# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Ar gued November 14, 2017 Decided April 24, 2018

No. 16

- 1244

C ITY OF C LARKSVILLE
, T ENNESSEE
, P ETITIONER

v.

F EDERAL E NERGY R EGULATORY C OMMISSION
, R ESPONDENT

T ODD C OUNTY
, K ENTUCKY
, I NTERVENOR

On Petition for Review of Orders of the Federal Energy Regulatory Commission

Jeffrey K. Janicke argued the cause for petitioner. With
him on the briefs were James R. Choukas

- Bradley and Joshua
L. Menter

.

John P. Gregg and Randolph Elliott were on the brief for
amicus curiae American Public Gas Association and American Public Power Association in support of petitioner. Delia D.
Patterson entered an appearance.

Beth G. Pacella , Deputy Solicitor, Federal Energy Regulatory Commissio n, argued the cause for respondent. On2

the brief were Robert H. Solomon , Solicitor, and Ross R.
Fulton , Attorney.

Jennifer N. Waters was on the brief for intervenor Todd County, Kentucky in support of respondent.

Before: G RIFFITH and W ILKINS
, Circuit Ju dges , and
R ANDOLPH
, Senior Circuit Judge

.

Opinion for the Court filed by Circuit Judge W ILKINS

.

W ILKINS
, Circuit Judge: We consider a Petition for Review challenging the Federal Energy Regulatory
Commission’s assertion of Natural Gas Act jurisdiction over
the transportation and sale of natural gas for resale from the City of Clarksville, Tennessee to the City of Guthrie, Kentucky. See Order Granting Service Area Determinations, City of Clarksville, Tennessee

, 146 FERC ¶ 61,074 (2014);
Ord er Denying Reh’g, City of Clarksville, Tennessee , 155
FERC ¶ 61,184 (2016). Clarksville challenges the
Commission’s exercise of jurisdiction as contrary to the plain language of the Natural Gas Act (“NGA”), 15 U.S.C. §§ 717

- 717z, and contrary to longstand ing FERC precedent.

For the reasons explained below, we grant the Petition for
Review and vacate FERC’s Order Granting Service Area Determinations and Order Denying Rehearing to the extent they are inconsistent with this opinion

.

I.

Congress enacted the Natural Gas Act, ch. 556, 52 Stat. 821 (1938) (codified as amended at 15 U.S.C. §§ 717

- 717z), with the principal aim of “ encourag [ing] the orderly developme nt of plentiful supplies of . . . natural gas at3

reasonable prices, ” NAACP v. Fed. Power Comm’ n , 425 U.S. 662, 669

- 70 (1976), and “ protect[ing] consumers against exploitation at the hands of natural gas companies, ” Fed.
Power Comm’ n v. Hope Nat

. Gas Co.

, 320 U.S. 591, 610 (1944). Along with those main objec tives, there are also
several “‘ subsidiary purposes ’. . . includ[ing] ‘ conservation, environmental, and antitrust ’ issues. ” Pub. Utils. Comm’ n of
Cal. v. FERC

, 900 F.2d 269, 281 (D.C. Cir. 1990) (quoting
NAACP

, 425 U.S. at 670 & n. 6).

The Act vests FERC with broad authority to regulate the

trans portation and sale of natural gas in interstate commerce. 15 U.S.C. § 717c; see also Schneidewind v. ANR Pipeline Co.

, 485 U.S. 293, 30 0 (1988) (“The NGA long has been recognized as a comprehensive scheme of federal regulation of all
wholesales of natural gas in interstate commerce.” (citations and internal quotation marks omitted) ). To achieve this objective, Congress equipped the Commission with a variety of regulatory tools, one of which captures the focus of this
Court’s review.

