Amicus Curiae Brief — FPC v. Louisiana Power & Light Co.
Supreme Court brief1972
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e TABLE OF CONTENTS
LOUISIANA’S INTEREST 2 2°... 2)’.
SUMMARY OF ARGUMENT
ARGUMENT
I. THE FPC HAS NO STATUTORY AUTHORITY +
TO REALLOCATE GAS SUPPLIES OF DIRECT
SALE CUSTOMERS. TO RESALE CUSTOMERS ;
A.. The FPC Boss Not Have Any Emergency
Statutory Power To Ration Gas Deliveries -
Among The Customers Of An Interstate
_ Pipeline Because Of A Systemwide Or
Nationwide. Gas Supply Shortage. .
_B. The FPC Has No Statutory Power To
Change The Terms Of Direct Sale 6 =” -
_ Contracts Governing Deliveries Of Gas
During Shortages ee ie MPR,
C. The Rate And Tariff Sections Of The Act
_ Grant The FPC Limited, Not Plenary,
Power Over. Service And ey a To
Resale ‘Comemess ; ;
D: The FPC Has No Statutory Power —- .
. - Discrimination In Service Between Direct
. And Resale. Customers me er ae
E. The FPC Lacks Statutory ‘Power To ~—
Reallocate Gas Supplies From Direct, ~~
_ Sale Customers, To: Resale Customers . . . , :
*
18
18.
25
(ii)
F. Section 1(b) Does Not Grant Any
Substantive Power And Cannot Be _
Combined With Sections 4, 5 And 16 To
Create Implied Power To’ Reallocate. Gas -
Supplies . ee 41
_G. The FPC Does Not Have Coextensive And
-Concurrent Power Over Transportation And
_ Sale Under The Certificate And Rate
seen Se Te Ae. ous ee ee ee e SO
a H. The FPC Has No Statutory Power To Change
_ The Impairment Of Delivery Terms.Of Direct -
Sale Or Resale Contracts By Tariff Revision
Procedwes. 2... 2. We
I. FPC Jurisdiction To Reallocate Direct Sale
--Gas Supplies To Resale. Customers Is Not |
Necessary To Avoid A Regulatory Gap . . . 56
Il. THE COURT OF APPEALS JUDGMENT THAT
UNITED’S GREEN SYSTEM IS AN INTRA-
‘STATE PIPELINE WAS NOT AN ABUSE OF |
a JUDICIAL DISCRETION:. . . . . .-. . 62
ra)
" CONCLUSION ia er oa . 70
(iii) -
APPENDICES:
APPENDIX “A” — Gas Exporting States Ranked
in Order of Production a es
APPENDIX “B” — Five Largest Gas Producing States
Ranked in Order of 1969 Gross Production .
APPENDIX “C” — Five Laggest Gas Producing States .
- Ranked in Order of 1969 Net Production .
APPENDIX *- Five. Largest Gas Production States
Ranked in Order of 1969 Marketed Production
APPENDIX “E” — Analysis of Interstate Gas
APPENDIX “F” — Analysis of Natural Gas Supply
APPENDIX “G” — Trend of Exports of Natural Gas
Produced in Louisiana on a ae
APPENDIX “H” — i Siadias Recoverable Reserves,
New Field and Reservoir Discoveries asa -
_ Percentage of the Nation
jppenow i ee . Analysis of Natural Gas Supply
. for United Gas Pipe Line Company .
= APPENDIX “7” - Cemperioon of Parcentign ¢ of.
Estimates Proved Recoverable Reserves of Natural |
Gas in 1969 for Louisiana and the Nation .
~
APPENDIX “K” — Gas Requirements, Firm Industrial
and. Firm Generation, ‘Percent Firm of aad’
APPENDIX “L” — Gas Requirements, Electric .
Generation, Percent Firm. of Total Electric -
Generation. . .-. . 2. we.
la
2a
3a
‘12a.
(w)
4
" APPENDIX: “M” — Gas Requirements, Percent Firm.
of Total See ae 2 « 2
APPENDIX “N” — ‘Congressional Record — -
Senate pp. 11084-11085 .
APPENDIX “O” — Excerpt from Appellant’s Brief In
Panhandle Eastern Pipe Line Co. v. Public |
_ Service Commission of Indiana, 332 US. 507 :
APPENDIX “P” — Conan of Curtailment
‘Provisions of United’s FPC Gas Tariff in Effect ©
Until November 14, 1971 and oa United
- Direct Sale Contract - S 6m
APPENDIX “Q” Louisiana Public Service Commission
Complaint for Temporary Restraining Order,
Preliniinary and Permanent Injunction ,
APPENDIX “R” — iain Public Service Commission
Special Order No. hain os
- APPENDIX “S" — Louisidna Public Service Commission,
“Special Order No. 17-71 (Order Affirming
Jurisdiction And To Show Cause). .- .
APPENDIX “T” — Louisiana Public Service Commission,
Special Order No. 27-71 (Order Denying Request
For Relief From _—— Restrictions). .
& 24a
47a
W)
LIST OF AUTHORITIES - .
American Tricking ‘Associations v. Frisco Transportation
Co, 238 UA, 193, 166 2 ec ce ee te ep we OO
Arkansas-Louisiana Gas Co, | eg , . - 3
27 FPC 697,703. EO
_ Qty of Chicngo ». Atchison T & SF. Rastway Co, .
' oo) ards ae | .. . 666
City of Detroit v. FP - og 2
- 230 F.2d 810, 816-817 (CADC). . . ... . ... . 35
; City of Detroit v. Panhandle Eastern Pipe Line Co., :
6: FRC: 196, 197, S204 6 e oh tur oes 32
City of Hastings, Nebraska v. FPC,
221. F.2d 31, 32-33, 36-39 -(CADC) cert. senkd
SUS OW oS aye es eS a OP
Centrat West Utility Co. v.-FPC. . se
247 F.2d 306, 310-313 (C.A.3). . 2... 0. 21, 41
Coastal Transmission Corp, ae - - :
26 FPC 318, 324-325. . . 2. 2... ws. sc . 37,38
Civil’ A eronautics Board v: Delta Airlines
367 US. 316, 321. ‘. *
Commonwealth of Pennsylvania v. State of West .
Virginia, 262 US. 584,598 . . . . 1... . . 61
" Colorado Interstate Gas Co. v. FPC, - |
185 F.2d 357) 359, 360 (C.A. 3) a oe ew we” 26
Deering Milliken, ine v. Jolnson, Z
295 F.2d 856 (CA. 4)... . 2... ote nw of es 66:
Dixie Pipe Line Co,
_ 14 FPC 106, 114. 2. 2... oe 8 crs |
(vi)
Florida Parishes, Louisiana Public Service
Commission v. FPC, 359 F.2d 525 (CA. 5)
_FPC v. East Ohia Gas,
338 US. 464, 470, 472-473
_ FPC v. Hope Natural Gas Co.,
320 US. 591, 608-614
FPC.v. Hunt, . |
376 US. 515, ‘519-524 :
FRC ». Panhandle Eastern Pipe Line Co.,
“337 US. 499, 503, 504, 507-508
FPC v. Panhandle Eastern Pipe Line Co.,
: 172 F.2d 57, 59-60, affd 337 US. 499, 514-515
FPC. v. Sierra Pacific Power Co.,
350 US. 348, 353, 355.
FPC v. Transcontinental saat Line Corp.,
365: US. 1- en ee ee
° Federal Trade Commission v. Bunte Bros, -Inc.,
312 US. 349, 350-355
Fuels Research Council, Ine. v. FPC,
374 F.2d 842, 852-853, 853-854 (CA. wy) :
: Granite City Steel Co. .v. FPC,
320 F.2d 711, 713 (CADC)
Houston, E& WIR Co. v. United States,
234 US: 342, 355-360 ,
Leedom v. Kyne,
358 US. 184.
| Michigan Consolidated Gas Co. v. Panhandle Eastern
Pipe Line Co., (C.A. 6) 173 F.2d 784-789 .
= oo, oF
« 23, 62
. 31, 57
Michigan Consolidated Gas Co. v. FPC, a
- 203 F.2d,895, 905 (CA.3) 2... 2 es SI
Pan American Petroleum Corp. v. Superior :
Court of the State of Delaware in and for a Me
New Castle County, 366 US.. 656, 665666. . . ... 62
Panhandle Eastern Pipe Line Co.; —— ee
22 FPC 679, 681, 683684. ... .....2... «19
Panhandle Eastern Pipe Line Co.,. e
14 FPC :264, affirmed, 236 F.2d 289 (CA. 3). . . 19_
Panhandle Eastern Pipe ‘Line v. Michigan
Consolidated Gas Co., 177 F.2d 943,
945 (CA.6). 0 0 eee te ee ee 9
Panhandle Eastern Pipe Line. Co. v. ged |
204 F.2d 675, 679, 680 (CA. 3)... . . . 20,31, 42
_ Panhandle ‘Edstern Pipe Line Co. v. Michigan
_+ Public Service Commission, oe :
341 US. 329, 334-336, cr. °
Panhandle Eastern Pipe Line Co. y. FPC, fs _—
324 US, 635,647... 0 8S
Panhandle Eastern Pipe Line Co. v. FPC,
232 F.2d 467 (C.A.. 3), cert. denied, “ ;
352 US. 891... . LS é eee 2 Oe
Panhandle’ Eastern Pipe Line Co. v. FPC,,. oe 4
247 F.2d 306; 310-313 (CA. 3). aa a *
Panhandle Eastern Pipeline Co. v. FPC,
359, F.2d 675, 682 (CA.8) -. 2... ee 38
Panhandle Eastern Pipeline Co. v. "Public Service .
- Commission of Indiana, = —_: 39,
332 US. 507, 512, 513-514, 516-519, S23: s . 42, 51,57
Skinner & Eddy Corp. v. United States, —
_ 249 US. 557, 562. a 66 |
.
Turnbull & Zoch Drilling Co,, —- o 3
* 26 FPC 678, 680 . - = ‘ 53
Ee siei Gwe
388 F.2d 385, 388 (C.A. 5) . 48
United Gas Improvement Co. v. Continental Oil Co.,
| 381 US. 392, 404 : $2
United Gas Pipe Line Co. v. FPC,
385 US. 83,91. 6 : —47-
United Gas Pipe Line Co. v. Nicls Light, Gas,
', Water Division, 358 US. 103; 112, H13-114 ° ; 540
| ' United Ges Pipe Line Co. v. Mobile Gas as
Service Co., 350 US. 341, 342,
343, 344, 348, it ae 540
"United States-v. Seatrain Lines, * 4 ,
329 US. 424, 428-432... ww 50, 51
_ Watson Bros. Transportation Corp. yv. United States,
132 F. Supp. .905 @C. Neb.) Affd.
350 U.S. 927 ; ig viet. 51
Willmut Gas & Oil Co. v. United Gas Pipeline Co,
12 FPC 132, 138-139 ioe = 4 19
* ~
a fe
Fifth Amendment . ts 68
Tenth Amendment . - $7
a Sipe EN: os sia , oar te: OIE TN i SOI Te ert
(ix)
Statutes
Bituminous ( Coal Act of 1937, 50 Stat. 720 Dries Bepeiaey * 58
Federal Power Act, 49 Stat. 487, amended
(67 Stat. 461, Part I |
Section.202 . . 4 Se aie shel, ee aie ee:
Section: 2076) +0. acu er aiglak ig ek
Sections 2021) es Si oe OS ae
Fair Labor Standards Act of 1938, 52 Stat. 1060... . . 58
_ Louisiana Constitation, Article VI, Section 4.
‘National Labor Relations Act of 1935, 49 Stat. 449. . . . 58
Natural Gas Act, 52 Stat. 821-833 as amended;
AS USC. 717-Ti7w eae
“Section 10) s+ jv +s + + 26,32,33,39,41,42
Section4 . 2... 2... 2. 32,33,34,35,37,47
EB i a SMe aY sn" a 4.
Section 4(b) 2 2. ee 42,4
‘Section 40M), ee ee
‘Section 4(c) . Se 8 Se Pee
Section 4d). 2 2 2 2. wwe ee 42,43
Section 4(e<) . 2 2. ee 26,43, 53, 54
Seti Se a ae:
Section S(a) 2. 2s . . . . . . . 33, 34,35, 42,55
Section7 . . 2 2°... 1 1 es. -24,36,37, 38, 46
Section 7(a) 0 Pe ope DD
Section 7(b) . . ees a age es, Sih co es ee | 4
| Section 7(c) . . ; : R
Section 7(e) . 2
_ Section 16.
| FPC Annual Report, 1951
FPC Annual Report, 1952 .
FPC Annual Report, 1953.
FPC Annual Report, 1954
FPC Annual Report, 1955 \
FRC A Annual nadie 1956 \L
FPC Annual Report, 1957 Ve +
. FPC Annual-Report, 1958 .
-FPC Annual Report, 1963
Fre Annual Report, 1970...
. FPC Gas Tariff, United Gas Pipe Line Co.,
Me Sec. 2. 1 Proration of. Impaired Deliveries ,
Seer of the hvary. Atlantic Seaboard,
Fre Dkt. No. CP 66-179
. FPC Regulations, Under Natural Gas Act, .
Section oT (1G eo a ws 8
FPC Order No. 431, 36 F.R. 7505 .
_ FPC Order Suspending Proposed Tariff Sheets,
El Paso Natural Gas Co., Dkt:; RP 724. .
.. 55
26
; | Burger we 1a BM NPAs ee & atte 39.
“3 Lentsians Constitution, - y
| Article VI, Sec. 4°. .
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; INTHE + serge
Supreme Court of the Ynited tates <
October Term 1971.
Nos. 71- 1016 = 7H-1008
FEDERAL POWER COMMISSION, Abner,
-LOUISIANA POWER & LIGHT COMPANY, ET AL. , Respondents. 3
UNITED GAS PIPE LINE CO., ET, .AL., Petitioners,
- o
. v.
| LOUISIANA POWER & 4 ucitreo, ET AL., Respondent |
On Writs of Certiorari to the United States Court of Appeals
. foe the Fitth Clrenke *.
BRIEF OF STATE OF LOUISIANA
AMICUSCURIAE © |.
&
_LOUISIANA’S INTEREST
| Louisiane is- the largest gas exporting state and the sec-
ond largest gas producing state in the nation.’ It delivers to
other states 47.9% of all-natural ; gas exported by producing
statés.to meet the needs of other states which cannot supply’.
their own requirements.” ‘Louisiana marketed production of :
- 1,227,826 trillion cubic feet of natural gas was 34.9% of °
United States ——— in 1969.3
l Appendices A, B. and C, la-3a.
Appendix A, la. > > ice =
3 Appendix D; 4a. We
a
Over 73% of its total production is exported to other- |
‘states; on a net delivery basis‘ During the last decade, gas
exports have increased’ dramatically. Using 1960 ‘as a base
year, exports increased by 31.8% in 1965 and by 100.4% in
1970. % : “te 3 re.
¥ In 1960, 31.5% of locally produced gas was consumed.
within the state. By 1965, this percentage declined to. 27.2%
and in 1970 to only 20.6%° | | —
Plainly, Louisiana contributed more than its fair share
to the national pool of natural gas and retains only a fifth of
its own gas production for interstate use. |
Historically, gas producing states have certain advan-
‘tages over states which do not have their own gas supply.
- Their very proximity to the source of production attracts
industries which use- gas as the .raw material without which
their plants could not operate. The lower transportation costs
of délivering gas to other industrial -and commercial users
_ within the state makes its use particularly attractive for such .
applications... It ‘is not surprising, therefore, that producing _
' states have a higher proportion of industrial-commercial con-
sumption of total gas consumed ‘and of firm gas than consum-
ing states. Louisiana utilizes 84% Of the total quantity of firm -
gas sold in the state for industrial and power plant generation
purposes, in cémparsion to a national ‘average average of only
37% . a
- Louisiana’s economy is heavily dependent upon the |
availability of a firm, reliable and uninterrupted supply of
natural. gas, Statewide investment by industrial category ©
. ronen E, Sa.
"> ‘Appendix F, 6a.
a. p CY , 6a.
if Appendix K, la.
3
clearly reflects the predominance of selina refineries and. .
- chemicals which represented $465, 297,370 or 76% of a total
_ industrial investment of $609, 578,850 in 1970.8 Apart from.
these industries which use natural gas a process gas. without =
which their plants cannot function; the state’s electric utili-
ties are completely dependent upon natural gas as r fuet for
electric generators.
Thus, the economic welfare « of the state hinges upon the
continued delivery of the volumes.of gas it received and used 7
prior to United's curtailment and upon. the ability to draw ;
upon greater volumes. Otherwise, its economy will be frozen
at or below its present level. This is not true of other states in
which natural gas plays.a subsidiary rather than a dominant
role in the overall economy of the state and in which the
. electrical utilities have alternate power sources such as coal,
imported liquified natural gas and inexpensive hydroelectric
- power. oa
The state currently has an unemployinent rate of 8.3%
‘as of June: 1971. This is the highest rate ‘for the month of
June since 1962. While-the state rate was increasing, the
national rate dropped to 5.6%9 *
Other, more fortunately situated states, have as their
principal economic assets resources which are neither. deplet- -
able nor of only temporary value. Louisiana’s wealth is in its
oil and natrual gas energy resources, which are, by definition;
a wasting asset. It is fact of life that each cubie foot of gas —
produced generates only one-time non-recurring income rai
.
* :
“@-.
“8 ee Horizons, Publication of. the Louisiana sesh acs
of Commerce and Industry, Winter; 1971 * >?
= Louisiana Labor Market, Department _ of Bia sailed
. saad June 1971.
< 4 +
°
the State of Louisiana. Furthermore, the cost- of locating,
drilling and producing natural gas in Louisiana is higher than .
the cost of producing gas in other states. Its gas wells are 50%
deeper but cost twiee the national average. Even dry holes i ir
Louisiana are three times as costly as the national average. !
Because of these unique and adverse. factors, Louisiana’s pres-
ent predominance as a supplier of energy to the nation is
exposed to a genuine and substantial threat that unlimited
supplies of atomic energy used to generate electricity will,
within the next two decades, supplant natural gas. Thus, if
Louisiana is deprived of the opportunity to use an equitable
share—which is far less than the share it exports—of its tem-
-porarily valuable natural gas resources, it will be inequitably —
and irreparably injured. | :
United. Gas Pipe Line Company (United) operated. an
integrated interstate natural gas system extending across
_ several states!! before the enactment of the Natural Gas Act —
(Act). A grandfather certificate of public service and.neces- |
sity covering the operation of such interstate facilities was
issued on November 10, 1942.12. United has. also operated,
ona completely separate basis, intrastate pipeline systems in
Southern Louisiana which -have always been regulated ex-
clusively by the Louisiana. Public Service Commission
'(LPSC). Such regulation has never hampered or impaired the
effectiveness of regulation of United’s iriterstate activities by °
the Federal roe Commission (FPC) and no such claim has
boey made,
eo?
10 Lentibaia Oil and Gas Facts, Eleventh. Edition, Louisiana-
Arkansas Division, Mid-Continent Oil and Gas Association.
ANY United Gas Pipe Line Company, 3. FPC 562. | oa
| 1244, at 863.
