Associated Gas Distributors v. F.E.R.C., s. 88-1856
| Decision Date | 04 June 1990 |
| Docket Number | Nos. 88-1856,s. 88-1856 |
| Citation | 283 U.S.App.D.C. 265,899 F.2d 1250 |
| Parties | , 58 USLW 2614 ASSOCIATED GAS DISTRIBUTORS, American Public Gas Association, Algonquin Customer Group, Cascade Natural Gas Corporation, Michigan Consolidated Gas Company, and Southern California Gas Company, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Tejas Power Corporation, Intermountain Gas Company, Columbia Nitrogen Corporation, ONG Transmission Company, et al., Amoco Production Company, Arco Oil and Gas Company, et al., Exxon Corporation, Pacific Gas and Electric Company, Phillips 66 Natural Gas Company, American Paper Institute, Inc., Arkansas Gas Consumers, Fertilizer Institute, Texas Inc. and Texaco Producing, Inc., Intervenors. ASSOCIATED GAS DISTRIBUTORS, Algonquin Customer Group, and Cascade Natural Gas Corporation, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Chevron Chemical Company, Intermountain Gas Company, Paiute Pipeline Company, Arco Oil and Gas Company, et al., Amoco Production Company, Washington Water Power Company, American Paper Institute, Inc., Hadson Gas Systems, Inc., Northwest Natural Gas Company, Northwest Pipeline Corporation, Intervenors. ASSOCIATED GAS DISTRIBUTORS and Algonquin Customer Group, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Tejas Power Corporation, Public Service Electric & Gas Company, Arco Oil and Gas Company, et al., Amoco Production Company, CNG Transmission Corporation, The American Paper Institute, Inc., Equitrans, Inc., Hadson Gas Systems, Inc., Niagara Mohawk Power Corporation, Northwest Pipeline Corporation, Pennzoil Exploration, et al., Texas Eastern Transmission Corporation, Texaco, Inc., et al., Intervenors. TEJAS POWER CORPORATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Arco Oil and Gas Company, CNG Transmission Corporation, Public Service Electric and Gas Company, Amoco Production Company, Public Service Commission of the State of New York, Hadson Gas Systems, Inc., Long Island Lighting Company, Texaco, Inc., et al., |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petitions for Review of Orders of the Federal Energy Regulatory Commission.
M. Lisanne Crowley, with whom Frederick Moring and Joseph M. Oliver, Jr., for Associated Gas Distributors, William T. Miller and Susan N. Kelly, for American Public Gas Association, John S. Schmid, Gerald L. Knowles and Barbara K. Heffernan, for Algonquin Customer Group, Ted P. Gerarden, Washington, D.C., for Cascade Natural Gas Corporation, and Douglas K. Porter, Los Angeles, Cal., for Southern California Gas Co., were on the joint brief for petitioners, Associated Gas Distributors, et al. in Nos. 88-1856, 88-1857, 88-1858, 89-1577 and intervenors in No. 88-1862. Richard A. Oliver, Washington, D.C., for Hadson Gas Systems, Inc., Eddie R. Island, Los Angeles, Cal., for Southern California Gas Co., and Steven W. Snarr, for Northwest Pipeline Corp., also entered appearances for petitioners.
John M. Hopper, Jr., for petitioner Tejas Power Corp. in No. 88-1862 and intervenor in Nos. 88-1856, 88-1857, 88-1858 and 89-1577. Richard E. Powers, Jr., Washington, D.C., also entered an appearance, for Tejas Power Corp.
Dwight C. Alpern, Atty., F.E.R.C., with whom Jerome M. Feit, Sol., F.E.R.C., was on the brief, for respondent in all cases. Hanford O'Hara, Atty., F.E.R.C., Washington, D.C., also entered an appearance, for respondent.
Kevin M. Sweeney, Washington, D.C., with whom Kathleen E. Magruder, Houston, Tex., for Arco Oil and Gas Co., William H. Penniman, for Process Gas Consumers Group, et al., Thomas E. Hirsch, III, and Gregory D. Chafee, for American Paper Institute, Jack M. Wilhelm, for Amoco Production Co., Stephen A. Herman, Newark, N.J., for The Fertilizer Institute, Philip G. Marston and Robert Y. Hirasuna, for Hadson Gas Systems, Inc., John B. Chapman and John K. McDonald, Washington, D.C., for Pennzoil Co. and John P. Beall, for Texaco Inc., were on the joint brief, for intervenors in No. 88-1856, 88-1857, 88-1858 and 88-1862. Robert F. Shapiro also entered an appearance, for intervenor, American Paper Institute, Inc.
Mary Ann Walker, Boston, Mass., entered an appearance, for intervenor, Intermountain Gas Co.
Frederic G. Berner, Jr. and Lisa J. Gefen, Washington, D.C., entered appearances, for intervenor, Columbia Nitrogen Corp.
William I. Harkaway, Douglas M. Canter, Washington, D.C., and C. Burnett Dunn entered appearances, for intervenors, ONG Transmission Co., et al.
Richard A. Drom, Washington, D.C., entered an appearance, for intervenor, Amoco Production Co.