Under Section 7(c) of the Act, a natural gas company must obtain a c ertificate of p ublic c onvenience and n ecessity from FERC prior to “ undertak[ing] the construction or extension ” of any natural gas facility for the transportation of natural gas in
interstate commerce. 15 U.S.C. § 717f(c)(1)(A) . The Act
defines a “natural

- gas company” as a “person engaged in the transportation of natural gas in interstate commerce, or the sale
in interstate commerce of such gas for resale.” Id. § 717a(6). A “person” “ includes an individual or corporation.”
Id. § 717a(1). The Act specifies that a corporation “shall not include municipalities,” which are defined as “cit[ies], count[ies], or othe r political subdivision[s] or agenc[ies] of a
State.” Id. § 717a(2 )

- (3).4

Section 7(f)(1) permits FERC to make a service area determination, by which it can authorize an entity primarily engaged in the local sale or distribution of natural gas but subj ect to the Commission’s jurisdiction because its facilities cross state lines, to construct, enlarge, or extend its facilities to meet market demand without prior FERC approval. 15 U.S.C. §717f(f)(1); Intermountain Mun. Gas Agency & Questar Gas
Co. , 97 F ERC ¶ 61,359, ¶ 62,660 (2001); Ken

- Gas of Tenn.,
Inc. , 45 FERC ¶ 61,110, ¶ 61,346 (1988).

FERC regulations issued pursuant to Section 7 provide for the automatic issuance of any necessary certificate authority for

a non

- interstate pipeline to make sales for resale in interstate commerce without being subject to other NGA filing or reporting regulations. 18 C.F.R. § 284.402. A separate regulation allows the Commission to issue a blanket certificate permitting an otherwise local distribution entity to tr ansport natural gas that is subject to FERC’s jurisdiction under the
NGA. Id. § 284.224; see Intermountain Mun. Gas Agency v.
FERC , 326 F.3d 1281, 1283 n.4 (D.C. Cir. 2003).

II.

The City of Clarksville, Tennessee (“Clarksville”) is a municipality that operates natural gas facilities providing natural gas services to customers in both Tennessee and Kentucky. Clarksville owns and operates a natural gas distribution system that serv es a “significant geographic area” in Montgomery County, as well as smaller, discrete areas in Cheatham and Robertson Counties, all in Tennessee. In addition, Clarksville operates distribution facilities that service the U.S. Army base at Fort Campbell

– partly located in Kentucky

– and provides gas service to 16 commercial customers through the “Kentucky Service Line” pipeline. The “Kentucky Service Line” pipeline extends from Clarksville’s5

municipal system in Montgomery County 2,400 feet into
Christian County, Kentucky.

On June 26, 2013, Clarksville filed an application with FERC, requesting a Natural Gas Act Section 7(f) service area determination covering its services to Fort Campbell and the Kentucky Service Line . Clarksville also requested a waiv er of reporting, accounting, and other regulatory requirements that are primarily applicable to FERC

- jurisdictional natural gas companies. In an order issued February 7, 2014, FERC granted these requests.

During the proceeding, the Commission learned t hat Clarksville has a service agreement with the City of Guthrie, Kentucky (“Guthrie”). Under that contract, Clarksville transports natural gas to a meter and regulating station 20 feet south of the Tennessee/Kentucky border, where Guthrie receives the ga s into a pipeline that crosses into Kentucky. Though Clarksville did not know for certain, it assumed that Guthrie sells the gas to retail customers in Kentucky. Having learned about the agreement between Clarksville and Guthrie

, FERC stated

– in a footn ote in its order granting the requested
service area determination

– that the sales to Guthrie were covered under a blanket marketing certificate already granted by 18 C.F.R. § 284.402 . FERC also declared that should Clarksville desire to transport natura l gas in interstate

commerce in the same manner as an intrastate pipeline may
under section 311 of the Natural Gas Policy Act (“NGPA”)

, 15 U.S.C. § 3371, it would be required to obtain a different certificate under 18 C.F.R. § 284.224. 146 FERC ¶ 61,074, at 61,311 n.15.