- United is the principal supplier of gas used within Louis- |
iana. But, the sharé of the state’s total-gas requirements sup-
plied by that pipeline has been consistently declining because
it is using ever increasing quantities of state —— gas to
" meet the needs of its interstate customers. 7
In 1960, United supplied 61.4% of all ual coemmaed
within the state. In 1965, it- ‘supplied only 58.6% of such gas.
In 1970, it supplied only 47.5% of such gas.'3 In 1965, -
‘United had increased its exports of Louisiana gas by 6.5%
- from 1960. By 1970, however, this percentage had increased
to 62. 1%! If this trend continues, and an assumption of
certificate jurisdiction by the FPC is ‘certain to accelerate it,
gas volumes delivered to United’s intrastate customers ‘in.
Louisiana will be constantly and progressively diminished.
The FPC’ s assertion of power to reallocate firm | direct :
sale gas to resale. customers will have an abnormally ‘severe
impact on: Louisiana. As Commission Carver noted in his‘dis- =
sent to Opinion No. 610, 68% of the gas volumes delivered in
United’s New Orleans District (Green System—East) repre-
sent direct industrial sales.'*° Furthermore, only 110,797 |
' Inillion cubic feet of the total of 1,607,609 million cubic feet
; of firm gas used within Louisiana i is applied to residential:and ©
commercial uses and purchased for resale.!4° In addition, the
FPC’s assertion of further power to control the end-use of.
natural gas by ultimate consumers will have an equally dis-
’ proportionate. impact on Louisiana as compared to its impact —
on other states. In the nation as a whole, only 37% of all firm
gas purchased is used for industrial and power plant. gencen-
"13 Appendix F, 6a.
148 4 pendix F, 6a.
14D United Pet., ftné 1, 128a.
14c Appendix M, 13a. .
tion purposes while the corresponding figure for Louisiana is -
84%. Again, firm gas used for electric generation is 89% of all
_ gas used for such purposes in Louisiana, as compared to 49%
in the nation as a whole.!4% The FPC’s end-use’ test dis-
regards the long established and universally recognized service
- priorities of firm over interruptible gas. Thus, although 93%
ofall gas used in Louisiana is firm, as compared’ with a
national average of 69% l4e it will bear the economic burden
- and dislocation of United’s curtailments to a far greater ex-
~ tent than other states served by this pipeline.
Apart from these considerations: the FPC’ S arbitrary
and capricious refusal to even consider the State’s suggestion —
of a nationwide allocation proceeding to fairly distribute
interstate gas supplies between -states, leaving to ‘such state
the responsibility for. controlling the end-use of gas by its
own citizens, casts its so-called curtailment plans in a frame- -
work which ignores such oppressive and severe discrimination °
and excludes any consideration of the equities of a producing
state. 4f Finally, United’s Louisiana customers obtain all of
_ their requirements. from this. pipeline; have no peak shaving -
facilities or underground storage. By way of contrast, its re-
sale pipeline customers and their distributor customers obtain
only part of their requirements from United and have both -
14d Appendix L, 12a.
_14€ appendix M, 13a. °
14f Opinion No. 606-A in the onda case denied the State’s
request, on rehearing, that the issues remanded to the. examiner to
encompass consideration of such matters on the basis of a single sen-
tence comprising the circular statement that “... we have determined
that the proper scope of this proceeding is that set forth: in Opinion
- 606.” Commissioner Carver dissented from the denial of rehearing
principally because he felt that the FPC had missed an opportunity to”
‘correct some of the extravagances of its jurisdictional assertions (Sol.
— Pet., oo. ar °
* . . . a“ 5
i a SOR RR Oe EeTEINS GBM SOIR EO AMEN S LIE E, VIGIL IEEE! PILL OF ALIEN LE LL AN F LEIS KBE EOE OL CARN RS LE IE POE PEED AE
. -
sea
shaving and underground storage capabilities
. In an “Environmental Impact Statement” submitted by.
United in the curtailment case on March 24, 1972, it admit- |
ted that Gulf States customers have borne! the brunt of its
curtailments, stating: °
“The curtailment of United’s ‘delves to
city gate® | power plants and industrials within the
Gulf-South from Texas to Florida, as shown in EIS
. Exhibit 1, has, to date, indirectly resulted in the
~. only substantial impact upon the environment in .
any way attributable to United’s curtailment pro-
gram, since United’s pipeline customers have been
'. able to offset the effect of ited s curtailment by ;
utilizing alternate sources of gas. ! The geographical .
distribution area served’ by. these pipeline cus-.
_ tomers may also be taken into, account because
United’s average day curtailment is - spread
equitably among all of United’s direct and indirect
customers. As noted, however, the primary effect
of United’s curtailment program is in thé area.
-. served directly by. United. was
1 Natural Gas Pipeline Sole of America is an ex-
ception, but it obtains only a very small part of its total
_ requirements from United.” (Emphasis added).
the
-Furthermore, the gas volumes reallocated from Louisi- -
ana direct sale customers to resale customers are used to meet
needs of industrial—not domestic and. com- ~
_ mercial—customers in other states. United’s initial brief to
the FPC blandly admits that:.
“The pipelines have significant interru ruptble loads ;
which are served both directly and indirectly .
through distributors (tr. 3270). Sales to these inter-
_ ruptible loads have continued in very substantial
quantities despite United’s curtailment (Item si
’ Reference Z).” (Emphasis added).
In other words, the purpose of United’s curtailment plans is
to divert firm direct sale gas to interruptible industrial con-
sumers served by its pipeline distributor resale customers.
SUMMARY OF ARGUMENT
, , I
THE FPC HAS NO STATUTORY POWER TO RE-
ALLOCATE ‘THE GAS SUPPLIES OF DIRECT
‘SALE CUSTOMERS TO RESALE CUSTOMERS
s
A. The. FPC asserts an urgent need for statutory author- _ |
ity to override the terms of direct sales contracts in times of
emergency caused by a pipeline’s inability to meet its con- |
arguments is that this court must construe the Act broadly,
and in disregard of the deliberate and meticulous exclusion of
_ direct sales from the scope of the agency’s regulatory powers
by Section 1(b), because a new and unforeseen situation has”
created an emergency. But, Congress was fully aware of the
total dependence of pipelines and their customers upon a
depleting asset in‘ finite supply. Section 7(b) is ‘the only pro- |
vision of the Act which specifically refers to gas shortages
and::it. permits an abandonment only upon findings of de-
/ pletion of the gas supply or that the public interest permits -
such action. Certificates of pubic convenience and necessity _~
" *are granted only upon a. showing of. maar iory gas reserve
lives ene deliverability volumes. |
RMR Ares a OH Bho? idl es . ar, LENE REY PESO MISE inte x 3 4.” fe
tract committments to: deliver firm -gas. The thrust of the °
oo
|
All ‘direct and - resale contracts contain impairment of
deliveries terms establishing definite service priorities between
classes of customers and fixing the rights and liabilities of the’
seller and buyer: ‘when the pipeline improvidently assumes
. obligations to deliver firm gas in quantities exceeding either.
its gas supply or transmission capacity. Congress intended
intérstate pipelines to have an absolute and uncenditional
- obligation to meet such firm delivery commitments. This ex-
plains why it did not equip the FPC with express statutory
powers.to deal with’ the abnormal and extraordinary-sitaation
of either an individual pipeline systemwide, or a nationwide, :
gas shortage. Congress delegated express: emergency authority
to deal with shortages of electrical energy ¢o. the FPC in
Sections 202(c) and 202(d) of the Federal Power Act.’ This
Omission was deliberate and reflected qn awareness of the
vital differences between the natural ‘gas and electric utility
industries. ae Se ik.
The FPC —_ repeatedly, and unsuccessfully, eae! an
amendment of the Natural Gas authorizing it to safeguard the
available gas. supply i in emergency situations.
B. Petitioners admit that the . FPC lacks rategnd tariff
jurisdiction over direct sale contracts. Nevertheless gghe FPC’s
order No. 431 required United and all other pipelines to file
. curtailment plans’ ap licable to such contracts as tariffs.
Thus, despite its disclaimer of jurissdiction, the FPC is chang- -
ing the .terms of such contracts by a method clearly pro- |
_ scribed by Section 1(b). In asking Congress to amend the Act
by granting authority to regulate the price and other: terms,
of such contracts, the FPC has twice — that it has-no
such statutory authority.
e c. The FPC is socking ¢ to improve upon the provisions s of
the Act, by asserting plenary jurisdiction in an* area where it has
been expressly granted only limited jurisdiction. over the gas
delivery obligations of pipelines. Sections 4 and 5 of the Act: .
- authorize ‘the regulation of service as well as of rates. The
10
/,
a
prohibitions against undue preferenct or advantage between
customers and against unreasonable differences in services
betw localities or classes of s@vice apply to the allocation -
of ind@equate mainline transmission capacity of an interstate _
‘pipeline, among its resale customers (Michigan Consolidated
Gas Co. v. Panhandle Eastern Pipe Line Co., 173 F.2d 784,
789 (CA 6); Michigan Consolidated Gas Co. v. FPC, 203 F.2d.
895, 901 (CA 3); Panhandle Eastern Pipe Line Co. v. EPC, —
204, F.2d 675, 679: (CA 3)). Such authority can only be
‘exercised upon express findings that the pipeline *s service -
‘ priorities are unduly preferential or discriminatory. No such
findings have ever been made with respect to either United’s |
eet sale or resale impairment of delivery. contract terms.
+_*
Both the plain language. and structure of Sections. 4and -—
5 of thé Act limit the FPC’s powers to regulate rates and
services to gas delivered by an interstate pipeline to a resale
customer. The term “persons” in: Section 4(b)(1), and the
powers of the FPC: to change unduly discriminatory or -pre-
ferential rate designs under Section 5(a), are limited in scope ©
- to resale rates affecting gas distributors and the ultimate con-
sumers purchasing from them. (Fuels Research Council, Inc..
v. v. FPC, 374 F.2d 842, 852-853). : 3
-~
D. Petitioners in that if direct sale customers obtain’
_ gas for industrial purposes while resale customers are unable _
to meet all.of their needs for domestic and commercial use,
there will bean undue preference to the former class of
"service. On this. premise, they argue that the Court of
Appeals holding that the FPC lacks curtailmentdurisidction
over direct Sales. is inconsistent with, and undermines, the
agency’s jurisdiction. under Sections 4 and 5. However, *
FPC lacks statutory authority to consider the end-use of ga
or conservation factors in proceedings under Sections 4 and 5.
--(FPC v. Hope Natural Gas Co.,'320 U.S. 591, 608-614; Fuels
Research Council, Inc. v. FPC, 374.F’2d 842, 853-854 (CA
14): City of Detroit v. FPC, 230 F.2d 810,816-817 (CADC)).
3 ll
a .
aon
%
Plainly then, the FPC cannot establish priorities, segitating
different classes of end-use by ultimate consumers, in
exercise of its rate and tariff jurisdiction. Nor can it eliminate ~
price discrimination between resale and direct sale customers
to equalize rates and charges between these classes of service.
: . (Panhandle Eastern Pipe Line Co. v. FPC 324 U.S. 635, 647). °
. By the same token, it-cannot remedy service discrimination |
_ arising from more favorable impairment of delivery terms | in
direct sale contracts. er
E. The FPC has no statutory authority to reallocate gas
Supplies between direct sale and resale customers or to con-
trol the end-use of natural gas by ultimate consumers. In FPC _
v. Transcontinental Gas Pipé Line Corp., 365 U.S. 1, 17, this .
Court held “... the Commission’ S$ powers under Section 7
are, by definition, limited. , ’: it “. . cannot order a natural —
gas company to sell gas bo users that’ it favors; it can only
_ exercise a veto power over proposed transportation and it can .
only do this when a balance of all the circumstances weight
against certification.” An effort by We FPC to reallocate the
portion of the mainline transmission capacity of an interstate
_ pipeline in excess of its delivery commitments to firm cus-
tomers from direct sale industrial users to resale customers "
was held unlawful under. Section 7(a) of the Act because it ‘
would impair the pipeline’s ability go render adequate service
to its.existing customers. In that ci , the FPC was exercising
its Section’ 5(a) authority to eli te unduly discriminatory
or preferential practices or contr.
thority’ upon.a finding that it was in the public interést for -
the pipeline to supply additional capacity to its resale cus-
tomers. (Granite City Steel Co., v. FPC, 320 F.2d 711, 713.
(CADE):
F. There is no merit to. the FPC’ s sivel: and unprece-
dented theory that it has concurrent and coextensive juris-
‘diction over interstate transportation: and_sales for resale.
under Section 1(b). This: reading of the Act is sects to
and its Section 7(a) au- 7
r. . | t we = or foe | 7 * |
: ; nage Se be . rae
“ > : : e : ei . _ ad 4
< evade the Ppa eae the very same section against regula- >
™ tion of any aspect 6 riggs and terms.of direct sales. This
is an argument that the chieve indirectly what Con-
gress has prohibjted it to- do directly; ~*~".
In, any Byént, Section 1(b) is not a Patt of ariy- ‘self--
excouting substantive. power. Rather! it is a mere definition _—
of the scope of: the regulatory powers conferred by the Act
which is cast in terms of the types of transportation and sale &
‘transactions Congress committed. to. federal regulation and _
‘Feserved :to state regulation. Each of the substantive: sections
of the Act empowers the FPC:to regulate a differerit subject,
and the individual powers thereby conferred must be exer:
cised in: accordance with the specific procedures: prescribed
by Congress. Furthermore, ir? implementing: its powers under
. any section of the Act, the FPC cannot claim implied power .
which was expressly withheld in another section of the Act.’
(Panhandle Edstern Pipe Line Co. v. FPC,. 204 F.td 675, -
_ 679-680 (CA 3); Panhandle Eastern Pipe Line Co. v. FPC,
ae Fae 306, 310-313 (CA 3). |
; In a completely parallet situation, this Court "has spec- :
ifically condemned _an attempt by the FPC to combine Sec-
tions. 1(b); 4°5,7, and. 16 for the purpose of circumventing a
' specific exemption in Section 1(b), concerning production or ~~
gathering (FPC.v. Panhandle Eastern Pee Line Co., 337.USS.
499, 504, 507-508). : eae
G. Petitioners’ attempts to ‘imply ;coéxtensive and con-
current power over transportation and-sale also run afoul of
the interrelationship between the certificate and rate sections:
of the Act. Section 7 is the“statutory vehicle for initially”
dedicating ‘natural gas supplies to interstate movement and
for initially authorizing the use of pipeline facilities forthe:
interstate transportation | or sale of such gas supplies. The —
_. powers granted to the FPC in Section 4 and 5 only become .
operative after such initial certification of natural gas in inter-
fy
a . :
¢
mee. 7 As: if:
< Se é
° ° “
7 , . . * .
» ?
. . ‘ ‘se
Y
. would only be exercised if sud
‘diction’. . Sc alg ame
-F pe > vate S
state. commerce by means of a permanent certificate. This.
‘S'very contention. was specifically rejected inweiited Gas Pipe --
. Line Co. v. FPC, 388 F.2d 385, 388 (CA 5), where the FPC
justified i®ylassification“of wholly unregulated direct sales as.
regulated business activities, for the purpose of applying its
consolidated tax return savings formula, on the ground that
such , sales were subject to its certificate jurisdiction with
respect to transportation. The Court of Appeals held that the
' FPC’s~“‘certificate jurisdiction is not the same as its rate juris-
: e
In any event, even if the FPC had coextensive and con-*
, . tinuing jurisidiction undertthe certificate and rate sections of
the Act, its claimed power to reallocate gas supply volumes ~
a continuing nature. But, it is hombook law that an admin-
istrative agency’ cannot alter. or amend a previously issued
) permanent certificate in-order to implement a changed regu- re
latory policy unless its. énabling act specifically provides for
modification or revocation of such certificates (Unitéd States
v. Seatrain Lines, 329 U.S. 424, 428-432; American Trucking
san ir v. Frisco Co., 358 U.S. 133, 146; Watson Bros. ,.. .— -
ortation Co. v. United States, 132 F. Supp, 905 (D.C.
Neb.) aff& 350 U.S. 927). The FPC’s reallocation of gas :
Supplies is such a change in policy and the acts does not
confer such authority.
H. United filed with the FPC tariff provisions, appli-
cable ‘for the first time to its direct sale customers and to its:
resale customers~served by the separate’ intrastate pipeline
Re a ig Southern Louisiana regulated by the LPSC and in
derogatién of their contract fights, which the agency made,
effective without any statutory findings that the existing con- |
tract terms.were unduly preferential or discriminatory or that
the revised terms were fair and lawful. But, the FPC cannot
. utilize the tariff revision procedures of Section 4 to chang&
either the ratés or terms of service tendered to even interstate
&
-
transportation authority isof — ~
_
7 . Tiss i* 3 “ie ee es 14
c oe : > can 2 +
° ,
resale eatin Subject, to its jurisdittion, unless they ave
consented to such unilateral chahges by, pipeline suppliers.in oe
their ‘contract rights. (United Gas ; Pipe Linc Co. v. Mobile Gas.
rvice Corp., 350 U.S. 333, 342-344; United Gas Pipeline
Co.‘ v.: Memphis Light, Gas and Water Division, 358 U. S. 103,
172-1 13). The FPC seeks to evade the rule of Mobile on the
straihed and tenuous theory that although a pipeline. cannot _
. unilaterally change the terms: of its contracts governing ser- -
~~ vice priorities in the event of a. -gas shortage, the agency may
: ord such’ companigs to formulate ‘curtailment plans real-:.:
locating their gas supplies from direct sale to resale Customers ©
+ and, to file such plans as tariffs. This is a-brazen and trans- _
‘parent attempt to circumvent the’ express reqfirement ‘of |.
- Section 5(4} that as a condition precedent to the exercise of .
its power to prescribe any rate, practice or contract: the
agency must find the existing tariff provision unlawful.
e Petitioners claim that unless that the FPC has power Pe
F lait the terms of direct sale contracts dealing with i impair-
. ment of —— there’ will ‘be an: “attractive ear”, in the
regulator sch C- p ick
ae > huesee isla committed to the exclusive regulatory
sins of the states the rate, licensing and service aspects of
- dictional pipeline (Panharidle Eastern Pipe Line Co. v. Public
Service Commission of Indiana, 332 U. S. 507, 512,. 513-514,
516-519; Panhandle Eastern Pipe Line Co: » Michigan Public
- -$brvice Commissian, 341 U.S..329, 333-337). The Act with-
“held from the FPC power to remedy undue discrimination or
of such.power would have invaded the constitutional prerog-
atives of the states to, regulate such commerce which have not | .
a been limited by the Act. Thus, the FPC’s:regulation of direct
sales violates the Act and invades powers reserved to the States
e
direct sales made by use of the interstate facilities of a juris- .
preference between such state regulated direct industrial con- -
sumers and federally regulated resale distributors and pipelines,
and the ifdustrial consumers ‘they serve, because the granting ©
fs
| are the Tenth Amendment to the United Staies ae
fa “tion,
- Apart from these considerations: the- FPC’s lidividuat
pipeline company systemwide’ basis for - rationing and re-
allocating gas deliveries creates, rather than ‘corrects, undue ee
a unlawful discrimination. /and ‘preference between end-
sers of the same class-in each state-and in different States. It ..
can insure, at most, only equal treatment to all customers -—
‘ the same pipeline. It cannot afford equal treatment to end-.
users of the same. class whether they are located in the same
“state or in. different states. However, the State’s suggested
«Nationwide approach of allocating .gas supplies - to -states,
leaving tp each state the. responsibility for controlling the
end-use of gas by its own citizens, would treat all states and
localities;fairly- ~
- Moreover, the FPC is ae its statutory-powers arid
invading prerogatives Congress deliberately lefi/to the states
when it seeks to conteal the end-use-of gas by ultimate con-’
sumers.Each~state—is- entitled to its-own choice of ‘service
priorities: and is not. obliged to. make them identical with ~
- those. of other states. While admitting that it lacks jurisdiction
to control end-use of natural gas by ultimate consumers, ‘the —
FPC j is unlawfully exercising such jurisdiction. }
f
ministrative interpretation of the Act by the FPC that it lacks —
~ The State submits that the explicit language of the. Act,
which feaves. no latitude for inference concerning -Conpres-
~ sional intent; its clear legislative history; the consistent ad-——
power to change the price or terms of direct sale contracts
-and that agency’s repeated and unsuccessful attempts to have
the Act amended to grant such authority compel the con-
clusion that uniform federal regulation i is neithey appropriate
nor a, insofar as direct sales are concerned.
