Consolidated Edison Co. of New York, Inc. v. Federal Power Commission

512 F.2d 1332, 168 U.S. App. D.C. 92
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 19, 1975
DocketNos. 73-1999, 73-2017, 74-1150, 74-1184, 74-1200 and 74-1231
StatusPublished
Cited by22 cases

This text of 512 F.2d 1332 (Consolidated Edison Co. of New York, Inc. v. Federal Power 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
Consolidated Edison Co. of New York, Inc. v. Federal Power Commission, 512 F.2d 1332, 168 U.S. App. D.C. 92 (D.C. Cir. 1975).

Opinion

BAZELON, Chief Judge:

Petitioners in these cases are customers of natural gas pipelines subject to the jurisdiction of the FPC. The three pipelines involved, Transcontinental Gas Pipe Line Corporation (Transco),1 Southern Natural Gas Company (Southern),2 and Panhandle Eastern Pipe Line Company (Panhandle),3 are experiencing systemwide shortages and have been forced to cut back deliveries during the past several winters, the peak demand season. As might be expected, these shortages have generated sharp disputes over the allocation of supplies among competing customers. Finding themselves caught in the middle, the pipelines have experimented ‘ with various allocational schemes, and their efforts have been guided, with increasing firmness, by the FPC itself. The current litigation arose from the FPC’s recent initiatives in implementing Order No. 467,4 governing the “utilization and conservation of natural gas resources.”

The background of Order No. 467 is set out in our opinion in Pacific Gas and Electric Co. v. FPC.5 In essence the order stated that it was the Commission’s policy to require curtailments on the basis of the uses made of the gas (end use) rather than on the basis of prior contractual commitments (pro rata), and it set forth nine priority of service categories based on end use. The terms of the order required “full curtailment of the lower priority category volumes to be accomplished before curtailment of any higher priority volumes is commenced.” 6 [97]*97Highest priority was given to residential and small commercial customers; large commercial users and various categories of industrial users completed the list.7 As the order purported to be a general policy statement rather than a rule of binding effect, the Commission declined to order pipelines to file conforming tariffs. At the same time, it stated that tariffs not in accord with its priorities would be subject to suspension and that “any curtailments made under nonconforming tariff sheets which have not received Commission approval may be found to be unjust and unreasonable ” 8

Order No. 467 was issued January 8, 1973. At the time Panhandle was curtailing under an interim plan which it had negotiated among its customers, pending the outcome of hearings on a proposed permanent plan which the pipeline had filed with the FPC in 1971. The interim settlement plan expired by its own terms on October 31, 1973. On October 1, Panhandle filed an interim plan patterned after Order No. 467. It requested the Commission to allow this plan to go into effect on November 1, 1973, in time for the 1973-74 heating season, if the Commission refused to extend “the present curtailment procedures.”9 In its order of November 6,-1973, the Commission denied Panhandle’s motion for an extension of the existing interim plan, and accepted and made effective its new 467 filing.10 On December 28, 1973, it denied rehearing.11

Transco too was operating under an interim settlement plan during the winter of 1972-73. This arrangement expired by its own terms on November 15, 1973, and required Transco to file a permanent plan with the Commission no later than May 1, 1973. In May 1973 the FPC denied a motion by the pipeline to extend the interim plan for another year.12 Transco responded by filing a 467-type permanent plan but at the same time renewed its motion to extend the interim agreement pending final decision on the permanent proposal.13 The Commission again denied the motion, suspended the 467 plan until November 16, 1973, and scheduled hearings.14

Southern found itself in a somewhat different posture when Order .No. 467 was handed down. It was then curtailing under a permanent plan which it had filed in 1971 and on which hearings before the FPC had already been held although no decision had been reached. The FPC’s staff moved to reopen the hearing record and to require Southern to file a 467 plan. The Commission ordered the record reopened but denied the second half of the staff’s request with the recitation that Order No. 467 was a guide rather than a rule.15 Southern proposed a 14-step end use plan, which the Commission rejected by letter order [98]*98on April 27, 1973.16 The pipeline then submitted a 9-step plan, which the Commission suspended for two months and set for hearing.17 On December 28, the Commission denied rehearing.18 Petitioners in all three of these cases contest orders of the Commission providing for the effectuation of the 467-type plans filed by the pipelines and rejecting alternative proposals.

After filing their appeals, petitioners in each case moved for a stay pendente lite. In two cases, those involving Transeo and Southern, stays were granted.19 In a per curiam issued November 26, 1974,20 we reviewed the interim situation, and found that “the existing arrangement — with a stay in effect in the Southern case [implementing its 1971 filing] and the stay denied in Panhandle [leaving its 467 filing in effect] — was likely to be as protective of customers during the coming winter as any alternative.”21 At the same time we found that the interim settlement plan in effect on the Transeo system by virtue of our prior stay was no longer adequate and responded by implementing a new interim settlement agreement which had just recently been proposed to the Commission by the pipeline and its customers.22

The central importance which relief pending decision has assumed in these cases is indicative of the nature of the underlying litigation. The petitioners do not contest the authority of the FPC to impose a 467-type plan on the pipelines after evidentiary hearings and decision on the record. But they do contest the Commission’s power to take the steps which it has taken in shaping the curtailment practices of pipelines during the interim. Hearings before the Commission have since been completed in each of these cases, with final decisions possible in time for the 1975-76 heating season.23 Thus, this phase of the alloeational controversy may be nearly over, the stakes having been determined, as a practical matter, by our disposition of these cases pendente lite. But as we have no way of knowing when in fact the Commission will make its final determinations, we think it best to proceed to the merits in order to resolve the uncertainties under which the Commission and the parties are now laboring.

[99]*99I.

Section 4 of the Natural Gas Act24 requires pipelines and other regulated concerns to file new schedules for rates, charges, classifications or service with the Commission 30 days prior to their effective date. The Commission has discretion under § 4(e)25 to suspend a filing for up to five months beyond the time when it would otherwise go into effect, pending hearings and a decision on its lawfulness. If the Commission finds at the conclusion of hearings that a schedule is unlawful, section 5(a) authorizes imposition of an alternative deemed reasonable and fair by the Commission.26

In FPC v.

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Bluebook (online)
512 F.2d 1332, 168 U.S. App. D.C. 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consolidated-edison-co-of-new-york-inc-v-federal-power-commission-cadc-1975.