Office of Consumers' Counsel v. Federal Energy Regulatory Commission
| Decision Date | 08 December 1980 |
| Docket Number | 80-1316,Nos. 80-1303,80-1321 and 80-1326,s. 80-1303 |
| Parties | , 40 P.U.R.4th 473 OFFICE OF CONSUMERS' COUNSEL, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Great Plains Gasification Associates, Tennessee Gas Pipeline Co., Columbia GasTransmission Corp., Transcontinental Gas Pipe Line Corp., Natural Gas PipelineCo. of America, Madison Gas and Electric Co., Wisconsin Power and Light Co., U.S.Department of Energy, Michigan Wisconsin Pipeline Co., General Motors Corp.,Public Service Commission of New York, Intervenors. GENERAL MOTORS CORPORATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Tennessee Gas Pipeline Co., Columbia Gas Transmission Corp., TranscontinentalGas Pipeline Corp., Natural Gas Pipeline Co. of America, Madison Gas andElectric Co., Wisconsin Power and Light Co., U. S. Department of Energy,Michigan WisconsinPipeline Co., Public Service Commission of New York, Office of Consumers'Counsel of Ohio, Gas Research Institute, Great Plains Gasification Associates,Intervenors. The PUBLIC SERVICE COMMISSION OF the STATE OF NEW YORK, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Tennessee Gas Pipeline Co., Columbia Gas Transmission Corp., TranscontinentalGas Pipe Line Corp., Natural Gas Pipeline Co. of America, Madison Gas andElectric Co., Wisconsin Power and Light Co., U. S. Department of Energy,General Motors Corp.,Michigan Wisconsin Pipeline Co., Office of Consumers' Counsel of Ohio, GasResearch Institute, Great Plains Gasification Associates, Intervenors. The STATE OF MICHIGAN, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Tennessee Gas Pipeline Co., Columbia Gas Transmission Corp., TranscontinentalGas Pipe Line Corp., Natural Gas Pipeline Co. of America, Madison Gas andElectric Co., Wisconsin Power and Light Co., U. S. Department of Energy,Michigan WisconsinPipeline Co., General Motors Corp., Public Service Commission of New York,Office of Consumers' of Ohio, Gas Research Institute, Great Plains GasificationAssociates, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Richard P. Noland, Washington, D. C., with whom Edward J. Grenier, Jr., Richard A. Oliver, Robert W. Clark, III, Washington, D. C., and Julius Jay Hollis, Detroit, Mich., were on the brief, for petitioner General Motors Corp., in No. 80-1316 and intervenor in Nos. 80-1303, 80-1321 and 80-1326.
Margaret Ann Samuels, Columbus, Ohio, for petitioner Office of Consumers' Counsel in No. 80-1303 and intervenor in Nos. 80-1316, 80-1321 and 80-1326.
R. Philip Brown, Asst. Atty. Gen., State of Mich., Lansing, Mich., with whom Frank J. Kelley, Atty. Gen. State of Mich., Lansing, Mich., was on the brief, for petitioner State of Michigan in No. 80-1326.
Richard A. Solomon, New York City, with whom Peter H. Schiff, Gen. Counsel, Public Service Commission of the State of New York, Albany, N. Y., was on the brief, for petitioner Public Service Commission of the State of New York in No. 80-1321 and intervenor in Nos. 80-1303, 80-1316 and 80-1326.
Dennis Lane, Washington, D. C., also entered an appearance for petitioner in No. 80-1321.
Jerome Nelson, Sol., Federal Energy Regulatory Com'n, Washington, D. C., with whom Robert R. Nordhaus, Gen. Counsel and A. Karen Hill, Atty., Federal Energy Regulatory Commission, Washington, D. C., were on the brief, for respondent.
Frederic G. Berner, Jr., Washington, D. C., with whom Richard J. Flynn, Washington, D. C., for Great Plains Gasification Association, John M. Hill, Giles D. H. Snyder, Charleston, W. Va., Stephen J. Small, Leonard Sargeant, III for Columbia Gas Transmission Corp., Harold L. Talisman, Terence J. Collins for Tennessee Gas Pipeline Co., Thomas F. Ryan, Jr. and Robert G. Hardy, Washington, D. C., for Transcontinental Gas Pipe Line Corp. were on the joint brief, for intervenor Great Plains Gasification Association, et al., in Nos. 80-1303, 80-1316, 80-1321 and 80-1326.
Bruce G. Forrest, Atty., Dept. of Justice, Alice Daniel, Asst. Atty. Gen., Robert S. Greenspan, Atty., Dept. of Justice, James
K. White and Arthur S. Weissbrodt, Attys. Dept. of Energy, Washington, D. C., were on the brief for intervenor, U. S. Department of Energy in Nos. 80-1303, 80-1316, 80-1321 and 80-1326.