. ° _
7
«
@
"Power Commission. The supremacy clause_of_the-Constr~ ——
ee = ST ceecelie a Se ee ee ar 42
| . Even if this case 1s regarded as a conventional injunction
g .
_. this intrastate system has been converted to an ‘interstate —
- . system to oust the LPSC of its lawful jurisdiction. This isnot .
_haustion of administrative remedies applies. Rather, this is a
until the courts have rendered a final judgment in’ favor of
the FPC.: The FPC has no authority at all over intrastate
~ commerce and Section 1(c) of the Act reserves regulation of
intrastate pipelines and of local distribution systems entirely - ©
- to state regulation. The FPC must defer to the states on
- matters of such primarily local concern. | rr
“by 4 private party challenging the jurisdiction of a federal
declaratory judgments, administrative proceedings concerned ...
- with the determination of so-called ‘‘jurisidictional . facts” **
| which will determine whether that party is subject to regula-
a | are
@ 7 . - : e : yt
‘THE"COURT OF ‘APPEALS JUDGMENT THAT .~ a
" UNITED’S GREEN SYSTEM IS AN INTRA; ©.
STATE PIPELINE WAS NOT AN ABUSEOF ITS ©
JUDICIAL DISCREHON 520 ae
The ssue-decided on fhe merits by the Court of Appeals *
was whether, by the self-serving and unlawful acts of United,
the. normal situatioh of a dispute between‘a private. party and
a federal administrative agency ¢oncerning a matter within its |“
established statutory powers to which the doctrine of ex-. — -
controversy concerning conflicting and mutually exclusive
claims of jurisidction between Louisiana and the Federal
tution is inapplicable. to resolution of this issue unless and
ae |
proceeding, the Court of Appeals did not abuse its judicial
discretion. The cases.cited by petitioners involve attempts
administrative agency to-enjoin or to otherwise terminate, by
tion. No such effort was made here and the-admiristrative _
and judicial review process continue completely unimpeded —
and uninterrupted. © on : a.
“
& »
ae
. ©
ci
This Coiatt has rejected the primary argument here here :
_ that the FPC is the sole competent judge of the scope of its —
~ own jurisdiction and that courts must defer to the pendency :
- - of its administrative proceedings | until it can determine. its
“en power and the necessity. of its exercise (FPC v.Pan-
handle Eastern Pipe Line Co., 172 F.2d 57, 59-60, aff'd, 3
_ 337.U.S. 499, 514-515). Where an agency is clearly acting a
‘excess of its statutory authority exhaustion of administrative
remedies i is pines (Leedomv. x ert 358 U.S. 184):
; Unlike the cases cited by petitioners, where the only
exposure to injury of the parties seeking. court relief'was the
burden and expense of participating in an agency hearing %
which this .Court does not view as- irreparable injury -
- (Petroleum Exploration, “Inc. v¥. PSC, 304 U.S? 209, 220-221),
* LPL alleged clear irreparable injury. The question of -ceftifi-
cate jurisdiction was decided by ‘fhe Fifth, Circuit upon the .
____—_—_basis Of undisputed. facts and purely as a matter, of statutory ©
. interpretation and the applicability of judicial precedents.
Such issues are within the specialized competence of the
courts, not thet: ‘of the FPC. If petitioners’ exhaustion view
has merit, the FPC’s issuance of a final opinion and its denial:
of reharing moet the very procedural 1 issue € they seek 6 have \
reviewed by this Court. jul
—_————
ay
ie Ga ae ARGUMENT
ok
_.. THE FPC HAS NO STATUTORY POWER 16.
’REALLOCATE,. THE GAS. .SUPPLIES™ “OF.
; ee SALE do rensnesis RESALE CUS-
ee ” THE FPC DOES NOT. HAVE: \ANY EMERGENCY
ST ATUTORY POWER TO RATION. GAS" DE- :
. LIVERIES AMONG THE CUST OMERS OF AN IN-
~ TERSTATE. PIPELINE : BECAUSE OF A SYSTEM-
Me OR NATIONWIDE — SUPPLY SHORT-
. ——
-
NS
; The FPC asseits. that sheet is a “need for Codnuniasion
authority to override the terms of the [direct sale] contract -
in times of emerge ich as: when a pipeline cannot meet ~
‘its contractual ce nt because of inadequate gas sup-
plies: 15 The FPC. also argues that its, express: statutory
power to authorize . abandonments under Section 7(b) of
the Act is not. sufficiently. flexible to deal with 4emporary
shortages. of gas during a period -of emergency,’ ® although
it pointedly ignores the possibility of a conditional aban-
-.donment wifich would permi resumption of full contract
_ deliveries when the shortage ends. The thrust of the FPC’s
arguments, ’ supported by United? is that this Court must
“©
- broadly construe the Act in disregard of the deliberate,and
meticulous exclusion of direct sales from the sgope. ofthe | |
agency’s ‘regulatory powers by Séction -1(b). because a new
-‘and unforeseen situation ‘has - created an meergency. The
State will demonstrate that Congress was aes aware of the
_ ot .
Le: oat Fass Pog
16 |B, at 18-19, ftn. 15.
ee
ae. "possi of ‘sersaly shortages when it sania Nat-
ural ¢ ct and has repeatedly refused the FPPC’ s‘Tequests ie
OF ‘express authority - to ce with such. Ceraemey short-
— es : cf ae a ; re Silas
The natural gas pipeline industry is icles de...
pendent upon:a depleting asset in finite supply... Congres--
sional awareness of this circumstance ‘jis ,éflected:in pivotal
provisions of the Natural ‘Gas Act designed. to insure a
dependable. and “uninterrupted supply of gas to the ul imate.
“consumers served directly or indirectly by interstate [Pipe
lines. Ue si a pan ella a
Sectio 7{b) prohibits a partial or total soaintictlinend
of any facilities or service subject to FPC jurisdiction unless
that agency authorizes.such action, after application by. the .
pipeline company, full evidentiary hearings and upon the:
'. basis of a specific finding that “.... the available supply of .
. natural gas is depleted to the extent that the: continuance -
of ‘service is unwarranted’’ er that the public interest. per-
‘ mits such abandonment. Both the” FPC and ‘the courts have.
held that. this Statutory protection encompasses a redugtion
in the valumetrie quantities. of gas delivered as well as a
complete cessation of.service (Dixie Pipeline. Co., 14°FPC -.
106, 114; Panhandle EasterfiPipe Line Co., 22 FPC 679,
681 683-684; Panhandle Eastern Pipe Line Co., 14 FPC
264 affirmed 236 F.2d 289 (CA.3); Willmut Gas\ and Oil
Co.,‘v. United Gas Pipe Line*Co., 12 FPC 132, 138-139;.
Panhandle Eastern Pipe. Line Co., v. Michigan. Consolidated
Gas Co., 177 F.2d°943, 945-(CA 6). ss \
‘Sectton Ha) authorizes’ the FPC to require extensions
of pipeline transmission facilities to serve the needs of gas
distributors in communities adjacent to such main lines but
expressly prohibits. any compulsory physical connection or
- sale. or natural gas which would impair the pipeline’s
. ability to render adequate service to its customers”.
. The FPC has always insisted upon a showing that. there are .
| adequate gas reserves firmly committed: under contracts to”
support the construction .and operation of any facilities or -
extentions sought. to be certificated under ‘Section H(c)'7
and Sectign 157. 14(a)(10). of the Regulations under the
Natural Gas Act “requires a comprehensive showing by the _
-
applicant to. establish satisfactory ‘gas. reserve ieaean and de-- ©
liverab ility voltimes. Ee ee as Pane én
Both direct sale customers and resale customers of
interstate pipelinés have shown equal awareness of the need
ta protect themselves against the danger of a gas shortage
in the event that their pipeline supplier improvidently as-
sumes. obligations to deliver firm gas in. quantities exceeding «
either its gas supply or transmission capacity., Thus, direct.
sales contracts. and resale tariffs invariably contain impair- .
ment of deliveries. provisions establishing service priorities
_+ between ‘different classes of customers and defi ining the -
“respective rights and liabilities of the seller and buyer in the
event of a jane to meet contractual delivery obligations..
Interstate ‘pipelines , differ from conventional public
»
utilities because ‘they are not legally obligated to meet-
_' service demands. by potential new custoniers or to. furnish
additional service to existing customers. The Natural Gas .
_ Act leaves such companies free to choose ‘their. custémers
and to make. voluntary business judgments concerning the
expansion of. their transmission capacity and the assump-
. tion of conttact obligations. to deliver additional volumes of
gas. 18 Section 7(a) specifically withholds from the FPC the
ascind to compel the solegecnent, of transportation facil- ae |
‘ . . ™ 4
17 tyunkline’ Gas Co.; 21 FPC 706: Texas Ilinois Natural Gas
* Pipeline Co.,:24 FPC 980; gee Gas Transmission @., 30 vi
164. pe
18 Panhandle Sain recto Co., 204 F:2d 675, 680-(C.A,
3). ee ‘ ‘ sf ~ 5 ses i -
od
oT ee
-
gr
\
and extraordinary situation or ei
‘with a ‘systemwide gas shortage re)
——
ities? 9 Pipeline transmission Capacity and gas‘ ‘Teserves ee
| always been geared to -the present and future’ needs of
- “resale and-direot sale customers. ° bee
_ &
a . 1: es : oe ‘ A f A P
These background considerations conclusively demon-~*
strate. that Congress intended interstate pipelines to have an
absolute and unconditional obligation to’ meet their con-_
tract commitments to. direct<éale and ‘resale customers and '
explain why it did not find it’ necessary to equip: the FPC
Be
ran individual pipeline
“with express statutory powers ihe with ‘thé abnormal *
é “a
“eA
‘ zs
is 4
Congress. was faced. with a different sitiation in’ n fram-
| ing the: statutory scheme ‘of the: Féderal Power Act for the
regulation of interstate electric ‘utilities. Electricity is an. -
intangible commodity” whereas -natural+ gas is ,a ‘tangible.
commodity. Electrical energy cannot be Stored. whereas:
nS natural gas occurs in producing wells which are inherently pat
‘. storage facilities permitting, withdrawal at known maximum
deliverabilty rates. For these teasons, Congress specifically
authorized the FPC to déal. with - emergency . shortages of
electrical energy ‘in Part Il of. that Act. Section 202(c)?®
proyides that during - ‘a war, éf whenever the agency ‘deter-
|
- a
19 Central: West Utility Co. v. FPC, 247 F.2d 306, 310-313
(CA 3):
20. Section 202(e): During the illic of any. war in”
" which. the United States is engaged, or whenever the Commission _
determines that an ‘emergency exists by reason of:a sudden increase
_in the, demand _f br electric enérgy,. or a shortage of electric energy or
' of, facilities. for the generation. of transmission of electric energy, or
of fuel or water for generating facilities, or ‘other causes, the Commis-
shall have authority, either upon its own motion or upon
complaint, with or. without notice, hearing, ‘or repost, to require by |
Strict! next page)
2
«
] . >
P ao VS
with a nationwide gas ©
b>
‘mines that an emergency exists by reason xt a sudden
increase in demands for electric energy or that there is a
shortage of -energy or of facilities or materials. for its gener- .
ation or transmission, .the FPC shall require temporary
connections of facilities and such other generation, delivery,
interchange and transmission. arrangements _as_ well best.
.meet the emergency needs and serve the public interest.
Section 202(4)?! vienealy exenipts from. FPC juris-
diction any temporary connections or facilities made or:
. ‘constructed to. deal. th such an emergency by. an inter
°
- (20 Cont.)
order such temporary connections of facilities and ‘such generation,
_ delivery, ‘interchange, or transmission of electric energy as. in its
judgment will best meet the “emergency and serve the: public interest.
If the parties affected by such order fail to agree upon the terms of.
any arrangement between them in carrying .out such order, the
Commission, after hearing held either before.or after such order takes”
effect, may prescribe by Supplemental order such terms as it finds to
. be just and reasonable, including the compensation or reimbursement
_ which should. be paid fo or by any such party. (49, Stat. 849; 16 |
U.S.C. 824a (c)). | oe ee
t
-21. Section 202(4): During*the éontinuance of any emergency
requiring immediate action, any person engaged in the transmission or
sale of electric energy arid not otherwise subject to the jurisdiction of
thé Commission may make such temporary connections with any
“public utility subject to the jurisdiction’ of the Commission or may
construct such temporary facilities for the transmission’ of electric
energy in interstate commerce.as may be necessary or appropriate to
meet such emergency, and shall not become subject to the juris-
diction of the Commission by.reason of such temporary connection —
or temporary congtruction; provided, that such temporary connection.,
‘shall be discontinued or such temporary. construction removed Or
otherwise disposed of upon’ the. termination of such émer-. -
gency: Provided further, .that upon approval of the Commission
permanent. connections for emergency use only may be made _— ae
under. (49 Stat. 849; 16 USC. 824a(4)).”
-
State electric utility. It also limits ethe duration of such .
temporary connections ard construction ‘to the. period of
emergency, and permits permanent. connections for emer- — .
gency use to be continued thereafter only upon specific.
; approval by the FPO. ~~
Congress delegated such express emergency authority
-_ to the FRC with ‘respeét to electric utilities on Augu . ee
1935. But, it failed to make any corresponding delegation”
of emergency authority in the Natural Gas Act enacted on
June 21, 1938..'The State submits that this. was not an
oversight but a deliberate omission and attributable to Con-
~ gressional awareness of the vital differences between the gas
pipeline and electric utility ‘industries. :
_» . The FPC has long been aware that it lacked authority
to deal with emergency situations arising from a shortage of
natural gas. It repeatedly requested that the Natural Gas
_ Act be amended “to-provide. specifically for control by the
_ Commission of the end-use of natural gas when. required -for
national defense or to safeguard the available supply” (31
FPC Ann. ‘Rep. 145.(1951); 32 FPC Ann. Rep. 152 (1952).
ang 22 FPC’Ann. Rep. 154 (1953)). For four years begin-
“ning in 1954, it requested narrower legislation “to -provide
specifically for, control by the Commission of the allocation -
of natural gas when required for national defense or to |
safeguard the available ‘supply in emergenay ‘Situations”’
(Emphasis added), 34 FPC Ann. Rep. 170 (1954); 35.FPC -
“Ann. Rep..182 (1955); 36 FPC Ann. ‘Rep. 18 (1956); 37
FPC Ann. Rep. 24 (1957); 38 FPC Ann. Rep. 16 (1958)).
January, 1970 the FPC again formally. asked Congress to
enact legislation granting ‘it such emergency powers and this
- time it modeled ‘the proposed legislation upon the pattern
of the broad grant. of. ‘authority to deal ‘with a national’
_ emergency contained’ in Section 202 of the Federal Power
* Act. The FPC’s Annual Report for 1970 summarizes this -
‘request: — : “ * 75> «= a
24. |
¢ . me
"t-te jut gas ‘which became
apparent during iscal year andwhich are
expected to'to increase: in the foreseeable. future
suggest urgent need for Congressional action to
_ aalleviate.. these problems and that the ‘Commis- ©
, sion ’s jurisdiction to do so should not be subject.
to challenge. This proposal. which would add a
_iew ‘subsection to Section as ‘of the Natural Gas
Act would. enable the. Commission to determine
when an emergency exists so as to require the —
construction of temporary connections of facil--
itiés and extensions of facilities and the delivery,
interchange, transportation, load curtailment and
: allocation of gas by any gas company, whether or
‘not it°is otherwise. subject | to the Commission’s
| jurisdiction. Undisputed ‘authority to. meet such -
_ crises .as they arise is necessary for effective regu-
lation of the natura] gas — (p. 8).” (Em-
phasis added).
wv
- These repeated and unsuccessful attempts to obtain =
- éxplicit emergency powers caset grave. doubt -upon the ~
FPC’s present claims that it. has plenary jurisdiction under
its enabling Act to deal with the alleged nationwide gas
supply emergency or with United’s = gas short-
age. ; ,
The only provision of the Natural Gas Act granting
emergency powers iS the portion . of 1(c)?? which applies
:'» . :
22 Section 7(c): Provided, however, that the Commission may
issue a temporary certificate in cases of. emergency, to assure .main-
tenance of adequate service or to serve particular customers, without
notice or hearing, pending the determination of jan application for a
certificate, and may by regulation exempt from the requirements of
this section temporary acts or operations for which the issuance of a
certificate will not be required ig the public interest. § . « %&
5 . . e ° : .
. \ ° 7
. ‘ ° e
+ ° 25
ould to, the limited situation ene issuance of a temporary
certificate, without notice or hearing, to a pipeline is neces-
sary “to assure maintenance of adequate service to to serve
' particular customers” during the pendency of hearings.
Such eniergency authority cannot be utilized to impair .
. adequate service or terminate service to particular custom-
ers under curtailment plans. This specific. and limited au-
- thorization negates the. FPC’s effort to imply much broader
and wholly different emergency powers. which were request:
ed from, but denied by, Congress. i |
/ .
In ‘any event, the FPC’s efforts to chatettertic met :
curtailment plans of United and other pipelines as attempts.
to deal with an emergency situation are inaccurate and.
misleading.- Neither United nor such other pipelines have
‘ proposed that the reduction in contract delivery volumes be
effective for only a specified hnd ‘limited. period of time.
‘ Rather, these pipelines have requested both thier direct sale
and resale customers to execute new long term contracts.
permanently, rechane their Spiga cclivery entitlements. a
-B. THE FPC HAS NO STATUTORY POWER TO
CHANGE THE TERMS OF DIRECT SALE CONTRACTS
GOVERNING DELIVERIES OF GAS DURING SHORT.
