IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 98-60057

THE BROOKLYN UNION GAS COMPANY;

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC;

PECO ENERGY COMPANY; SOUTHERN NATURAL GAS COMPANY;

AMOCO PRODUCTION COMPANY AND

AMOCO ENERGY TRADING CORPORATION;

DESTIN PIPELINE COMPANY, LLC;

SOUTH CAROLINA PIPELINE CORPORATION;

Petitioners

versus

FEDERAL ENERGY REGULATORY COMMISSION;

Respondent

Petition for Review of an Order of the

Federal Energy Regulatory Commission

September 17, 1999

Before REYNALDO G. GARZA, HIGGINBOTHAM, and DAVIS, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

We are a sked today to decide whether the Federal Energy

Regulatory Commission had jurisdiction over pipeline facilities

newly constructed by Transcontinental Gas Pipe Line Corporation for

transporting gas from the Gulf of Mexico to the shore and questions

of how the expense of constructing the new pipeline should be

distributed. The case before us arose from an Application filed2

with the Commission in 1996 by Transco under Section 7(c) of the

Natural Gas Act, 15 U.S.C. § 717(f), seeking a certificate of

public convenience and necessity to extend its existing system by

building and operating new offshore natural gas facilities in the

Gulf of Mexico, called the Mobile Bay Project.

In turn we will address questions of standing, reg ulatory

reach of the Commission, cost and pricing. The latter includes the

related question of whether Transco included the full costs of its

expansion or segmented a larger project to gain advantage from

rules that favor roll-in rates over incremental pricing when doing

so would not increase prices more than five percent.

I

After applying for a certificate of public convenience and

necessity, Transco conducted an “open season,” soliciting

transportation customers for the planned service addition. There

was little customer interest. Transco and WESCO, an affiliate gas

marketing company, executed a 15-year “Precedent Agreemen t” that

WESCO would t ake prescribed levels of service over the new

facilities. Transco also received some offers to relinquish

capacity from some of its existing Mobile Bay lateral shippers. In

April 199 7 Transco amended its application, reducing the size of

the proposed addition to fit the WESCO commitment and the

relinquishments. It then proposed to build the facilities and

place them in service in two phases. Phase I would consist of 57

miles of 24-inch diameter pipeline extending from the East Main3

Pass, Block 261, to a proposed new junction platform in the Mobile

Bay area, Block 822; 19 miles of 30-inch diameter pipe would extend

from the platform at Block 822 to a non-jurisdictional gas

processing plant in Mobile County, together with 36-inch pipe from

the processing plant to Transco’s Compressor Station 82, together

with a 15,000 horsepower compression addition at Transco’s existing

Station 82. In Phase II Transco would build a new Compressor

Station 83 with a 15,000 hp unit on the Mobile Bay Lateral,

downstream of Station 82.

Under the amended proposa l the initial rates to be charged

WESCO for service on the expanded facility would conform to the

existing maximum rate under Tran sco’s generally applicable rate

Schedule FT for firm transportati on within its rate Zone 4A,

encompassing the Mobile Bay Lateral.

Transco estimated the costs of the project at approximately

$120.2 million and submitted that its rate impact would be under

five percent and hence it was entitled to a presumption of rolledin-rate treatment. Responding to the requirement that it

demonstrate that the expansion brought system benefits, Transco

urged that there were both operationa l and financial benefits to

its existing system customers. These benefits, it urged, included

incre ased access to additional sources of gas supply, enhanced

reliability of peak service based on the increased supply and

compr e ssion, greater flexibility, and reduced costs of future

expansions.

FERC first concluded that the proposed facilities were gas4

transmission facilities subject to the regulatory reach o f NGA §

1(b) rather than exempt gas gathering facilities. In this first

order t he Commission also preliminarily determined that the

requested certificate was required by the public convenience and

necessity under NGA § 7(c), subject to specified conditions; that

absent changed circumstances, Transco should be permitted to roll

the costs of the facilities into its system rates when Transco

filed a generally applicable rate case under § 4 of the NGA. See

Pricing Policy for New and Existing Facilities Constructed by

Interstate Natural Gas Pipelines, 71 F.E.R.C. ¶ 61,241, reh’g

denied , 75 F.E.R.C. ¶ 61,105 (1996).

