Pacific Gas & Electric Co. v. Federal Power Commission

506 F.2d 33, 164 U.S. App. D.C. 371, 1974 WL 333571
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 26, 1974
DocketNos. 73-1358, 73-1485
StatusPublished
Cited by106 cases

This text of 506 F.2d 33 (Pacific Gas & Electric Co. 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
Pacific Gas & Electric Co. v. Federal Power Commission, 506 F.2d 33, 164 U.S. App. D.C. 371, 1974 WL 333571 (D.C. Cir. 1974).

Opinion

MacKINNON, Circuit Judge:

Petitioners assert that we have jurisdiction under section 19(b) of the Natural Gas Act1 to review Order No. 467, 49 F.P.C. 85,2 which the Federal Power Commission issued on January 8, 1973. Order No. 467 is a “Statement of Policy” on “priorities-of-deliveries by jurisdictional pipelines during periods of curtailment” which the Commission indicated it proposes to implement in all matters arising under the Act. The petitioning customers of pipeline companies, whose deliveries are subject to curtailment during natural gas shortages, contend that Order No. 467 is procedurally defective for failure to comply with the Administrative Procedure Act,3 substantively defective for failure to compile an adequate record, and environmentally defective for failure to comply with the National Environmental Policy Act.4

We hold that as a general statement of policy, Order No. 467 is exempt from the rulemaking requirements of the Administrative Procedure Act. We further hold that Order No. 467 is not reviewable under section 19(b) of the Natural Gas Act because this general statement of policy does not have a sufficiently immediate and significant impact upon petitioners and because the record in this case is inadequate to permit meaningful judicial review.

I. BACKGROUND

This country appears to be experiencing a natural gas shortage5 which necessitates the curtailment of supplies to certain customers during peak demand periods. The problem confronting many pipeline companies is whether to curtail on the basis of existing contractual commitments or on the basis of the most efficient end use of the gas. In some instances the pipeline companies are concerned that withholding gas due under existing contracts may subject them to civil liability.

Recognizing these uncertainties and mindful of the desirability of providing uniform curtailment regulation,6 the FPC in 1971 issued a Statement of General Policy in the form of Order No. 431 directing jurisdictional pipeline companies which expected periods of shortages to file tariff sheets containing a curtailment plan.7 Order No. 431 hinted that curtailment priorities should be based on the end use of the gas and stated that curtailment plans approved by the Commission “will control in all respects notwithstanding inconsistent provisions in [prior] sales contracts . ” 8 In response to Order No. [374]*374431, numerous pipeline companies which had not already done so submitted a variety of curtailment plans for the Commission’s approval. As could be expected, the curtailment plans reflected a wide range of views as to the proper priorities for delivery. Some plans were based on end use; others, on contract entitlements. The industry was forced to speculate as to which priorities would later be found to be just and reasonable by the Commission, and the absence of any stated Commission policy hindered effective long range planning by pipelines, distributors and consumers.

Sensing a need for guidance and uniformity in the curtailment area, on January 8, 1973 the Commission promulgated Order No. 467, the order presently under review, which is reprinted in the Appendix to this opinion. Entitled “Statement of Policy,” Order No. 467 was issued without prior notice or opportunity for comment. The statement sets forth the Commission’s view of a proper priority schedule and expresses the Commission’s policy that the national interest would be best served by assigning curtailment priorities on the basis of end use rather than on the basis of prior contractual commitments. Order No. 467 further states the Commission’s intent to follow this priority schedule unless a particular pipeline company demonstrates that a different curtailment plan is more in the public interest. On January 15, 1973 the Commission issued Order No. 467-A, 49 F.P.C. 217, which corrected an inadvertent omission in Order No. 467 of procedures to provide for emergency situations that may occur during curtailment periods.