AGES
- The impairment of deliveries Provisions in dneci Ste |
contracts are “‘terms” governing the service provided in the
event of: a.gas shortage. The FPC cannot abrogate and
5 nullify ‘these contract terms concerning. the liabilitiés and
rights of. the pipeline and _ its direct - - customers merely ‘be- -_
. cause the contingency to-which they are. drawn has mater-—
idized. ‘Any effort by ‘this agency to regulate such matters
‘is a direct: and prohibited assertion’ of Powe over ‘direct
sales. | oe
age a
"Both the FPC?3 and United?‘ admit that the agency
- lacks rate jurisdiction over direct industrial sales. Neverthe-
- less, the FPC’s*Order No. 43175, required United to. file a
plan providing for ,the curtailment of direct sales. in the
form. of. new and amended tariff sheets’ ‘which become .
effective, under the‘ provisions of Section. 4(e) of the Act, ©
during: the ‘pendency: of an investigation of the reason-
ableness and lawfulness of such plans. Thus, despite its
disclaimer of rate and tariff jurisdiction over direct sales,
the FPC is changing the terms of direct sale contracts. This ~
clearly violates the express prohibition of Section 1(b)
‘which excludes from the regulatory sii of the FPC any.
regulation of sales for consumptive use.
. - Fhe FPC plainly lacks the authority. to require a pipe-
link to. file a tariff covering the price and terms of d direct -
sale because this would give it the contirfuing/ rate and
setvice jurisdiction it exercises over sales for resale as op-
posed. to the initial certification jurisdiction it has over
transportation. An attempt by. a divided FPC to require a.
pipeline to file-a tariff applicable _to direct sales contracts in, —-
order to obtain such continuing sales jurisdiction | was found
unlawful in Colorado Interstate Gas Co. v. FPC, 185 F.2d
baud 359, 360 (CA 3),.% where the court stated:
> "ihe power of the Commistion to: awe
) the sale: of natural gas by’ Colorado Interstate
extends only. to sales to buyers. for resale and not
to sales to buyers for their own consumption.
That being the “extent of the authority which’
Congress has conferred upon the Commission that |
wad is without authority to. as tae Colorado
23 1B. 22.
" 2A TB.9. os
” 25136 Fed. Reg. 7505, FPC L.B., pp. 50-54.
- Intétstate to make its gas tariff sails to any °
sales other than those- for resale. Itis. beyond the.
power of the Comniission to require a natural gas :
company within its jurisdiction to ‘make its tariff
applicable to sales which -are not within the regu- —
latory: power of the Commission for this would
be in effect to regulate such sales. Indeed, the
Commission itself recognized this in 1945 when
, in accepting Colorado interstate’s earlier tariff
_? changes for filing it specified : that they were to
'. . be effective only. for sales ‘for resale for ultimate -
public consumption’. 7 a Added):
The FPC also cannot amend. ; an interstate pipeline’s
filed rate tarifé to’ compel continued deliveries of gas under .
a resale rate schedule for the purpose of permitting the
purchaser’ to divert such volumes from resale channels to
direct consumptive use in a power plant. In City of Hast-
ings, Nebrasks v. FPC, 221-F.2d_ 31, 32-33;--36-39 (CADC
cert.. denied, 349 U.S. ~920) the court held. such action
beyond the scope of the -FPC’s statutory Powers" as a
| prohibited regulation of a direct sale, stating:
“In, effect, the Commission says when the
- City cancelled its contract for power plant gas, it
put itself into the position of having no no con-
tract for, and no right to; power plant gas, and
the Commission is unable to write a new contract
for the parties. The Commission says it may not, .
_ because it cannot, although it has recommended =
to Congress. that it be given authority to, regulate :
sales not now governed by the statute. It there-
__ fore concludes that. the’ complaint, must ‘be. dismis-
sed.”: (Emphasis Added). Me ee,
if As the District of Columbia Court. of appeals observed
in City if Hastings, cited supra, P: 12, the FPC had re-
8 2 we
. cucited suthotity to ‘regulate direct. sales before 1954.
. Again, in 1963, the FPC recognized its lack of statutory
i “authérity to regulate. either the rates or terms of direct.
industrial sales and asked eae ear for such legisiigiive au-
thority:
“At the time the Natural Gas Act was adopted in
1938, itgwas not believed that Commission regu-
lation “of the rates ‘and terms of such sales was
necessary to protect the purchasers from discrim- ~
ination or unduly high rates, or that such sales
could have any adverse effect upon, jurisdictional
sales for resale. Both of these. views have provedn
- to be incorrect in a ‘significant number of situa-
tions. _ Thus, while the Commission is not suggest- .
ing that this type of sale if inherently. improper
or should be generally prohibited — on the con- © -
trary, in many situations: theye have been*shown..
‘to be mutually beneficial to all interested\parties
— it is believed that’ bringing.such salés within the
range -of Commission regulations would materially.
enhance the .effectiveness of ‘Commission regu--
: lation, of natural gas ini the public interest. (1963
: FPC Annual wa pp. 405). ‘(Emphasis Added).
The FPC justified the proposed legislation by reference :
to the freedom of interstate pipelines under the Natural”
Gas Act. to engage in discriminatory practices, respecting
- gervice, by preferring induggrial consumers they served
‘ directly‘ to. industrial consum served by their resale cus-
- tomers and by diverting natural gas from superior domestic
use to industrial use.(Appendix N, 14a-21a). In a letter dated
June 12, 1963, from then FPC Chairman Joseph C. Swidler
- to. President: of the Senate Lynd P. Johnson; the FPC
‘ stated: .
“Under etiiting law the Commiséion’s au-
4.
29°
thority is limited to sales for resale. i in interstate
‘commerce: hence, ‘the: price and “other terms‘ ‘of a
direct sale by'a pipeline-to an industrial consumer
aré outside the sphere Of this. Commission’ S regu- |
latory authority.
. the Coramission conn :
that it be given jurisdictio ion over direct industrial
che by cane os ames This authority .
+e e the Commission to. require that inter- -
> State’ industrial gas ‘Sales. will be made at sych -
prices. and on such terms as -to realize the poten-
tial benefits of such sales to both industrial and
' domestic ‘consumers.” . (Cong, Rec. 11084;
11085). (Emphasis Added). | —
The FPC cannot cite a single agency _ decision, whether. -
or not litigated in the cour rts, in which it has changed either
the price or any term in“a direct: sale contract authorizing
the inferstate transportation of natural gas under a perma- |.
\nent certificate of public convenience and necessity.
C. THE RATE AND TARIFF SECTIONS OF THE _
ACT GRANT THE FPC LIMITED, NOT -
PLENARY, POWER OVER SERVICE AND
APPLY ONLY TO RESALE CUSTOMERS ;
| The “FPC claims’ ‘plenary authority. to approve or pre-.
scribe “curtailment plans” which allocate reduced gas deliv-
ery’ volumes to. both the direct sale and resale customers of __
an interstate. pipe ine. in derogation of its contract and
certificate - -obligations. Its exercise of such authority, which
is asserted for ‘the first time in its history, will have: drastic
and far-reaching consequences.
The FPC proposes to obliterate judicially sanctioned
differences in treatment between existing-and new custom-
_ ers ard the’ universally recognized service priorities of firm
“a ae
30
over interruptible customers. It his accepted for filing, at
permitted to. become effective pending a determination on -
the merits, the ‘curtailment plans.of United and of other
pipelines which reduce gas deliveries’ to direct sales custom-
ers and reallocate such gas volumes to resale customers.
Such curtailment plans are effective as to both present and .
potential gas shortages. While asserting an urgent need for
* such plenary authority to. deal with a nationwide. gas supply
shortage, the FPC has _ permitted curtailments by pipelines
who are not ‘experiencing such a shortage but have elected .
_ to fail to proivde- additional transmission capgcit y needed
‘to meet firm contract : obligations. to existing ° ustomers
because of the additional risk of investing # new or en-
larged facilities’ ‘when there is a possibility that potential
future shortages will diminish profit margins.” -
-
¢ Furthermore, the: FPC has made manifest ifs iritention -
to inure: that pipeline rates and charges for direct sale and ©
resale service will be “fully compensatory” and thus pro- .
vide financial incentive to encourage exploration. for and —
. development of new gas reserves. 27 The State. submits that.
gas Allocation, proceedings are not the ‘proper vehicle Tor
_ dealing with this, /problem and that the alleged eméf. Tgency is
being used asa pretext to circumvent the limited powers of
‘the FPC to relieve United of financial obligations to direct
~ sale customers?® which were profitable but no .longer pro-
- 26 Order Suspending Proposed Tariff Sheets, etc., p. 4, issued |
"August 5, 1971 in El Paso Natural Gas Company, Docket RP 72-6.
Sec. 14.3 Curtailment Procedures, El Paso Natural Gas Co., FPC Gas .
Tariff, issued July 2, 1971. as
7 27 Opinion 606, FPC Pet. 70a; Louisiana Power and Light Co.
v. United Gas Pipe Line Co., F.2d (CA >) January 14, 1972,
Id. at Ta.
28 See Discussion, infra at :p. 56.
“ ° a
a
4
1 ee
s
/
vide as great a profit as- that pipeline can earn by diverting a
.the gas volumes from those customers.who purchased under.
low price, long term contracts to reslae’ customers’ who
: must pay. substantially higher ‘and continuously escalating =
prices under rates’ fixed by the FPC.
No provision of the Act grants the FPC any authority.
to override and. supersede all existing contracts between a
pipeline and its direct sale and resale customers, as well as .
__the certificate obligations of such pipelines. The term “‘cur
tailments”’ is alien to the Act, as is the concept of “plenary -
: jurisdiction” over the gas delivery obligations of pipelines. .-
The FPC is ‘seeking. to improve ‘the Aet, from its stand-
point, by. inducing” this Court to accept a strained and -
tenuous interpretation of statutory ‘provisions which delib-
erately denied it any authority over the prices and terms of.
direct sale service and only limited authority of the type
sought to be exercised over resale service.
Sijons 4. 4 and. 5 of the Act suthotize the Sgulation :
of servic and well as of rates. The prohibitions of: ‘Section
- 4(b) ‘against the action of a natural gas company in accord- -
ing any undue preference or advaiitage to one resale cus-
tomer over another or in maintaining any unreasonable
differerice as between localities or classes of service has
been held applicable to the allocation-of i equate main-
line transmission capacity, of. an interstate: pipeline, among ©
its resale customers (Michigan Ce lidated Gas Co. v. Pan-
handle Eastern. Pipe Line Co., iF. 22d 784, 789 (CA 6);
‘Michigan Consolidated Gas Co. v. FPC, 203 F.2d 895, 901.
(CA 3); Panhandle Eastern Pipe Line Co. v. FPC,. ‘204 F.2d
6 5, 679 (CA: 3)). ‘But, the FPC can- only’ invoke its
authority under these sections upon. a finding: that the -
_ pipeline’s service priorities are unduly preferential or dis-
criminatory since its authority to regulate service is based
upon the implementation of the ‘Statutory objective of,
\ a ‘ .
. °° : \ : . : ¢
° Fd se
-
remedying’ such unlawful practices (Michigan Consolidated®
- Gas Co. v. Panhandle Eastern Pipe Line Co., cited supra, at
-
its powers-to control and limit gas deli volumes in the
only case in which it has ever exercised such authority>
City of Detroit v. Panhandle: Eastern Pipe ‘Line Co.,;’6 FPC
196, 197, 203, 204; and a series of related cases all involv-
ing the same parties and a single interstate pipeline. These. -
"cases afe distinguishable in several vital respects. They rela-
‘ted; to a shortage of ‘pipeline transmission capacity. rather —
‘than to a.gas supply shortage. The reduced gas volume
‘allocations were made effective by FPC orders only with
_ respect to Panhandle’s resale. customers, ‘gas distributors and —
other‘ interstate pipelines. Panhandle’s contracts with these
jurisdictional: resale customers were filed with the FPC as.
rate schedules under Section 4(c) of the Act but did-not ° .
contain ‘“‘any provisions respecting curtailment of firm serv-
ice when demands on the pipeline system exceed _ its
delivery capacity.” (at 202) No party ever challenged ‘in
court ‘the validity of the Emergency Service Rules ahd”
_ Regulations/ prescribed by the’ FPC which were of. limited:
_. duration. The "rights of firm direct’ sale customers were -
‘neither at issue nor .affected in such cases, None of these
circumstances are present here. - « ak a ae *
The FPC itself has recognized nh ne upon
Pere os
. An analysis of the structure of Sections -4 and 5°
clearly reveals that the FPC’s ,féte.and service powers can
be exercised only with respect to gas “delivered ‘by an.
‘interstate pipeline to a resale customer. Each. of the opera:
tive paragraphs of Section 4 and of Section 5 repeats the.
‘express limitation of the powers thereby granted to the
, “transportation or sale of natural gas subject to the juris-
diction .of the Comthission” for the purpose of excludingy .
therefrom. the matters expressly exempted from the cover-
age of the Act by Section 1(). These. include sales not for
es
“¢
— ensee @
le
i | ¢
‘
resale, i.€., any direct sale of gas ‘to a consumed bythe -
"_ purchaser: To read ‘the word “transportation” in this limit- : |
_ ing clause as conferring upon the FPC under Sections 4 and:
- thereafter effective. ne ay Fire ...2
5, the very powers over the prices. and: terms of direct sales
excluded by Section 1(b) and again excluded: by the in-
corporation of such ited clauses in each of such sections
‘would. nullify and subvert the -clear intention of. Congtess .
- (FPC v. Panhandle Eastern Pipe Line Co,., 337 U. S; 499,
503, 508). Yet thé:FPC and United: — such a con-
. struction by this Court.
,
Section 4(4) requires all lenis: rates ad charges, and
rules segulations affecting them, to be just and Teason-
-able. Section 4(b) prohibits any natural gas company, with
respect to any resale rate or: service, from subjecting any
+ person. to any undue prejudice or disadvantage..and from
maintaining any ‘unreasoable™ difference in .rates, service,
facilities or in any -other- regpect between localities or
classes of such: service. Section 4(c) requires the filing, in ©:
the form of tariffs, of schedules embodying all resale rates,
classifications, practices and regulations affecting such rates,
dogether with all contracts affecting such matters. Section
7s 4(d) requires the Tiling, on thirty days notice, of tariffs -
' proposing changes in such resale rates.and. serviées. Section
Ae) provides for hearings, ‘upon ‘complaint ' or on the FPC’s
own. initiative, concerning the . _ lawfulness of such resale
< rates, classifications Or service. Section 5(a) authorizes the
‘FPC when it finds that any-resale rate of classification, or es
any regulation, practice or contract affecting such*rate or
classffication is unjust, unreasonable, unduly discriminatory | |
or preferential to prescribe the lawfuf rate or service to be
ea
_ These considerations based upon. the plain text of the .
. Act establish’ that the ‘limited: powers ,of the. FPC to |
" regulate. service. for the purpose of. preventing discrimination
or ‘preference ‘can only be exercised’ with respect to,gas sold
1° , scat vhs ° ee |
/
/
/
/
ee a 34 ne ie
Js - 2 ae el
,
for resale. The Court of Appeals for the Seventh Circuit
‘reached the same conclusion in Fuels- Research Council,
Inc. v. FPC,, 374 F.2d 842, 852-853. That decision .con-
strued. the term “persons”? in Section 4(b)(1) and the
powers of. the ,FPC. to ghange unduly (discriminatory or
.perferential rate ‘designs under Section 5(a) to "be limited in
scope to resale rates affecting gas distributors ‘and the
ultimate consumers purchasing from them.”
D. THE FPC HAS NO STATUTORY POWER OVER
ss DISCRIMINATION IN SERVICE BETWEEN
a DIRECT AND RESALE CUSTOMERS)
The FPC’s only authority to prevent undue and, unlaw- -
ful discrimination or preference derives from Sections 4 and
5 of the Act. The FPC?9 and United?® contend that if
direct sale customers obtain gas for industrial purposes,
while resale customers requiring gas for ultiniate consump-
tion by domestic end-users are curtailed, there will be an
undue: preference to the former class of service. They argue
from this premise that the Court of Appeals holding that
the FPC lacks curtailment jurisdiction over direct .sales in
- inconsistent with, and undermines, the agency’s jurisdiction.
under Sections 4 and 5. This argument erroneously assumes
that: the rate, service and tariff provisions of the Act are
designed for the mutual and reciprocal protection of direct
_sale aiid resale. customers. It further erroneously assumes
that the FPC has been invested by Congress with authority
_ to control and regulate, in rate proceedings, the end-use of
gas by different classes of ultimate. consumers.
7 a
29 Pet. 18-19. oie
30 1B. at 15. |
a
%.
: > = 32
As already ecard, Sections” 4 and 5 encompass
only the protection and regulation by the. FPC of Tesale _
customers. Furthermore, ‘the FPC.lacks statutory authority —
to consider the end-use. of gas or conservation factors in
proceedings under Sections 4 and 5 (FPC v. Hope Natural
Gas Co., 320 U.S. 591, 608-614;, Fuels Research Council,
Inc. v. FPC, 374 F.2d 842, 853-854 (CA 7); Gity of
Detroit v. FPC, 230 F.2d 810, 816- 817 (CADC)). The
aim of discrimination against resale customers is based
solely on’ the ‘unfounded assumption that the FPC is
authorized to establish service priorities, regulating different |
classes of end-use by ultimate consumers, in the exercise. of
its rate and tariff jurisdiction. Thus, the alleged discrimina-
tion is wholly beyond-the statutory powers of this agency.
The FPC3! and United rely upon a dictum in Pan-- =
handle Eastern Pipe Liné Co. v. FPC, 324U.S. 635, 647, to
support the thesis that direct sales contra@ets are within the -
scope’ of its Section 5(a) powers to prevent discrimination’. —
and preference. But, Panhandle did not present any issue as
to the agency’s powers to nullify or vary either the price or
terms of such contracts. It decided only that the FPC did
‘* not abuse its administrative discretion by allocating excess
earnings or the combined jurisdictional and nonjurisdic-
tional business of an interstate pipeline to its regulated
resale business. This Court noted that Panhandle earned
more than a 200 percent profit on its industrial sales and.
held: em ae
“It is a fairly obvious indication that the.
regulated business is being saddled with costs
which in fairness should be borne by direct indus- |
trial sales. That is an extremely relevant con--
sideration for the. Commission ‘to take into ac-
.
-
.
31 1B, ftn. 19a at. 22.
aw’
36 sie a
count when jk determines what costs are fairly
attributable to each business and what the re-
sultant rate for the- wholesale business should be.
Section 5(a) does not of course give the Commis-.
sion authority to disregard the jurisdictional lines
which Congress, has drawn between. interstate
wholesale sales and direct industrial,sales so as to
level the profits between the two classes of busi-
ness.”’ (At 647). (Emphasis Added).
Clearly, the ‘decision recognized that the FPC could not
eliminate price discrimination between resale and direct sale
customers. A fortiori, it cannot’ ‘remedy service discrimina-
tion- between these two ‘lasses of customers because Sec-
— tion. 5(a) cannot possibly be’construed as granting gréater
powers over practices or contracts which do not, than over
’ those which do, affect a jurisdictional resale “rate, charge, .
or classification”.2? Allocation or assignment of the regula-
ted portion of a pipeline’s total business clearly and di- *
rectly affects jurisdictional resale rates. Reduction of gas
_ delivery obligations by allocations under curtadment plaffs
have no such impact.
