Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-01143/USCOURTS-caDC-06-01143-0/pdf.json

Parties Involved:
Federal Energy Regulatory Commission
Respondent
Sunoco, Inc.
Intervenor
Transcontinental Gas Pipe Line Corporation
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 23, 2007 Decided May 11, 2007

No. 04-1234

TRANSCONTINENTAL GAS PIPE LINE CORPORATION,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

SUNOCO, INC. (R&M), ET AL.,

INTERVENORS

Consolidated with

06-1143

On Petitions for Review of Orders of the

Federal Energy Regulatory Commission

Gregory Grady argued the cause for petitioner. With him

on the briefs were Michael Thompson and David A. Glenn.

Lona T. Perry, Attorney, Federal Energy Regulatory

Commission, argued the cause for respondent. With her on the

brief were John S. Moot, General Counsel, and Robert H.

Solomon, Solicitor.

USCA Case #06-1143 Document #1040054 Filed: 05/11/2007 Page 1 of 17
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Richard G. Morgan was on the brief for intervenor Sunoco,

Inc. (R&M).

Before: GRIFFITH and KAVANAUGH, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge KAVANAUGH.

KAVANAUGH, Circuit Judge: Transco owns a natural gas

pipeline; Sunoco ships gas on Transco’s pipeline. In 1992, to

settle a lawsuit by Sunoco against Transco, Transco agreed to

provide natural gas gathering and transportation services to

Sunoco for 20 years. In 2000, Transco decided to sell facilities

used to provide the gathering services covered in that agreement

to a Transco affiliate, Williams Gas Processing. The Federal

Energy Regulatory Commission approved the transfer to

Williams, but also ruled that Transco breached its 1992

agreement with Sunoco. As a remedy, FERC ordered Transco

to reimburse Sunoco for the extra amount that Sunoco has to pay

to obtain gathering services from Williams.

Transco’s principal contention is that FERC lacked

jurisdiction to impose this remedy because the gathering

services become non-jurisdictional once transferred to Williams.

We disagree. At the time of the contract, FERC had authority

to regulate the gathering services. FERC therefore had authority

to order Transco to pay compensation for terminating those

services in violation of the contract. Transco’s remaining

challenges also lack merit, and we therefore deny Transco’s

petitions for review.

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I

In 1991, Transco (formally known as Transcontinental Gas

Pipe Line Corporation) divided its natural gas transportation

services from its natural gas sales services. That “unbundling”

enabled customers to purchase either gas or transportation from

Transco, rather than requiring customers to buy both the gas and

the transportation from Transco. See Exxon Mobil Corp. v.

FERC, 430 F.3d 1166, 1169 (D.C. Cir. 2005). Transco

unbundled its transportation and sales services in preparation for

FERC’s issuance of Order 636. Issued in 1992, Order 636

promoted competition within the natural gas industry in two

ways. It required pipelines to unbundle transportation services

from sales services. And it permitted customers to access new

sources of gas by abrogating their prior commitments to

purchase gas from particular pipeline companies. See United

Distribution Cos. v. FERC, 88 F.3d 1105, 1126 (D.C. Cir. 1996).

As a consequence of Transco’s unbundling, one of its

customers, Sunoco, stopped purchasing natural gas from

Transco (instead, Sunoco would purchase only the transportation

services from Transco). The decision by Sunoco (and other

Transco customers) to abrogate their agreements to purchase gas

from Transco in turn caused Transco to incur liability to the

producers from whom Transco had agreed to purchase natural

gas. See id. at 1176-77. Under Transco’s arrangement with its

natural gas producers – a fairly typical arrangement for a natural

gas pipeline – Transco had already agreed to “take or pay” for

natural gas from those producers to satisfy the demands of

Transco’s customers. Therefore, after unbundling, Transco

owed significant money to its natural gas producers – an amount

for which Transco no longer received reimbursement from

Sunoco and other customers. See id. Like other pipelines,

Transco reached settlements with most of its former natural gas

customers and divided the “take or pay” liability between

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Transco and those customers.

