88 F.3d 1105 (D.C. Cir. 1996), 94-1259, United Distribution Companies v. F.E.R.C.

Docket Nº:94-1259, 94-1263 to 94-1265, 94-1267 and 94-1270.
Citation:88 F.3d 1105
Party Name:UNITED DISTRIBUTION COMPANIES, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. Windward Energy & Marketing Company, et al., Intervenors. Nos. 92-1485, 92-1495, 92-1496, 94-1171, 94-1173 to 94-1181, 94-1183 to 94-1185, 94-1187 to 94-1190, 94-1193, 94-1194, 94-1196 to 94-1198, 94-1200, 94-1201, 94-1206, 94-1207, 94-1209, 94-1213, 94-
Case Date:July 16, 1996
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 1105

88 F.3d 1105 (D.C. Cir. 1996)

UNITED DISTRIBUTION COMPANIES, Petitioner,

v.

FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

Windward Energy & Marketing Company, et al., Intervenors.

Nos. 92-1485, 92-1495, 92-1496, 94-1171, 94-1173 to 94-1181,

94-1183 to 94-1185, 94-1187 to 94-1190, 94-1193, 94-1194,

94-1196 to 94-1198, 94-1200, 94-1201, 94-1206, 94-1207,

94-1209, 94-1213, 94-1215, 94-1217, 94-1218, 94-1222,

94-1223, 94-1226, 94-1228, 94-1229, 94-1231 to 94-1234,

94-1236 to 94-1243, 94-1246 to 94-1249, 94-1252, 94-1256 to

94-1259, 94-1263 to 94-1265, 94-1267 and 94-1270.

United States Court of Appeals, District of Columbia Circuit

July 16, 1996

Argued Feb. 21, 1996.

As Amended Oct. 29, 1996.

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[319 U.S.App.D.C. 55] On Petitions for Review of Orders of the Federal Energy Regulatory Commission.

Frederick Moring, Washington, DC, Roy R. Robertson, Jr., Chicago, IL, Michael W. Hall, O. Julia Weller, Washington, DC, Roberta L. Halladay, Washington, DC, Daniel F. Collins, Washington, DC, Robert T. Hall, III, New York City, Harvey L. Reiter, Washington, DC, Lee A. Alexander, Washington, DC, Edward J. Grenier, Jr., Washington, DC, Charles F. Wheatley, Jr., John P.

Page 1119

[319 U.S.App.D.C. 56] Gregg, John T. Miller, David W. D'Alessandro, Washington, DC, Denise C. Goulet, Harrisburg, PA, and Philip M. Marston, Alexandria, VA, argued the causes for petitioners, with whom Dana C. Contratto, John E. Holtzinger, Jr., Kevin M. Downey, Kenneth T. Maloney, William I. Harkaway, Donald K. Dankner, Frederick J. Killion, Jeffrey L. Futter, Stephen L. Huntoon, Douglas M. Canter, Mary E. Baluss, Kristine L. Delkus, Christopher J. Barr, John K. Keane, Jr., Telemac N. Chryssikos, James K. Mitchell, Paul K. Sandness, Kevin J. Lipson, Scott Silverstein, Janice A. Alperin, Christine R. Pembroke, Kenneth M. Simon, Mitchell F. Hertz, Randolph Q. McManus, William L. Slover, Donald G. Avery, Andrew B. Kolesar, III, Laurence E. Skinner, William I. Harkaway, Michael W. Hall, William H. Penniman, Glen S. Howard, Sterling H. Smith, Gail S. Gilman, Thomas E. Hirsch, III, David K. Schumacher, Frederic G. Berner, Jr., Nancy Y. Gorman, Debra L. Raggio Bolton, Susan N. Kelly, William T. Miller, Elisabeth R. Myers-Kerbal, Glenn W. Letham, Steven M. Sherman, Don C. Uthus, Timothy P. Ingram, Richard A. Rapp, Jr., Jennifer N. Waters, Kelly A. Daly, Edward W. O'Neill, Harvey Y. Morris, Theresa V. Czarski, Paula M. Carmody, Diane Munns, Lawrence F. Barth, Veronica A. Smith, John F. Povilaitis, Harold L. Stoller, Jr., Penny G. Baker, Helene S. Wallenstein, Thomas B. Nicholson, Charles D. Gray, Robert S. Tongren, Margaret Ann Samuels, Jospeh P. Serio, Yvonne Ranft, Deborah Y. VanDervort, Robert J. Mussallem, Darrell S. Townsley, Ellen M. Averett, Richard A. Solomon, Robert K. Johnson, William H. Smith, Jr. and Kim M. Clark were on the briefs. Jack M. Wilhelm, Robin M. Nuschler, Douglas J. Law, Kathleen L. Mazure, Phillip G. Lookadoo, Toni M. Fine, John T. Stough, Jr., Robert I. White, Jacolyn A. Simmons, Kent D. Murphy, Marc Richter, Richard A. Rapp, Jr., Don S. Smith, Steven A. Weiler, Paul W. Fox, Kevin J. McIntyre, Scott S. Ives, Donald C. Shepler, Jr., James Howard, Robert S. Hall, Jr., James F. Bowe, Jr., Steven H. Lasher, Donald G. Avery, David C. Dickey, Robert F. Shapiro, Jack M. Irion, Philip B. Malter, Harold L. Talisman, Jeanne M. Bennett and Robert H. Benna entered appearances.

