ANR Pipeline Co. v. Federal Energy Regulatory Commission

876 F.2d 124, 277 U.S. App. D.C. 365, 1989 U.S. App. LEXIS 7140
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 23, 1989
DocketNos. 88-1031, 88-1045, 88-1211, 88-1085 and 88-1179
StatusPublished
Cited by1 cases

This text of 876 F.2d 124 (ANR Pipeline Co. v. Federal Energy Regulatory Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ANR Pipeline Co. v. Federal Energy Regulatory Commission, 876 F.2d 124, 277 U.S. App. D.C. 365, 1989 U.S. App. LEXIS 7140 (D.C. Cir. 1989).

Opinion

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

In October 1987 ANR Pipeline Company and Great Lakes Gas Transmission Company applied to the Federal Energy Regulatory Commission to extend the terms of the individual certificates of public convenience and necessity under which they were transporting imported Canadian natural gas. FERC’s disposition of the applications has raised two sets of issues. First, FERC imposed conditions, confining the certificates to a shorter period than proposed and fixing a rate for ANR much higher than it had proposed to charge. Second, in finding that the proposed service advanced the “public convenience and necessity,” as § 7(e) of the Natural Gas Act, 15 U.S.C. § 717f(e) (1982), requires as a predicate to certification, the Commission did not independently consider whether the importation of the gas was in the public interest, an issue already decided by the Economic Regulatory Administration, an office of the Department of Energy, under § 3 of the Act, 15 U.S.C. § 717f(b). We uphold the one condition as to which petitioners’ objections are neither moot nor unripe; we also uphold the Commission’s refusal to reopen the issue decided by the ERA.

I. FERC’s Term and Rate Conditions

Background

On July 10, 1981 FERC issued individual certificates of public convenience and necessity to ANR and Great Lakes to transport Canadian natural gas purchased by Texas Eastern Transmission Corporation and Tennessee Gas Pipeline Company. Natural Gas Pipeline Co. of America, 15 FERC H 61,254 (1981). Great Lakes was authorized to transport the gas from the U.S.-Canadian border to an interconnection with ANR in Michigan, and ANR to transport it from there to points specified for receipt by Texas Eastern and Tennessee. Although the contracts between the pipelines and their customers were to run for twenty years, FERC provided that the original certificates should expire on October 31,1987, the date Texas Eastern’s and Tennessee's import authorizations from the ERA would end.

On the basis of ERA’s later decisions to extend the import authorizations through November 1, 2000,1 the two transporting pipelines applied to FERC in the summer of 1987 for amendments extending their certificates to that date.

In the decision challenged here, FERC extended the certificates. Great Lakes Gas Transmission Co., 41 FERC 1161,094 (1987), reh’g denied, 42 FERC 1161,029 (1988). But it imposed a two-part limit on their duration, providing for them to end on the earlier of two events: first, the passage of one year, and second, the applicant pipeline’s “acceptance of blanket certificates issued pursuant to section 284.221 of the regulations.” Id. at 61,248 (footnote omitted).

The “blanket certificates” referred to in the conditions are ones that might be issued pursuant to the Commission’s program to encourage pipelines to make transportation service available to all shippers. Acceptance of a blanket certificate obliges an accepting pipeline to carry gas even for parties selling gas in competition with the pipeline itself. The Commission hopes that by inducing pipelines to accept such certificates it will enable a wide range of gas producers and middlemen to sell gas to a wide range of buyers, thereby subjecting pipelines’ gas sales to competition. See Order No. 436, 50 Fed.Reg. 42,408 (1985), affd in substantial part, remanded in part sub nom. Associated Gas Distributors v. FERC, 824 F.2d 981 (D.C.Cir.1987), cert. denied sub nom. Interstate Natural Gas Ass’n of America v. FERC, — U.S. -, 108 S.Ct. 1468, 99 L.Ed.2d 698 (1988), repromulgated as Order No. 500, 52 Fed. Reg. 30,334 (1987), modified, 52 Fed.Reg. 35,539 (1987); 52 Fed.Reg. 48,986 (1987); 53 Fed.Reg. 8439 (1988), appeal pending sub nom. American Gas Ass’n v. FERC, No. 87-1588 (D.C.Cir. filed Oct. 19, 1987). [369]*369For a pipeline, a blanket certificate makes it possible to provide service to any place it can reach and to any customer, without the delay and expense of obtaining individual § 7 certification, which is site- and customer-specific. The pipeline’s service under a blanket certificate is subject to certain broad limits as to rates and other matters, and, of course, to a requirement that the pipeline provide “open access.” See 18 C.F.R. § 284.8(b) (1988) (requiring pipeline to provide service without “undue discrimination, or preference”).

In addition to the term conditions, the Commission attached a rate condition to ANR’s certificate, requiring it to charge the maximum rates that would be applicable for the same service under its Rate Schedule FTS-1, a schedule proposed by ANR for service under a possible future blanket certificate. See ANR Pipeline Co., 35 FERC 1161,400 (1986). This rate condition effected a fivefold increase in the rates paid by Tennessee and Texas Eastern.

On July 27,1988 ANR accepted a blanket transportation certificate, ANR Pipeline Co., 44 FERC 1161,126 (1988), thereby triggering the expiration of its individual certificate. It now provides transportation service for Texas Eastern and Tennessee under that authority.2 On October 27, 1988, two days before Great Lakes’s amended certificate was due to expire, FERC extended its certificate for an additional one year or until the pipeline should accept a blanket certificate.

Mootness: Alleged Redundancy of Individual and Blanket Certificates

At the outset, FERC argues that ANR’s petition for review should be dismissed as moot because under its blanket certificate ANR can transport natural gas for Tennessee and Texas Eastern pursuant to their contracts and charge the same rate as it would have charged under the individual certificate that it sought. Thus, it argues, the Commission’s term and rate conditions no longer have any effect. See, e.g., Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975) (Article III prohibits a court from rendering advisory opinions and requires the presence of an actual controversy at all stages of judicial review). FERC’s position is consistent with its view that “[cjertificates for individual transportation transactions would be totally redundant to the authority already conferred by the blanket certificates.” Tennessee Gas Pipeline Co., 43 FERC ¶ 61,042, at 61,126 (dismissing as moot application for individual certificate by pipeline operating under blanket certificate) (footnote omitted), reh’g denied, 44 FERC 1161,094 (1988). As to rates, counsel for ANR confirmed at oral argument that the range of rates allowed under its blanket certificate encompasses those it would have charged under the individual certificate as originally proposed. Moreover, he indicated that a pipeline with a blanket certificate could provide service under a long-term contract, although he said such arrangements are uncommon.

Nonetheless, we find that the two types of certificates are not entirely redundant. Although a pipeline may not engage in undue discrimination under either

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876 F.2d 124 (D.C. Circuit, 1989)

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Bluebook (online)
876 F.2d 124, 277 U.S. App. D.C. 365, 1989 U.S. App. LEXIS 7140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anr-pipeline-co-v-federal-energy-regulatory-commission-cadc-1989.