Altamont Gas Transmission Co. v. F.E.R.C.
| Decision Date | 22 July 1992 |
| Docket Number | No. 91-1084,91-1084 |
| Citation | 965 F.2d 1098 |
| Parties | ALTAMONT GAS TRANSMISSION COMPANY, Petitioner v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent El Paso Natural Gas Company, Pacific Gas Transmission Company, Kern River Gas Transmission Company, Pacific Interstate Transmission Company, Southern California Gas Company, Intervenors |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Frederic G. Berner, Jr., with whom James F. Bendernagel, Jr. and Joseph R. Guerra, Washington, D.C., were on the brief, for petitioner. Margaret L. Bollinger, Houston, Tex., also entered an appearance for petitioner.
Randolph Lee Elliott, Atty., F.E.R.C., with whom William S. Scherman, General Counsel and Jerome M. Feit, Sol., Washington, D.C., were on the brief, for respondent.
Raymond N. Shibley, Washington, D.C., with whom Elias G. Farrah, Boston, Mass Keith T. Sampson, Washington, D.C., Frank R. Lindh, and Jack F. Fallin, Jr., San Francisco, Cal., were on the brief, for intervenor Pacific Gas Transmission Co.
Britton White, Jr., Denver, Colo., Phillip D. Endom, El Paso, Tex., Rush Moody, Jr., and Mark F. Sundback, Washington, D.C., were on the brief, for intervenor El Paso Natural Gas Co.
Paul M. Flynn, Harold L. Talisman, Washington, D.C., Margaret L. Bollinger, Houston, Tex., and Mark C. Moench, Salt Lake City, Utah, entered appearances for intervenor Kern River Gas Transmission Co.
David J. Gilmore, Los Angeles, Cal., entered an appearance for intervenor Southern California Gas Co.
David L. Huard, Los Angeles, Cal., entered an appearance for intervenor Pacific Interstate Transmission Co.
Before: WALD, STEPHEN F. WILLIAMS and D.H. GINSBURG, Circuit Judges.
Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.
Altamont Gas Transmission Company objects to the Federal Energy Regulatory Commission's dismissal of its application for authority to construct a pipeline--a dismissal that enabled a rival company to secure authority for an arguably competing project without a comparative hearing. See Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945). Altamont contends that FERC's justification for early dismissal of its application--that its incompleteness would hinder an ultimate determination of the project's economic viability--was arbitrary and capricious. Finding no such error, we dismiss the petition for review.
* * * * * *
Anticipating a growing demand for natural gas in California, gas carriers in the region have sought to lay new pipelines and to increase the capacity of old ones. On December 20, 1988 Altamont's rival, Pacific Gas Transmission Company ("PGT"), applied to FERC for authorization under § 7(c) of the Natural Gas Act to expand existing facilities. See 15 U.S.C. § 717f(c) (1988). The project would permit PGT to increase the amount of Canadian gas that it could ship to Malin, Oregon, near the California border, where its parent, Pacific Gas & Electric Company ("PG & E") would receive the gas for transmission to markets in California. PG & E needed to expand its facilities in order to carry the additional load, but since it operated only in California, it applied to the California Public Utilities Commission for the necessary authority rather than to FERC.
On July 21, 1989 Altamont filed its § 7 application for authority to build a pipeline to carry gas from the Canadian border to Wyoming, to be transported from there to the south-central Californian market by Kern River Transmission Company. While Kern River had a pending application for FERC authority for a Wyoming-California pipeline, the facilities contemplated would not have been able to handle all of the additional load from Altamont. 1 Kern River promised Altamont it would expand the planned facilities.
Kern River did not, however, file an application for additional authority. Altamont, after an exchange of letters in which FERC inquired about the unfiled application, wrote on March 14, 1990 stating that Kern River had promised Altamont that it would do so 55 days after the later of (a) receipt of a certificate to construct its original facilities "no longer subject to rehearing" and (b) execution of contracts with certain shippers.
On May 1, 1990 FERC ruled that Altamont's and PGT's applications were both incomplete, and gave them until May 15, 1990 to fill the gaps. In Altamont's case, it said, this would require (among other things) Kern River's application for authority to build the larger Wyoming-to-California facilities. Pacific Gas Transmission Co., 51 FERC p 61,112 (1990). Both Altamont and PGT filed amended applications on that date, but the requested Kern River filing did not appear.
