operations under such lease or permit shall have been

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under suspension, or temporary prohibition, by the Secretary,
with due extension of any lease or permit term continuously
for a period of five years, or for a lesser period upon request
of the lessee;

(C) that such cancellation shall entitle the lessee to
receive such compensation as he shows to the Secretary as
being equal to the lesser of (i) the fair value of the canceled
rights as of the date of cancellation, taking account of both
anticipated revenues from the lease and anticipated costs,
including costs of compliance with all applicable regulations
and operating orders, liability for cleanup costs or damages,
or both, in the case of an oil spill, and all other costs
reasonably anticipated on the lease, or (ii) the excess, if any,
over the lessee's revenues, from the lease (plus interest
thereon from the date of receipt to date of reimbursement) of
all consideration paid for the lease and all direct expenditures
made by the lessee after the date of issuance of such lease and
in connection with exploration or development, or both,
pursuant to the lease (plus interest on such consideration and
such expenditures from date of payment to date of reim-
bursement), except that (I) with respect to leases issued
before the date of enactment of this subparagraph [enacted
Sept. 18, 1978], such compensation shall be equal to the
amount specified in clause (i) of this subparagraph; and (II) in
the case of joint leases which are canceled due to the failure
of one or more partners to exercise due diligence, the
innocent parties shall have the right to seek damages for such
loss from the responsible party or parties and the right to
acquire the interests of the negligent party or parties and be
issued the lease in question;

(3) for the assignment or relinquishment of a lease;

(4) for unitization, pooling, and drilling agreements;

(5) for the subsurface storage of oil and gas other than
by the Federal Government;

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(6) for drilling or easements necessary for exploration,
development, and production;

(7) for the prompt and efficient exploration and
development of a lease area; and

(8) for compliance with the national ambient air quality
standards pursuant to the Clean Air Act (42 U.S.C. 7401 et
seq.), to the extent that activities authorized under this Act
significantly affect the air quality of any State.

(b) Compliance with regulations as condition for issuance,
continuation, assignment, or other transfer of leases. The
issuance and continuance in effect of any lease, or of any
assignment or other transfer of any lease, under the provisions
of this Act shall be conditioned upon compliance with
regulations issued under this Act.

(c) Cancellation of nonproducing lease. Whenever the
owner of a nonproducing lease fails to comply with any of the
provisions of this Act, or of the lease, or of the regulations
issued under this Act, such lease may be canceled by the
Secretary, subject to the right of judicial review as provided
in this Act, if such default continues for the period of thirty
days after mailing of notice by registered letter to the lease
owner at his record post office address.

(d) Cancellation of producing lease. Whenever the owner
of any producting lease fails to comply with any of the
provisions of this Act, of the lease, or of the regulations
issued under this Act, such lease may be forfeited and
canceled by an appropriate proceeding in any United States
district court having jurisdiction under the provisions of this
Act.

(e) Pipeline rights of way; forfeiture of grant. Rights-of-
way through the submerged lands of the outer Continental
Shelf, whether or not such lands are included in a lease
maintained or issued pursuant to this Act, may be granted by

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the Secretary for pipeline purposes for the transportation of
oil, natural gas, sulphur, or other minerals, or under such
regulations and upon such conditions as may be prescribed by
the Secretary, or where appropriate the Secretary of
Transportation, including (as provided in section 21(b) of this
Act [43 USCS § 1347(b)]) assuring maximum environmental
protection by utilization of the best available and safest
technologies, including the safest practices for pipeline burial
and upon the express condition that oil or gas pipelines shall
transport or purchase without discrimination, oil or natural
gas produced from submerged lands or outer Continental
Shelf lands in the vicinity of the pipelines in such
proportionate amounts as the Federal Energy Regulatory
Commission, in consultation with the Secretary of Energy,
may, after a full hearing with due notice thereof to the
interested parties, determine to be reasonable, taking into
account, among other things, conservation and the prevention
of waste. Failure to comply with the provisions of this section
or the regulations and conditions prescribed under this section
shall be ground for forfeiture of the grant in an appropriate
judicial proceeding instituted by the United States in any
United States district court having jurisdiction under the
provisions of this Act.

(f) Competitive principles governing pipeline operation.

