694 F.2d 778
224 U.S.App.D.C. 212
The PROCESS GAS CONSUMERS GROUP, et al., Petitioners,
v.
U.S. DEPARTMENT OF AGRICULTURE, Bob Bergland, Secretary of
Agriculture, Respondents,
United Gas Pipe Line Company, et al., Intervenors.
UNITED GAS PIPE LINE COMPANY, Petitioner,
v.
U.S. DEPARTMENT OF AGRICULTURE, Bob Bergland, Secretary of
Agriculture, Respondents,
Transcontinental Gas Pipe Line Corporation, et al., Intervenors.
The PROCESS GAS CONSUMERS GROUP, et al., Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
American Bakers Association, et al., Intervenors.
COLUMBIA GAS TRANSMISSION CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
United Distribution Companies, the United States Brewers
Association, Inc., Public Service Commission of New York,
Consolidated Gas Supply Corporation, Great Western Sugar
Company, Tennessee Gas Pipeline Co., Intervenors.
UNITED DISTRIBUTION COMPANIES, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Consolidated Gas Supply Corporation, Intervenor.
UNITED DISTRIBUTION COMPANIES, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The BROOKLYN UNION GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Public Service Commission of New York, Intervenor.
STATE OF LOUISIANA, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
COLUMBIA NITROGEN CORPORATION and Nipro, Inc., Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
FIRST MISSISSIPPI CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ATLANTA GAS LIGHT COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
FIRST MISSISSIPPI CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
UNITED GAS PIPE LINE COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The PROCESS GAS CONSUMERS GROUP, American Industrial Clay
Company of Sandersville and Georgia Kaolin
Company, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ALLIED CHEMICAL CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
STATE OF LOUISIANA, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The FERTILIZER INSTITUTE, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
COLUMBIA GAS TRANSMISSION CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The BROOKLYN UNION GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
UNITED DISTRIBUTION COMPANIES, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
NATIONAL FOOD PROCESSORS ASSOCIATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ATLANTA GAS LIGHT COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
No. 79-1336.
United States Court of Appeals,
District of Columbia Circuit.
Argued En Banc April 13, 1982.
Decided Oct. 1, 1982.
Jerome M. Feit, Sol., F.E.R.C., Washington, D.C., with whom George H. Williams, Jr., Atty., F.E.R.C., Washington, D.C., was on the rehearing brief on Section II.A for respondents.
Edward J. Grenier, Jr., Richard P. Nolan, Robert W. Clark, III, and William H. Penniman, Washington, D.C., for the Process Gas Consumers Group, C. William Cooper, Falmouth, Mass., Richard M. Merriman, and John R. Schaefgen, Jr., Washington, D.C., for United Distribution Companies, Lewis Carroll, Birmingham, Ala., and Gordon Grant, Washington, D.C., for Washington Gas Light Co., Joseph P. Stevens and Alvin Adelman, Brooklyn, N.Y., for the Brooklyn Union Gas Co. and Richard A. Solomon, Washington, D.C., for The Public Service Commission of the State of N.Y. were on the rehearing brief on Section II.A for petitioners.
Steven A. Herman, Washington, D.C., for American Bakers Ass'n and The Fertilizer Institute with whom William A. Mogel, Washington, D.C., for American Meat Institute, et al., Joseph M. Creed, Washington, D.C., for Biscuit & Cracker Mfrs' Ass'n, Joseph S. Fontana, Washington, D.C., for Corn Refiners Ass'n, Albert J. Feigen, Washington, D.C., for American Sugar Cane League of the U.S.A., Inc., Richard S. Harrell, Washington, D.C., for Distilled Spirits Council of the U.S., Inc., Margaret M. Huff and Michael J. Huston, Indianapolis, Ind., for Eli Lilly Co., Gerard Paul Panaro, Washington, D.C., for Retail Bakers of America, James W. Riddell, Washington, D.C., for U.S. Brewers Ass'n, Inc., Keith R. McCrea, Washington, D.C., for Glass Packaging Institute, Donald A. Frederick, Washington, D.C., for National Council of Farmers Co-op., Edwin H. Pewett and Michael J. Ruane, Washington, D.C., for National Meat Ass'n, and Frederic G. Berner, Jr., Washington, D.C., for National Soybean Processors Ass'n were on the joint rehearing brief on Section II.A for Agriculture intervenors.