C. Roger Hoffman entered an appearance, for intervenor, Exxon Corp. and Exxon Gas System, Inc.
Steven F. Greenwald and Lindsay How-Downing entered appearances, for intervenor, Pacific Gas and Elec. Co.
John L. Williford, Larry Pain and Luke A. Mickum entered appearances, for intervenor, Phillips 66 Natural Gas Co.
Stephen A. Herman, Newark, N.J., entered an appearance, for intervenor, Arkansas Gas Consumers.
Ronald E. Christian and Tom Rattray, Washington, D.C., entered appearances for intervenor, Indiana Gas Co., Inc. John M. Hopper, Jr. entered an appearance, for intervenor, Pennzoil Exploration and Production Co.
Henry S. May, Jr., Houston, Tex., Kathleen C. Lake and Judy M. Johnson entered appearances, for intervenor, Texas Eastern Transmission Corp.
Glenn S. Howard entered an appearance, for intervenors, Process Gas Consumers Group, et al.
David J. Evans and Daniel John Regan, Jr. entered appearances, for intervenor, Chevron Chemical Co.
David J. Meyer entered an appearance, for intervenor, Washington Water Power Co.
Robert A. Nelson, Jr. entered an appearance, for intervenor, Northwest Natural Gas Co.
James R. Lacey entered an appearance, for intervenor, Public Service Electric & Gas Co.
John E. Holtzinger, Jr., Washington, D.C., and Kevin J. Lipson entered appearances, for intervenor, CNG Transmission Corp.
Gary E. Guy, Washington, D.C., entered an appearance, for intervenor, Equitrans, Inc.
Harry H. Voigt, M. Reamy Ancarrow, Mindy A. Buren and Diane B. Schratwieser, Washington, D.C., entered appearances, for intervenors, Niagara Mohawk Power Corp. and Orange and Rockland Utilities, Inc.
Richard A. Solomon and David D'Alessandro entered appearances, for intervenor, Public Service Com'n of the State of N.Y.
James J. Stoker, III and James F. Bowe, Jr. entered appearances, for intervenor, Long Island Lighting Co.
Stanley W. Balis and Demetrios G. Pulas, Jr., Washington, D.C., entered appearances, for intervenor, The Municipal Defense Group.
Edward Myers entered an appearance, for intervenor, Orange and Rockland Utilities, Inc.
Before WALD, Chief Judge and MIKVA and EDWARDS, Circuit Judges.
Opinion for the Court filed by Chief Judge WALD.
Does Sec. 311 of the Natural Gas Policy Act of 1978 authorize the Federal Energy Regulatory Commission to exempt any transportation of natural gas from the requirements of Sec. 7 of the Natural Gas Act so long as some intrastate pipeline or local distribution company receives some economic benefit from the transportation? That is the central question posed by these cases, and we think the only reasonable answer is no. Accordingly, since the orders before us rest on an unacceptably broad interpretation of the Commission's power under Sec. 311, we vacate them and remand the cases for further proceedings.
This proceeding is the latest in a series dealing with the efforts of the Federal Energy Regulatory Commission ("FERC" or "Commission") to "restructure the natural gas industry along lines more competitive than it had traditionally followed." American Gas Ass'n v. FERC, 888 F.2d 136, 141 (D.C.Cir.1989). We have on several recent occasions recounted the history and purpose of these efforts. See Associated Gas Distributors v. FERC, 893 F.2d 349 (D.C.Cir.1989); American Gas Ass'n v. FERC, 888 F.2d 136 (D.C.Cir.1989); Associated Gas Distributors v. FERC, 824 F.2d 981 (D.C.Cir.1987), cert. denied, 485 U.S. 1006, 108 S.Ct. 1468, 99 L.Ed.2d 698 (1988). To put the present case in perspective, we briefly review the nature of the natural gas market, the reasons why FERC is attempting to foster competition in the market, and the role that Sec. 311 of the Natural Gas Policy Act ("NGPA") plays in the FERC's grand design.
Natural gas is produced at the "wellhead." There is today a competitive marketplace in the interstate sale of gas at the wellhead, see 824 F.2d at 994, and there would be little need for regulation at all if the ultimate consumers of gas had ready access to the wellhead marketplace. However, natural gas cannot simply be brought to market in a truck, like produce; it must be transported through pipelines, and the construction of a gas pipeline requires considerable capital expense. Although some (indeed, increasingly many) pipelines face competition for customers from other pipelines, still other pipelines enjoy a monopoly or oligopoly position, because their customers must buy natural gas from them or not at all.
The Natural Gas Act ("NGA"), 15 U.S.C. Secs. 717-717z (1988), serves to protect consumers of natural gas from the monopoly power of interstate pipelines. 824 F.2d at 995. It gives the FERC regulatory jurisdiction over the transportation and sale of gas in interstate commerce. Section 7 of the NGA, 15 U.S.C. Sec. 717f, prohibits any natural gas company from engaging in transportation or sale of gas subject to the Commission's jurisdiction unless the Commission has issued a "certificate of...
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