Unlike Transco’s other customers, Sunoco objected to

Transco’s proposed recovery of “take or pay” costs from

Sunoco, and five years of litigation ensued. Transco and Sunoco

resolved that conflict on February 14, 1992, in a Settlement and

Firm Transportation Service Agreement.

In the 1992 settlement, Sunoco agreed to terminate the

litigation against Transco. In exchange, Transco agreed to

provide Sunoco with 20 years of transportation service from

numerous specified points along the Outer Continental Shelf to

the Sunoco refinery in Pennsylvania. Transco agreed to provide

the entirety of that service (including gathering and

transportation) at a single rate – Transco’s maximum firm

transportation (“FT”) rate, which is subject to periodic change

by Transco. See J.A. 55 (Stipulation: “Appendix A to the

Agreement contains the Form of Service Agreement under Rate

Schedule FT to be effective between Transco and Sun at such

time as the FERC has approved the Agreement . . . .”); id. at 98

(Art. V, Service Agreement: “Buyer shall pay Seller for natural

gas delivered to Buyer hereunder in accordance with Seller’s

Rate Schedule FT and the applicable provisions of the General

Terms and Conditions of Seller’s FERC Gas Tariff . . . .”).

On June 4, 1992, FERC approved the agreement. On

August 1, 1992, the agreement became effective.

From August 1, 1992, to November 20, 2000, Transco

provided Sunoco the transportation services as required by the

1992 agreement. Those transportation services included

“gathering” in which Transco took natural gas from wellheads

in Texas and transported the gas to a collection point for further

movement through Transco’s principal transmission system.

See Williams Gas Processing – Gulf Coast Co. v. FERC, 331

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F.3d 1011, 1013 (D.C. Cir. 2003) (internal quotation omitted);

see Transcon. Gas Pipe Line Corp., 96 FERC ¶ 61,115, at

61,429-30, 61,434-35, order on reh’g, 97 FERC ¶ 61,296

(2001), pets. denied, Williams Gas Processing, 331 F.3d at

1013, cert. denied, sub nom., Producer Coal. v. FERC, 540 U.S.

1141 (2004) (“Transco I”).

On November 20, 2000, Transco applied to FERC for

permission to sell facilities used to provide those gathering

services to an affiliated company, Williams Gas Processing –

permission that FERC granted. See Transco I, 96 FERC ¶

61,115, at 61,429. The transfer to Williams has not yet

occurred; when it does, Transco will have completed a process

known as a “spin down.” Transco’s spin down of the seven

gathering facilities in Texas will remove those facilities from

FERC’s jurisdiction. Gathering services typically are outside

the scope of FERC’s jurisdiction unless the services are

provided in connection with an interstate pipeline’s transmission

of gas. See 15 U.S.C. § 717(b) (“The provisions of this

chapter . . . shall not apply . . . to the production or gathering of

natural gas.”). At the time of the 1992 settlement between

Transco and Sunoco, Transco’s gathering services were within

FERC’s jurisdiction because Transco provided those services in

connection with Transco’s interstate transmission of gas. See

Williams Gas Processing – Gulf Coast Co. v. FERC, 373 F.3d

1335, 1337 (D.C. Cir. 2004) (FERC regulates gathering services

if gathering services provided by interstate pipelines that resell

services in interstate commerce); Conoco, Inc. v. FERC, 90 F.3d

536, 540, 545 (D.C. Cir. 1996) (same).

Because the gathering facilities will be non-jurisdictional

once sold to Williams, FERC lacked authority to prevent

Transco from selling those facilities. And in part for that reason,

in 2001, FERC approved Transco’s application to transfer the

facilities to Williams. See Transco I, 96 FERC ¶ 61,115, at

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61,435; see also Williams Gas Processing, 331 F.3d at 1022.