. ‘The FPC itself has recognized that it lacks necessary
- statutory authority ° to remedy undue preference and dis- °
_crimination ° between ‘different direct sale customers oF
between localities, caused by’ either unequal rate levels or
2
3 2 This Court’s statement that direct sales contracts are within
‘Section S(a). Specifically referred to the statutory language that.
. whenever the. ‘Commission: ‘shall find that any rate, charge, or
‘classification demanded, observed, charged, or collected by any natu-
ral 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 prefer:
- ential, the Commission shall determine the just and reasonable rate.’”’
(p- 647) (Emphasis original).
-
/
je
/
ot Bie
by soetailiient practices concerning internuptible direct cus-
tomers (Coastal Transmission Corp., 26 FPC 318,
324-325). ; -.
E. THE FPC LACKS, STATUTORY POWER TO RE-
ALLOCATE GAS SUPPLIES FROM DIRECT SALE
CUSTOMERS TO RESALE CUSTOMERS
The FPC claims plenary jurisdtetion, by virtue of its.
‘authority over the interstate transportation of natural gas,. -
.to reallocate gas supplies between direct sale and resale
‘customers and also to control the end-use of natural gas by
ultimate. consumers. As already demonstrated, such. powers
cannot ‘be derived from Sections 4 and 5. .They are.‘not
‘expressly conferred by ‘any section of*the Act and could
only bg implied under the certificate’ provisions of the Act,
Section 7..That section authorizes, by i issuance of a certi-
ficate of public conveniencé and necessity, the regulation of
any, transportation or natural gas in interstate commerce ©.
utilizing fhe facilities of -a pipeline. It provides the statutory
vehicle for authorizing the dedication of a natural gas —
supply to interstate movement andthe installation of any
‘new or improved facilities used to t€ansport such gas, either
on a transportation service for hire basis or on a sale for
resale basis.
'
In determining whether the public convenience and
necessity requires the issuance of a certificate, the FPC
_«.° must consider all aspects of the proposed use of interstate °
transportation facilities in order to decide whether the
granting of the requested authorization will impair the
pipeline’s ability to continue adequate service to its existing
tracts. When the proposed use of facilities, and the service
to be. rendered thereby, involve a direct sale to industrial
consumers the FPC may initially certificate facilities used
for the “‘transportation’’ of gas althoygh the “‘sale” of such
2
customers, including those purchasing under direct sale con- ‘
s
4
ae 38
gas is beyond its regulatory powers (FPC v. Transcontinen-
tat’ Gas Pipe Line Corp., 365 U.S. 1; Panhandle Eastern -
Pipe. Line Co. y. FPC, 359 F.2d 675, 682 (CA 8)s, Pan-
handle Eastern Pipe Line Co. v. FPC, 232 F.2d 467 (CA 3),
cert. denied, 352 US. 891; Coastal Transmission Corp., 26
FPC 318, 324). F . @
Such certificate jurisdiction ‘does not involve any regu-
lation of the price or other terms ‘of a direct .sale. or
represent an assertion of jurisdiction over the purchaser. In -
the framework of initial certification, transportation and
sale are separate subjects of regulation. But, this indirect
_ and limited jurisdiction does not detract from the force and
. scope of the complete exclusion of direct sales from the
~
regulatory powers of the FPC in other situations and under
other sections of the Act, such as Sections 4 and 5. As this
~ Court held, in. Transcontinental, cited supra at 4, a direct
sale “...is not. subject to the Commission’s jurisdiction
except insofar as’ Section 7 requires the Commission to
certificate the transportation of gas pursuant to” the sale.”
(Emphasis Added). | .
In any event, the FPCts powers under Section 7 are
limited in nature-and fall far short of the complete alloca-
tion power it claims to divert gas supplies from direct sale
tndustrial use to resale domestic and. commercial prep ran-
continental, cited supra at 17, decided that “. . . the Com-
mission’s powers unger Section 7 are, by definition, limit-
ed...) it “..J cannot order a natural gas company to sell
gas to users that it favors; it can only exercise a veto power
cover proposed transportation and it can only do this when
a balance of al] the circumstances weighs against certifi-
cation”. That sase further held’ that the FPC was not
empowered to allocate gas to specific end-uses stating:
“it is clear that the Commission fully realized the dis-
-tinction between the [limited] power it enjoys under. Sec-
tion 7 moll a al allocation power” (at 18-19).
AN :
}
s FA .
~~: = 39:
> i
In arriving at this congyision, careful consideration was
siven to an abortive attempt to amend the Act by declaring
‘a national policy that the. public interest required the pro-
motion of national defense and conservation of gas reserves |
for those uses affording the highest social benefits to the
public (H.R. 982, 1949). The FPC had opposed this bill
because much of the. gas sold for industrial uses: was con-
sumed within producing states and could not be subjected -
. to its regulatory control. This Court also recognized that—
_the. Act deliberately and meticulously invested~the FPC
with only. limited authority short of the reach of féderal
- constitutional power over interstate commerce, and left the °
residue including regulation of direct sales to the states,
citing Panhandle Eastern Pipe’ Line Co. v. Public: Service
Commission of Indiana, 332 U.S. 507 (Transcontinental, ’
cited supra, at 8). . - : . 2,
In the light of these considerations, this Court con-
cluded that 4) FPC lacked power to prohibit by a uniform.
‘\al
rule direct. '\ales for use as boiler fuel (365 U.S. 16-17).
However, although, the FPC cannot directly controt and
regulate end-use in a. Section 7 proceeding, it en fosier
proposed uses of gas sold under direct sale contrac
relevant factor, among all other such factors, in deteYmining
whether to certificate a proposed sale.
ih: . Applying the same rationale’ it also: conclud d that
Section 1{b) prohibits any effort “. .. to bar diréct sales.
absolutely, thus forcing all gas transactions into regulated
_[resale] channels”* although the FPC could give such limit-
ed consideration and weight to the impact of a proposed
‘direct sale price on- prices payable by resale customers (365
U.S. 23-24). is
To ‘summarize, Congress left the regulatory’ authority
of the states intact and undiminished with .respect to all
aspects of direct sales made by interstate pipelines except
- for the initial certification. Of such sales by the FPC; de-
as. one |
— FZ
“40 2 _
clined to incorporate in the Act a national policy preferring
certain end-uses of this limited natural resource; denied the
‘FPC power to allocate either the national supply or, the
___interstate- supply of natural gas- to-different-classes of.end- | _
use by ultimate consumers and prohibited any effort by. the
FPC. to channel. gas supplies to resale customers of ‘inter--
_ State pipelines by barring sales to direct industrial consum-
oe “ |
” In Granite. City Steel-Co., v. FPC, 320 F.2d°711, 713
(C.A:D.C ‘an attempt by the FPC to reallocate mainline
transmissi in capacity of an interstate pipeline in excess of
its delivery commitments to-firm customers from direct sale.
industrial users to resale customers was held unlawful urider
Section .7(a) because it- would impair the pipeline’s ability
to render adequate service ot its existing customers. The-
rationale of the decision rejected the FPC’s claim that it
could - control the. end use of gas and give priority to
domestic and commercial users? > on the basis that:
“The theary and purpose of the statutory
restriction of 7a) appear to be that’ persons
~~ - desiring gas for_the-first time, or desiring more —
- gas, Should not get it by taking it away from —
existing lawful customers. We think Mississippi's
service to ‘its industrial customers will not be
“gdequate” within the meaning of Section Ha).
unless it meets their present and reasonably fore-
seeable requirements approximately as well as the
_- service Mississippi has been furnishing them. This ~
is no less true because Mississippi has contracted
be]
33 tn -Arkansas-Louisiana’ Ges Co. et al., 27 FPC 697, 703, the |
agency found, under Section 7(a), that it was in the public interest .
‘for the pipeline to supply additional capacity: to its resale customers
and also. found under Sectional. 5(a). that its “practice or contract”
respecting allocation of capacity to direct ‘industrial customers was
“unduly discriminatory or preferential” against resale customers. ~ .
ene Si
to supply the full requirements of many utility —
customers while its contracts ,with industrial cus-
~ tomers contain’ no full- -requirements clause and
are subject to cancellation on six months notice-’
(at 713) (Emphasis added). - .*
a ee
Clearly, ‘the FPC cannot permanently reallocate gas
volumes from direct sale to resale customers by prohibiting
industrial end-use of such gas. Since it lacks special emer-- -
‘gency power to deal with a gas shortage, it is acting outside
the scope of its statutory authority in taking such action to
relieve United of its delivery obligations for an alleged
temporary period. — . ;
F. SECT iON 1(b) DOES NOT GRANT ANY SUB-
- STANTIVE POWER. AND. CANNOT BE COM- -
BINED WITH SECTIONS 4, 5 AND 16 TO
CREATE IMPLIED POWER TO REALLOCATE .
GAS SUPPLIES ; Pp’
Th FPC claims. power ‘to reallocate gas supply vol-
umes from. direct. Sale to resale customers.on the novel and
> unprecedented theory that it has concurrent and coextensive
jurisdiction over interstate transportation and sales for
resale. under Section 1(b)@ This reading of the Act is- design-
ed to evade the prohibition in the very same section against |
regulation’ of any aspect of the prices and terms of direct
sales. It is the keystone of the FPC’s attempt to nullify and
supersede the impairment of delivery terms .of direct sale
. contracts without invoking its rate, service and tariff powers °
_ which are: admittedly limited to sales for resale. This is an
argument that the FPC can achieve indirectly what Congress =
_ has prohibited it to do diréctly.>*. - ‘
34 The agency recognized this limitation on its jurisdiction in
the context of construction of its powers under the unusually broad
standard of “public convenience and necessity” in Panhandle Eastern
Pipe Line Co., 15 FPC 46, 57-59, aff'd. Central West Utility Co. v.
. FPC, 247 = 306, 312 (CA 3).
8 42
Section 1(b) is not aegrant of any substantive power. *
Rather, it is a mere. definition of the scope of the regula-
tory powers conferred by the Act which is cast in. terms of ©
the types of transportation and sale transactions Congress
committed to federal regulation and reserved to state regu-
lation. Direct: sales for - ‘consumptive - -use~ were deliberately
| and_ unmistakably exempted from the authority granted the
FPC in. each and every section, of the Act (Panhandle
Eastern Pipe Line Co. v. Pubjic Service Commission of
Indiana, 332 U.S. 507, 516; Panhandle Eastern Pipe Line
Co. v. Michigan Public Service Commission, 341 U.S. 329,
334-336). Section ‘Yeb) is nat self-executing. Each of the
substantive “seetions of the Act empowers the FPC to regu-
late a different subject and the individual powers, thereby
conferred must be-exercised in accordance with the specific ,
procedures, prescribed by Congress. :
Furthermore, in implementing its powers ‘iaider any
section of the Act, the FPC cannot claim implied power
which was expressly withheld in another section of the Act.
~ Thus, in Panhandle Eastern Pipe Line Co. v. FP@¥204 F.2d -
675, 679-680 (CA 3), an attempt, under Sections 4(b) and
5(a), to eliminate unduly disrciminatory and preferentiaf
practices in a pipeline’s allocation of its transmission main- —
line delivery capacity to different resale customers by
ordering a compulsory enlargement of such facilities in
disregard of the prohibition against such action, in Séction
7(a), was held unlawful.35 The FPC’s claim that Section
+» 1(b) grants powers which can be implemented under the ©
c.
tariff revision hs aaa prescribed in A(d) and 4c) for .
35 Birtermnoke: the FPC may not rely on Section 4(b) to
override this prohibition- of Section 7(a) even. when exercising its
certificate powers (Panhandle Eastern Pipe Line Co. v. FPC, 247. F.2d
* 306, 310-313 (CA 3).
changing resale rates, practices and contracts although. the
latter sections may hot be applied to direct sales clearly
runs afoul of. this legal. doctrine. This Court has.’specifically
condemned an attempt by the FPC to combine different
Sections of the Act by the purpose of circumventing
| explicit limitations imposed by Congress. .
In a completely parallet ‘situation presented in FPC v.
Panhandle Eastern Pipe Line Co., 337 U.S. 499, 504,
507-508, the agency ‘claimed jurisdi ion over a transfer of
undeveloped gas reserves owned by . iriterstate pipeline to
its production affiliate which sold thé gas in intrastate
commerce. The FPC was unable to. base’ its claim of statu-
tory’ authority on any express provision of the Act and ‘was
" confronted with a specific exemption in Section 1 {b), con-
cerning production or \ gathering. It sought a ‘narrow inter-
pretation of that. exemption. and combined several separate
sections of the Act to lay the foundation for implied
authority ‘necessary ‘to protect. granted statutory functions
and. .objectives.: It claimed -authority under Section. 1(b)
broad enough to neutralize the specific exemption: and also |
invoked Section 16. to counterbalance that prohibition. Fi-
nally, it justified the requested: broad construction on the.
need to avoid a gap impairing the comprehensive regulatory .
scheme established by the Act. In all of these respects, the
arguments presented to this Court were the same as those
pressed here. This Court completely and squarely rejected
each of these arguments, for reasgns which are equally
compelling, and controlling in this case:
“The Commission seeks to- caligtinguish - ‘be-
tween the activities of ptoduction and gathering,
such as drilling, spacing wells, or collecting’ gas,
~ and the facilities, such as reserves and gas ‘leases, |
used therefor and argues that only: the former
were excluded from the coverage of the Act. In
mee of this position at is poutes out that the
~-
J °
“44
3
‘section spefifically exempts both the socal dis-:
tribution and: the facilities used therefor while it
makes ‘no. mention of ,the facilities used for pro-
duction ofr, gathering. In ‘the face of the
unambiguous language of the Act and. its legisla- -
-tive background, we cannot ‘ascribe such a narrow
meaning to the words, ‘the production or. gather-
'- ing of natural gas.’ .
‘
.
The Commission /urges it has jurisdiction
over’. the . transaction | between Panhandle and —
Hugoton. from the powers granted t0.it by Sec-
tion 7(c) of the Act,:15 USCA Section 77 f (c),
4 FCA ‘title | 15, Section TIT F (c), which au-
thorizes it to issue certificates of convénience and —
necessity for the interstate trnasportation and sale |
- of natural gas and those granted to it by. Sections —
4 and 5, 15 USCA Sections 717c, and. 71145 °4
- FCA title 15, Sections 717c and 717d,. to. deter-
mine reasonable rates for such transportation : and
sale. It is. pointed out that Panhandle ‘in three
applications for certificates of convenience and
necessity to construct additional. pipe-line facil-
ities had included the acreage here jnvolved as .
part .of its gas reserves, and certificates were
issued upon the finding by. the Commission that
Panhandle - had adequate reserves tg warrant. its
‘expansion. “Moreoyer Panhandle had been permit- .
ted to include these reserves . in its rate base as’
‘used and useful property.” The Commission,’
- therefore, argues that these gas leaves which Pan-
handle proposes to grant to Hugoton have been. -
dedicated to the discharge of Panhandle’s public-- °
utility obligation to render adequate service at
reasonable. and nondiscriminatory. rates. From
these. circumstances, the Commission concludes
+ ‘ . ; ’
te
_or gathering of na
a
he
that these leases ‘cannot be relinquished by ‘Pan-
handle without the consent of the Coinmission,
which has the implie power to. protect its rate-
making function and Q insure the maintenance
of adequate servic@by a natural-gas company.
Sections” 4, 5 and
gas; rather they have re-
ference to the interstate sale and transportation
of gas.and are so limited. by their. express terms.
Thus Sections -4(a), (b), (c), 5(a) and 7¢c) speak
/ of ‘transportation or sale of natural gas subject to
the jurisdiction. of the Cominission’ while Section
7(a) afd: (b) refer respectively to ‘transportation
facilities’ and ‘facilities subject to the jurisdiction
of the Commission. ’ Nothing in the sections in-
dicate that the power given to the Commission
over natural gas companies by Section 1(b) could
_ have been intended to swallow all the exceptions
of the same section and: thus extend the power
the Commission to ‘the constitutional limit of
not concern the producing
¢
congressional authority over commerce, The re-"
o petition of the’ words subject ot the jurisdiction’
‘makes: clear to us the intent to keep. the Commis- .
sion’s hands out of the excepted local matters.
| The same answer applies to petitioner’s argument.
that Section 16,:15 USCA Section 7170, 4 FCA,
title 15, Section 7170, gives it authority to stop ©
sales of leases. The power. to do the things appro-
priate to carry out the provisions of the Act can
hardly be taken to ‘rescind a prohibition against
". certain actions. . o's
To accept these arguments springing from
power to allow interstate Service, fix rates, and
control by the Federal Power Commission over
‘the production and gathering of gas. It would’ “4
‘invite expansion of power into other phases of
.
s
=
Ee ab
the forbidden area.’4 ‘It would be an-assumption
of powers specifically denied the Commission by
the words of the Act as explained”in the Seer
and on the floor of both Houses of epee
~ 14 Would it : soon be. contended that statutory, power
to. require extension of service, Section 7(a), included
power to require exploration or acquisition of leases or
| allocation of production to interstate pee lines in order to
serve the public interest? a
Note:
Other footnotes omitted and: Emphasis Added.
~
| There is no merit to the FPC’s claim that Section 16
‘authorizes it to utilize the procedures prescribed in the rate.
- sections to implemient transportation authority granted; if
al all, only by\Section 7. Nor can that section be used to
enlarge ‘authority, withheld "by the Act since its sole fun-.
,. ction. is to implement ma. ‘specifically granted (Murphy ~
. Obl Corp. v. FPC, 43KF. 2d 805 (CA 8); Willmut Gas & Oil
_ Co. v. FPC,’ 294 F 24 “245, 249-250 (CADC); Niagra Mo-.
awk Power Corp. v.. FPC\379 F.2d -153, 158 (CADC)).
~ Finally, as this Court held im.Panhandle, Section 16 can
- never be utilized to circumvent evade an express pro-
hibition against the exercise of jurisdiction, in. this case,
_ regulation va ed terms of direct sale contracts |
- i
ot
= as FPC DOES NOT HAVE COEXTENSIVE AND. =
CONCURRENT POWER OVER’ TRANSPORTA- 7
TION AND SALE UNDER THE CERTIFICATE
a ey AND RATE SECTIONS OF THE ACT en
” Section 7 is the only provision in the: the Act which
authorizes the regulation. of the transportation —— of a
. ' “
cm
~
Line Co. v. PC, 385 US. 83, 91).
&
ar’. 2
°
natural gas company or of the service ‘thereby eadered 36
It is both complete and comprehensive and expressly grants
authority to control and supervise extensions or. improve-
ments of such’ facilities: the abandonment; the issuance
and terms and conditions of certificates and ‘the acquisition
of pipeline right-of-ways by eminent domain proceedings.
