Rhode Island Consumers' Council and Division of Public Utilities and Carriers of State of R. I. v. Federal Power Commission Boston Gas Co. v. Federal Power Commission
| Decision Date | 28 August 1974 |
| Docket Number | 73-1223,73-1292 and 73-1337,Nos. 73-1159,s. 73-1159 |
| Citation | 504 F.2d 203,164 U.S.App.D.C. 134 |
| Parties | RHODE ISLAND CONSUMERS' COUNCIL AND DIVISION OF PUBLIC UTILITIES AND CARRIERS OF the STATE OF RHODE ISLAND, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Algonquin Gas Transmission Co. et al., Intervenors. BOSTON GAS COMPANY et al., Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Texas Eastern Transmission Corporation et al., Intervenors. MUNICIPAL DEFENSE GROUP, Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Arkansas-Missouri Power Co. et al., Intervenors. CONNECTICUT PUBLIC UTILITIES COMMISSION, Petitioner v. FEDERAL POWER COMMISSION, Respondent, Arkansas-Missouri Power Co. et al., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Dennis J. Roberts, II, Providence, R.I., I., for petitioners in No. 73-1159.
John S. Schmid, Washington, D.C., with whom John W. Glendening, Jr., Washington, D.C., was on the brief for petitioners in No. 73-1223.
William T. Miller, Washington, D.C., with whom Charles F. Wheatley, Jr., Washington, D.C., was on the brief for petitioners in No. 73-1292.
John H. Burnes, Atty., Federal Power Commission with whom Leo E. Forquer, Gen. Counsel and George W. McHenry, Jr., Sol., Federal Power Commission, were on the brief for respondent.
J. Evans Attwell, Houston, Tex., was on the brief, for intervenor Texas Eastern Transmission Corporation.
Robert K. Killian, Atty. Gen., for the State of Connecticut, Richard L. Barger, and F. D. Neusner, Asst. Attys. Gen., were on the brief for petitioner in No. 73-1337.
Charles E. McGee, John T. Ketcham and Robert J. Haggerty, Washington, D.C., were on the brief for intervenor Algonquin Gas Transmission Company.
Richard M. Merriman, J. Richard Tiano and Peyton G. Bowman, III, Washington, D.C., entered appearances for intervenors Arkansas-Missouri Power Company and Associated Natural Gas Company.
George J. Meiburger and Platt W. Davis, III, Washington, D.C., entered appearances for Texas Gas Transmission Corporation.
Before TAMM, LEVENTHAL and ROBINSON, Circuit Judges.
These cases are before the court on petitions to review an order of the Federal Power Commission approving an interim plan for curtailment of natural gas deliveries by Texas Eastern Transmission Corporation, and for certain changes in Texas Eastern's rates. Petitioners include natural gas distributors purchasing gas that flows through Texas Eastern's system, some directly from Texas Eastern and others from Algonquin Gas Transmission Company, a New England pipeline which currently obtains its entire supply from Texas Eastern. Other petitioners are Rhode Island Consumers' Council, the Rhode Island Division of Public Utilities, and the Connecticut Public Utilities Commission. Intervening in support of the Commission's order are Algonquin, Texas Eastern and several large customers of the latter.
Petitioners challenge both the allocation and the rate structure changes ordered by the Commission. We decline to pass upon certain objections to the allocation provisions, in view of events that have occurred subsequent to the Commission's order. We do consider the merits of the objections leveled by petitioners against the rate tariff order, particularly the Commission's approval of retention of 'demand charge' provisions notwithstanding termination of entitlement to contract 'demand' quantities. We reject these contentions.
Taking note of the nation's gas shortage, the Commission on April 15, 1971, issued Order No. 431 1 directing all jurisdictional pipelines to submit reports to implement the FPC's policy that pipelines take all steps necessary to insure an adequate and reliable gas supply for the 1971-72 winter and thereafter. The FPC directed pipelines anticipating curtailment of deliveries to file a tariff sheet, pursuant to 4 and 5 of the Natural Gas Act, setting forth a curtailment plan.