(1) Except as provided in paragraph (2), every permit,
license, easement, right-of-way, or other grant of authority for
the transportation by pipeline on or across the outer
Continental Shelf of oil or gas shall require that the pipeline
be operated in accordance with the following competitive
principles:

(A) The pipeline must provide open and nondiscrimi-
natory access to both owner and nonowner shippers.

(B) Upon the specific request of one or more owner or
nonowner shippers able to provide a guaranteed level of

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throughput, and on the condition that the shipper or shippers
requesting such expansion shall be responsible for bearing
their proportionate share of the costs and risks related thereto,
the Federal Energy Regulatory Commission may, upon
finding, after a full hearing with due notice thereof to the
interested parties, that such expansion is within technological
limits and economic feasibility, order a subsequent expansion
of throughput capacity of any pipeline for which the permit,
license, easement, right-of-way, or other grant of authority is
approved or issued after the date of enactment of this
subparagraph [enacted Sept. 18, 1978]. This subparagraph
shall not apply to any such grant of authority approved or
issued for the Gulf of Mexico or the Santa Barbara Channel.

(2) The Federal Energy Regulatory Commission may, by
order or regulation, exempt from any or all of the require-
ments of paragraph (1) of this subsection any pipeline or class
of pipelines which feeds into a facility where oil and gas are
first collected or a facility where oil and gas are first sepa-
rated, dehydrated, or otherwise processed.

(3) The Secretary of Energy and the Federal Energy
Regulatory Commission shall consult with and give due
consideration to the views of the Attorney General on specific
conditions to be included in any permit, license, easement,
right-of-way, or grant of authority in order to ensure that
pipelines are operated in accordance with the competitive
principles set forth in paragraph (1) of this subsection. In
preparing any such views, the Attorney General shall consult
with the Federal Trade Commission.

(4) Nothing in this subsection shall be deemed to limit,
abridge, or modify any authority of the United States under
any other provision of law with respect to pipelines on or
across the outer Continental Shelf.

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(g) Rates of production.

(1) The leasee [lessee] shall produce any oil or gas, or
both, obtained pursuant to an approved development and
production plan, at rates consistent with any rule or order
issued by the President in accordance with any provision of
law.

(2) If no rule or order referred to in paragraph (1) has
been issued, the lessee shall produce such oil or gas, or both,
at rates consistent with any regulation promulgated by the
Secretary of Energy which is to assure the maximum rate of
production which may be sustained without loss of ultimate
recovery of oil or gas, or both, under sound engineering and
economic principles, and which is safe for the duration of the
activity covered by the approved plan. The Secretary may
permit the lessee to vary such rates if he finds that such
variance is necessary.

(h) Federal action affecting outer Continental Shelf;
notification; recommended changes. The head of any Federal
department or agency who takes any action which has a direct
and significant effect on the outer Continental Shelf or its
development shall promptly notify the Secretary of such
action and the Secretary shall thereafter notify the Governor
of any affected State and the Secretary may thereafter
recommend such changes in such action as are considered
appropriate.

(i) Flaring of natural gas. After the date of enactment of
this section [enacted Sept. 18, 1978], no holder of any oil and
gas lease issued or maintained pursuant to this Act shall be
permitted to flare natural gas from any well unless the
Secretary finds that there is no practicable way to complete
production of such gas, or that such flaring is necessary to
alleviate a temporary emergency situation or to conduct
testing or work-over operations.

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(j) Cooperative development of common _hydrocarbon-
bearing areas.

(1) Findings. [(A)] The Congress of the United States
finds that the unrestrained competitive production of
hydrocarbons from a common __hydrocarbon-bearing
geological area underlying the Federal and State boundary
may result in a number of harmful national effects,
including—

(i) the drilling of unnecessary wells, the installation of
unnecessary facilities and other imprudent operating practices
that result in economic waste, environmental damage, and
damage to life and property;

(ii) the physical waste of hydrocarbons and an
unnecessary reduction in the amounts of hydrocarbons that
can be produced from certain hydrocarbon-bearing areas; and

(iii) the loss of correlative rights which can result in
the reduced value of national hydrocarbon resources and
disorders in the leasing of Federal and State resources.

(2) Prevention of harmful effects. The Secretary shall
prevent, through the cooperative development of an area, the
harmful effects of unrestrained competitive production of
hydrocarbons from a common hydrocarbon-bearing area
underlying the Federal and State boundary.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1163%3A04. Public record. Not legal advice.