Anthony J. Steinmeyer and Bruce G. Forrest, Attys., Dept. of Justice and Terrence G. Jackson, Atty., Dept. of Agriculture, Washington, D.C., were on the rehearing brief on Section II.A for respondent, U.S. Dept. of Agriculture.
Gregory Grady, Washington, D.C., with whom Michael J. McDonald, Nicholas W. Fels, K. Gregory Tucker, Washington, D.C., Thomas E. Midyett, Knoxville, Tenn., A.S. Lacy and Roy R. Robertson, Jr., Birmingham, Ala., were on the joint rehearing brief on Section II.A for petitioners, Midwestern Gas Transmission Co., et al.
John R. Holtzinger, Jr., Paul H. Keck, John T. Stough, Jr., and Brian R. Gish, Washington, D.C., for Atlanta Gas Light Co. and William I. Harkaway and G. Douglas Essy, Chicago, Ill., for Consol. Edison Co. of New York, Inc. were on the joint rehearing brief on Section II.A for respondents.
David B. Robinson and James R. Patton, Jr., Washington, D.C., for the State of La., Nicholas W. Fels, Washington, D.C., for Air Products and Chemicals, Inc., et al., and Michael J. Manning, Washington, D.C., for Entex were on the joint rehearing brief on Section I.C for petitioners.
D. Knox Bemis, Washington, D.C., with whom W. DeVier Pierson, Richard A. Yarmey, Washington, D.C., and Sheila Jackson Lee, Houston, Tex., were on the rehearing brief on Section I.C for petitioners, United Gas Pipe Line Co.
Joel M. Cockrell, Atty., F.E.R.C., Washington, D.C., with whom Jerome M. Feit, Sol., and George H. Williams, Jr., Atty., F.E.R.C., Washington, D.C., were on the rehearing brief on Section I.C for respondent.
Joseph P. Stevens and Alvin Adelman, Brooklyn, N.Y., for The Brooklyn Union Gas Co., Richard A. Solomon, Washington, D.C., and David D'Alessandro for the Public Service Com'n of the State of N.Y., Inc. and Lewis Carroll, Birmingham, Ala., and Gordon M. Grant, Washington, D.C., for Washington Gas Light Co. were on the joint rehearing brief on Section I.C for respondents.
Free access — add to your briefcase to read the full text and ask questions with AI
694 F.2d 778
224 U.S.App.D.C. 212
The PROCESS GAS CONSUMERS GROUP, et al., Petitioners,
v.
U.S. DEPARTMENT OF AGRICULTURE, Bob Bergland, Secretary of
Agriculture, Respondents,
United Gas Pipe Line Company, et al., Intervenors.
UNITED GAS PIPE LINE COMPANY, Petitioner,
v.
U.S. DEPARTMENT OF AGRICULTURE, Bob Bergland, Secretary of
Agriculture, Respondents,
Transcontinental Gas Pipe Line Corporation, et al., Intervenors.
The PROCESS GAS CONSUMERS GROUP, et al., Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
American Bakers Association, et al., Intervenors.
COLUMBIA GAS TRANSMISSION CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
United Distribution Companies, the United States Brewers
Association, Inc., Public Service Commission of New York,
Consolidated Gas Supply Corporation, Great Western Sugar
Company, Tennessee Gas Pipeline Co., Intervenors.
UNITED DISTRIBUTION COMPANIES, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Consolidated Gas Supply Corporation, Intervenor.
UNITED DISTRIBUTION COMPANIES, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The BROOKLYN UNION GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Public Service Commission of New York, Intervenor.
STATE OF LOUISIANA, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
COLUMBIA NITROGEN CORPORATION and Nipro, Inc., Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
FIRST MISSISSIPPI CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ATLANTA GAS LIGHT COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
FIRST MISSISSIPPI CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
UNITED GAS PIPE LINE COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The PROCESS GAS CONSUMERS GROUP, American Industrial Clay
Company of Sandersville and Georgia Kaolin
Company, Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ALLIED CHEMICAL CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
STATE OF LOUISIANA, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The FERTILIZER INSTITUTE, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
COLUMBIA GAS TRANSMISSION CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
The BROOKLYN UNION GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
UNITED DISTRIBUTION COMPANIES, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
NATIONAL FOOD PROCESSORS ASSOCIATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
ATLANTA GAS LIGHT COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
No. 79-1336.