The Commission immediately received numerous petitions for rehearing, reconsideration, modification or clarification of Orders Nos. 467 and 467-A, and several parties requested permission to intervene. Most of the petitioners were customers of pipeline companies subject to curtailment, particularly electric generating companies to whom Order No. 467 had assigned a low priority. New pipeline companies objected to Order No. 467, apparently because the pipelines sell all the gas they can during periods of shortage and consequently are not overly concerned with which customers receive it. On March 2, 1973 the Commission issued Order No. 467-B, 49 F.P.C. 583, which affirmed the policy expressed in Order No. 467, amended that order in some minor instances and otherwise denied the petitions for rehearing and intervention.

Petitioners seek review of Order No. 467 9 in this court under section 19(b) of the Natural Gas Act10 and advance the following three arguments: (1) that Order No. 467 is in effect a substantive rule which the Commission should have promulgated after a rulemaking proceeding under the Administrative Procedure Act (APA) 11; (2) that there is an insufficient factual basis for the priorities announced in Order No. 467; and (3) that the Commission failed to comply with the National Environmental Policy Act.

II. STATEMENTS OF POLICY

The principal issue is whether this court has jurisdiction to review Order No. 467 under section 19(b) of the Natural Gas Act. In resolving this issue it is necessary first to determine whether [375]*375Order No. 467 is a substantive rule or merely a general statement of policy. We recognize that a decision on the latter question effectively disposes of petitioner’s procedural challenge under the APA. However, since many of the same considerations are relevant to both issues, disposition of the APA issue is an unavoidable incident to disposition of the jurisdictional issue.

A. General Principles

The APA requires that before an agency adopts a substantive rule, it must publish a notice of the proposed rule and provide interested persons an opportunity to comment. 5 U.S.C. § 553. The FPC did not utilize this rulemaking procedure in adopting Order No. 467. However, section 553(b) (A) of the APA provides an exception to the general rule-making requirements:

Except when notice or hearing is required by statute, this subsection does not apply—
(A) to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice; ....

Id. § 553(b) (A) (emphasis added).12 The Commission maintains that Order No. 467 was exempt from the rulemaking requirements because it is a “general statement of policy” within the meaning of section 553(b)(A).

The APA never defines “general statements of policy” but it does define “rule” to

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Marcellus Shale Coalition v. DEP, Aplts.
Supreme Court of Pennsylvania, 2023
National Mining Association v. Gina McCarthy
758 F.3d 243 (D.C. Circuit, 2014)
Bethlehem Area School District v. Zhou
976 A.2d 1284 (Commonwealth Court of Pennsylvania, 2009)
Insurance Federation of Pennsylvania, Inc. v. Commonwealth
970 A.2d 1108 (Supreme Court of Pennsylvania, 2009)
Baldwin Health Center v. Department of Public Welfare
755 A.2d 86 (Commonwealth Court of Pennsylvania, 2000)
Chemical Manufacturers Ass'n v. Environmental Protection Agency
26 F. Supp. 2d 180 (District of Columbia, 1998)
Physicians Insurance v. Callahan
648 A.2d 608 (Commonwealth Court of Pennsylvania, 1994)
Environment Now! v. Espy
877 F. Supp. 1397 (E.D. California, 1994)
METROPOLITAN SCHOOL DIST. OF WAYNE TP. v. Davila
770 F. Supp. 1331 (S.D. Indiana, 1991)
Prudential Property & Casualty Insurance v. Department of Insurance
595 A.2d 649 (Commonwealth Court of Pennsylvania, 1991)
Department of Environmental Resources v. Rushton Mining Co.
591 A.2d 1168 (Commonwealth Court of Pennsylvania, 1991)
United States Court of Appeals, Third Circuit
869 F.2d 719 (Third Circuit, 1989)
Information Systems & Networks Corp. v. Abdnor
687 F. Supp. 674 (District of Columbia, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
506 F.2d 33, 164 U.S. App. D.C. 371, 1974 WL 333571, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacific-gas-electric-co-v-federal-power-commission-cadc-1974.