In 2002, Sunoco filed a complaint with FERC that

challenged Transco’s spin down, arguing that the costs for the

services previously received from Transco would be $15-28

million higher when Sunoco purchased the transportation and

gathering services from Transco and Williams. See Sunoco, Inc.

(R&M) v. Transcon. Gas Pipe Line Corp., 100 FERC ¶ 61,252,

at 61,889-91 (2002). In response to Sunoco’s 2002 complaint,

FERC required Transco to acquire natural gas capacity from

Williams and to assign that capacity to Sunoco at a rate

consistent with the 1992 settlement – this would ensure that

Sunoco continued to receive the services included in the

settlement at the agreed-to price. Id. at 61,892, 61,894. As a

result of this Court’s decisions in cases such as Williams Gas

Processing, 373 F.3d at 1342-44, which confirmed that FERC

lacked jurisdiction to regulate gathering services, FERC vacated

the remedy from its 2002 order and imposed a new remedy.

FERC decided that Transco must “reimburse Sunoco for any

additional costs Sunoco may incur as a result of Transco’s

violation of the 1992 Settlement rate.” Sunoco, Inc. (R&M) v.

Transcon. Gas Pipe Line Corp., 111 FERC ¶ 61,400, at 62,675

(2005). Transco now challenges that order in this Court.

II

As the parties agree, all of the natural gas services that

Transco committed to provide in the original 1992 settlement

were services then within FERC’s jurisdiction. Section 16 of

the Natural Gas Act authorizes FERC, moreover, “to perform

any and all acts, and to prescribe, issue, make, amend, and

rescind such orders, rules, and regulations as it may find

necessary or appropriate to carry out the provisions of [that

Act].” 15 U.S.C. § 717o. And the Natural Gas Act gives FERC

broad power to remedy violations of the Act. Columbia Gas

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Transmission Corp. v. FERC, 750 F.2d 105, 109 (D.C. Cir.

1984). That authority includes the power to order monetary

remedies for violations of contractual obligations.

Transco does not dispute that FERC possesses the authority

to remedy breaches of settlement agreements. Instead, Transco

suggests that FERC has attempted to indirectly (and

impermissibly) regulate Williams’s provision of nonjurisdictional gathering services by forcing Transco to reimburse

Sunoco for the costs of the gathering services. In Transco’s

view, such regulation exceeds FERC’s authority under Section

1(b) of the Natural Gas Act because FERC cannot regulate

gathering services. See 15 U.S.C. § 717(b) (“The provisions of

this chapter . . . shall not apply to . . . the production or gathering

of natural gas.”).

We disagree. FERC’s reimbursement order does not

regulate Williams’s provision of gathering services in any way.

FERC’s order is expressly directed against Transco, not

Williams. It requires Transco to reimburse Sunoco for causing

Sunoco’s costs to increase – in other words, for forcing Sunoco

to pay Transco and Williams more than the FT Rate that Sunoco

would owe to Transco under the settlement. FERC’s order has

no effect on Williams’s gathering services or the rate that

Williams charges Sunoco for gathering. See Sunoco, Inc.

(R&M) v. Transcon. Gas Pipe Line Corp., 114 FERC ¶ 61,180,

at 61,575-77 (2006) (“Sunoco VI”).

FERC traditionally has required reimbursement in

circumstances such as these. For example, in Office of the

Consumers’ Counsel v. FERC, 808 F.2d 125 (D.C. Cir. 1987),

a company abandoned a stretch of pipeline used to provide

jurisdictional natural gas service; FERC ordered the company to

reimburse customers for the costs of replacing the terminated

service with propane service (a non-jurisdictional energy

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service). See id. at 127, 129-30. This Court upheld FERC’s

order. See id. at 129-30, 133. Although the order in

Consumers’ Counsel arose in the form of a condition on

abandonment, rather than as a remedy for the breach of a

contract, the ultimate impact of FERC’s order in that case is

equivalent to FERC’s order here. Both orders required a FERCregulated company to reimburse customers when the company

increased customers’ costs by altering its earlier commitment to

provide certain specified services.