Brooklyn Union and numerous other companies, some gas

transportation customers of Transco, challenged the Commission’s

assertion of jurisdiction and its order all owing roll-in rates.

Amoco Production Company also challenged the ruli ng on roll-in

pricing and urged the Commission to put Transco at risk should the

facilities be underutilized. Amoco is a gas producer shipping on

Transco’s system and competing with WESCO in the sale of gas.

Petitioners Destin Pipeline Compa ny and Southern Natural Gas

Company compe te with Transco, and they challenged the orders

allowing roll-in pricing. Completing the array of challengers,

South Carolina Pipeline Corporation, a Transc o pipeline customer

who also competed with WESCO in the sale of gas in South Carolina,

challenged as discriminatory the order allowing Transco to charge

WESCO the existing rate until the next rate case. The Commission

rejected all these contentions and the petitio ns for review now5

before this court followed.

II

T ransco and the Commission challenge the standing of

petitioners, urging that none was aggrieved within the meaning of

§ 19(b) of the NGA by the orders they contest. The principles are

well developed. We have refused to review Commission orders that

are not “definitive” in their impact upon the rights of the parties

and that do not threaten the petitioner with irreparable harm.

Pacific Gas & Elec. Co. v. FERC

, 106 F.3d 1190, 1194 (5th Cir.

1997) (citing Transco ntinental Gas Pipe Line Corp. v. FERC

, 589

F.2d 186, 189 (5th Cir.), cert. denied , 445 U.S. 915 (1979)).

“A party has not been ‘aggrieved’ by a FERC decision unless

its injury is ‘present and immediate.’” P acific Gas & Elec. Co. v.

FERC

, 106 F.3d 1190, 1194 (5th Cir. 1997)(quoting Tenneco, Inc. v.

FERC

, 688 F.2d 1018, 1022 (5th Cir. 1982)). Relatedly, the dispute

must be r ipe for review. This kindred doctrine shifts to a

temporal focus, timing review to secure a fit of controversy and

judicial resolution. Ripeness considers the fluidity of the events

defining the dispute, such as whether the claim rests upon facts

yet airborne or sufficiently upon facts that have found ground. It

then balances the hardship of withholding decision and the fitness

of the case for judicial resolution. Courts work best with

historical facts and often must wait until history is determinable.

See Abbott Labs. v. Gardner

, 387 U. S. 136, 149 (1967); T exas v.

United States

, 118 S. Ct. 1257, 1259 (1988). At the same time

there is no requirement for finality in the usual sense in which we6

look for a final “judgment.” While we must not smuggle in these

familiar limits of 28 U.S.C. § 1292 upon appellate jurisdiction,

they are not irrelevant to the question of ripeness, whether events

are sufficiently settled.

The regulatory jurisdicti o n of the Commission aside, the

issues in this case trail from the overarching question of

incremental versus roll-in rate pric ing. Absent roll-in rates,

there is no proximate injury to the petitioners. And no petitioner

is aggrieved by the Commission decision that the project is for the

transport of interstate gas and not for its gathering, beyond the

pricing question.

The Commission urges that its decision to allow Tra nsco to

roll in its costs have no impact on rates and could not have impact

absent the turn of several events, each yet contingent. The

argument continues that Transco must first file for the rates and

that is not certain. The reply from petitioners is that the

Commission’s order is a determination adverse to their in terest,

particularly to Transco’s competitors, not unlike the determination

in ANR Pipelin e Co. v. FERC

, 771 F.2d 507 (D.C. Cir. 1985).

Pointing to the Pricing Policy Statem ent in which the Commission

stated that it will “summarily resolve the pricing issue in the

first rate case consistent with its certificate decision,”

petitioners c hallenge the assertion that the order has given

Transco only a “leg up.” Absent changed circumstances, the order

stands. Petitioners also point out that WESCO is granted an

immediate competitive advantage, and companies such as AETC will be7

subsidizing its competitor WESCO in that WESCO is not carrying the

cost burdens of an incremental rate.

