503 F.2d 844 (5tht Cir. 1974), 73-3478, State of La. v. Federal Power Com'n

Docket Nº:73-3478.
Citation:503 F.2d 844
Party Name:STATE OF LOUISIANA, Louisiana Municipal Association and Parish of Cameron, et al., Petitioners, v. FEDERAL POWER COMMISSION, Respondent.
Case Date:November 08, 1974
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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503 F.2d 844 (5tht Cir. 1974)

STATE OF LOUISIANA, Louisiana Municipal Association and

Parish of Cameron, et al., Petitioners,



No. 73-3478.

United States Court of Appeals, Fifth Circuit

November 8, 1974

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

        , Rehearing and Rehearing En Banc Denied Dec. 13, 1974.

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        Arnold D. Berkeley, Washington, D.C., William J. Guste, Atty. Gen., Baton Rouge, La., for State of Louisiana, Louisiana Municipal Assn. and Parish of Cameron.

        Richard M. Merriman, Peyton G. Bowman, III, Washington, D.C., Sherwood W. Wise, Richard B. Wilson, Jr., Wise, Carter, Child, Steen & Caraway, Jackson, Miss., for Mississippi Power and Light Co.

        John T. Miller, Jr., Washington, D.C., Richard W. Duesenberg, Monsanto Co., St. Louis, Mo., for Monsanto Co.

        John T. Miller, Jr., Washington, D.C., George W. Hugo, Texasgulf, Inc., Houston, Tex., for Texasgulf, Inc.

        John T. Miller, Jr., Washington, D.C., Richard Sexton, Vice President & Gen. Counsel, SCM Corp., New York City, for Allied Paper Inc.

        John F. Harrington, George J. Meiburger, Christopher T. Boland, Robert G. Hardy, Gallagher, Connor & Boland, Washington, D.C., Robert O. Koch, Steve H. Finch, Owensboro, Ky., for Texas Gas Transmission Corp.

        J. Evans Attwell, William P. Pannill, Vinson, Elkins, Searls, Connally & Smith, and Jack D. Head, Texas Eastern

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Transmission Corp., Houston, Tex., Platt W. Davis, III, Washington, D.C., for Texas Eastern Transmission Corp.

        Nelson Jones, Clayton L. Orn, Anderson, Brown, Orn, Pressler & Jones, Houston, Tex., for New Orleans Public Service, Inc.

        Wm, Warfield Ross, Wald, Harkrader & Ross, Washington, D.C., Stanley Plettman, Orgain, Bell & Tucker, Beaumont, Tex., for Gulf States Utilities Co.

        William B. Cassin, Vice President and General Atty., United Gas Pipe Line Co., Houston, Tex., w. DeVier Pierson, Peter J. Levin, Washington, D.C., for United Gas Pipe Line Co.

        William A. Smith, Harry L. Albrecht, Birmingham, Ala., for Southern Natural Gas Co.

        William W. Bedwell, Hohn J. Mullally, Bedwell & Mullally, Washington, D.C., James H. Wuller, Secretary & General Atty., Mississippi River Transmission Corp., St. Louis, Mo., for Mississippi River Transmission Corp.

        Norman A. Flaningam, Charles R. Brown, Washington, D.C., David E. Weatherwax, Philip L. Jones, Clarksburg, W. Va., James E. Wright, Jr., New Orleans, La., Henry P. Sullivan, Richard B. Gordon, Pittsburgh, Pa., for Consolidated Gas Supply Corp.

        Edward J. Grenier, Jr., Richard P. Noland, Richard J. Pierce, Jr., Sutherland, Asbill & Brennan, Washington, D.C., Ross L. Malone, William A. Vaughan, General motors Corp., Detroit, Mich., George Mabry, Johns-Manville Corp., Denver, Colo., for General Motors Corp. and Johns-Manville Corp.

        Sheldon A. Zabel, Raymond P. Buschmann, Schiff, Hardin & Waite, Chicago, Ill., for Illinois Power Co.

        Joseph M. Wells, Paul E. Goldstein, Chicago, Ill., for Natural Gas Pipeline Co. of America.

        John S. Schmid, Glendening & Schmid, Washington, D.C., for Boston Gas Co.

        Michael R. W. Green, LeBoeuf, Lamb, Leiby & MacRae, New York City, for St. Regis Paper Co.

        J. David Mann, Jr., Morgan, Lewis & Bockius, Washington, D.C., for Laclede Gas Co.

        William A. Wood, Jr., William G. Riddoch, Thomas G. Johnson, Houston, Tex., for Shell Oil Co.

        Bryce Rea, Jr., John R. Bagileo, Washington, D.C., for Willmut Gas and Oil Co.

        Jerome Ackerman, James R. McCotter, Washington, D.C., for Air Products and Chemicals, Inc., American Cyanamid Co., International Paper Co., Scott Paper Co., and Stauffer Chemical Co.

        Robert J. Haggerty, Charles E. McGee, John T. Ketcham, McGee & Ketcham, Washington, D.C., for Algonquin Gas Transmission Co.

        Albert J. Feigen, Washington, D.C., Paul G. Borron, Jr., Borron & Delahaye, Plaquemine, La., for American Sugar Cane League of the U.S.A., Inc.