The Fifth Circuit approved FERC’s imposition of a similar

remedy in Coastal Oil & Gas Corp. v. FERC, 782 F.2d 1249

(5th Cir. 1986). Coastal delivered gas to its wholly owned

subsidiary, Lo-Vaca Gas Gathering Company, an intrastate

pipeline. Coastal had previously contracted to deliver that gas

to a FERC-regulated interstate pipeline belonging to the Florida

Gas Transmission Company. See id. at 1250-52. The Fifth

Circuit approved FERC’s order requiring Coastal to reimburse

Florida Gas for the extra costs that Florida Gas had to pay

following Coastal’s abandonment of FERC-regulated services.

See id. at 1253.

In an effort to counter these two decisions, Transco points

to other precedents of this Court. But the cases cited by Transco

do not address the issue before us and therefore do not help

Transco’s cause.

In one of the cases, as a remedy for Columbia Gas’s alleged

breach of a tariff agreement, FERC required Columbia to

provide and pay for services that were outside the scope of

FERC’s jurisdiction. See Columbia Gas Transmission Corp. v.

FERC, 404 F.3d 459, 460, 463 (D.C. Cir. 2005). FERC lacked

jurisdiction to impose the order in that case because Columbia’s

tariff governed non-jurisdictional gathering services from the

time of the tariff’s inception. See id. at 460-61. Therefore,

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regulation of the services in Columbia’s tariff was never within

the scope of FERC’s jurisdiction.

Here, by contrast, Transco’s settlement agreement with

Sunoco covered gathering services that were within FERC’s

jurisdiction at that time. Because FERC’s order in this case

(unlike in Columbia Gas) remedied the violation of a contract

regarding jurisdictional services, Columbia Gas does not

support Transco.

In Williams Gas Processing – Gulf Coast Co. v. FERC, 373

F.3d 1335 (D.C. Cir. 2004), Williams Field Services began

providing numerous energy companies with gathering services

from facilities that Transco previously owned. See id. at 1338-

40. FERC concluded that Williams Field Services had been

charging an unfair rate for those services, so FERC ordered

Williams Field Services to change its rate. See id. at 1340-41.

Although FERC argued that Williams Field Services and

Transco were so closely connected that FERC’s regulation of

Williams’s rate was really just a regulation of Transco (a

company within FERC’s jurisdiction), this Court concluded that

Williams acted independently from Transco when it established

its rates. Therefore, we found that FERC had no authority to

regulate the rate that Williams charged for entirely nonjurisdictional gathering services. See id. at 1343.

The difference in the case here, of course, is that FERC’s

orders have no effect on the rate that Williams Gas Processing

will charge Sunoco for the provision of non-jurisdictional

gathering services. Rather, FERC’s orders simply require

Transco to reimburse Sunoco for the extra gathering costs that

Sunoco will bear after the spin down. See Sunoco VI, 114 FERC

¶ 61,180, at 61,575-77.

The decision in Conoco Inc. v. FERC, 90 F.3d 536 (D.C.

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Cir. 1996), likewise does not support Transco’s argument. In

that case, FERC had issued orders related to NorAm Gas’s spin

down of gathering facilities to NorAm Field. See id. at 539,

541, 553. FERC ordered both NorAm Gas and NorAm Field to

provide NorAm Gas’s former customers with two years of

gathering services from NorAm Field following the spin down.

See id. at 541-42, 550. This Court concluded that FERC lacked

jurisdiction to issue the order because it indirectly regulated

services provided by NorAm Field, a non-jurisdictional

gathering facility. See id. at 552-53.