Clarksville sought rehearing of FERC’s determinations regarding its agreement with Guthrie, arguing that it did not require authorization under Section 7 of the NGA to transport6

and sell gas to Guthrie for resale and consumption in Kentu cky
because Clarksville is a municipality as defined by the NGA. Relying on prior FERC orders, Clarksville argued that FERC lacked jurisdiction over these transaction s because the NGA excludes municipalities from the ambit of FERC’s jurisdiction. Althoug h FERC acknowledged the precedent upon which Clarksville relied, FERC explained that it had “reconsider [ ed ] ” this precedent. 155 FERC ¶ 61,184 at P

. 11

. Specifically, FERC explained that its prior “interpretation of the municipal exemption created by ope ration” of the NGA was “overly expansive, at least to the extent it would allow municipal gas utilities to avoid NGA jurisdiction over the transportation and sale of gas for consumption in other states , because such an interpretation would create a regulat ory gap.” Id. (emphasis in original). The Commission reasoned that this regulatory gap would contravene the purpose of the NGA, which was “intended to fill the regulatory gap left by a series of Supreme Court decisions that interpreted the dormant Commerce Clause to preclude state regulation of interstate transportation and of wholesale gas sales.” Id

. at P

. 1 5 (citation omitted). FERC largely relied on its decision in Intermountain Municipal Gas Agency , 97 FERC ¶ 61,359 (2001), reh’g denied , 98 FERC ¶ 61,216 (2002), aff’d

, 326 F.3d at 1286 (denying petition for review on separate grounds), where FERC found that it has jurisdiction over a municipally

- owned pipeline that crosses
state lines. 155 FERC ¶ 61,184 at P

. 19.

In addition to finding that it has jurisdiction over
Clarksville’s sales and transportation of natural gas to Guthrie, FERC recognized “that Clarksville has been providing service for Guthrie for some time and that the current arrangement provides necessary gas supplies for Guthrie’s local distribution system in Kentucky. ” Id. at P. 20. In light of that, FERC found that the “public convenience and necessity” required it to issue
Clarksville a “case

- specific certificate of limited jurisdiction to7

authorize [Clarksville’s] existing transportation service for
Guthrie withou t affecting its otherwise non

- jurisdictional
activities and facilities.” Id. Thus, Clarksville could continue
to transact with Guthrie under the terms of the existing

contract.

II I

.

A.

Before addressing the merits, we must first determine
whether Clarksville has standing to challenge the orders at issue and whether the dispute is ripe for our review. For the reasons discussed below, we reject FERC’s standing and ripeness challenges to our authority to hear the Petition for
Review.

i

.

Any party t o a proceeding under the Act who is

“ aggrieved ” by a FERC order may petition for review of that
order in this court, provided that they first seek rehearing
before FERC. 15 U.S.C. § 717r(a)

- (b). A party is aggrieved only if it can establish the constitut ional requirements for standing. PNGTS Shippers’ Grp. v. FERC , 592 F.3d 132, 136 (D.C. Cir. 2010) (citation omitted). To establish constitutional standing, a petitioner must establish that she has suffered an injury in fact that is fairly traceable to th e challenged action of
the defendant and “ likely ” to be redressed by a favorable judicial decision. WildEarth Guardians v. Jewell , 738 F.3d 298, 305 (D.C. Cir. 2013) ( citing Lujan v. D efs. of Wildlife , 504 U.S. 555, 560

- 61 (1992)).

Clarksville plainly satisfies the first requirement that it seek rehearing before FERC

. But the Commission contends8

that the Clarksville is not “aggrieved” because

, notwithstanding the orders at issue, Clarksville can continue to transport and make sales for resale t o Guthrie in the same
manner as it could before the Commission’s orders , and thus it
has suffered no injury . Resp’t’s Br. 3. Clarksville disputes this portrayal of the facts and provides two grounds upon which it asserts it has standing. First, Clarksvi lle explains that FERC’s decision subjects it to the data retention and price reporting requirements set forth in 18 C.F.R. § 284.403. See Pet’r’s Br.
14 & nn.39

- 40. Second, Clarksville states that FERC’s exercise of jurisdiction in this situation has af fected its business decisions regarding the provision of new services to other
entities outside of Tennessee

. Id. at 1 5 ; Pet’r’s Reply 4; Hickey Affidavit, Pet’r’s Br. add. B, at B

- 2

- B

- 3.

