Public Utilities Commission Of The State Of Colorado v. Federal Energy Regulatory Commission

660 F.2d 821, 213 U.S. App. D.C. 1, 1981 U.S. App. LEXIS 18296
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 24, 1981
Docket80-1117
StatusPublished
Cited by7 cases

This text of 660 F.2d 821 (Public Utilities Commission Of The State Of Colorado 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
Public Utilities Commission Of The State Of Colorado v. Federal Energy Regulatory Commission, 660 F.2d 821, 213 U.S. App. D.C. 1, 1981 U.S. App. LEXIS 18296 (D.C. Cir. 1981).

Opinion

660 F.2d 821

213 U.S.App.D.C. 1, 44 P.U.R.4th 261

PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Gas Research Institute, Northern Distributor Group, American
Gas Association, Interstate Natural Gas
Association of America, Intervenors.

No. 80-1117.

United States Court of Appeals,
District of Columbia Circuit.

Argued April 2, 1981.
Decided Aug. 24, 1981.

Petition for Review of an Order of the Federal Energy Regulatory commission.

Eugene C. Cavaliere, Asst. Atty. Gen., State of Colo., Denver, Colo., for petitioner.

A. Karen Hill, Atty., Federal Regulatory Commission, Washington, D. C., with whom Robert R. Nordhaus, Gen. Counsel and Jerome Nelson, Sol., Federal Energy Regulatory Commission, Washington, D. C., were on the brief, for respondent. Rhodell G. Fields, Atty., Federal Energy Regulatory Commission, Washington, D. C., also entered an appearance for respondent.

Christopher T. Boland, Washington, D. C., with whom James M. Broadstone, Washington, D. C., was on the brief, for intervenor, Gas Research Institute.

David J. Muchow, Arlington, Va., and John A. Myler, Washington, D. C., were on the brief, for intervenor, American Gas Association.

Peter H. Schiff, Gen. Counsel, Public Service Commission of the State of New York, Albany, N. Y., Richard A. Solomon, Washington, D. C., were on the brief, for amicus curiae Public Service Commission of the State of New York urging affirmance.

George C. Mastor, Minneapolis, Minn., and Ned Willis, Perry, Iowa, entered appearances for intervenors, Northern Distributors Group.

Lawrence V. Robertson, Jr., Washington, D. C., entered an appearance for intervenor Interstate Natural Gas Association of America.

Before MIKVA and EDWARDS, Circuit Judges, and VAN PELT,* Senior District Judge for the District of Nebraska.

Opinion for the court filed by Senior District Judge VAN PELT.

VAN PELT, Senior District Judge:

Petitioner seeks review of Opinion No. 64, Docket No. RP79-75 (Oct. 2, 1979) of the Federal Energy Regulatory Commission (referred to herein as FERC or "the Commission"). Opinion No. 64 substantially approved Gas Research Institute's (GRI's) 1980 research and development (R & D) program, and the related 1980-84 five-year R & D plan, and allowed GRI's jurisdictional members to collect a general R & D funding unit of 4.8 mills per Mcf1 in their rates for sales of natural gas. Petitioner's argument both before the Commission and this court is that FERC had no jurisdiction to approve the program of funding because:

1. GRI is not a natural gas company and does not engage in the transportation or sale of natural gas in interstate commerce, and therefore FERC has no jurisdiction over GRI; and

2. Even if FERC had jurisdiction over GRI, some of the R & D projects planned by GRI fall outside the jurisdiction of FERC and such costs cannot be imposed upon consumers of natural gas.

Before deciding these issues, it may be helpful to review briefly the functions and purpose of both FERC and GRI.

FERC came into being on October 1, 1977 pursuant to the provisions of the Department of Energy Organization Act of August 4, 1977, Pub.L.No.95-91, 91 Stat. 565 (codified at 42 U.S.C. § 7101 et seq.) and Executive Order No. 12009, 42 Fed.Reg. 46267 (Sept. 13, 1977). It assumed the functions and regulatory responsibilities of the Federal Power Commission (FPC) on that date. Under the Natural Gas Act, 15 U.S.C. § 717 et seq., FERC has the authority to regulate the interstate transportation and sale of natural gas by natural gas companies. See § 717(b).2 A natural gas company is defined in § 717a as a person or corporation "engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale."

The best brief description of GRI's membership and purpose appears in Opinion No. 64, which states:

GRI was incorporated on July 8, 1976, under the General Illinois Not for Profit Corporation Act. GRI does not engage directly in research, development and demonstration activities. It is a planning and managing organization which engages in such activities through RD&D project contracts with laboratories, universities and others. As of March 1979, GRI had 190 members 28 interstate pipeline members, 136 distribution company members, 24 municipal utility members, and two associate members.3

Prior to GRI's incorporation in 1976, the natural gas industry's research efforts were carried on collectively under the auspices of the American Gas Association (AGA) which is a trade association currently representing some 300 companies involved in the transportation and distribution of natural gas. AGA has filed a brief as an intervenor in this proceeding. Their brief indicates that AGA's first research project was undertaken in 1923 and such research has gradually been expanded through the years until by 1976 AGA had some 90 individual research projects divided into five major areas.4 The research done by AGA was broad in scope, and this trend has been continued by its successor in interest, GRI.5

The first issue for our consideration is whether the Commission has any jurisdiction to approve GRI's research and development program and budget, not just the specific items contained within it. Petitioner contends that the Natural Gas Act does not confer any jurisdiction upon FERC to entertain or rule upon an application filed by a corporation which is not a natural gas company and does not sell or transport gas in interstate commerce. FERC has recognized that GRI is not a natural gas company within the meaning of § 717a(6). In opinion 11, which was an approval of GRI's first request for R & D advance approval in 1977, the Commission specifically stated:

GRI is not and does not propose to become a "natural gas company" within the meaning of Section 2(6) of the Natural Gas Act and, as a result, it is not and does not propose to become subject to our continuous jurisdiction.

The Commission went on to find, however, that because GRI was a R & D organization supported by the natural gas industry, it fell within the Commission's regulation of R & D organizations in 18 C.F.R. § 154.38(d)(5) and its initial application fell within Sections 4, 8, 15 and 16 of the Natural Gas Act,6 and that future annual applications would be submitted under the ratemaking authority granted to the Commission in Section 4 of the Act.

Section 4 of the Act, 15 U.S.C.

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660 F.2d 821, 213 U.S. App. D.C. 1, 1981 U.S. App. LEXIS 18296, Counsel Stack Legal Research, https://law.counselstack.com/opinion/public-utilities-commission-of-the-state-of-colorado-v-federal-energy-cadc-1981.