In the orders on appeal in this case, by contrast, FERC has

not required Williams to provide Sunoco with gathering

services. Therefore, FERC’s orders neither directly nor

indirectly regulate Williams’s provision of non-jurisdictional

gathering services. Cf. Richmond Power & Light v. FERC, 574

F.2d 610, 620 (D.C. Cir. 1978) (“What the Commission is

prohibited from doing directly it may not achieve by

indirection.”).

In sum, as the case law demonstrates, FERC possesses

jurisdiction to order Transco to reimburse Sunoco for the extra

costs that Sunoco will bear after Transco transfers facilities used

to provide gathering services to Williams.

III

In its petitions, Transco raises eight additional arguments,

none of which is persuasive, particularly given the “high degree

of deference” we give to “the Commission’s interpretation of a

settlement agreement.” Transcon. Gas Pipe Line Corp. v.

FERC, 922 F.2d 865, 869 (D.C. Cir. 1991).

First, Transco contends that the 1992 agreement governed

only jurisdictional services and points out that gathering services

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from the seven Texas facilities will cease to fall within that

category following the spin down. Because the agreement was

intended to apply only to jurisdictional services (so Transco

argues), Transco contends that its termination of what are now

non-jurisdictional services cannot possibly breach its agreement

with Sunoco.

This is incorrect because the agreement included a flat

commitment by Transco to provide certain specified services for

20 years. FERC reasonably concluded that Transco’s new

arrangement breaches that agreement.

Second, Transco also argues that its spin-down proposal did

not violate the 1992 agreement because Article IV, paragraph 3

of the Settlement and Article V, paragraph 1 of the Service

Agreement constitute so-called Memphis Clauses. The Clauses

provide that nothing in the agreement “is intended, nor shall it

be construed, as limiting or affecting in any way Transco’s

rights under the Natural Gas Act to file and place into effect any

changes in rates or modifications, additions, or deletions to its

FERC Gas Tariff.” J.A. 66 (Settlement); see also id. at 98

(Service Agreement). Transco contends that the Clauses permit

Transco to unilaterally alter the FT Rate it charges to Sunoco or

to abandon gathering services. FERC reasonably found

Transco’s contention to be both factually and legally flawed.

As a factual matter, the agreement permits Transco to

modify only the rate it charges to Sunoco or the general terms

and conditions of the service that Transco provides to Sunoco.

The Memphis Clauses do not purport to provide Transco with

any authority to eliminate portions of the services that it

provides to Sunoco.

As a legal matter, moreover, the Supreme Court and this

Court have confirmed that Memphis Clauses ordinarily do not

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authorize companies to unilaterally alter the amount of services

they have agreed to provide their customers. The Memphis

Light case from which the Clauses originated involved a

contract clause that permitted a change merely in energy rates –

not a change in the amount of energy services covered by the

relevant contract. See United Gas Pipe Line Co. v. Memphis

Light, 358 U.S. 103, 105 (1958). This Court has determined that

changes in services are not permitted under Memphis Clauses.

See Exxon Mobil Corp. v. FERC, 430 F.3d 1166, 1173 (D.C.

Cir. 2005); id. at 1168 (“[P]rices may be increased, terms may

be altered, but contracts may not be unilaterally amended to

effectively add new service.”). Transco’s Memphis Clause

argument therefore fails.

Third, Transco points to a phrase in Article II(A), paragraph

2, of the settlement that provides: “[A]bandonment of this FT

service shall occur only in accordance with the procedures and

standards set forth in Section 7(b) of the Natural Gas Act.” See

Petr.’s Br. at 28 (internal quotation omitted). Because the only

restriction is the requirement that abandonment comply with the

Natural Gas Act, Transco suggests that some abandonment of its

services must be permissible.