Although FERC asserted in its brief that Clarksville would
not b e subject to the additional regulatory requirements found in 18 C.F.R. §284.403, see Resp’t’s Br. 16

- 17, at oral argument counsel for FERC conceded that its ruling did in fact subject Clarksville to a “minimal” data retention requirement. This imposition of new regulatory obligations, in and of itself, is sufficient to establish standing. See Dominion Transmission,
Inc. v. FERC , 533 F.3d 845, 852 (D.C. Cir. 2008) (finding standing where FERC required the petitioner to meet new regulatory and reporting req uirements, thereby changing existing obligations and requiring the disclosure of private operating data); cf. State Nat’l Bank of Big Spring v. Lew , 795 F.3d 48, 55 (D.C. Cir. 2015) (finding petitioner’s claim too speculative without additi onal regulatory requirements).

The injury Clarksville alleges it has suffered is fairly traceable to FERC’s actions and is likely to be redressed by a judicial decision in Clarksville’s favor. Accordingly , we find that Clarksville has standing to challenge the orders at issue,9

and we need not decide the effect of FERC’s exercise of jurisdiction on Clarksville’s business decisions.

ii.

FERC’s assertion that the controversy is not ripe for
review fares no better. Ripeness involves an inquiry into the fitness of the issues for judicial review and the hardship to the parties of withholding that review. Abbott Labs. v. Gardner

, 387 U.S. 136, 149 (1967). But a showing of hardship is ordinarily unnecessary where the a gency “has suggested no institutional interests in postponing review

. . . , and adjudication will not benefit from additional facts.” Pub. Serv.
Elec. & Gas Co. v. FERC

, 485 F.3d 1164, 1168 (D.C. Cir. 2007)

.

Neither Clarksville nor FERC has suggested a need for further factual development. Moreover , FERC does not suggest that its interpretation of the NGA has not crystalized enough for this Court’s review. See Burlington N. R. R

. Co. v. Surface Transp. Bd. , 75 F.3d 685, 691 (D.C. Cir. 1996). Instead, the Commission repackages its standing argument, asserting that Clarksville does not face any hardship that requires judicial review at this time. Our discussion of standing
dooms that contention

.

B

.

Turning to the merits , we review the Commission’s interpretation of the NGA under the familiar two

- step framework of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984). See S.C. Pub.
Serv. Auth. v. FERC , 762 F.3d 41, 54 (D.C. Cir. 2014) (per

c uriam). If the Court determines that “Congress has directly spoken to the precise question at issue,” and “the intent of10

Congress is clear, that is the end of the matter.” Chevron , 467 U.S. at 842. If, however, “the statute is silent or ambiguous
with r espect to the specific issue,” then the Court must determine “whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843. “No matter how it is framed, the question a court faces when confronted with an agency’s interpr etation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority,” City of Arlington v. FCC

, 569 U.S. 290, 29 7 (2013) (emphasis omitted), and the court
will defer to the Commission’s reasonab le interpretation of statutory ambiguities concerning both the scope of its statutory authority and the application of that authority, see id. at 296

- 97.

In addressing a question of statutory interpretation, we begin with the text. See, e.g.

, Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist. , 541 U.S. 246, 252 (2004). The dispute
centers around Section 7(c) of the NGA, which, in relevant part, provides:

No natural

- gas company 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, subject to the jurisdiction of the Commission . . . , unless there is in force with respect to such natural

- gas company a certificate of public convenience and ne cessity issued by the Commission authorizing such acts or operations[.]

