El Paso Natural Gas Co. v. F.E.R.C.
| Decision Date | 21 March 1995 |
| Docket Number | No. 94-1059,94-1059 |
| Citation | 50 F.3d 23 |
| Parties | , Util. L. Rep. P 14,035 EL PASO NATURAL GAS COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. Public Utilities Commission of the State of California; Arizona Public Service Company; Salt River Project Agricultural Improvement and Power District; Meridian Oil Inc.; San Diego Gas & Electric Company; Southern California Gas Company; Southwest Gas Corporation; Transwestern Pipeline Company, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the Federal Energy Regulatory Commission.
Richard C. Green, Washington, DC, argued the cause, for petitioner. With him on the briefs, were James R. McCotter, El Paso, TX, Mark F. Sundback, Peter J. Thompson, Washington, DC and Phillip D. Endom, El Paso, TX. Britton White, Jr., El Paso, TX, entered an appearance.
Eric L. Christensen, Atty., F.E.R.C., Washington, DC, argued the cause, for respondent. With him on the brief, were Jerome M. Feit, Sol., and Joseph S. Davies, Jr., Deputy Sol., F.E.R.C., Washington, DC.
Mark Fogelman, San Francisco, CA, argued the cause, for intervenors. With him on the joint brief, were Edward W. O'Neill, San Francisco, CA, for Public Utilities Commission of the State of California, Douglas M. Gleason, James P. Walsh and Nicholas W. Fels, Washington, DC, for San Diego Gas & Electric Co. and David J. Gilmore, Los Angeles, CA, for Southern California Gas Co. Barbara S. Jost and Joel L. Greene, Washington, DC, entered appearances, for Arizona Public Service Co. and Salt River Project Agricultural Improvement and Power Dist. Kim M. Clark, Washington, DC, entered an appearance, for Meridian Oil Inc. John C. Walley, Las Vegas, NV, entered an appearance, for Southwest Gas Corp. Sherrie N. Rutherford, Houston, TX, and Steve Stojic, Washington, DC, entered appearances, for Transwestern Pipeline Co.
Before EDWARDS, Chief Judge, WALD and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
Petitioner El Paso Natural Gas Company ("El Paso") seeks review of two orders of the Federal Energy Regulatory Commission holding that a proposal by two local distribution companies ("LDCs") located in California to extend their pipeline network into Mexico would not bring the network within the Federal Energy Regulatory Commission's ("FERC" or "Commission") jurisdiction under Secs. 4 and 7 of the Natural Gas Act ("NGA" or "Act"). 15 U.S.C. Secs. 717c, 717f (1988). El Paso argues that FERC's determination contravened both the terms of the NGA and Commission precedent. We hold that El Paso lacks standing because it has failed to demonstrate aggrievement or a likelihood of imminent injury under the challenged rulings, and we therefore dismiss the petition without reaching the merits.
The NGA regulates the transportation and sale of natural gas in interstate commerce. Three sections of the Act are particularly relevant to this case. Section 7 provides that "[n]o natural-gas company 1 or person which will be a natural-gas company upon completion of any proposed construction or extension shall engage in the transportation or sale of natural gas" without first obtaining a certificate of public convenience and necessity from the Commission. Id. at Sec. 717f(c)(1)(A). Section 4 requires that "natural-gas companies" must maintain their rates for transportation or sale of gas on file with the Commission. Id. at Sec. 717c(c).
Section 3 of the NGA is broader in scope than Secs. 4 and 7. It requires that the Commission must approve the exportation or importation of natural gas by any "person" unless it finds that the project "will not be consistent with the public interest." Id. at Sec. 717b. Because this section addresses "person[s]," rather than "natural-gas companies," the need for compliance with Sec. 3 extends to all importers or exporters of natural gas, regardless of whether they operate in interstate commerce. 2
The "Hinshaw Amendment," contained in Sec. 1(c) of the NGA, exempts certain facilities that transport or sell "interstate" gas but that are located within a single state from many provisions of the NGA, including Secs. 4 and 7:
The provisions of this chapter shall not apply to any person engaged in ... the transportation in interstate commerce or the sale in interstate commerce for resale of natural gas received by such person from another person within ... a State if all the natural gas so received is ultimately consumed within such State, or to any facilities used by such person for such transportation or sale, provided that the rates and service of such person and facilities be subject to regulation by a State commission. The matters exempted from the provisions of this chapter by this subsection are declared to be matters primarily of local concern and subject to regulation by the several states.