The FPC’s claim that Congress intended the mere defini-
tions. in Section 1(b) to override and supersede these spe-. ts
cific. provisions granting its only express powers. to regulate .
the interstate transportation of. natural Bas defies credibil-
ay ct
"The FPC?’ construe. the incorporation, in Sections 4°
and 5 of the Act, of the limitations upon its jurisdiction set
forth in Section 1(b) as evidence of an intention to author-
ize the exercise of “transportation” authority under these
rate and tariff provisions. To, read the word. “transport-
ation” in this limiting clause as conferring upon the FPC
under those sections the very power to regulate the prices
and terms of direct sales. deliberately excluded: by Section
1(b) and again éxcluded by the express recital that the
powers of the FPC under Section 4 and 5 are limited to-
. the transportation or sale of natural gas subject to the
jurisdiction of the Commission. . > would nullify and sub-
vert the clear. and plainly expressed intent of Congress. In
the context of rate and tariff regulation, ‘the FPC’s powers
are restricted to the regulation of rates.and the elimination
; of preferences and discrimination in Sh ag with the
36 Neither the FPC nor - United can. invoke such certificate
authority in the absence of an ‘application under Section 7(b) or Hc),
the statutory . hearings ‘required as a. prerequisite to the exercise of
such authority and express findings that the granting of a certificate
will serve the public convenience and necessity: (United Gas =
37 1.B. at 34. esl
)
48
interstate transportation ae gas owned by others and the
interstate sale of gas Jor resale.
Furthermore, the FPC’s assertion of coextensive and
concurrent jurisdiction oyer the transportation and sale of
natural gas under the: certificate and rate sections of the
Act ignores both the interplay. between thdse sections and -
the structure of the Act. Section 7 is the statutory vehicle
_ for initially dedicating natural gas supplies to interstate
movement and for initially authorizing the use of pipeline
facilities for the interstate transportation or sale of such gas
supplies. The powers granted to the FPC in Sections. 4 and
5 only become. operative after such initial certification of
natural’ gas in interstate commerce by means of a perma-
- nent certificate. Before the issuance of such a cettificate,
the FPC can :regulate rates by attaching appropriate con-
ditions under Section 7(e). Thereafter, it can correct. an
excessive OF discriminatory rate only by proceedings under
Section 4, initiated by company rate filings, or under Sec-. <
tion 5, initiated by its action in instituting a rate investi-
gation. (376 U.S. 515, 519-524). Consequently, the FPC
can exercise its statutory. authority over the transportation
of natural gas in interstate commerce only under the certifi-
cate section of the Act and cannot claim such authority
under the. rate and tariff sections of the Act. These legal
considerations fully and plainly negate its claim that it may .
reallocate gas supply volumes from ‘direct sale to resale
. customers by virtue of its “transportation” authority under
Sections 4. and 5.
. ‘The FPC’ s contention that it has coextensive and con-
current jurisdiction over transportation and sales ‘for resale _
under. the certificate and rate séctions of the Act was”
specifically rejected in United Gas Pipe Line Co. v. FPC,
Zz 388 F.2d 385, 388 (CA 5). In that case, the issue was the
proper application of the agency’s formula for allocating
consolidated tax return savings between affiliated regulated
‘
.
es
ee ey
“gg
4
and. unregulated companies joining in a single return. Its
formula involved. three distinct Steps: separation of ‘the
companies into regulated and unregulated groups;
determination of the net aggregate taxable income of each .
group. and dpportionment of the total consolidated tax
_ between the two groups, and among companiés in the
regulated group, on the basis of their respective - taxable
incomes. The FPC classified the pipeline as a completely
_ Tegulated company. although 45% of its income was derived
- from jurisdictional sales for resale,. 10% from nonjurisdic-
tional sales for resale regulated by State commissions and
45% from nonjurisdictional direct sales not regulated by
any agency. The FPC justified its classification of such’
direct sales as regulated business activities-on the ground
that ‘they were “... subject to the Commission’s certificate
jurisdiction with respect to transportation.” (Emphasis Add- _
ed). The Court of Appeals’ flatly repudiated this theory |
because: . | 7 : .
| The Commission’s certificate jurisdiction is
not the same as its rate jurisdiction and ‘the
-' Commission’s judgment in this respect is invalid
since this is a rate case which we are considering
and regulation here is rate regulation. (Emphasis -
Original). |
The State submits-that these considerations conclusively ~
establish that the FPC does not have coextensive and con-
tinuing jurisdiction over the interstate transportation and
sale of gas under the. certificate and rate sections of the ©
Act. —
-” Assuming, for. the sale of argument, that it had such
jurisdiction .the Claimed power to reallocate gas supply
volumes could - only be exercised if such transportation
authority is of a continuing nature. ‘Stated otherwise, if
Such transportation authority is exhausted, and terminated
50
by. the issuance of a permanent certificate authorizing. the
use of interstate pipeline facilities to transport gas to direct
~ gale customers, the FPC clearly lacks any statutory author-
ity ‘“.:.to regulate the volumes of gas transported for
direct sale.”3 This was the rationale of Opinion No. 606
‘and the heart of its claim that curtailments do not relate to
rates but to transportation. The FPC’s arguments to the
‘ Court of Appeals in this case were based principally on this
- continuing transportation jurisdiction theory. In its argu- 7
ments to this Court, the FPC has completely abandoned its
reliance on Section 7 of the Act and seeks to conceal “and
deemphasize the total dependence of its alleged plenary
_jurisdiction over pipeline curtailment plans on such continu-
‘ing transportation jurisdiction. The State submits that this
reversal of position is caused by thie FPC’s belated reali-
zation that its certificate powers end upon the issuance of a -
permanent certificate which, as alréady established, do not
permit reallocation of gas supplies.
The Natural Gas Act doesnot expressly confer upon .
the FPC the authority to. “change an issued and effective
‘certificate of public convenience and necessity. The: absence
of such an express provision gains significance from the
explicit delegation | by’ Congress to the Civil - Aeronautics
Board of power to “alter, amend, modify or suspend any
such certificate, in whole or in part, if the public conveni-
ence and necessity so require. . .°39 It is hornbook law that
_an administrative agency cannot alter or amend a previously
issued permanent certificate in order to implement a chang-
ed regulatory policy unless its enabling act specifically pro- _
vides for modification or revocation of such certificates -
United States v. Seatrain Lines, 329 U.S. 424, 428-432; _
American Prucking . Association v. Frisco Co., ‘358 U. S. 133,
38 sol. Cnt: Pet. at 57a. —
39 49 U.S.C.A., Sec. 1371. .
eee ot HAPS
“a
146; Watson Bios, Transportation Co. v. United States, [32 =
~F. Supp. 905 (D.C. Neb.) aff'd 350 U.S. 927): The. FPC’s.
reallocation of gas supplies is such a change in policy.
. Nor may an agency condition a certificate by reserving
the power to-attach such terms, conditions and limitations
as it may later deem appropriate in order to. deprive the
licensee of previously granted substantive tights“(United
~ States v. Seatrain Lines, Inc.; 329 U.S. 424; Civil. Aeronau-
_ tics Board v. Delta Airlines, 367 U.S. 316, 321). Section 16
_which grants the FPC power to “rescind such orders, rules,
and‘ regulations as it may find necessary or appropriate to
carry out the provisions of this Act: does not include
“certificates” (United States v. Seatrain Lines, Inc., cited
“supra, at 432). The FPC is unable to cite a single instance
in which it has either vacated or modified a permanent and
unconditioned’ certificate which has become effective. On
‘the contrary, it has conceded the applicability. of the Sea-
train Lines doctrine where. the natural gas company has
‘relied upon the. issuance of.a permanent certificate (Turn-
bull: & Zoch Drilling Co., Operator, 26 FPC 678; 680).
The FPC49 and United! rely upon a -there: dictum,
‘taken out of context and incorrectly construed, in Pan--
handle Eastern Pipe Line Co. v. Public Service Commission
of Indiana, cited supra at 523. This is the sole support for
‘their clearly erroneous view that the statutory grant of
authority over “transportation” authorizes the reallocation
of direct sale gas supply volumes to resale customers. Fun- —
damental questions of jurisdiction must be based on an.
informed and sound interpretation of\the agency’s enabling
Act rather than On isolated fragments of superfluous lan-
guage in an opinion. As ‘this Court stated in United: Gas
4078 at 24.
41 1B. at 9-10.
52
"Improvement Co. v. Continental Oil Co., 381 US. 392,
404: oc : -~ *
“Concepts of stare decisis in statutory. interpre- _
tation apply to the holdings with which the case-
by-case_ method of decision surrounds a statute. _
To recognize no differences between the Pan-
handle transfers and those in ‘issue here; and in
the name of stare decisis to hold that Commis-
sion jurisdiction depends on the form rather than
the. substance of the transaction, would turn the
case-by-case process ‘against itself.” (Emphasis.
Original). .
4 Panhandle did not involve any reallocation of gas, Or
any interruption of service, to either direct or resale cus-
tomers, rather: it presented for decision only the issue of
whether a state commission had power to require an inter-
state pipeline’ to make direct sales, in competition with
local gas distributors. This Court sustained such state power
holding that Congress had not preempted the entire’ field of
regulation of direct sales made. in interstate commerce; had _
reserved to the statés ‘their preexisting powers to regulate
both the rate and service aspects of- such sales and that’
“uniform national regulation was not. required either by the
Act or by the Constitution. — 7
The dictum quoted by petitioners was a response to
_ the. contention of Panhandle, in its brief,4? that since the ©
Supreme Court of Indiana had held the pipeline obligated
-to serve all applicants, and other states would also impose
‘such a public. utility obligation, there would be conflicts
between. the several states and between the states and the
FPC resulting from diverse administrative. orders imposing
— service obligations beyond the physical capacity of the
»
42 appellant’s Brief at 49-50, Appendix O, 22a-23a.
Preiser vistertieicae oie
pipeline to meet. Panha@pdle relied upon the provisions of |
the Act giving the FPC jurisdiction over the construction of
new facilities for the interstate transportation of natural gas
| and its policy of refusing certification of sales to new
customers without regard to any need for additional facili-
ties when such authorization would impair the pipeline’s
ability to render satisfactory service to existing customers. |
It was in the context of this purely hypothetical situation,
‘which had not then and still. has not materialized, that this
Court stated that: “... if such conflict should develop, the
matter of interrupting service is one largely related, as
appellees say, to transportation’ and thus within the saa
diction of the Federal Power Commission to control, in
accommodation of any conflicting interests among various
states.”’ (Footnote Omitted).
H. THE FPC HAS NO STATUTORY POWER TO
CHANGE THE IMPAIRMENT OF .. DELIVERY |
TERMS OF DIRECT SALE OR RESALE CON- .
TRACTS BY TARIFF REVISION PROCEDURES
4 United filed with the FPC tariff provisions, applicable
for the first time to its direct sale customers and to its
resale customers served by the separate intrastate pipeline
’ systems in’ Southern’ Louisiana regulated by the LPSC and
in derogation of their contract rights, which the agency —
made effective without any statutory findings that the .
existing contract terms were unduly preferential or discrim-
inatory or. that the revised terms were fair and lawful. The.
» FPC urges that because there is an emergency caused by a
- gas supply shortage it is essential that it utilize the tariff .
revision _procedures of Section 4(e) of ‘the Act. As already
established, the FPC has no: special emergency authority to
deal with such istuations; has«not made any findings sup-.
ported by evidence, substantial or otherwise, that there is
an emergency and cannot order a oe to file: ‘tariffs
a same to direct sale. contracts.
of service rendered to even interstate resale customers sub-
ject to its jurisdiction, unless they have consented to such
unilateral ‘changes by ‘pipeline suppliers in their contract
rights. The basic powers of tha FPC over resale rates and
- service ate defined by, and can only be exercised in accord-
ance with, the specific procedures prescribed in Section
5(a) of the Act. That Section authorizes the agency to set
aside and modify any new or existing resale rate, practice
or contract which it finds to be “unjust, unreasonable,
unduly discriminatory or preferential” on the basis of
record evidence, after full hearings, and such powers may
only be exercised prospectively (United Gas Pipe Line Co. ;
_ v. Mobile Gas Service Corp., 350 U.S. 333, 341-343; FPE v..
Sierra Pacific Power Co., 350 U.S, 348, 353). Section 4(e)
Furthermore, the FPC cannot utilize the tariff revision *
procedures of Section 4 to change either the rates or terms:
adds to this basic power, in the case of a newly filed rate. .
or.a change in a previously filed rate proposed by a natural -
‘gas company, the further powers to preserve the status quo ©
pending review of the. new or changed rate by suspension
for a limited period and, after final determination of its —
_ lawfulness, to make its. order. retroactive. to the date when
the suspended rate becamé effective by means. of refunds
(United: Gas Pipe ‘Line Co. v. Mobile Gas Service Corp.,
cited supra, at 341-342; United Gas Pipe Line Co. v.
Memphis Light, Gas and Water Division, 358 U.S. 103,
-113- 114).
~ However; Section 4 does not supersede either the’ rates
or any other terms of a contract between an interstate
- pipeline supplier and its distributor or pipeline resale cus- _
- tomers. Unlike the Interstate Commerce Act which requires |
*uniform rates and practices, the Natural Gas Act preserves - |
and sanctions invididual private contracts. Natural gas com-
‘panies retain the right ‘“‘to establish ex parte, and change at
will, the- rates offered to prospective customers; or. to, fix’
by contract, and cHange only by mutual agreement, the
a
rate agreed upon with a particular customer” (United Gas -
Pipe Line Co. v. Mobile Gas Service Corp., cited supra at .
343). Thus, the. Act does’ not empower an interstate pipe-
line to unilaterally change its contracts and the tariff re-
vision procedures of Sections 4(d) and 4(e) can be utilized ©
only where the customers have consented to such changes
(United Gas. Pipe Line Co.: v: Mobile Gas Service Corp.,
cited supra at 342-344: United Gas Pipeline Co. v. Memphis
Light, Gas, and Water. Division, cited supra at 112-113).
United’ s Louisiana direct sale and _ resale customers
have withheld such consent, except for’a few who have
recently signed so-called “tariff and service agreements”
under duress. The FPC seeks to evade thé rule of Mobile on»
the. strained and tenuous theory that a although a pipeline
... cannot unilaterally change the terms of its contracts govern- |
ing service priorities in the event of a gas shortage, -the
agency may order such companies to formulate curtailment
‘plans’ reallocating their gas supplies .from. direct sale to.
tesale customers and to file such plans as tariffs.43 This is a
brazen and transparent attempt to circumvent _ the express
requirement. of Section 5(a)** that as a condition pre-
cedent to the exercise of its power to prescribe any rate,
_practice or contract the agency must find the existing tariff
provision unlawful. The FPC has not found that. the impair- -
‘ment of ‘deliveries provisions in effect , before -United’s
tariff revisions discriminatory or preferential. Such a finding
would appear to be precluded by the fact that United’s
direct sales contracts and Section 12.1 of its preexisting FPC
i
8 LB, at 31-32.
-* Applicable also to Section 4 poacebiling under the Section
~ 4(e) proviso that the. FPC may make such’ orders in ‘proceedings —
initiated by company tariff filings as would be proper in an investi-
gation of an existing rate. |
Gas Tariff are substantially identical.45 Finally, the FRC does |
not have plenary or unlimited powers to substitute its
judgment of» what constitutes a lawful rate, practice or
contract for that of the parties to such contracts. Thus,
* “even when it is properly proceeding under Section 5(a) to” ,
modify an existing contract it cannot relieve a pipeline of
an obligation to provide service at a rate which is less than
the just and reasonable rate unless “the rate is so low as to ©
adversely affect the public interest—as where it might |
impair the. financial ability of the public utility, to continue _
its service, cast upon other consumers as excessive burden, -
\ or be unduly discriminatory” (FPC v. Sierra Pacific Power
/\Co., cited supra, at 355).4© This is because the \powers of
the agency to regulate rates are for the protect n of the
public interest, as opposed " the private interests of the |
utilities.
: i FPO. JURISDICTION TO REALLOCATE DIRECT .
SALE\GAS SUPPLIES TO RESALE. CUSTOMERS
__IS_NOT\ NECESSARY TO AVOID A REGULA-
TORY GAP oy
Petitioners ‘claim 47 that, unless’ the FPC has. power to»
overtide the terms of direct sale contracts dealing with im-
pairment of deliveries during periods. of gas shortage, it will
‘be impossible to establish a.uniform and rational system of ;
aa eae: and that there will be an “attractive gap’ “in :
4S See Appendix P, 24a-26a.
46 Sierra held the rate and tariff provisions of the Natural Gas
’ Act ard of the Federal Power Act equivalent. and identical-”
47 EPC, 1.B. at 17-21,24-26; United, I.B. 10-13.
een $7.
the regulatory scheme. The FPC has adopted an individual
"pipeline company systemwide approach -as the appropriate’
unit for gas reallocatién purposes. United’s direct Sale con-
tracts and resale tariffs have impairment of delivery terms _
which are substantially identical and uniform,’ and also
wholly free of any undue or unlawful prejudice or preference
between direct sale and resale customers. Even if this were ‘
not the case, the FPC has no statutory authority to equalize |
the terms of. we rengered to direct and resale customers.
Congress committed to the exclusive regulatory control’
of the states the rate, licensing and-service aspects of direct
sales made by use of the interstate facilities of a jurisdictignal
_ pipeline (Panhandle Eastern Pipe Line Co. ». Public Service ~
Commission of Indiana; 332 U.S. 507, 512; 513-514, -—
_.. 516-519; Panhandle Eastern Pipe Line Co. v. Michigan Public —
Service Commission, 341 U. S. 329, 333-337).-The Act with-
held from the FPC power to remedy undue ‘discrimination or
preference between such state regulated direct industrial con-
‘sumers and federally regulated résale distributors and pipe-
’ lines, and the industrial consumers.they serve, because the
e: granting of such power would have invaded the constitutional -
prerogatives of the states to regulate such commerce which |
-have not been limited: by the Act. Thus, the FPC’s regulation
of direct sales violates the Act and invades powers reserved to -
_ the States: under the: Tenth Amendment to the’ ‘Unitéd States :
Constitution. beeen .
The, Act docs wo occupy the entire field within the
' “peach. of federal constitutional power and limited federal reg-,
ulation only to the “gap area” where the Supreme Court had
held the States constitutionally unable to act by fixing the
import ‘prices of out-of-state’ gas ‘sold for resale, in many
cases, by an interstate pipeline to an affiliated distributor
company (interstate United Gas Co. v. FPC, 331 U. S. 681;
682; 689; FPC y. Hope National Gas, 320 U.S. 591, 609; FPC
v. East Ohio Gas, 338 U.S. 464, 470, 472-473). :
. pel
Le cas ro uit gg
: “The: Natu l Gas Act i is an “in . interstate commerce” act,
a3 not one:* “‘affecti g” interstate commerce. Congress, was well
“et “aware of the difference. and had used broader: language mm
- statutes passed fore or-contemporaneously with the Na- »
> © tural Gas Act such as. the Fair. Labor Standards Act of 1938,
_\ $2 Stat. 1060, the Bituminous Coal Act of 1937, 50 Stat. 72
and the National Labor: Relations Act, 49 Stat. 449. This
. .. nestrietion .on FRC jurisdiction was designed to avoida repeti-
tion’ of the unanticipated and, unintended. invasion’ of state |
e) jurisdiction in the transportation field under the Shreveport |
.. doctrine. (Hous on, E.&W.T.R. Co. v: United States, 234
342; 355-360). A tatutory prohibition against discrimination
; nsportation by railroad. unaccompanied by
eed any express limitation’ upon its scope was there properly in-
'. terpreted as: empowering. ‘the Interstate. Commerce. Commis-
‘sion to regulate’ intrastate rates Which affected interstate
traffic ‘by virtue of ‘discriminatory. or preferential features.