United States Court of Appeals,
District of Columbia Circuit.
Argued En Banc April 13, 1982.
Decided Oct. 1, 1982.
Jerome M. Feit, Sol., F.E.R.C., Washington, D.C., with whom George H. Williams, Jr., Atty., F.E.R.C., Washington, D.C., was on the rehearing brief on Section II.A for respondents.
Edward J. Grenier, Jr., Richard P. Nolan, Robert W. Clark, III, and William H. Penniman, Washington, D.C., for the Process Gas Consumers Group, C. William Cooper, Falmouth, Mass., Richard M. Merriman, and John R. Schaefgen, Jr., Washington, D.C., for United Distribution Companies, Lewis Carroll, Birmingham, Ala., and Gordon Grant, Washington, D.C., for Washington Gas Light Co., Joseph P. Stevens and Alvin Adelman, Brooklyn, N.Y., for the Brooklyn Union Gas Co. and Richard A. Solomon, Washington, D.C., for The Public Service Commission of the State of N.Y. were on the rehearing brief on Section II.A for petitioners.
Steven A. Herman, Washington, D.C., for American Bakers Ass'n and The Fertilizer Institute with whom William A. Mogel, Washington, D.C., for American Meat Institute, et al., Joseph M. Creed, Washington, D.C., for Biscuit & Cracker Mfrs' Ass'n, Joseph S. Fontana, Washington, D.C., for Corn Refiners Ass'n, Albert J. Feigen, Washington, D.C., for American Sugar Cane League of the U.S.A., Inc., Richard S. Harrell, Washington, D.C., for Distilled Spirits Council of the U.S., Inc., Margaret M. Huff and Michael J. Huston, Indianapolis, Ind., for Eli Lilly Co., Gerard Paul Panaro, Washington, D.C., for Retail Bakers of America, James W. Riddell, Washington, D.C., for U.S. Brewers Ass'n, Inc., Keith R. McCrea, Washington, D.C., for Glass Packaging Institute, Donald A. Frederick, Washington, D.C., for National Council of Farmers Co-op., Edwin H. Pewett and Michael J. Ruane, Washington, D.C., for National Meat Ass'n, and Frederic G. Berner, Jr., Washington, D.C., for National Soybean Processors Ass'n were on the joint rehearing brief on Section II.A for Agriculture intervenors.
Anthony J. Steinmeyer and Bruce G. Forrest, Attys., Dept. of Justice and Terrence G. Jackson, Atty., Dept. of Agriculture, Washington, D.C., were on the rehearing brief on Section II.A for respondent, U.S. Dept. of Agriculture.
Gregory Grady, Washington, D.C., with whom Michael J. McDonald, Nicholas W. Fels, K. Gregory Tucker, Washington, D.C., Thomas E. Midyett, Knoxville, Tenn., A.S. Lacy and Roy R. Robertson, Jr., Birmingham, Ala., were on the joint rehearing brief on Section II.A for petitioners, Midwestern Gas Transmission Co., et al.
John R. Holtzinger, Jr., Paul H. Keck, John T. Stough, Jr., and Brian R. Gish, Washington, D.C., for Atlanta Gas Light Co. and William I. Harkaway and G. Douglas Essy, Chicago, Ill., for Consol. Edison Co. of New York, Inc. were on the joint rehearing brief on Section II.A for respondents.
David B. Robinson and James R. Patton, Jr., Washington, D.C., for the State of La., Nicholas W. Fels, Washington, D.C., for Air Products and Chemicals, Inc., et al., and Michael J. Manning, Washington, D.C., for Entex were on the joint rehearing brief on Section I.C for petitioners.
D. Knox Bemis, Washington, D.C., with whom W. DeVier Pierson, Richard A. Yarmey, Washington, D.C., and Sheila Jackson Lee, Houston, Tex., were on the rehearing brief on Section I.C for petitioners, United Gas Pipe Line Co.
Joel M. Cockrell, Atty., F.E.R.C., Washington, D.C., with whom Jerome M. Feit, Sol., and George H. Williams, Jr., Atty., F.E.R.C., Washington, D.C., were on the rehearing brief on Section I.C for respondent.