        J. Parker Connor, Mullin, Connor & Rhyne, Washington, D.C., for First Chemical Corp.

        Richard A. Solomon, Wilner & Scheiner, Washington, D.C., Peter H. Schiff, Albany, N.Y., for Public Service Commission for the State of New York.

        Michael J. Manning, Fulbright, Crooker & Jaworski, Washington, D.C., Jefferson D. Giller, Fulbright, Crooker & Jaworski, Houston, Tex., for United Gas, Inc.

        Howard E. Wahrenbrock, Washington, D.C., John M. Kuykendall, Jr., Jackson, Miss., for Mississippi Valley Gas Co.

        Howard E. Wahrenbrock, Washington, D.C., John M. Kuykendall, Overstreet & Kuykendall, Jackson, Miss., for Three City Gate Customers, Mobile Gas Service Corp., Mississippi Valley Gas Co., and Clarke-Mobile Counties Gas Dist.

        Carroll L. Gilliam, Grove, Jaskiewicz & Gilliam, Washington, D.C., for Industrial Gas Users.

        Jerome Ackerman, James R. McCotter, Washington, D.C., for International Paper Co.

        Andrew P. Carter, New Orleans, La., for Louisiana Power & Light Co.

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        John W. Glendening, Jr., Washington, D.C., for Boston Gas Co.

        Leo E. Forquer, Gen. Counsel, George W. McHenry, Jr., Acting Sol., Federal Power Commission, Washington, D.C., for Federal Power Commission.

        John J. Hill, Atty. Gen., Larry F. York, First Asst. Atty. Gen., Austen H. Furse, J. Milton Richardson, Asst. Attys. Gen., Austin, Tex., for State of Texas, amicus curiae.

        Evelle J. Younger, Atty. Gen., Robert H. O'Brien, Sr., Asst. Atty. Gen., Richard A. Haft, Deputy Atty. Gen., Jane Chatten, Los Angeles, Cal., for State of California, amicus curiae.

        Before GEWIN, THORNBERRY and COLEMAN, Circuit Judges.

        THORNBERRY, Circuit Judge:

        I. Introduction

        In this case we review Opinions 6471 and 647-A, 2 in which the Federal Power Commission approved a final curtailment plan for United Gas Pipe Line Company (United). 2A In essence this appeal is a bitter economic struggle in which each party seeks to minimize the losses dealt it by the now famous natural gas shortage. FPC contends the curtailment plan represents its best possible effort under trying circumstances; the intervenors compliment FPC's wisdom and defend its plan; and the petitioners cry 'foul', raising a host of reasons why FPC should issue a plan more favorable to them. They say, inter alia, that FPC has no authority to curtail on an end-use basis; that FPC has no authority to order a new curtailment plan without finding the old one inadequate; that curtailment plans must be accompanied by environmental impact statements; that FPC improperly attempted to exonerate United from all liability flowing from its gas shortage; that FPC's curtailment plan is not supported by substantial evidence; and that the plan is not ripe for review. We find merit in some of these contentions and therefore must remand.

        Under pressure to survive the worsening gas shortage, the parties in this case ironically seek to find shelter in federal legislation designed not for corporate giants but for the consumer and average citizen. Congress intended the FPC, acting under the Natural Gas Act, 3to 'protect consumers from exploitation at the hands of natural gas companies,' FPC v. Hope Natural Gas Co., 1944, 320 U.S. 591, 611, 64 S.Ct. 281, 291, 88 L.Ed. 333, and ensure that the public receives just and reasonable gas prices. Atlantic Refining Co. v. Public Service Commission, 1959, 360 U.S. 378, 388, 79 S.Ct. 1246, 1253, 3 L.Ed.2d 1312. See comment, FPC Natural Gas Allocation: Curtailment in Context, 50 Texas L.Rev. 1370 (1972). In this case, however, by seeking FPC approval of its curtailment plans United is using the Commission as a shield against potentially massive contractual liability growing out of its inability to meet contractual commitments. Not to be outdone, its jilted corporate customers seek to use the National Environmental Policy Act (NEPA) 4 as a sword to destroy United's FPC shield. They claim that FPC cannot approve (or impose) a curtailment plan without first filing an environmental impact statement. Thus we are presented with the interesting spectacle of industrial giants using environmental legislation to frustrate a consumer-oriented agency's attempt to protect another industrial giant.

        II. Background

        United, one of the nation's largest pipeline companies, owns and operates a

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natural gas pipeline system that extends throughout the states of Texas, Louisiana, Mississippi, Alabama, and Florida. United sells its gas to local distribution systems ('city gates'), industries, power plants, and other pipeline companies. Its five major pipeline customers distribute United's gas through the Middle South, the Midwest, the Northeast, and the Atlantic Coast. 5 Thus a shortage in United's supplies necessarily must be felt throughout the eastern half of the United States.

        A. The Shortage Materializes

        The shortage evolved from possibility to reality sometime prior to the fall of 1970 when United realized that its supplies were insufficient to see its customers through the winter heating season of 1970-71; curtailment was unavoidable. On October 26, 1970, United initiated the proceedings that have culminated in the instant case by petitioning FPC in Docket No. RP71-29 for a declaratory order holding that its proposed threepriority curtailment plan was consonant with the curtailment provisions in its tariffs and direct sale contracts. On November...

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