_’ The'states were determined to avoid any repetition of such
a. federal, i invasion of their regulatory prerogatives and the plain
Fe * Fanguage_ of,-the: Act, :enacted at the requést of the states
_\” “acting in concert through the National Association of Rail-’
poad and: Utility” Commissions, witnesses this. compact be-
tween: the states and the federal government: aS a
“The ‘State submits thit the explicit language of the Act,
; which: leaves no latitude for inference .concerning Congres-
“sional intent;. its clear: legislative history; the consistent
ne administrative interpretation of the Act by. the FPC that it
lacks .power to change. the-price or terms of. direct sale con- - 1.2
. tracts and that agency ’’s repeated and unsuccessful attempts
‘to have the Act amended to grarit such authority compel the. . 4
~.°". conclusion that: uniform federal. regulation is:neither appro-
., priate. nor lawful: insofar as. direct sales are concerned. This -
urt, in a case presenting parallel elements. construed identi-
cal statutory language to preclude an exercise of jurisdiction
over the use of urifair methods of competition in intrastate *
~ Sales despite the: fact that the. ——— of such business
\ . ‘ \
. ‘ :
“te
59
a
practices by. persons engaged in interstate | commerce handi- -
capped: such competitors (Federal Trade’ Commission. v.
_ Bunte, Brothers, ‘Inc., 312 US. 349, 350-355).48
nN
Apart from these considerations, the FPC’s individual
pipeline: company systemwide. basis for rationing and real- ©
- locating gas deliveries creates, rather than corrects, undue and
unlawful discrimination and preference between end-users of
the same class in.each state and in. different states. It can |
insure, at most, only equal treatment to all customers of the :
. same pipeline. It cannot afford equal treatment to end-users :
_ of the same class whether. they are located in the game state’
or in different states. However, the State’s suggested. nation-\_
wide approach of allocating gas supplies to states, leaving to
each state the responsibility for controlling the-end-use of gas ‘
by its own citizens, would treat all states and localities fairly.
me Many discriminatory and inequitable consequénces flow |
‘from ° failure to allocate the total interstate supply of gas to
the individual states of the federal union. A pipeline which ;
has’ kept faith with its customers and not oversold its frans- ~~
"’. mission capacity or gas reserves to maximize its profits will |
continue delivering full contract volumes, and or gccasion
increased volumes, to-its direct industrial and power «plant
* customers while other pipelines which have disregarded their
contract and statutory obligations are substantially reducing
deliveries to the same class of customers located in either the _
same state or in different states. The individual company
: approach has. ‘a disproportionate ‘and oppressive adverse
impact upon industrial and power plant: consumers in the -
Gulf States where United has always been. the dominant sup-
plier of direct sales gas used for such: purposes. United is:
48 The decision took cognizance of the fact that ‘the Shreve- a
port docrtine was in effect during the life of the Federal T rade Com-
* mission’ but that it never asserted sieniier authority.
60
-totally unlike: other. pipelines. It not only supplies gas for
resale by distributors and industrial gas in several states. but,
acts" as a gigantic gas gatherer collecting gas from the pro- .
ducing. areas of the Southwest which it sells to, and trans- |
ports for, five major interstate pipelines. This is its principal
role. It is, in terms of volume, the world’s largest transporter
of natural gas and its system purchased, collectéd, and trans-
‘ported more than 1.8 triljon cubic feet in 1970. (Tr. 71-79,
120). Thus, consumers in producing states unfairly. bear the
brunt of a gas ening reflecting increased demand in other
states. ‘
_ Moreover, the FPC is exceeding its statutory powers and
invading prerogatives Congress deliberately left to the states-
when’ it seeks to control the end-use of gas by ultimate
- consumers. Each state is entitled to its own choice of service
priorities and is not obliged to make them identical with
. those of other states. For, as the FPC itself recognized in
“Opinion No. 606: “Our jurisdiction. over the disposition of -
natural gas ends when it reaches the hands of a nonjurisdic- _
tional: person such as.a distributor purchasing for resale. This
language would in effect attempt to extend our jurisdiction
over the disposition of gas by a local distributor,:a matter |
within the pravince of the local regulatory body. We will of
course consider the past and planned disposition of volumes
by the customers when ruling upon allocations for the vari-.
ous customers, but after allocating among United’s custom?
ers, we leave for the states or other local bodies the job to
* oversee the distribution of that gas by the customers at the
local level. 49 Thus, while admitting that it lacks jurisdiction
to control end-use of natural gas by ultimate consumers, the
FPC is unlawfully. exercising such jurisdiction. It is self-
evident that. the use made of gas by; a direct industrial con-
- sumer is at least as much a matter of purely local concern as
the disposition of resale gas by: a distributor.
49 Sol. Gen. Pet. at “7i-0-72a:Emphasis added.
6]
Contrary to the claims of United>® and Brooklyn Union
Gas Company,>! Louisiana is not asserting that the citizens .
of a producing state are entitled to a priority in the use of
their natural gas reserves during a period of shortage and
taking action which prohibits exports of gas to other states of
the type deemed to constitute a direct burden on interstate
commerce. in ‘Commonwealth ‘of Pennsylvania v. State of -
. West Virginia, 262 -U.S. 584, 598. Rather, the State asserts. -
onty a right to a fair share of its natural gas reserves. Further-
more, the investigation instituted by the LPSC does not have
as its purpose, as United suggests,>? any attempt to rechan-
nel interstate gas .to industrial consumption within its bord-
ers. Rather, that investigatiqn concerns only United’s deliber-
ate and. persistent - refusal to meet its. obligations as an
intrastate pipeline (Appendices R, S and T, at 40a, 44a, 47a). ~
Nor is there any merit to United’s ‘contentoon™? that the .
LPSC is constitutionally prohibited from Tegulating curtail-
ment practices of intrastate gas pipelines. Article VI, Section .
Ay. of the Louisiana | Constitution provides that the
. power, authority, and duties of the Commission shall
affect and include all matters and things connected with,
concerning, and growing out of the service to be given or
rendered’. . .” by such-companies. This is an unusually broad
- delegation of power not found in the conventional state or
federal public utility statute. Further, in a Special Order is-
sued September 28, 1971 and in a General Order issued Sep-
tember 30, 1971, the Commission declared that it “thas been
vested with the authority and responsibility to regulate and
-
901.B. at 11.
9! Brief, Amicus Curide at 11.0 ce
S21. B at 11.
531 Bat 11-12.
MORRO tee eos anon
™~
62
control utilities with respect ... to the services rendered by
public utilities” and exercised such powers with respect to
‘both United and other intrastate pipelines by instituting a
comprehensive investigation. In any event, FPC “jurisdiction
was not intended to vary from state to state depending upon.
the degree of state regulation.” (The Secretary of the Army,.
Atlantic Seaboard Corporation, Order Denying Rehearing,
Dkt. No. CP66:179, issued October 22, 1971). ' |
. Petitioners’ suggestion that courts are not competent to”
- deal with any disputes which may arise from the failure to an
interstate pipeline to honor its clearly defined delivery obli- —
gations to direct sale customers is clearly without merit. This
is an area in which the judiciary branch, not the FPC, has
specialized expertise. Furthermore, the judicial process is sub-
ject to supervision by this Court and it has expressly rejected
the argument. that uniformity of regulation under the Act
- will be destroyed or impaired by permitting courts to enforce ‘
traditional common law contract rights (Pan American Petro-
leum Corp. v. -Superior Court of Delaware for New Castle
County; 366 U.S, 656, 665-666). he ts |
.
’
_ Finally, ‘the concept of an “attractive gap” applies only
in the absence of an express statutory prohibition against .
regulation of a specific subject as this Court held in rejecting
the FPC’s claim of implied authority in FPC ». Panhandle
Eastern Pipe Line Co., 337 US. 499, discussed infra at 38.
. RR ee.
THE COURT OF: APPEALS JUDGEMENT
THAT UNITED’S GREEN SYSTEM IS AN
INTRASTATE PIPELINE WAS NOT AN
ABUSE OF ITS JUDICIAL DISCRETION
_ The LPSC has’ always exercised exclusive and sole juris-
diction over the separate intrastate pipeline systems of
Deen 2 Se one emer Oa ee
eae
« Sant
Ni ait sect: Phat ali ich oes
.
63
United in Southern Louisiana. Thus, the issue decided on the
- merits by the Court of Appeals was whether, by the.-self--
serving.and unlawful acts of United, this intrastate system has
been converted to an interstate system to oust the LPSC of |
| its lawful jurisdiction. This is not the normal situation of a
dispute between a private party and a federal administrative
agency concerning a matter within its established statutory
powers to which the doctrine of exhaustion of administrative
remedies applies. Rather, although arising in the context of a
private lawsuit, this is a controversy concerning conflicting
and mutually exclusive claims of jurisdiction between Louis-
iana and the Federal Power Commission.
. On September 28, 1971, the LPSC instituted a compre-
hensive investigation of United’s separate Southern Louisiana
intrastate systems (the Green and Purple Systems).> 4 United .-_
denied the jurisdiction of the state agency claiming that its
- unilateral action in applying to. the FPC for certification of
such systems invoked ‘the supremacy -clause of the United
States Constitution to terminate the‘ sole. and exclusive juris-
diction the LPSC has continuously and lawfully exercised. It
was, and still is, unable to cite any authority supporting this:
view. In Special Order No. 17-71, Order Affirming . Juris-
diction and to Show Cause, (Appendix S, 44a-46a), the
LPSC rejected this contention on the: Je eae grounds,
which United. has never answered or appealed:
“The docttins of pre-emption is applicablé
“only where Congress has enacted legislation design-_
. ed to encompass all aspects of a particular field °
- of regulation. But, Congress has not delegated to .
the FPC the full reach of its constitatiorial- powers
over interstate. commerce. On the contrary, it -
authorized that agency to regulate only certain
limited aspects of the transportation and sale for.
54 Appendix R, 40a-43a.
64
9
resale in interstate commerce of natural gas.
Congress gave the FPC no authority at all over
intrastate commerce (FPC v. Transcontinental Gas
Corporation, 365 US. 1}, 17). Furthermore,
Congress enacted Section 1 (c) of the Natural Gas
Act in ofder to reserve regulation of intrastate
pipelines ‘and of local distribution systems entirely
to state regulation. Plainly then, the FPC ‘must |
defer to the states on matters which are primarily 3
of local concern.
The supremacy clause is. inapplicable. unless |
and until a binding and final ‘determination has
been made that United’s separate pipéline system
in southern. Louisiana is both in interstate com-
merce and outside , the scope of the cearramie
Amendment.
Such a determination cannot be nile by ‘the-
‘"FPC. Only the ‘courts can exercise the judicial func-
tion of determining the lawfulness of an assertion
_ of jurisdiction by that agency in a particular pro--
ceeding. State regulation by this Commission will
end therefor, if at all, only after the Federal Courts |
have made an adverse decision which is no longer-
subject to judicial review. a2
This Commission believes - that ‘during the
pendency of such litigation it has both the author- ~
ity. and the duty to continue its regulation of
United’s rates and services. ha |
Aside from these unique aspects involving a 5 coufiict of
jurisdiction, the Court” of Appeals did not abuse its judicial
, discretion even if the case is regarded: as a conventional in-
“junction. proceeding. The FPC and United maintain that ‘the
- Court of Appeals committed reversible error .in rendering
judgment . on, an issue. admittedly within ‘its jurisdiction
ae
65. -
| because of the mere pendency before the FPC of ai an adminis- :
trative proceeding presenting the same legal question. Petit-_
ioners mistake the nature of the doctrine of exhaustion of
ministrative remedies. It is a guide to the exercise of dis- .
_ cretionary judicial power to hear and determine contro-
versies, not an absolute and inflexible barrier to court review.
The cases cited by petitioners involve attempts by a private -
party challenging the jurisdiction of @ federal’ administrative
" agency to enjoin or to otherwise terminate, by declaratory
judgments, administrative . proceedings concerned with the
determination of so-called “jurisdictional facts’ which will
determine whether that.party is subject to regulation. Here,
neither LPL nor LPSC has souight to invoke the authority of
‘ the courts to ‘stay, or end the FPC’s pending certificate pro-
ceedings. The judgment of the court below has not precluded
the later issuance of FPC Opinion No. 610 which reached a
contrary conclusion ‘concerning the jurisdictional status of
United’s Green System. In fact, the FPC has remanded the ee
case to an examiner for further hearings and the adminis-
/
trative process continues completely unimpeded and uninter- .
rupted. Opinion No. 610-A issued on April 7,;:1972 denied
all petitions for rehearing and is now final. A timely petition
for review has been filed by LPL in the Fifth Circuit. Court
- review of these jurisdictional: issues -will. also proceed under
thé provisions of Section 19(b) of the Act aand, contrary to
Unitéd’s claim,>> Congress has not’ prohibited ‘resort by a
private party to the general equity powers of the federal
courts for interim. relief pending a ia resolution of i issues of .
jurisdiction.
The vital distinction pare cases where courts inter-
vene in a controversy between a private litigant and the
_ agency, by-blocking or refusing to assist the administrative ©
oe 3 in its task of investigating jurisdictional facts, and cases -
55 LB. 22-23.
reas
66
where the agency’ S investigatory powers are unopposed was
recognized and relied upon in FPC v. Panhandle Eastern Pipe
Line Co., 172 F.2d 57, 59-60; aff'd. 337 U.S. 499, 514-515.
That case also rejected the primary argument made here that ae
the FPC is the sole competent judge of the scope of its own
jurisdiction and that courts must defer to the pendency of its
administrative proceedings until it can determine its own —
_ power and the necessity of its exertise. While this ruling was
made in the context of an FPC effort to obtain ‘a court
injunction during the pendency of its administrative proceed-
_ ing, and this case presents the same issue in the context of ©
_ the FPC’s effort to prevent. ‘such. an injunction, the rationale
* of the decision is equally applicable to both situations. Pan-
. handle applied the long standing rule that where an agency is
clearly acting.in excess of its statutory authority, exhaustion
of administrative remedies is unnecessary:(Leedom v. Kyne, . __
358 U.S. 184; City of Chicago v. Atchison, T & S.F. Railway
Co., ‘357 U:S: 77; Skinner & Eddy Corp. v. U.S., 249 US.
557, 562; Deering Milliken, ‘Inc. v. Johnson, 295 F.2d. 856
(C. A. 4)).
The FPC, which was neither a defendant nor obliged to
intervene in this private litigation between United and LPL,-
having participated as a party cannot complain that it was
s . obliged to defend its jurisdiction and that the Court rendered
a judgment on the merits adverse to its position. Petitioners’
real complaint is not the judgment of the Court, which is not
yet final, but rather its opinion which impedes their efforts
to unlawfully oust the LPSC of its jurisdiction, convert an
intrastate pipeline to an interstate pipeline and reallocate
direct sale gas volumes from Louisiana ‘customers to —
' industrial consumers in othér states served by this pipeline’ S
resale customers who’will be compelled to pay higher rates. .
Yet, the FPC and United have neither petitioned the’Court of,
Appeals for —s en bane nor song review on | the.
merits by this Cart
s,s)
.
+ ion a tine eh ~“s~
rh 6 OO NON NR eel ot eT rl
ipl Aes ae aa Maid wahoo Ae
| A reading of Opinion No. 610 discloses the reason for
this reluctance. The evidentiary records before the FPC and
_before the District Court both related to.the same facts and °
year of actual gas flows and operations. In the light of the
Fifth Circuit opinion, petitioners doubt their. ability to pre-
vail on the merits and wish. to improve their prospects by
' Tesorting to facts not of: record which result from United’s
' deliberate rearrangement of its gas. flows and operations,
admittedly in violation of Section 7 of the Act; after it filed:
its October I, 1970 application for a certificate. Opinion No.
610 unlawfully finds that United’s motives in seeking to serve
its own interests and evade state jurisdiction are immaterial _ fe
and irrelevant. The FPC has officially noticed extra-record
_ facts and unlawfully denied any opportunity to the parties to
_.- the procetding? ® to controvert such facts by rebuttal evi-
- dence and cross-examination under Section 7(c) of the’
Administrative Procedure Act. .
_ Petitioners seek to invoke the aid of this Court in their _
- unlawful effort, unsupported by any precedent, to exercise
certificate, curtailment and rate jurisdiction over United’s
_ intrastate Green System during the prolonged period rere-’
. quired to obtain a final resolution of this conflict of juris- ~
diction issue. If this Court does not vacate the judgment of
the Fifth Circuit as to the Green System, thie issue of whether
the FPC is bound by that judgment will be litigated. If the
LPSC prevails on this and related issues, the FPC will be
unable to enforce the conditions of Opinion No. 610. that
service to all of United’s intrastate customers shall be con-
tinued. only on an emergency basis and that they shall pane
. ”
' subject to interim curtailment and rate increases and compel-
led to execute. service agreements waiving ‘their contract -
rights against unilateral changes by United. The State submits .
that these conditions are arbitrary, Capricious, contrary to
fa’
The State and LPSC requested this opportunity in their Peti-
tion for Rehearing of Opinion No. 610. °
: : 2
‘
68
law, beyond the statutoty authority of the FPC anda depri-,
yation of due process of law in violation of the Fifth hieied-
ment to the United States Constitution. ‘The FPC willglso ©
then be ‘unable to enforce itggdirection that. all of Unit€d’s |
intrastate ‘pipeline facilities and systems be operated as part
of its integrated interstate pipeline system which is equally
- unlawful and unconstitutional and designed to aid United’ Ss
"efforts to evade state regulation. This is the relief sought in
a
the LPSC injunction suit?’ which United. characterizes as “an
injunction sega exercise of FPC mpulatony’ Jurisdiction. pda
Unlike iat ieee cited by potiiionees, where the only =
injury incurred by the parties seéking court relief was the
burden and expense of participating in an agency hearing
which: this Court does not. view, as irreparable injury®? LPL
alleged in its sworn complaint i in the District Court a material
danger of a blackout or brownout of electrical service in a
wide-geographical area resulting in incalculable damages; that
it has no adequate alternate means of generating electricity -
and would permanently lose sales. Thus, the test of the ex-
tent of the injury which will be caused by exhaustion of
. ‘administrative ‘remedies is clearly satisfied here. The question -
of certificate: jurisdiction was decided by. the Fifth Circuit ~
upon the basis of undisputed facts and purely asa matter of
= statutory interpretation and the applicability of its own
Florida Frtines decision.©® Issues of this figure are within’
os Appendix Q,
SSiptti.
: Pa "pe
59 Petroleum Exploration, Inc. >, Public, eas Commission,
hid USS..209, 220-221. —
- 60: United Gas Pipeline Co., Docket No. CP 62-161, 30 FPC..
560 (1963), aff'd, Louisiana Public Service Commiation ». FPC, 339 =
F.2d 525(C.A.5).
69°
: Pea a : tos es be ot 4 :
the speciflized competence of the courts, ‘not that of the
FPC; - : . 7 |
The petitioners have exposed the completely untenable
nature of their views concerning the procedural issue of ex-
haustion of remedies by the inconsistency of the position
they maintained before the two lower courts and the position —
they. urge upon - this Court. Below, they denied the juris-
diction of the District Court to hear and decide, on ‘the
merits, either the direct sale issue or the certificate issue in .