Joseph P. Stevens and Alvin Adelman, Brooklyn, N.Y., for The Brooklyn Union Gas Co., Richard A. Solomon, Washington, D.C., and David D'Alessandro for the Public Service Com'n of the State of N.Y., Inc. and Lewis Carroll, Birmingham, Ala., and Gordon M. Grant, Washington, D.C., for Washington Gas Light Co. were on the joint rehearing brief on Section I.C for respondents.
Before ROBINSON, Chief Judge, WILKEY, WALD, MIKVA, EDWARDS and GINSBURG, Circuit Judges, and ROBB, Senior Circuit Judge.
PER CURIAM:
The court's opinion in this case consists of the panel opinion of July 29, 1981, except for Parts II.A.2 and II.A.3, together with the en banc opinion of October 1, 1982. The court's order of November 13, 1981 granting rehearing en banc vacated Parts I.C and II.A of the panel opinion; the en banc opinion, however, reinstates Part II.A.1 of the panel opinion and adopts Part I.C of the panel opinion as the opinion of the en banc court.
Opinion for the Court filed by Circuit Judge WALD.
WALD, Circuit Judge:
We granted rehearing en banc in this case to determine whether the Federal Energy Regulatory Commission ("FERC" or "Commission") improperly construed its authority under sections 401 and 403 of the Natural Gas Policy Act of 1978 ("NGPA") with respect to integrating priority treatment for essential agricultural uses into ongoing curtailment plans. Under the NGPA, the Secretary of Agriculture ("Secretary") is instructed to certify amounts of natural gas required to supply "essential agricultural uses" so as to meet "full food and fiber production." The Commission is then instructed to implement the Secretary's certification by assuring that "to the maximum extent practicable" essential agricultural use requirements will not be curtailed unless doing so is necessary to meet the needs of the highest priority users: residential customers, small commercial establishments, schools, hospitals and other users for whom curtailment might be life threatening or might endanger physical property. In this case, the Commission ruled that its implementation authority under the NGPA is not sufficiently broad to allow it to limit implementation of certified essential agricultural requirements to those requirements reflected in "base-year" curtailment plans. Because we conclude that the Commission failed to exercise its authority to determine whether any modification to full implementation is appropriate to protect the interests of high priority users, and has therefore allowed an apparent reversal of statutory priorities to be carried out by default rather than by any considered analysis of curtailment policy, we reverse and remand this aspect of the Commission's decision.
I. BACKGROUND
Prior to passage of the NGPA, the Commission reviewed natural gas curtailment plans pursuant to its broad authority to regulate the interstate transportation of natural gas. Early on in the development of such plans, the Commission expressed a preference for "end-use" plans--that is, plans that would distribute natural gas according to the needs of the ultimate consumer. Residential consumers, for whom temporary curtailments could be life threatening, were given highest priority. Those for whom curtailment was considered to pose the least hardship--customers with "interruptible" contracts and those who used natural gas as a boiler fuel--were given lowest priority. Since curtailment plans only covered direct customers of interstate pipelines, there was no assurance that natural gas allotted to a distributor based on the high priority status of his customers would actually reach the preferred end-users. Nonetheless, the Commission stood by its position that end use plans would most equitably distribute natural gas. By the time the NGPA was enacted, the Commission's end use methodology was firmly established.
Section 401 of the NGPA was designed to remedy a gap in the standard end use scheme. As numerous legislators explained, standard end use plans did not provide any special protection for agricultural users of natural gas. Consequently, when natural gas supplies were short, agricultural users had to compete with large numbers of industrial users for the natural gas that remained following disbursal to preferred users. The ramifications of this priority schedule were far-reaching. In some cases, temporary shortages of natural gas were responsible for causing the complete destruction of agricultural products.
The remedy set forth by the NGPA was to give agricultural users a high priority, second only to the highest priority of residential users, small commercial establishments, hospitals, schools and other uses for which curtailments could be life threatening or dangerous to property. The statute provides a two step procedure for implementing this new priority system. First, the Secretary of Agriculture is instructed to certify, in volumetric or percentage terms, the natural gas requirements of agricultural users needed to meet full food and fiber production. Once these amounts have been certified, the Commission is instructed to reopen curtailment plans to provide, "to the maximum extent practicable," that essential agricultural users will only be curtailed when necessary to meet the requirements of the highest priority grouping.