Jerome M. Feit, Solicitor, Federal Energy Regulatory Commission, Washington, DC, Joseph S. Davies, Deputy Solicitor, Bethesda, MD, and Susan J. Court, Special Counsel, Washington, DC, argued the causes for respondent, with whom Timm L. Abendroth, Eric L. Christensen, Randolph L. Elliott, Edward S. Geldermann and Janet K. Jones, Attorneys, were on the brief. Thomas J. Lane and Jill Hall, Attorneys, entered appearances.

Henry S. May, Jr., Houston, TX, argued the cause for intervenors, with whom Judy M. Johnson, Clifton S. Rankin, Richard J. Kruse, Jeffrey D. Komarow, James W. McTarnaghan, Allan W. Anderson, Jr., David K. Schumacher, Frederick T. Kolb, Daniel F. Collins, Janice A. Alperin, Christine R. Pembroke, Michael W. Hall, Michael J. Manning, Kenneth R. Carretta, James P. White, William T. Miller, John P. Gregg, Elisabeth R. Myers-Kerbal, Emery J. Biro, III, Norma J. Rosner, David G. Stevenson, Bruce A. Connell, MaryJane Reynolds, Leslie J. Lawner, Jane E. Wilson, Joseph R. Hartsoe, R. Brent Harshman, Richard C. Green, Douglas W. Rasch, John H. Cheatham, III, Bud J. Becker, O. Julia Weller, Paul F. O'Konski, Marge O'Connor, Kenneth E. Randolph, Jeffrey G. DiSciullo, Edward J. Grenier, Jr., William H. Penniman, Glen S. Howard, Sterling H. Smith, Charles F. Wheatley, Jr., Don C. Uthus, Timothy P. Ingram, Paul Korman, Paul W. Mallory, Charles L. Pain, Kathleen T. Puckett, James J. Cleary, R. David Hendrickson, Patrick P. Pope, Ralph J. Pearson, Jr., Linda L. Geoghegan, Marilyn L. Doria, Blaine Yamagata and James Denvir were on the brief. Donald C. Shepler, Jr., James F. Bowe, Jr., Jean E. Sonneman, Kenneth T. Maloney, Gordon Gooch, J. Stephen Martin, Katherine B. Edwards, Mario M. Garza, Mark R. Haskell, J. Paul Douglas, Luke A. Mickum, Leslie J. Lawner, Deborah A. Macdonald, Sherrie N. Rutherford, Clifton D. Harris, Jr., Frederick W. Giroux, Mark D. Foss, Marge O'Connor, James K. Morse, Kevin M. Sweeney, James P. White, Michael J. Manning, Charles J. McClees, Michael A. Kelly, F. Nan Todd Wagoner, Janice H. Parker, Andrew N. Greene, Elisabeth Y. Pendley, Emmitt C. House, Georgetta J. Baker,

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[319 U.S.App.D.C. 57] Paul E. Goldstein, Frank X. Kelly, Maria K. Pavlou, Steve Stojic, Merlin E. Remmenga, David B. Ward, Robert Baker and G. Mark Cook entered appearances.