Christopher T. Boland and James M. Broadstone, Washington, D. C., were on the brief, for intervenor, Gas Research Institute in Nos. 80-1316, 80-1321 and 80-1326.
Edward J. Grenier, Jr., Richard P. Noland and Richard A. Oliver, Washington, D. C., were on the brief, for Amicus Curiae, Process Gas Consumers' Group, et al. in Nos. 80-1303, 80-1316, 80-1321 and 80-1326 urging reversal.
Arthur S. Kallow, Chicago, Ill., also entered an appearance for intervenor, Natural Gas Pipeline Co. of America in Nos. 80-1303, 80-1316, 80-1321 and 80-1326.
Bruce F. Kiely and Catherine C. Wakelyn, Washington, D. C., also entered appearances for intervenor, Madison Gas and Electric Co., et al. in Nos. 80-1303, 80-1316, 80-1321 and 80-1326.
Before ROBB, WALD and MIKVA, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
Petitioners seek review of a decision 1 by the Federal Energy Regulatory Commission ("FERC") to grant a certificate of public convenience and necessity to Great Plains Gasification Associates ("Great Plains") pursuant to Section 7 of the Natural Gas Act, 15 U.S.C. § 717 et seq. The certificate was issued to facilitate the construction and operation of a coal gasification plant which Great Plains wishes to build in Mercer County, North Dakota. We hold that FERC lacked jurisdiction to issue this particular certificate and remand the case to FERC for further proceedings consistent with this opinion.
Great Plains is a partnership 2 formed to construct a facility which will manufacture synthetic gas from coal (a "coal gasification plant"). The plant is designed to produce an average of 125,000 Mcf 3 of synthetic gas per day when fully operational, and is estimated to cost over $1 billion to build. 4 It will utilize both the so-called "Lurgi process" 5 and the "Menthanation process" 6 to convert lignite coal feedstock from nearby surface mines into high-Btu, 7 pipeline quality gas. Great Plains proposes to contract with the Great Lakes Gas Transmission Company ("Great Lakes") to transport the manufactured gas through a pipeline to be constructed from the tailgate of the plant to a point on Great Lakes' existing pipeline system near Thief River Falls, Minnesota. There the synthetic gas would be commingled with natural gas and then transported through Great Lakes' facilities to a point near Crystal Falls, Michigan. 8 At Crystal Falls, Great Plains would sell equal quantities of commingled synthetic and natural gas 9 to each of five customer pipeline companies. The gas would then be delivered by those companies to consumers. FERC Opinion No. 69, at 4.
The original proposal for a coal gasification plant in Mercer County was filed in March, 1975 by Michigan Wisconsin Pipeline Company ("Michigan Wisconsin") and ANG Coal Gasification Resources Company ("ANG"), both affiliates of American Natural Resources Company ("American Natural"). These applicants proposed a plant capable of producing 250,000 Mcf of synthetic gas per day for the purpose of alleviating a shortage of natural gas on the Michigan Wisconsin system. Later, during administrative hearings on the proposal held in 1976, the applicants scaled down the plant production capability to 125,000 Mcf during the first phase of a proposed two phase construction program. In November, 1976, after those hearings had been substantially completed, applicants requested that the Administrative Law Judge defer ruling on their proposal because federal loan guarantees which they had counted on to provide essential support for the debt portion of the project's financing had not yet been approved by Congress. The Administrative Law Judge granted applicants' request, and on May 9 and August 8, 1977, amended applications were filed by the American Natural affiliates, joined by Peoples Gas Company ("Peoples"), in which American Natural and Peoples agreed to share both the burden of financing and the plant's output. However, the amended application continued to assume the availability of Federal loan guarantees. FERC Opinion No. 69, at 11.
Additional hearings were held on the amended application, but once again applicants declared that they wanted to substantially restructure their proposal because of inadequate financing. Mr. Arthur K. Seder, Jr., Chairman and President of American Natural, testified before the Administrative Law Judge that "(f)or the past several years our principal efforts to arrange debt financing for the project have centered around obtaining Federal loan guarantees." Joint Appendix (hereinafter "J.A.") at 26. He went on to state that "we were getting some encouragement to believe that the Administration might ... simply go directly to Congress and ask for authority to grant loan guarantees toward (the) project." J.A. at 38-9. Now, however, it appeared to Mr. Seder that the Department of Energy ("DOE") would not do that, and other possibilities for federal loan guarantees were unpromising. According to Mr. Seder it (was) suggested by officials of the Department of Energy that if other gas pipeline companies are brought into the project and a consortium is formed, DOE would recommend the approval by FERC of tariff and financing conditions that would provide consumer credit support against the risks of project failure and would otherwise contribute to the financeability of the project. In light of that suggestion, American Natural and Peoples have decided to inquire whether other pipeline systems are willing to join in such a consortium ....
J.A. at 27 (emphasis supplied...
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