Texas Eastern initially responded to Order 431 with a statement that any curtailment necessary would be carried out in accordance with the existing tariff, which called for pro-rata reductions of customers' entitlements under their contracts. Subsequently, on October 19, 1971, Texas Eastern advised the Commission that it would be necessary to curtail deliveries by approximately 15 billion cubic feet during the winter of 1971-72. At the same time, Texas Eastern filed a tariff change eliminating an obligation to refund certain charges when it curtailed deliveries as a result of a supply shortage. The Commission docketed Texas Eastern's tariff change 2 and consolidated further proceedings with those to be held on the delivery curtailment plan. Also joined with the foregoing were proceedings on the curtailment plan and a similar tariff change filed by Algonquin.
Following a November 19, 1971, order by the Commission that Texas Eastern should distribute 'evidence in support of the curtailment programs to be pursued' and that the possibility of a settlement should then be explored, the parties commenced negotiations that stretched into the spring of 1972. These culminated in a proposal for an interim curtailment of Texas Eastern deliveries through September 1, 1973; the curtailment plan incorporated the tariff change Texas Eastern had sought by its prior filing.
On August 28, 1972, the proposal, which had been drafted by representatives of Texas Eastern and certain Texas Eastern customers, was presented as a nonunanimous settlement proposal to an administrative law judge (ALJ). The proposal was opposed by several parties, including petitioners here. The ALJ rejected requests for an evidentiary hearing concerning the terms of the proposed plan, but did allow Municipal Defense Group (MDG), a petitioner here, to serve Texas Eastern with interrogatories. Following the filing of interrogatories and answers and other documentary materials in support of and opposition to the proposed plan, the ALJ certified the record to the Commission.
On December 1, 1972, the Commission approved the proposal as an interim plan for curtailment through September 1, 1973. It turned aside objections by petitioners to the basis for allocation of gas to customers, to the allocated amounts themselves, to the rate structure changes, and to the procedures followed by the ALJ in receiving evidence bearing on the proposal. Petitioners' application for rehearing was denied on January 26, 1973, and this appeal followed.
The plan approved by the Commission provided that each Texas Eastern customer was to receive an annual 'entitlement' (hereinafter 'allocated entitlement') to supersede Texas Eastern's contract commitment to deliver a specified volume of gas. Each customer's allocated entitlement was based initially upon its historical annual purchases of gas from Texas Eastern; upward adjustments from the historical purchase 'baseline' were then made to reflect additional needs of some customers.
In the event Texas Eastern's gas supply did not allow it to fill each customer's allocated entitlement, the plan provided that further curtailment of deliveries would be accomplished by ratable reductions in allocated entitlements. Small-volume customers, defined as those with contractual entitlements of 10,000 Mcf per day or less, were exempt from daily curtailment below allocated entitlements (Article III). Under Article IV, other customers were eligible to seek an emergency exemption from daily curtailment to avoid jeopardy to residential and commercial loads.
Petitioners' principal challenges to the allocation provisions may be summarized as follows:
1. The Commission's use of historical purchases as the baseline for allocated entitlements was unreasonable in that there was no differentiation among consumptive use of gas, to the detriment of small-volume customers serving highpriority uses of gas;
2. The Commission unreasonably refused to guarantee that the exemption from curtailment below allocated entitlements available to small-volume Texas Eastern customers would be extended to Algonquin customers meeting the qualifying criteria; and
3. The Commission erred in refusing to require presentation of the settlement proposal by a sponsoring witness, available for cross-examination as to the methods used to calculate individual adjustments to the historical baseline in determining allocated entitlements, an error which led the Commission to approve the proposal on an inadequate record.
While some of the petitioners' objections are not without force, the court concludes that, in light of events occurring since the Commission's order, including the expiration of the allocation plan in September, 1973, judicial resolution of challenges to the allocation provisions is now inappropriate. The expiration of the plan, and the accompanying inability to change the allocation of gas to customers, does not alone deprive the court of a to adjudicate, for the court is empowered to decide the questions presented if they are likely to recur, and their immediate resolution will serve important public interests. 3 Such a course might be appropriate if petitioners challenged the Commission's power to act, or a basic approach it is likely to follow in future allocation proceedings. But petitioners' objections cannot be so characterized. The Commission's power to mandate allocations, upheld by the Supreme Court in FPC v. Louisiana Power & Light Co., 406 U.S. 621, 92 S.Ct. 1827, 32 L.Ed.2d 369 (1972), is beyond challenge. And subsequent to the approval in this case of what it stressed was an 'interim curtailment settlement,' thE commission has announced a new approach to permanent curtailment plans. For thr reasons stated...
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