Appearances were also filed by Carl M. Fink, Howard E. Shapiro, James C. Moffatt, Jennifer B. Corwin, Robert A. Nuernberg, Ronald D. Eastman, Oleta J. Harden, Barbara K. Heffernan, Cheryl L. Jones, Tom Rattray, Gearold L. Knowles, Margaret Ann Samuels, David C. Dickey, Thomas E. Hirsch, III, Britton White, Jr., James D. Senger, James J. Flood, Joel F. Zipp, Leja D. Courter, Ronald E. Christian, James C. Moffatt, Shippen Howe, John R. Staffier, Robert A. Nelson, Timothy C. Bladek, Andrew N. Greene, Edward B. Myers, Carolyn Y. Thompson, Kenneth D. Brown, Frank R. Lindh, Keith T. Sampson, Raymond N. Shibley, Cheryl J. Walker, Thomas J. Eastment, Michael L. Pate, Barbara S. Jost, Michael E. Small, Robin M. Nuschler, John C. Walley, Gary E. Guy, Stephen J. Small, Susan D. McAndrew, Timothy N. Black, David W. Anderson, David L. Huard, David J. Evans, George H. Rothschild, Jr., Charles H. Shoneman, Randall S. Rich, Joel L. Greene, Joseph M. Oliver, Jr., M. Lisanne Crowley, Mark C. Darrell, John B. Chapman, John K. McDonald, Richard E. Powers, Jr., Sylvia P. McCormack, Jeffrey M. Petrash, Phillip G. Lookadoo, J. Neises, S.D. Holbrook, James D. McKinney, Jr., John J. Wallbillich, Joshua L. Menter, Jack P. Grimaldi, J.D. Steelman, Jr., Nicholas W. Fels, Anthony J. Ivancovich, Rebecca S. Haney, John S. Grube, Stuart W. Conrad, Robert B. Langstaff, Michael J. Gianunzio, David W. Rubadue, Marilyn A. Specht, Paul W. Fox, Bruce F. Kiely, Mark K. Lewis, Jack M. Wilhelm, Michael R. Waller, Mark C. Moench, Paul M. Flynn, Frederick J. Killion, Michael Thompson, Wade H. Hargrove, Jr., Donald W. McCoy, Bruce Henderson, Kris L. Terry, Joseph M. Marcoux, Elizabeth A. Ward, Philip F. Cronin, Jr., Stephen L. Huntoon, Nancy J. Skancke, Timothy A. Beverick, Kenton L. Erwin, Scott P. Klurfeld, David B. Robinson, Anita T. Gallucci, Michael P. May, Daniel J. Guttman, Jr., William Bingham, James H. Holt, Don P. Garber, Floyd L. Norton, IV, Dennis D. Ahlers, David I. Bloom, Thomas M. Patrick, John M. Hopper, Jr., Mary A. Walker, Joseph E. Mixon, Nancy J. Skancke, Cecil W. Talley and Arthur L. Smith.

Before: WALD, SENTELLE and ROGERS, Circuit Judges.

Opinion for the Court filed PER CURIAM. [*]

TABLE OF CONTENTS I. INTRODUCTION .................................................................... 1121 A. Background: Natural Gas Industry Structure .................................. 1122 B. Order No. 436: Open-Access Transportation ................................... 1123 C. Order No. 636: Mandatory Unbundling ......................................... 1125 D. Issues on Review and Conclusions ............................................ 1127 II. OPEN-ACCESS FIRM TRANSPORTATION ................................................. 1130 A. Unbundling .................................................................. 1130 1. Prohibition on unilateral customer release of transportation capacity .... 1130 2. Pipeline modification of contract-storage rights ......................... 1133 3. Capacity retention by transportation-only pipelines ...................... 1135 4. Eligibility date for no-notice transportation ............................ 1136 B. Right of First Refusal ...................................................... 1137 1. Pre-granted abandonment generally ........................................ 1138 2. The twenty-year contract term ............................................ 1140 3. Requirement to discount...

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