In this case, a series of shifting positions by the Secretary and the Commission has resulted in a curtailment scheme in which some agricultural users are given preference over some users in the highest priority. In his initial notice of proposed rulemaking issued on November 20, 1978, the Secretary of Agriculture took the position that the Commission's traditional base year methodology would be inadequate to estimate the needs of agriculture. Under a base year methodology, a curtailment plan allocates natural gas to distributors according to an end use profile of their customers during a particular historical period. Thus, a distributor's allotment during curtailment does not include any provision for customers added on following the base year. Even when the new customers qualify for the highest priority classification, the fact that they were not serviced during the base year precludes priority treatment. Because of "the vagaries of weather whereby energy demands unpredictably vary from season to season and year to year," the Secretary proposed to replace the "impractical" historical base period concept with a certification of "100 percent of current requirements."
In its proposed rule issued two months after the Secretary's proposed rule, the Commission stood by its base period approach. The Commission explained that its "proposed rule is limited to the basis upon which the interstate pipeline now curtails." In the Commission's view, this approach would minimize disruption to existing curtailment plans, in accordance with the directions of the NGPA Conference Report, which stated that:
For purposes of implementing this section, the Commission is instructed to reopen curtailment plans that are already in effect under the Natural Gas Act only to the extent necessary to adjust those plans to bring them into conformity with the new curtailment priority schedule. The conferees were concerned that these changes not burden the Commission with lengthy proceedings which might throw existing curtailment plans into disarray. Therefore, the conference agreement includes the term "to the maximum extent practicable" to assure that the Commission has the necessary flexibility in implementing any changes. For example, the conferees do not intend the reopening of curtailment plans for this limited purpose to result in adoption of a new base year for curtailment purposes.
The Secretary of Agriculture's interim final rule, issued on February 8, 1979, cut back on the broad sweep of his proposed rule. Instead of certifying one hundred percent of current requirements for all agricultural users, the Secretary proposed a dual approach applying current requirements for small scale uses and a base year methodology for other essential agricultural uses. On March 6, 1979, the Commission accepted the Secretary's certification on an interim basis although it continued to state that the amount of permissible load growth was a "vital issue" deserving further comment. Following further consideration of its authority to limit agricultural load growth, the Commission reached the conclusion that it was without authority to cut back on the agricultural uses certified by the Secretary. The Commission explained that:
In the past, the Commission's policy has not favored load growth, i.e., increasing new customers or base period entitlements. However, the Commission's reading of the NGPA and the many comments and legal analysis provided it in the extensive record in this proceeding leads it to the conclusion that some agricultural load growth was intended by Congress.... Thus, to the extent that load growth is required by USDA rule and the agricultural users [sic] (or its local distributor) has the requisite contractual authority, it is the Commission's view that Congress intended that agricultural load growth be permitted.
Thus, when the Secretary subsequently returned to his initial proposal of certifying one hundred percent of current requirements for all essential agricultural uses, the Commission incorporated this certification on a permanent basis.
On petitions for review, a panel of this court agreed with the Commission that it was required to open curtailment plans not only to reorder priorities, but also to add demand representing agricultural load growth into the priority category for essential agricultural use. The panel recognized, however, that adding agricultural load growth, while continuing to exclude high priority load growth, would result in a seeming reversal of statutory priorities. This reversal of priorities may be illustrated by a simple example. Under the traditional, "base period," approach to curtailment, a distributor who provides 100,000 units of gas to residential customers today, but only provided 50,000 units in the relevant base period, will receive natural gas during curtailment based on only 50,000 units of use. The remaining 50,000 units of demand will stand outside the ambit of the curtailment plan, and will only be served if natural gas supplies exceed the total demand accounted for by the plan. As implemented by FERC the Secretary's definition of essential agricultural use upsets this standard plan by computing agricultural entitlements based on current demand. Thus, 100,000 units of agricultural demand will be accounted for in the plan even if there was only 50,000 units of demand in the base period. As this example readily shows, agricultural demand created between the base period and the date of curtailment receives preferential treatment with respect to analogous demand in the highest priority. Put more graphically the distributor who serves a family or hospital that installed a gas furnace following the base period is required to wait in line behind one who supplies natural gas to a newly built beer factory. The panel concluded that this reversal of statutory priorities places the priority schedule on its head, and remanded the Commission's rule with instructions to "draft a rule that does not in practice reverse the statutory scheme of section 401." The panel dissent, while agreeing that the Commission's rule should be remanded because it reverses the statutory scheme of priorities, argued that Title IV of the NGPA did not mandate a policy of agricultural load growth. The dissent concluded that the Commission should be allowed to "utilize its much needed 'expertise' to resolve this complex curtailment problem." We granted rehearing en banc on November 13, 1981. In this opinion we conclude that the Commission has authority to review the "practicability" of incorporating load growth for agricultural users into existing curtailment plans insofar as it has consequences for the Commission's curtailment policies regarding high priority users. Because the Commission erroneously considered itself bound to incorporate such load growth regardless of the consequences for natural gas markets or high priority users currently placed outside the ambit of curtailment plans, we remand for further consideration.