But the context of the contractual provision in which the

“abandonment” phrase appears is as follows: “FERC approval

of this Stipulation and Agreement shall provide that pregranted

abandonment under Section 284.221(d) of the Regulations will

not be applicable to this FT service. As a result, abandonment

of this FT service shall occur only in accordance with the

procedures and standards set forth in Section 7(b) of the Natural

Gas Act.” J.A. 61-62 (Art. II(A), ¶ 2, Settlement). This

provision does not establish that abandonment of services is

permitted if it complies with the Natural Gas Act. The

“pregranted abandonment” to which paragraph 2 refers is a

specific right to abandon transportation services upon the

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expiration of an energy company’s contract to provide

transportation services. See 18 C.F.R. § 284.221(d). Paragraph

2 denies that particular abandonment procedure to Transco; it

does not suggest, however, that Transco can abandon energy

services before the expiration of Transco’s 20-year contract

term.

Furthermore, interpreting Article II as permission for

Transco to abandon some of the services specified in Exhibit A

of the agreement would make no sense. It would contravene the

provisions in the agreement that require Transco to provide

services for a period of at least 20 years. Why would Transco

and Sunoco have agreed to a 20-year contract term if the 1992

agreement really meant that Transco had to provide the services

only until Transco unilaterally decided to abandon some of those

services? Transco has no answer.

Fourth, Transco claims that certain provisions in the 1992

agreement regarding successors show that Transco and Sunoco

envisioned Transco’s selling facilities used to provide some of

its services to other companies, such as Williams. Therefore,

according to Transco, FERC should no longer hold Transco

responsible for gathering services because Sunoco was aware

that Transco might stop providing some of the services. The

problem with Transco’s argument is that the text of the 1992

agreement explicitly binds Transco’s and Sunoco’s successors

to the agreement. Therefore, either Transco must adhere to the

agreement, or Transco’s successor must provide the services

governed by the 1992 agreement. Because Williams is not such

a successor (as Transco has previously argued to FERC), FERC

reasonably concluded that Article IV of the Settlement and

Article VI of the Service Agreement bind Transco to its 1992

commitment. See Sunoco, Inc. (R&M) v. Transcon. Gas Pipe

Line Corp., 114 FERC ¶ 61,180, at 61,575 (2006) (“Sunoco

VI”).

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Fifth, Transco argues that FERC mischaracterized the FT

Rate that Transco must charge Sunoco as a flat rate rather than

a cost-based rate. Therefore, according to Transco, Transco

could have charged Sunoco an extra fee for gathering services

– in addition to the FT Rate – even if Transco continued to

provide gathering services to Sunoco rather than abandoning

those services. If the 1992 agreement permitted Transco to

provide an extra charge for gathering services, Transco contends

it certainly cannot be a breach of the agreement for Transco to

choose instead to terminate its gathering services while

continuing to charge just the FT Rate to Sunoco.

The problem for Transco here is that the terms of the

agreement establish that Sunoco would pay a single rate for all

of the services that it received from Transco for 20 years –

services that initially included Transco’s gathering services.

Furthermore, Article IV, paragraph 2 of the settlement provides

that various portions of the settlement are non-severable –

suggesting that Transco could not separate its gathering services

and subject them to a distinct charge. As a result, there is no

contractual authority for Transco to impose a gathering charge

on Sunoco above and beyond the FT Rate that Sunoco pays for

the remaining settlement charges. And there is no contractual

basis, therefore, for Transco to continue charging Sunoco the

full FT Rate without ensuring that Sunoco receives all of the

services listed in the agreement at the agreed-upon rate.

Sixth, Transco argues that FERC’s remedy is inequitable

and unreasonable under Section 5 of the Natural Gas Act. See

15 U.S.C. § 717d(a) (when FERC finds natural gas rate unjust

or unreasonable, “Commission shall determine the just and

reasonable rate . . . to be thereafter observed and in force, and

shall fix the same by order”). According to Transco, FERC’s

order is unjust because FERC had already conditioned its

approval of Transco’s spin down on Transco’s decreasing its FT

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Rate. See Transcon. Gas Pipe Line Corp., 97 FERC ¶ 61,296,

at 62,388-89 (2001). Therefore, as a result of FERC’s latest

orders, Transco notes that it must both (i) reduce its FT Rate to

reflect its lower operating costs without the gathering facilities

and (ii) reimburse Sunoco for the extra amount above the FT

Rate that Sunoco will have to pay for gathering services after the

spin down. According to Transco, that combination of FERC

orders causes Transco to face a double burden, which is unjust.

