283 F.2d 204 (D.C. Cir. 1960), 14975, Michigan Consol. Gas Co. v. Federal Power Commission

Docket Nº14975-14977, 15061, 15065, 15070, 15073, 15074, 15077, 15093, 15144.
Citation283 F.2d 204
Party NameMICHIGAN CONSOLIDATED GAS COMPANY, a corporation, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Michigan Gas Utilities Company et al., Central Illinois Light Company, Michigan Gas Storage Company, City of Indianapolis, Indiana, Northern Indiana Fuel& Light Co., Southeastern Michigan Gas Co., Citizens Gas
Case DateApril 29, 1960
CourtUnited States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 204

283 F.2d 204 (D.C. Cir. 1960)

MICHIGAN CONSOLIDATED GAS COMPANY, a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Michigan Gas Utilities Company et al., Central Illinois Light Company, Michigan Gas Storage Company, City of Indianapolis, Indiana, Northern Indiana Fuel& Light Co., Southeastern Michigan Gas Co., Citizens Gas Fuel Company, Missouri Power& Light Company, Missouri Public Service Company, Central Illinois Public Service Company, Illinois Power Company, Illinois Commerce Commission, Missouri Public Service Commission, Public Service Commission of Indiana, Indiana Gas & Water Company, Inc., Intervenors.

MICHIGAN WISCONSIN PIPE LINE COMPANY, a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Missouri Public Service Company, Central Illinois Public Service Company, Intervenors.

AMERICAN LOUISIANA PIPE LINE COMPANY, a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Missouri Public Service Company, Central Illinois Public Service Company, Intervenors.

COUNTY OF WAYNE, MICHIGAN, a municipal corporation and body politic, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

MILWAUKEE GAS LIGHT COMPANY, a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

WISCONSIN FUEL AND LIGHT COMPANY et al., Petitioners,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

NATURAL GAS DISTRIBUTORS, INC., a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

STATE OF WISCONSIN and Public Service Commission of Wisconsin, Petitioners,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

CITY OF DETROIT, MICH., a municipal corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

WISCONSIN PUBLIC SERVICE CORPORATION, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Intervenor.

MICHIGAN CONSOLIDATED GAS COMPANY, a corporation, Petitioner,

v.

FEDERAL POWER COMMISSION, Respondent, Panhandle Eastern Pipe Line Company, Central Illinois Light Company, Michigan Gas Utilities Company, Battle CreekGas Company, Michigan Gas Storage Company, Missouri Power & Light Company, Missouri Public Service Company, Illinois Power Company, Illinois Commerce Commission, Missouri Public Service Commission, Indiana Gas & Water Company, Inc., Intervenors.

Nos. 14975-14977, 15061, 15065, 15070, 15073, 15074, 15077, 15093, 15144.

United States Court of Appeals, District of Columbia Circuit.

April 29, 1960

Argued Oct. 1, 1959.

Petitions for Rehearing Denied July 11, 1960.

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Mr. Charles V. Shannon, Washington, D.C., with whom Messrs, Stanley M. Morley and Richard F. Generelly, Washington, D.C., were on the brief, for petitioners in Nos. 14975, 14976, 14977, and 15144, argued for all petitioners.

Mr. Leonard Simons, Detroit, Mich., of the bar of the Supreme Court of Michigan, pro hac vice, by special leave of Court, with whom Mr. Mitchell J. Cooper, Washington, D.C., was on the brief, for petitioner in No. 15061.

Mr. Glen H. Bell, Madison, Wis., with whom Messrs. Charles P. Seibold, Madison, Wis., and George Bunn, Washington, D.C., were on the brief, for petitioners in No. 15070.

Mr. William E. Torkelson, Midison, Wis., for petitioners in No. 15074.

Mr. J. Parket Connor, Washington, D.C., with whom Messrs. Charles S. Rhyne and Lenox G. Cooper, Washington, D.C., were on the brief, for petitioner in No. 15077.

Mr. Seymour Tabin, Chicago, Ill., with whom Mr. Julius Tabin, Chicago, Ill., was on the brief, for petitioner in No. 15093.

Mr. Robert L. Russell, Ast. Gen. Council, Federal Power Commission, with whom Messrs. Willard W. Gatchell, General Counsel, Federal Power Commission, and Howard E. Wahrenbrock, Solicitor, Federal Power Commission, were on the brief, for respondent.

Mr. Raymond N. Shibley, Washington, D.C., with whom Mr. Richard P. Taylor, Washington, D.C., was on the brief, for intervenor Panhandle Eastern Pipe Line Company.

Mr. J. W. McAuliffe, Detroit, Mich., of the bar of the Supreme Court of Michigan, pro hac vice, by special leave of Court, with whom Mr. Thomas J. Lynch, Washington, D.C., was on the brief, for intervenors Battle Creek Gas Company. Michigan Gas Utilities Company, Northern Indians Fuel & Light Company, and Southeastern Michigan Gas Company in No. 14975.