15 U.S.C. § 717f(c)(1)(A). Again, t he NGA defines a “natural

gas company” as a “person” “ engaged in the transportation or sale for resale of natural gas in interstate commerce. ” Id. § 717a(6). The Act defines a “person” to include an11

“individual or corporation,” id. § 717a(1), and specifies that a corporation “shall not include municipalities .” Id. § 717a(2).

Relying on the plain language and significant FERC precedent

, Clarksville contends that as a municipality, it is exempt from regulation under NGA Section 7. Pet’r’ s Br.
20

- 2 5 , 27. We agree. The language of the statute with respect
to the definition of a “natural

- gas company” and a “person” is clear and unambiguous

– a municipality is not a natural gas

company or a person. Given the plain meaning of the text

, we hold that Section 7(c) of the NGA precludes FERC from regulating, through certificates of public convenience and necessity, natural gas sales by municipali ties acting as municipalities

. Cf. In termountain , 97 FERC ¶ 61,359, at 62,659

- 60 (municipality with pipeline crossing state line ceases to act as a municipality). Indeed, FERC has held as much for over 50 years. See, e.g.

, Freebird Gas Storage, LLC

, 111 FERC ¶ 61,054 , P. 5 (2005) (“The Commission has determined that District is a municipality under section 2(3) of the NGA and therefore is not subject to the Commission’s jurisdiction.”); Somerset Gas Serv. , 59 FERC ¶ 61,012 (1992) (disclaiming jurisdictio n under the NGA and the Natural Gas Policy Act over a municipality’s transportation service for an interstate pipeline) ; Tenn. Gas Pipeline Co. , 70 FERC ¶ 61,329

, ¶ 62,013 (1995) (“[T]he NGA exempts municipalities as entities from our jurisdiction[.]”) ; Te nn. Gas Pipeline Co. , 69 FERC ¶ 61, 239

, ¶ 61,903 (1994 ) (“[S]ince a municipality is not an individual and cannot be a corporation under NGA section 2, it cannot be a person and thus cannot be a natural

- gas company subject to the Commission’s NGA jurisdicti on.”); United Gas Pipe Line Co. , 46 FERC ¶ 61,060 (1989) (holding that municipalities are “nonjurisdictional”); Nw. Ala. Gas Dist.

, 42 FERC ¶ 61,371 (1988) (disclaiming NGA jurisdiction over an Alabama municipality’s backhaul service for an interstate pipe line); Tex. Gas Transmission Corp. , 3 FERC ¶ 61,135

,12

¶ 61,40 5 (1978) ( “Memphis is not required to obtain certificate authorization under the Natural Gas Act to acquire the subject facilities since Memphis is a municipality and Section 2 of the
Act does no t include municipalities within the definition of a ‘person’ within the meaning of the Act.”); Panhandle E. Pipe Line Co. v. City of Rolla, Kan. , 26 FPC 736, 737 (1961) (dismissing for lack of jurisdiction an interstate pipeline’s complaint against a municipality after finding that the “plain language” of the NGA “expressly” excludes municipalities from “the ambit of Commission jurisdiction” ) ; Sal es and Transportation by Interstate Pipelines and Distributors; Expansion of Categories of Activities Authorized Under Blanket Certification, 48 Fed. Reg. 34,875

- 01, at 34,886 ( July
20 , 1983) (“[M]unicipalities cannot be issued certificates under
section 7 (c) of the Natural Gas Act[.]”)

.