On June 28, 1990 FERC issued two orders that effectively buried the Altamont application. The first denied Altamont's petition for rehearing of the May 1 order. Altamont Gas Transmission Co., 51 FERC p 61,364 (1990) ("Incompleteness Order on Rehearing"). The second found that Altamont had disobeyed the May 1 order by failing to get Kern River to submit its application, and dismissed Altamont's application. Altamont Gas Transmission Co., 51 FERC p 61,365 (1990) ("Dismissal Order"). On December 18, 1990 FERC denied Altamont's request for a rehearing. Altamont Gas Transmission Co., 53 FERC p 61,395 (1990) ("Dismissal on Rehearing"). FERC did not dismiss PGT's application, and, indeed, approved it on August 1, 1991. Pacific Gas Transmission Co., 56 FERC p 61,192 (1991). Petitions for review of that decision are now pending in this court. Altamont Gas Transmission Co. v. FERC, No. 91-1369 (D.C.Cir. filed Aug. 6, 1991), and consolidated cases.
In the meantime, Altamont applied for "optional expedited certification" of essentially the same facilities, which the Commission granted. Altamont Gas Transmission Co., 54 FERC p 61,028 (1991); Altamont Gas Transmission Co., 56 FERC p 61,199 (1991). Though easier to secure, such authority leaves the pipeline with more financial risk than does a conventional § 7 certificate. See 18 CFR § 157.103(d) (1991); Associated Gas Distributors v. FERC, 824 F.2d 981, 1030-38 (D.C.Cir.1987). Thus Altamont continues aggrieved by FERC's dismissal of its § 7(c) application.
* * * * * *
Altamont claims that where dismissal of an application forecloses a comparative hearing required by the Ashbacker doctrine, we must subject the dismissal to "heightened scrutiny", either as a supplement to the ordinary "arbitrary and capricious" test or as a variation of that test. Neither of those formulations quite states the court-agency relation correctly. Foreclosure of an Ashbacker hearing is obviously an important consequence, both for a barred applicant and potentially for the public--through loss of the service of a possibly better licensee. Obviously the Commission must weigh these effects in designing and enforcing rules to weed out applications that are doomed or that, because of substantial omissions, would be most unlikely to prevail without protracted delay. Accordingly, we have "scrutinized closely" agency actions foreclosing a comparative hearing, New South Media Corp. v. FCC, 685 F.2d 708, 715 (D.C.Cir.1982), i.e., we have insisted on reasons that the agency could find adequate to justify defeat of the values its decision has foreclosed. But we have not purported to alter the standard of review prescribed by 5 U.S.C. § 706(2)(A).
Where "two bona fide applications are mutually exclusive", the Ashbacker case forbids the agency to grant a license to one without first holding a hearing on both. 326 U.S. at 333, 66 S.Ct. at 151. The express limitation to bona fide applications implies an agency power to impose a variety of reasonable threshold requirements, not confined to literal want of bona fides. To read Ashbacker otherwise would improperly curtail the agencies' broad freedom to select their procedures. Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Counsel, Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978).
FERC here rejected Altamont's application on the ground that it did not show the availability of downstream facilities adequate to carry the new load. Dismissal on Rehearing, 53 FERC at 62,373. As the Commission assesses a project's viability in the light of conditions all the way from supplier to user, see Kansas Pipe Line & Gas Co., 2 FPC 29, 40-55 (1939), it requires the applicant to provide information on all the links of the chain on which it depends, including interdependent applications. See 18 CFR §§ 157.6, 157.13(c). Since Kern River did not file an application for authority to expand its facilities, FERC had neither the information necessary to verify Altamont's claims about the proposed downstream facilities, nor the assurance of the facilities' provider that it was committed to bringing them into existence. In the past the Commission has dismissed an application as incomplete for want of endorsement by the applicant's intended downstream carrier, see Transcontinental Gas Pipe Line Corp., 51 FERC p 61,173 (1990); East Tennessee Natural Gas Co., 51 FERC p 61,247 at 61,691 (1990), as well as for simple lack of information on downstream transportation capacity, see Southern Natural Gas Co., 35 FERC p 61,126 (1986); Texas Eastern Transmission Corp., 34 FERC p 61,120 (1986).
Altamont argues that FERC should have been satisfied with Altamont's assurances that Kern River had entered a contract to provide downstream transportation for Altamont and that Kern River promised Altamont to file its application shortly after certain events had taken place. However, because the commitment was contingent--indeed, in part contingent on events within Kern River's control (the execution of contracts between Kern River and certain potential shippers)--FERC could reasonably find Altamont's assurances and Kern River's promises unsatisfactory.
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