Mr. Patrick J. Smith, Indianapolis, Ind., of the bar of the Supreme Court of Indiana, pro hac vice, by special leave of Court, with whom Mr. John H. Pratt, Washington, D.C., was on the brief, for intervenor City of Indianapolis, Indiana in No. 14975.

Mr. H. R. Begley, Chicago, Ill., of the bar of the Supreme Court of Illinois, pro hac vice, by special leave of Court, with whom Mr. Earle W. Wallick, Washington, D.C., was on the brief, for intervenor Illinois Commerce Commission in Nos. 14975 and 15144.

Messrs. Vernon A. Swanson, Milwaukee, Wis., and George P. Lamb, Washington, D.C., were on the brief for petitioner in No. 15065.

Mr. John Wattawa, Washington, D.C., was on the brief for petitioner in No. 15073.

Mr. John T. Miller, Jr., Washington, D.C., was on the brief for intervenor Citizens Gas Fuel Company in No. 14975.

Mr. Bradford Ross, Washington, D.C., entered an appearance for intervenor Central Illinois Light Company in Nos. 14975 and 15144.

Mr. Edwin Robbins and Lawrence A. Baker, New York City, entered appearances for intervenor Michigan Gas Storage Company in Nos. 14975 and 15144.

Mr. Robert E. Losch, Washington, D.C., entered an appearance for intervenor Missouri Power & Light Company in Nos. 14975 and 15144.

Messrs. Charles E. McGee and Francis H. Caskin, Washington, D.C., entered

Page 209

appearances for intervenor Missouri Public Service Company in Nos. 14975, 14976, 14977 and 15144.

Mr Moultrie Hitt Washington, D.C., entered an appearance for intervenor Central Illinois Public Service Company in Nos. 14975, 14976 and 14977.

Mr. James D. Williams, Jr., Washington, D.C., entered an appearance for intervenor Illinois Power Company in Nos. 14975 and 15144.

Mr. Thomas J. Downey, Jefferson City, Mo., entered an appearance for intervenor Missouri Public Service Commission in Nos. 14975 and 15144.

Messrs. Donald E. Vankoughnet and Joseph H. Lesh, Washington, D.C., entered appearances for intervenor Public Service Commission of Indiana in No. 14975.

Mr. A. L. Wheeler, Washington, D.C., entered an appearance for intervenor Indiana Gas & Water Company, Inc., in Nos. 14975 and 15144.

Before BAZELON, WASHINGTON and BURGER, Circuit Judges.

BAZELON, Circuit Judge.

This proceeding is another encounter in a long running battle between Panhandle Eastern Pipe Line Company ('Panhandle') and American Natural Gas Company ('American Natural') the dominant corporations in two of the largest natural gas systems serving the Midwest. 1 Their difficulties arose shortly after Panhandle and American Natural's subsidiary, Michigan Consolidated Gas Company ('Michigan Consolidated') entered into a contract in 1935 which, as amended, required Panhandle, an interstate natural gas transportation company, to furnish Michigan Consolidated, a local gas utility serving Detroit and environs, with 127,000 Mcf of natural gas per day. 2 The orders of the Federal Power Commission here under review, promulgated after one of the longest hearings in the history of the commission, granted Panhandle the right to abandon this service. 3

I. Background

The gas delivered under the 1935 agreement originally constituted Michigan

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Consolidated's sole supply of natural gas. But Panhandle's deliveries failed to keep pace with the growth of the Detroit market and by 1945, Michigan Consolidated was forced to turn to other sources. It organized through its parent, American Natural, two interstate pipe lines--Michigan Wisconsin Pipe Line Company ('Michigan Wisconsin') and American Louisiana Pipe Line Company ('American Louisiana')-- to bring gas to the Great Lakes area from Texas and Louisiana. Each of these companies now sells some gas to Michigan Consolidated for resale in the Detroit area; the balance is sold through Michigan Wisconsin to local utility companies, for resale in their respective markets. 4

Panhandle obtains gas from both independent producers and its own large reserves in Texas, Oklahoma and Kansas. Its pipe line extends from these gas fields to northern termini in Michigan. Panhandle sells its gas in the intervening states to two main classes of customers: (1) independent local utilities (some 60 in number) who resell primarily, but not exclusively, to domestic and commercial space heating consumers; (2) industrial customers who use the gas as industrial fuel. Significantly, the sale of gas to utilities for resale is subject to the regulatory jurisdiction of the Commission; sales made directly to industrial customers are not. 5

There are strong indications that one of Panhandle's primary purposes in seeking abandonment is to shift gas from regulated to unregulated sales. According to the Commission, 'at least part of the trouble (between Panhandle and Michigan Consolidated) seems to have arisen from competition (between them) to serve industrial consumers in the Detroit area.' 6 Another factor, which clearly appears from the 'chronical of (their) disputes and litigation,' 7 is Panhandle's failure to enlarge its pipe line capacity to satisfy the great demand...

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