Despite its longstanding precedent to contrary, FERC makes two arguments to support its present position , neither of which is persuasive . First, relying on United States v. Pub lic
Utilities Commission of Cal ifornia ( CPU C )

, 345 U.S. 295 (1953), FERC contends that a municipality can be a jurisdictional “person” and, therefore, a “natural gas company”
under the NGA. 155 FERC ¶ 61,184 at P. 13

. In CPUC , the Supreme Court considered whether the Federal Power
Commission (“FPC”) had the authority to regulate wholesale sales of electricity from a company to a municipality in another

state pursuant to Section 201 of the Federal Power Act (“FPA”), 16 U.S.C. § 824 . Section 201(b)(1) states that the provisions of the FPA at is sue

– Part II of the FPA

– “apply to the transmission of electric energy in interstate commerce and to the sale of electric energy at wholesale in interstate commerce,” with some exclusions not relevant here. 16 U.S.C. § 824(b)(1). Section 201 further de fines the “sale of electric energy at wholesale,” as the sale of such energy to “any person
for resale.” Id. § 824(d)

. FPA Section 3(4) states that “person13

means an individual or corporation,” the latter of which is defined not to include a municipality. Id. § 796(3), (4).

Acknowledging this statutory language but concluding that the plain language would “bring about an end completely at variance with the purpose of the statute

, ” the Court rejected
the contention that FPC could not exercise authority over the sales in question. CPUC , 345 U.S. at 31 5

- 1 6. Specifically

, the
Court stated that the use of the definitions found in Section 3 “has no support in the statutory scheme as a whole,” particularly because other sections of Part II of the FPA rely on the premise “that [ ] political subdivision s of the states can be aggrieved by the failure of a public utility selling power to them to satisfy the requirements of Part II.” Id. at 312

- 13. In addition, the Court found no evidence of “conscious
coordinat ion” between Section 3 and Section 201 , and thus, Congress could not have intended the definitions to be a “limitation on Commission jurisdiction

. ” Id. at 313.

Because the NGA is modeled substantively after the FPA

, they are interpreted similarly. Ten n. Gas Pipeline Co. v.
FERC , 860 F.2d 446, 454 (D.C. Cir. 1988) (“The Supreme
Court has held that the Natural Gas Act and the Federal Power Act are in all material respects substantially identical and
constructions of one are authoritative for the other.” (internal
citation s and quotation marks omitted) ). FERC argues that the reasoning in CPUC is equally applicable here, where adopting Clarksville’s position would result in a regulatory gap in contravention of Congress’s purpose in enacting the NGA

. See
United Distrib. Cos. v. FERC , 88 F.3d 1105, 1122 (D.C. Cir. 1996) (per curiam) ; H .R. Rep. No. 75

- 709, at 2 (1937).

I t is not entirely clear , however, that a regulatory gap would result if FERC could not exercise jurisdiction over
Clarksville’s sale of natu ral gas to Guthrie. A t oral argument,14

counsel for Clarksville challenged FERC’s finding that the State could not regulate the transaction. Similarly

, amici
contend that a local governing body can regulate the
transaction at issue

. Brief for Am. Pub. Gas Ass’n & Am. Pub. Power Assoc. as Amici Curiae Supporting P et’r 14. I f
Clarksville and amici are correct, there is no regulatory gap

. CPUC , 345 U.S. at 311 (“[T]he limitations established on Commission jurisdiction [articulated in the NGA] were designed to coordinate precisely with those constitutionally imposed on the states.”); United Distribution Cos. , 88 F.3d at 1122 (“The NGA was intended to fill the regulatory gap left by a series of Supreme Court decisions that interpreted the
dormant Commerce Clause to preclude state regulation of interstate transportation and of wholesale gas sales.” ). We need not decide the issue, however, because e ven if there were a regulatory gap, it would not be of the sort Congress was worried about in enacting the NGA. See Hope Nat. Gas Co.