II. THE SCOPE OF THE COMMISSION'S AUTHORITY
As counsel for the Commission stated at oral argument, there is an inherent tension between section 401's delegation of certification responsibility to the Secretary and the statute's caveat that the certification need only be incorporated to "the maximum extent practicable." The Commission's opinion, however, does not seek to resolve this tension. Rather than giving content to the practicability language of section 401, the Commission concluded that it was simply bound by law to fashion a rule that would fully accommodate the Secretary's certification. In doing so, the Commission read out of the statute an important aspect of its responsibilities.
Section 401 plainly provides that essential agricultural uses need be assured second priority status only "to the maximum extent practicable." In adding this qualifying language, the conference committee expressed its concern that the more rigid language of the House and Senate bills would deprive the Commission of much needed flexibility. The conference committee proceeded to suggest that a "practicable" means for incorporating agriculture's heightened priority into existing curtailment plans would be to retain existing base years--that is, to raise agriculture's priority within existing curtailment plans without opening up such plans to accommodate the natural gas needs of users not on board in the base period. Notably, this proposed solution would have had no adverse impact on the highest priority grouping. Instead, a reordering of existing plans would have only affected the order in which priority groups lower than the highest priority grouping were to receive natural gas.
Although the conference report does not focus on the particular issue presented here--namely, the scope of the Commission's authority when the Secretary explicitly determines that a current requirement methodology would best serve agricultural goals--it does suggest that the Commission unduly abdicated responsibility in this case. Critical for present purposes is that the conference revisions sought to give the Commission flexibility so that it could integrate the new priority treatment for agriculture into existing curtailment plans without throwing those plans into disarray. Grafting a current requirements methodology onto a base period curtailment plan, however, could increase demand for natural gas to such a degree that it disrupts natural gas markets, and significantly increases the probability that new high priority users will be injured as a result of natural gas shortages. Although an assessment of the likelihood and scope of these consequences and the importance of avoiding them might still lead the Commission to decide that full implementation of the Secretary's current requirements methodology is nonetheless appropriate, the Commission made no such determination in this case. Instead it simply found itself "required by law" to adopt the Secretary's certification, no matter what the consequences might be.
Most disturbing in this case is that the Commission's narrow interpretation of its powers allows major curtailment decisions to be made without any analysis by any agency of the impact of those decisions on curtailment plans. Read together, the opinions of the Secretary and the Commission are reminiscent of Alphonse and Gaston. In undertaking the task of certifying essential agricultural uses, the Department of Agriculture claims no responsibility to consider the consequences of its decision. "Nowhere," it states, "does section 401 direct USDA to focus upon pipeline curtailment plans." Meanwhile, the Commission presents an interpretation of section 401 calling for complete deference to the Secretary's certification. The result of this dual denial of responsibility is a patchwork approach to curtailment policy that allows the needs of the second priority group to disrupt Commission policy geared to controlling instability in natural gas markets and protecting the interests of the higher priority users. This might occur even though it is long established in Commission practice that the growth needs of the highest priority grouping do not justify a blanket authorization of load growth. Since this result is not dictated by the statute, and could well frustrate Congress' manifest concern with protecting the needs of the highest priority group, we are loath to read section 401 as leaving no agency with responsibility to assess the consequences of fully incorporating a current requirements methodology. Given the Commission's traditional expertise in fashioning curtailment plans, and the statute's explicit provision that incorporation of the Secretary's certification may be conditioned on grounds of practicability, we have no doubt that the Commission is the most appropriate agency to perform this task.