The Commission points to the recent decision in New York State

Electric & Gas Corp. v. FERC

, 177 F.3d 1037 (D.C. Cir. 1999). The

D.C. Circuit dismissed for lack of jurisdiction a challenge to an

order preliminarily approving roll-in pricing when certifying new

pipeline construction as here. Petitioners respond that the case

is distinguishable in that NYSEG rejected a customer-petitioner’s

claim of current injury based on increased rates because those

increases actually stemmed from orders not on review.

The threshold questions of whether petit ions have standing,

were aggrieved, and whether the case is ripe turn here on whether

the order preliminarily approving roll-in rates caused petitioners

present injury. WESCO and companies like Destin are competitors,

and WESCO will enjoy large advantages if roll-in rates are allowed.

Providing the roll-in subsidy allows WESCO to receive 100 percent

of the transportation capacity while paying for only 41 percent of

the cost of service, $10.9 million. Transco’s unaffiliated

ratepayers will suffer an initial annual cost shift of $15.7

million. Petitioners urge that the proposed rate has immediate and

injurious consequences in the market is plain. Southern Natural

Gas urges that the “very prospect of subsidized, rolled-in rates of

$0.28 per Dth from Transco’s Mobile Bay Expansion to Southern’s

Zone 3 discourages subscriptions for competing capacity on

Southern.”

The Commission and Transco accent the preliminary character of8

the order and the opportunity of all parties to challenge the rate

decision in Transco’s rate case. They argue that any competitive

disadvantages from market anticipations of the likelihood of rollin rates are remot e reverberations to be ignored—at least too

ephemeral to be caught by a judicial hand. In this assertion the

Commission travels against its efforts to give predictability and

assurance to an industry faced with large capital decisions. To

the extent the Commission softens the bite of its pr eliminary

decision, it risks a toothless presumption and heightens the risk

of Transco.

All said, the inherent uncertainty of fu ture events and the

equivocal footing for any finding of current injury lends

commonsense support to the Commission and Transco’s urging of wait

and see. The price of delay is that petitioners must have a full

opportunity to challenge the roll-in rates, including the footing

of the presumption of roll-in rates itself.

III

We are persuaded that there is Article III standing and that

we have aggrieved petitioners. Ripeness, however, is an even

closer question. Its resolution is informed by additional

circumstances that awaiting the rate case may mitigate if not cure.

The Commission has initiated a Notice of Inquiry in response to our

decision in Sea R obin C o. v. FERC

, 127 F.3d 365 (5th Cir. 1997).

See Alternative Methods for Regulating Nat ural Gas Pipeline

Facilities and Services on the Outer Continental Shelf, FERC Stats.

and Regs. ¶ 35,532 (1998). The Commission did not take this case9

as an occasion for that response. The result is uncertainty of the

Commission’s position in the interim.

In granting Transco’s request for advance approval of roll-in

rates, the Commission summarily found that the impact of roll-in

rates was less than five percent and that Transco had demonstrated

specific system benefits in a c ase in which many customers

protested and the immediate benefits flow directly to WESCO, the

sole shipper subscribing and a Transco affiliate, a c ircumstance

that ou ght to trigger a hard look. The record reflects little

consideration to the assertion that Transco’s cost estimates were

unreasonable and were segmented by Transco to travel under the five

percent rule.

We decide the merits of none of these issues today. We recite

them only to emphasize that they remain open for contest when

Transco files its rate case. The motions to dismiss the petitions

for lack of justiciability, specifically that the orders they

challenge are not ripe for decision, are granted. We accept the

invitation of Transco and the Commission and direct t hat the

p etitioners may present their contentions to the Commission when

Transco files its rate case.

Questions of whether a petitioner is aggrieved and whether the

case is ripe for review are often nestled in clusters of fact and

circumstance unique to the case. In refusing to allow this case to

proceed to the merits we need not conclude that such “preliminary”

orders are never immediately reviewable, and we do not.

DISMISSED.