, 320 U.S. at 610 (“The primary aim of [the NGA] was to protect consumers against exploitation at the hands of natural gas companies.”); Hearing on H.R. 4008 Before H. Comm. on Intrastate & Foreign Commerce , 75th Cong. 66

- 68 (193 7 ) ( statement of Luke J. Scheer, National Secretary of the Cities Alliance) (discussing the difficulties faced by municipalities attempting to obtain access to natural gas pipelines); Hearing on H.R. 11662 Before Subcomm. of H. Comm. o n Interstate & Foreign Co mmerce , 74th Cong. 16

- 17 (1936) (statement of
Dozier A. De V ane, Solicitor, Fed. Power Comm’n) ( explaining that the NGA was necessary to “correct the abusive practices” of natural gas companies that were “enjoying a monopolistic position”); id. at 12 (stati ng that 11 companies owned about 76 percent of the total mileage of all natural gas pipelines in the United States). Thus, the reasoning of CPUC is inapposite
here.15

Second, FERC asserts that even if it were to accept Clarksville’s argument that a municipality could not be a natural gas company, Clarksville’s interpretation of the NGA is excessively narrow because the NGA provides the Commission jurisdiction over three separate areas: (i) the transportation of natural gas in interstate commerce; (ii ) the sale of natural gas in interstate commerce for resale; and (iii) natural gas companies engaged in such transportation or sale.
155 FERC ¶ 61,184 at P. 8 (citing 15 U.S.C. § 717(b)); see also
Fed. Power Comm’n v. E. Ohio Gas Co. , 338 U.S. 464, 468 (1 950) ( Section 1(b) “ made the Natural Gas Act applicable to three separate things,” and each has “independent and equally important places in the Act”). Thus, because the transaction between Clarksville and Guthrie constitutes the transportation
and sale f or resale of natural gas in interstate commerce, FERC contends that Clarksville’s identity as a municipality is essentially irrelevant where the gas is “dedicated to the
interstate market.” 155 FERC ¶ 61,184 at P. 14 (citing Pub. Serv. Co. of N.C. v. FERC , 587 F.2d 716 (5th Cir. 1979) and California v. Southland Royalty Co. , 436 U.S. 519 (1978)).

While FERC is correct that Section 1(b) provides for jurisdiction over those three separate areas

, the articulation of the scope of FERC’s jurisdiction does not mean that Congress gave FERC jurisdiction over everything within those three

areas . Indeed, Section 1(b) is not power

- conferring or jurisdiction

- creating and should not be read to say that FERC has jurisdiction over anything and everything related to the transportation and sale for resale of natural gas in interstate

commerce . None of the cases on which FERC relies stands for such a broad interpretation of FERC’s authority

. For example,
in Public Service Company of North Carolina, Inc. v. FERC

, the F ifth Circuit emphasized “ t he convergence of three factors

– (1) interstate transmission by a natural gas company, (2) Commission certification, and (3) the state’s acquiescence in16

(1) and (2)” that subjected the state to FERC regulation. 1 587
F.2d at 720. Here, by contrast, although Clarksville acceded to FERC jurisdiction when it applied for a Section 7 service area determination for Fort Campbell and the Kentucky Service Line, it did so only because its pipeline crossed state lines. See generally I ntermountain

, 97 FERC ¶ 61,359

. There is no similar acquiescence with respect to Clarksville’s sales to
Guthrie

. Moreover, unlike Intermountain , in which we affirmed FERC’s determination that it could regulate a municipality where its facilities crossed state lines because “a municipality is authorized to act as a municipality only within its state of incorporation,” 326 F.3d at 1284, Clarksville acts only within Tennessee, its state of incorporation

, with respect
to its sales to Guthrie. See 146 FERC ¶ 6 1,074, at 61,310 (stating, without finding otherwise , Clarksville’s representation that Guthrie owns and operates the pipeline that crosses the border). Accordingly, FERC’s alternative argument fails as well.

* * * For the foregoing reasons, we see no r eason to deviate from the clear and unambiguous language of the statute and
therefore grant the Petition for Review and vacate FERC’s Service Area Order and Rehearing Order to the extent they are
inconsistent with this opinion

.

1 Similarly , the entity challenging FERC’s jurisdiction in California v. Southland Royalty Company had acceded to FERC jurisdiction when it applied for and received a certificate of public convenience and necessity. 436 U.S. at 521

- 22.