‘this case. Here, they seek review of the merits of the Court of —
Appeals decision on the former issue but have avoided such
review on the latter issue.. .They seek to differentiate these
‘two substantive issues®! on the ground that the exhaustion
__of remedies problem has been mooted ‘by the FPC’s issuance
of Opinion Nos. 606 and 606-A. prior to the Court of Appeals
decision. But, the FPC has now issued both its Opinion Nos.
610 and 610-A in ‘the certificate case: thereby, under their
view, also. mooting the very procedural issue they seek to
have reviewed by. this Court.: Petitioners’ effort to differ-
entiate between the direct sale issue and the certificate issue
on the. ground that the Fifth Circuit squarely rejected the -
legal rationale of Opinion No. 606 is equally futile and un-.
‘ sound because that court’s opinion also squarely rejected the
legal- rationale of Opinion No.. 610.
©! Sol. Gen. Pet. 20; United Pet. 14, ftn. 26.
i
a tie 70 : 7
ks = ‘ . : Se: a . . ae -
4 f _ CONCLUSION ene oe Es
~ ;
is e -™s . . ?* ;
me i ' The State. maintains that ‘certiorari was -improvidently
granted in this case ‘because thefe’ is no support, either in
~ agency findi BE. fact or in. the pleadings. of petitioners, for
- the ‘challenged clai |
- Jocate United's direct Sale
volumes essential deliveries for
*icmestic: use will be jeopardized. In any.event, the pebgeent:
of the bumedal of Appeals ween be affirmed ‘inits entirety. -
7 ¢ ae Oe
. Respectfully submitted G
at Brae THE HON. J )HN J. McKEITHEN
Ae ele * Governor of ‘thie State of Louisiana |
State Capitol Building
' Baton Rouge, Louisiana —
° oe HON. JACK P. F. GREMILLION
"Attorney General of the State of
ak Ae eee Louisiana.
Se ee ae State Capitol Building
rue ei - Baton Rouge, Louisiana . -
% ee aes FRED G. BENTON, SR.
; ; Benton & Moseley. e
- eS. PM St. Louis Street
fe. - =" Baton Rouge, ~ Louisiana 70801
ARNOLD D. BERKELEY :
Suite 1200, 1819 H Street, NW. :
Washington, D.C. 20006 a
‘ A e ‘ ‘e -
. ae. ‘< . .
< i : 8
** o
oe
ia B
val
\ ge
ee ra
eens
States .
, Mis
“Nebraska
Mississippi
=
GAS ¥ XPORTZ 3 STATE
Louisiana i
xas 7 eS
nresfer ‘
Kentucky
Alabe ra
Avbhancnas
Ok Jahon
-Keanse's
, Ohio
New toxic
“West Virginia
souri.
Pennsylvania
Indiana
Arizona
Tilinoise
Georg ta
Towa
‘South Caro)i na,
Vireinia. -
North Carolina
. Maryland ..
New Yersey
Idaho
Washington
Orsgon
© Wyoming :
New. York
- Minncssta ‘
Utah
Colorado
Connecticut
Rhode IsJand
Michigan
Massachusetts
Montana
- Wisconsin
“*Norlh Dakota
. Alaska
* Delaware
New Hampshire
South Diakota;
Nationa) rotal
af,
oF PRON
(Mil) Lens
ee
‘ ;
, APPETDIX A.
SANE, it “ORDER
LOmL 27 yS
- :
Deliveries
6,527, 705-
5,860,437
3,993,763
3,657,8)2
3,488,971
2,863,601
2,519,758
2,263,047 -
2,25) ,627)
1,840,035)
>, S64, 460.
1,462, 566
1,308,335:
1.29) 854
315254,134.
pore hg =
1,073,
1,073,450
32,016,515
923,565
&48.423
623,396
216,066
. 360,616
. 341,012
260, 306
. 256,667
234,703
156,936
24), 310
89,723
89,137
71,226
_ 29,770
"(22,537
- 20,789
17,888
6,383
. 2,082
1,922
1,687
* 7 Source:
Tables
— Ineustry in 1969,
ee sy ExcesS dcliverié::
Gas Facts,
A
over rece pts. °
Statistical)
cuhie feet
Receipts
3,278, 99% -
G,0? 845 —
403,293
3,92) 252
3,68, 372
3,367 ,4%
2,01),,753
~ 1,370,359
) 9G, 734
7 20,2702
wes, 24;
1,356,800 .
° 21,706,524 -
2,027,425
3,802,014
1,422,256
1,276,838
. 3,230,926
),333,70)
1,296, 07?
994, 40a
957,370
4,423
830,054
» B0).,478
' 802,737
-487,6)0
350,678
74,071.
. 937, 680
482,966
220,174
252,398
146,575
94,248
ie 7%,
159,903
21,177
346,929
- 22,823
‘a
27,559
_ 22,877
. 36,27 5.3
¥Ol -
8
a
*
Pigott 7°
5,243,710.
3,609,670
i re ae a)
2 6,47
“Bis 223-7
“or,706f ¢
eee
mm ¢
50,918,658 :
SPREE OE Te | A ETS SLIT IER ATER EL NE PE EEE
“ .
Record of the Gas
16,993,418
‘ok Gse
. Louisiana exports as a percentage of Totnl Nilional Deliveries - 47.6%"
r
FIVE LARGEST GAS KRODUCING STAT
» RANKED
IN ORDF: R a 19 “.GRCS aS. aes ico oe
e
?
a bug
g
. States. :
United Stat's
Texas
Louisiana
Oklahoma
. ene , @
“New Mexico %
_ Kansas:
®
aoe
eg oe Roe. 26, Gas Facts, A Statistical. Record ef. the. Gas Utility —
Industry in 1969,
Na
&
= Volume e
(Millions, «cubic feet)
?
5
22, 679, 15
& >
8,914,794 .
2, 561, 027
1, 741, 677
1, 142, 594
887,03
°
2
-
?
e
.
F
aS v
Preve niFze uf
Nationz.) i?roduction |
é
100%».
39.3%.
3 3. 35.
4
‘~~ APPENDIX’R
ed
K dated
Lai
a. Peek a a APPENDIX E
ate — | . ex
; ,- @ 7
° x os F i) e
> : ml 0 / ye
FIVE LARGEST GAS PRODUCING STATES RANKED :
* IN OKDER OF 14969 NET PRQODUGTION*
° (Millions cubic fect). eter A, Fos
f , i Percentage of -« N\ m
States . i Volume: « Nationa! Production” or
cf : . ve we . a
‘United States. | J. os .* 2.1, 223,990 _ ; 190% - °
> : ° e
. . ° - . . . . : * ae e
Texas . 2 4°" sO _ 7,964,698 oF 37.5%: - .
Louisiana a 7,386,678 © > 34, 8% ’
Oklahoma. ~ "4,654,481 TET ,
New Mexico ; - * hy 242,191 °° 5, 387,
_ Kansas" 2 _ 885, &22 we BT - Ps
Fe tal : ; hd
. . ‘ >
ee ' y
ad e
sii an
ba
*Source: Table 27; Gas Facts, A Statistical Rdcord ofthe Gas Utility 9.
. Tee ~~ , ae i
‘ o° :
pe et
| o “
<3 be ~
¥ ry ‘
a ° :
\ ; . *
ae late Oe, ; . ‘ ( cree
7 : ab - ay ~ ae ee
< 4a |
: . APPENDIX 3 *
e
2. a , ;
= : oe is
. me: / “
eat “Be . ° e #7 |
FIVE LARGEST GAS PRODUCTION STATES RANKED “ . 3
IN ORDER OF 1969 MARKETED. PRODUCTION* ° a
(Millions cubic fuut} . . E
ty ; ; he . Percentage of 4
States Volume * National Production ot
United States \ 2 20, 698, 240. 100%...” ——S
’ . " a e - . . : ie . :
Texas + 7,853,199 37.9%
Louisiana Pa. 7 227, 826 34.9% :
Oklahoma 1, 523, 715 7.36%
New Mexico 1, 1384333, | 5.04%
Kansas v ; 883,156 4.26%
. . - ae y
ae eer ee
— | — - mt. - - .
> ¥ .
° . —— )
° ¢ ice ° *
tBbaree: Table 28, ‘Gas Facts, * Statietical Record of the Coe Utility
“iadustey in 1969, Se
o se . | °
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GIVLSUZLNI GAZAITAC NOLLINGOUd WIVISINOT JO ZOWLNANAd
ad \ e* : . . : P . 3 | . ry
\
CALENDAR’ YEAR"
. ? ’ . Se ne
rR CM Dae RangpeifARnESSIStToN RNIN” ate ataRS ERIE sTisemencg My tac nentt ey 9 enatmenp e ta RE Te Gg SR TENT ERPS GE ORTETY SANTINO NA SINR FAIRE POTEET NCR MN are
Sere ran greet RINE TY wai : ' A : a :
\ > A
aa. vie
NRE A LTT BOR WORT OR
X
te
;
3
&
s
&
« >
i
%
,
=.
: : “Louisiana
Year United States Louisiana Percentage of &:,5,
19638 287,349, 852 88,015, 624. 30.63%.
> * 1967 292,.907, 70: ‘ 86,290,009 - 29,467.
1966 B 28°, 332, 805 - 83, 664, 092 28.92%
_ 4965 266,466, 923 62, 811, 157 28.91%
1964 281,251,454 © 79, C76, 209°. 28.12%
1963. 276, 151,233 "75, 364, 992 2729 |
ed : New Field Discoveries :
* "1969" 1,769, 557 262, 140 14.81%
1968 _ 1, 376,429 7] 376,919 27. 38°
1967 3, 170, 520 750, 644°" 23068"
1966 2, 947, 329 433, 345 14,706
ot a ae Pe .
- . +
_ New Reservoir Discoveries
~ + 1969 2,043, 219 "}, 002,308 | 49.06%
1966 1,545,612 - 687, 902 44.51%
1967 2, 5249652. 1,026, 915 40, 68%
(1966 3,110, 396 1, 284,014 41.28%
a te >? ~
. ; J .
‘Sources ‘Table 2, ‘Gas Facts, A Statistical: Record of the Gas Utility » ihe
—_— for 1963-199. 8 4
’ ;
~ s
«
° u .
(Million ‘alii feet)
¢
LOUISIANA RECOVERABLE ‘RESERVES, NEW Fiz LD, , :
AND RESERVOIR | Dls COVERIES AS A. PERCENTAGE pi THE NATION *.
Receverable Rererves of Natural Gas.
APPENDIX H
5
CO
e° 3 4
gee
-
'@ ” ANALYSIS Or QATURAL GAS SUPPLY FOR
i UNITED GAS PIPE LINE COMPANY = °
. ‘ .
STATE OF LOUISIANA’€ DEPARTMENT OF CONSERVATION -
- - oP . \ : 4 . : : -
APPENDIX I
- >
-
‘ “IN MOF: - 15,025 pounds Abs, 60 Degrees* ‘+ ...¥
Das — : ‘ 2 noe ; r
ei “Total Available” é e
- Year ee in State. _ * , Exports ts
1970 - + - 1,475,062, 580. 485, 701, 523 144, 792, 981
1969 ' 1,442,660,890° 476, 552, 185 : 143, 408, 910
1968 -1,256, 852,564. . 423, 357, 903 125, 145,762 |
. 1967 1,122, 302,791 ° 379,492,001 ‘121, 487,781.
1966 1,057,033, 316 * 353,995, 578 174, 125,884 |
1965 1, 036, 401, 716 319, 821, 477 "450, 438, 303.
‘1964. _ 1,029, 034, 128 - 323, 067, 954, —:124, 390,436.
4 1963 ‘(no records) © . 293, 386, 955 " 134, 626, 288)
1962 ‘ 860,752,808 MW 264, 444,967 ‘Psz, 373,933 :
1961: “ > 871,779, 864 * 301, 316, 763 223,866,184
1960 881, 584, 353 299, 637, 510 - 224, 089, 524
1959 _, 839,182,532 276, 013, 704 206, 142, 854
"1958 806,976,272 + --264, 351, 336 "198, 226, 154 |
1957 796,702,907’ | . 264,580,704 | *% 210,646,432
1956 - , 803, 881, 299 259,042, 333 220, 963, 719
+ 1955 758,973,817. |. 254,816,631 - 205, 306, 598
1954 ji " 164, 600, 945° '244, 535, 502 197, 895, 391 ,
1953 700, 753, 308 225,835,779 . 185,387,221 ©
1952 * 514, 698, 050 121,540,119 6 gt
~ a
5 i :
e Pita
rm
a Ae
f +4 . :
vs ‘Source: Table 2, Gas Facts, A Statistical Record of the Gas Utility cpa |
. \ °
} °
| ;
: oo,
Ai, aaah i pus Hares 2, 4hhe 2 ts ane De mw nts qaymaee se yen. — arn _—ee pen eee
~ @«
<s
10a°
. e :, 6 7
. ee APPEN OR
_ COMPARISON OF PERCENTAGE OF: ESTIMATES _
PROVED RECOVERA BLE RESERVES-OF NATURAL .-
GAS IN 1969 FOR —- AND ‘TaE NATION :
(Millions cubic feet) : = . 7
_ © a — : :
. . , .
r Jt a. . . Percertace
United States . ‘Louisiana - Utilization Us ages
Production*® . 22,679, 195 7 “¢, 561, 027°
m 7 . : >
"Total Proved Qo. . ;
Recoverable Referves** 275, 108, ahs - , $5,956,935 OL 4
7. yf - N. 4, 287, 202 55 ba
te -e S.89, 789, 437 * 2a. *
Non-Associated Proved 4 . Se ora. oe m a
Rec he'aties oe Reserves** 211, 873, naz + 69,429,161 de | 2.7%. *:
v: "ON, 2, 826, 606 1. 33% a
s S.66, 602, 555 7 "31.4%
' Associated Dissolved** — . 59, 633,644 15, 514, 268 26.0%. ;
oe ae 7.'-. "Ne 1, 347,386 - oy 25R
. S.14, 166, 882°— 234.7%.
@ . 6 : on
t a d
: e ‘ « -f
4 . > . . .
“* Source: .Table 26, Gas Facts, A Statistical ‘Record of the Gas Utility
_Industry in 1969. - .
** Source: Table 2, Gas Facts,
Industiy in cata
é
A Statistical Recerd of the Gas Utility: ~- .
.® , 7 = a j
ag
Lou:rs:ana
Texas
ARKANSAS
~NEvaoa
MississipP:
Frorioa
Oxc aroma ;
“y. ViRGi tA
* . TNotana
Ono hg
PENNSYLVANIA
ALABAMA
-Decaware
tLernors |
Toano
TENNESSEE
Mi cHiGan.
Marys end
Maine @
ViRGINIA
Cownwecticur
lowa
N. CarRoOutina
Wr omit NG
Kentucky
- Ruooe Isiano
WASHINGTON
Orecow .
WISCONS Ig mo
AriZOna
Minnesota |
NEBRASKA.
Geor
“New Yorn:
S. Carorina
Kansas.
New Jersey
Missouge = «+
Cororaco
| MasSacnuseris
. Mee Mexico
; TANA
Car Peornia
Utan
- New Hamesasne.
Verwowr .
SA. “Darosk
N. Dakota *
Dist. of Cor.
Uniteo
States®-
lla |
GAS REQUIREMENTS
‘" Fiem twoustes car ato Fram Gewewation
Future ,Gas Reguireninrs Or TH
APPeNo: x C - Cacewoar Year 19
’
. 4 “\Pracen
. * Fie
-Anpys tral GENERATION
1,181,538. _ 315,274
1,933,846 ‘35,163
189,877 94,333.
-~12,65 21,287. .
129,647 \ 83 , 595.
_ 55,681 143,843
* .” 56,703 224,331
80, 750 45
191,067 3,299
| 371,78 12,960
292,585 - . 683
_ 108,861 133
- 8,162 * . 88
283,860 72 341
11,683 ° ‘ -
*- »« 72,972 “ a7
170,611 ¢ 27,854
23,362 11,513
ot 394 -
28,346 . -
12,682 c -
62,359 424
26,970 3
13,037 -
39,854 . 335
¢ 3,286 ~
22,141 : _
13,296 :
38,970 3,049
»654 4,876
38,748 3,601
28,429 a
44,568 -
87,639 335
- 18,916 =
56,934 7,319
39,669 178
32,729 5,043
175186 ~ §;180
13,413 ° 486
4,717 8,322
2,590 1,234
86,9 32,014
3,618 =
185 — -
e293 =
180 -
30 5
“. , .
5,942,153 .1,919,145
F on %r Tomar
> (Mfuctow Cust Feet)
x °
‘
@.
Totac Firm
’ Pwoustarar
Torat —
+ > Ano e
n ia A .
1,496,812 1,790,250
2,769,009 * °4,008,246
284,210 418,346
33,943 54,399
213,242. 371,361
. ® 199,528 362,028
» . 281,034 540,566
80,795 215,504
"194,366 546,422
384,741 1,112,768
293 5268 ' 841,296
108,994 .317,765
8,250 27,320
» 356,201 1,216,261
ER agocFas
72,972 ?
pt amt
34,875 ’
3 1,906
28,346. 444,013
12,682@ , 64,020 +
62,783 378,610
26,973" . 157,610
13,077 75,417
405189 254,315
3,286 - aoe
22,141 st9Q_
13,296 93-715. N\
42,019 * 328,652
28,530 215,375
42,349 . 332,197
28,429 215,369
44,568 368, 446
87,974 -~* 762,010
18,916 161,523
64,253 602 , 834
39,847 357,652
42,772 439,698
: 22,366 - 254,814!
13,899 15.1 07
13,0399 167,263
3,824 82,468
118,936 2,177,896
3,618 122,
185 5, :
. 29 2,619
\ 160 31,435
30 19,463
<4 7 -
- 7,861,298 21,392,314
Ornver Rescarce Instirure, University or Denver, Denver, Coconnoa
° ALASKA AND Hawaii omrtteo
- Percent :
Fiam Imouste® ac.
-and Generation
rOo- -WWUUD Oo
37
i States + Vorume No. . + Octo@cr 1971,
°
A ow. Virginia
MarRYLAND
ARKANSAS
Oxi anoma
aaa Lousiana
: , sMissessiPPr
Texas
NEVADA
Onto °
Frorioa
~e Sa
. Tecinors
Mi: cCHIGAN
. MONTANA
Néw Mexico”
Detaware
Cororaoco
INDIANA
Wiscorsin
+» , Missouri
MASSACHYSETTS
ARIZONA .
. PENNSYLVANIA
‘. Mi NNESOTA
CALIFORNIA.
Kentucky
Kansas
lowa
ALABAMA
New Yorn
Georcia
a
. New JERsey
_ NEBRASKA @
S. Carourna
TENNESSEE
; N, CaroOuina
. Utan
> $§. Daxota
ViRGInta
Rwooe Iscako -
N. Danota
_ Commecticur
WrominG
Wasninéton
VERMONT
Orecon
New Hamesni re
Maine
_ Toano
- - Dist. oF Cou.
Uni teo
State
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