15 U.S.C. Sec. 717(c) (1988). Because the Hinshaw Amendment exempts "Hinshaw pipelines" only from aspects of the NGA "subject to regulation by a State Commission," and state commissions have no authority to approve exportation or importation of natural gas, the requirements of Sec. 3 apply even to Hinshaw pipelines. See, e.g., Empire State Pipeline, 64 F.E.R.C. p 61,035 at 61,335-36 (1993).
Petitioner El Paso transports natural gas in interstate commerce from various gas sources to distributors. It is a "natural-gas company," as defined by the NGA, 15 U.S.C. Sec. 717(a)(6), and is therefore subject to FERC's Secs. 4 and 7 jurisdiction.
Among El Paso's customers are two LDCs, San Diego Gas & Electric Company ("SDGE") and Southern California Gas Company ("SoCal"), whose pipeline network serves southern California. The LDCs are Hinshaw pipelines, and so exempt from FERC regulation under Secs. 4 and 7 of the NGA. Their rates, services, and facilities are regulated by the Public Utilities Commission of the State of California ("CPUC").
This case involves a proposal ("Project Vecinos") by the LDCs to extend their service into Baja California, in Mexico. The Project contemplates construction of 110 miles of new pipeline in California, primarily to transport gas to Mexico, but which would also convey gas for consumption in California. In addition, Project Vecinos would require the LDCs to construct and operate a border crossing facility at the Mexican frontier, including a 2.1 mile pipeline (the "Otay Mesa Extension") that would connect the LDCs network to a Petroleos Mexicanos facility.
In December 1992, SDGE applied to the Commission for Sec. 3 authorization and a Presidential Permit to construct the Otay Mesa Extension. At the same time, the LDCs filed a joint petition for a declaratory order stating that execution of Project Vecinos would not jeopardize the Hinshaw status of their distribution network upstream of the Otay Mesa Extension. El Paso intervened in opposition to the LDCs' declaratory order request.
In August 1993, the Commission issued an order granting the necessary Sec. 3 authorization and Presidential Permit. See San Diego Gas & Electric Co., 64 F.E.R.C. p 61,221 at 62,651-52 (1993). It also declared that upon completion of Project Vecinos, the LDCs would retain their Hinshaw status and thus did not require Sec. 7 authorization to execute the Project. Id. at 62,653. The Commission reasoned that gas exported to Mexico would be in "foreign," not interstate commerce, and so could not render the LDCs "natural-gas companies" subject to the requirements of Sec. 7 of the NGA. Because the remainder of the gas would be "consumed in California," the Commission believed that the LDCs would continue to satisfy the requirements of the Hinshaw Amendment. Id.
El Paso timely petitioned the Commission for rehearing. It argued that FERC precedent establishes that "interstate gas" sold in foreign commerce remains in interstate commerce until it reaches the border. Therefore, upon completion of the Project, the LDCs would be engaged in interstate commerce, rendering them "natural-gas companies" subject to Secs. 4 and 7 of the NGA. Moreover, El Paso argued, the LDCs would no longer fall within the Hinshaw Amendment, because the gas exported to Mexico would not be "consumed" within California as the Amendment mandates. El Paso concluded that the LDCs were therefore required to obtain Sec. 7 authorization before executing Project Vecinos, and should be subject to rate regulation by FERC under Sec. 4 upon completion of the Project.
In December 1993, the Commission issued an order denying rehearing for essentially the reasons advanced in its earlier decision. San Diego Gas & Electric Co., 65 F.E.R.C. p 61,299 (1993). El Paso petitioned this court for review on the same grounds advanced in its petition for rehearing to the Commission.
FERC challenges El Paso's standing to pursue this petition. We agree with the Commission that El Paso has failed to demonstrate aggrievement or the likelihood of imminent injury under FERC's rulings, and we therefore dismiss the petition without reaching the merits.
Pursuant to Sec. 19(b) of the NGA, 15 U.S.C. Sec. 717r(b), only a party that is "aggrieved" by an order issued under the Act may obtain judicial review thereof. See, e.g., Moreau v. FERC, 982 F.2d 556, 564 (D.C.Cir.1993). In addition, like all parties seeking access to the federal courts, petitioners must satisfy the requirements of constitutional standing. "Common to both these thresholds is the requirement that petitioners establish, at a minimum, 'injury in fact' to a protected interest." Shell Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C.Cir.1995).
The Supreme Court recently held that to demonstrate "injury in fact" under Article III, a party must allege an invasion of legally protected interests that is both (a)...
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