In reaching this conclusion, we reject the Department of Agriculture's argument that partial implementation of the Secretary's certification would render the Secretary's certification a nullity. Fulfillment by the Commission of its statutory responsibility to assess the practicability of implementing methodologies, will not undermine the fundamental task assigned to the Secretary: namely, to identify agricultural uses that are "essential" and to assess what proportion of its natural gas demand an agricultural user must receive to allow for full food and fiber production. Although the Secretary's certification might be modified in accordance with considerations of practicability and the needs of high priority users, these modifications would reflect factors that the statute requires be accounted for and that the Secretary has neither the expertise nor the willingness to take into account in his certification decision. So long as the Commission recognizes that it has no authority to reassess the needs of agriculture, and modifications of full implementation are rationally based on an assessment of the practicability of full implementation and its impact on the legitimate needs of high priority users as the Commission defines them, the Commission would properly act within its statutory bounds.
Nor do we agree with the Department's suggestion that we should defer to the Commission's interpretation of its responsibilities, in accordance with the traditional deference afforded to an agency charged with administering its governing statutes. The extent to which courts should defer to agency interpretations of law is ultimately "a function of Congress' intent on the subject as revealed in the particular statutory scheme at issue." Thus, when Congress delegates full responsibility to an agency to implement a statute, but provides little guidance on how the governing statute should be interpreted, common sense suggests that Congress would wish courts to consider agency views on questions of law that are "closely related ... to the everyday administration of the statute and to the agency's administrative or substantive expertise." Indeed, in some cases, administrative interpretations might be deserving of "legislative effect." The underlying logic for deference, however, largely depends on the agency having "primary responsibility" for administering a statute, so that its interpretation may fairly be characterized as being infused with the agency's expertise. In this case, the Commission concedes that its reading of section 401 of the NGPA is not informed by notions of how best to implement national curtailment policy. Instead, the Commission simply asserts that under the language and history of the statute, its hands are tied, no matter how disastrous the implications of its interpretation. But even the Commission must acknowledge that its shifting interpretation of its statutory authority bespeaks of an ambiguity in the statute's language and legislative history. Under these circumstances, courts have an undeniable responsibility to determine whether the agency has construed its powers too narrowly.
CONCLUSION
By narrowly interpreting its authority under the NGPA, the Commission may have allowed agricultural load growth to squeeze out new high priority users without any assessment of whether that result is compatible with overall curtailment policy. In this opinion, we hold that section 401's practicability language gives the Commission flexibility to adjust the Secretary's certification when so doing will appropriately advance the interests of high priority users. Because the Commission considered itself powerless to follow any course other than full implementation of a current requirements methodology for agricultural users, we remand for further proceedings.
APPENDIX
ORDER GRANTING REHEARING EN BANC
Order granted November 13, 1981.
Before ROBINSON, Chief Judge, WRIGHT, TAMM, MacKINNON, ROBB, WILKEY, WALD, MIKVA, EDWARDS and GINSBURG, Circuit Judges.
Order PER CURIAM.
Suggestions for rehearing have been filed by the following parties:
(1) Southern Natural Gas Company
(2) Midwestern Gas Transmission Company and East Tennessee Natural Gas Company
(3) Washington Gas Light Company
(4) United Distribution Companies and the Brooklyn Union Gas Company
(5) United Gas Pipe Line Company
(6) Alabama Gas Corporation
(7) The State of Louisiana
(8) Process Gas Consumers Group, American Industrial Clay Company of Sandersville, and Georgia Kaolin CompanyOn consideration of the foregoing, it is
ORDERED by the Court en banc that the aforesaid suggestions are granted and, it is
FURTHER ORDERED by the Court en banc that Sections I.C and II.A of the Court's opinion, and the corresponding parts of the judgment of the Court, both issued on July 29, 1981 be, and the same hereby are, vacated.
The Court will issue an order to govern further proceedings in these cases at a later date.
MacKINNON and ROBB, Circuit Judges, would deny the suggestions for rehearing en banc.
WRIGHT and TAMM, Circuit Judges, did not participate in this order.