Transco’s argument does not account for the fact that

Transco never charged Sunoco a rate for services that is broken

down to reflect the separate costs of the gathering services.

Since 1992, Transco always charged one FT Rate to Sunoco.

Therefore, the reduction in Transco’s FT Rate to reflect the costs

that Transco will save after the spin down is unlikely to equal

the extra fees (above the pre-spin down FT Rate) that Sunoco

will pay to receive gathering services from Williams. In fact,

FERC calculates that Transco’s reduction in costs due to

abandonment is likely to be de minimis, in contrast to the $15-

28 million in extra costs that Sunoco has contended it will bear

after the spin down. See Sunoco VI, 114 FERC ¶ 61,180, at

61,581-82. Therefore, the mere reduction in Transco’s FT Rate

that FERC ordered as a condition of Transco’s abandonment

plainly will not compensate Sunoco for the loss of gathering

services that Transco committed to provide in the 1992

agreement. FERC has “broad authority to fashion equitable

remedies.” Columbia Gas Transmission Corp. v. FERC, 750

F.2d 105, 109 (D.C. Cir. 1984). Within that “broad authority,”

FERC appropriately determined that Sunoco will receive fair

treatment under the 1992 agreement only if Transco reimburses

Sunoco for the extra gathering costs that Sunoco will pay to

Williams after Transco’s spin down.

Seventh, Transco broadly argues that FERC’s order is

contrary to FERC’s long-standing pro-competitive policies in

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favor of unbundling energy services. To be sure, Order 636

encouraged natural gas companies to unbundle their

transportation and sales services to promote competition within

the natural gas industry. And FERC has concluded that the spin

down of gathering facilities furthers FERC’s policy in favor of

unbundling. See Transcon. Gas Pipe Line Corp., 96 FERC

¶ 61,115, at 61,429-30, 61,434-35, order on reh’g, 97 FERC

¶ 61,296 (2001), pets. denied, Williams Gas Processing – Gulf

Coast Co. v. FERC, 331 F.3d 1011, 1013 (D.C. Cir. 2003), cert.

denied, sub nom., Producer Coal. v. FERC, 540 U.S. 1141

(2004).

In addition to its pro-competitive policies, however, FERC

also has had a long-term policy in favor of enforcing

settlements. See Brooklyn Union Gas Co. v. FERC, 409 F.3d

404, 405, 407 (D.C. Cir. 2005); United Mun. Distribs. Group v.

FERC, 732 F.2d 202, 209 (D.C. Cir. 1984). And FERC’s orders

in this case simply enforce the 1992 settlement between Transco

and Sunoco.

Eighth, Transco contends that Sunoco’s 2002 challenge to

Transco’s alleged settlement breach was an improper collateral

attack on FERC’s 2001 approval of Transco’s abandonment of

facilities used to provide gathering services. This argument is

entirely unpersuasive. In the orders before this Court, FERC did

not revisit whether it properly approved Transco’s abandonment

of gathering facilities. Instead, FERC tried to determine how to

fairly remedy Transco’s breach of its 1992 agreement in light of

Transco’s already-approved abandonment. See Sunoco, Inc.

(R&M) v. Transcon. Gas Pipe Line Corp., 100 FERC ¶ 61,252,

at 61,889 (2002). By contrast, the cases that Transco cites

regarding collateral attack involved repeated requests for FERC

to consider the same issue. See, e.g., McCulloch Interstate Gas

Corp. v. FPC, 536 F.2d 910, 912-13 (10th Cir. 1976). Those

cases are irrelevant to the issue here.

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* * *

We deny Transco’s petitions for review.

So ordered.

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