United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 14, 2017 Decided April 24, 2018

No. 16-1244

CITY OF CLARKSVILLE, TENNESSEE,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

TODD COUNTY, KENTUCKY,

INTERVENOR

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 Commission, argued the cause for respondent. On 
2

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: GRIFFITH and WILKINS, Circuit Judges, and 

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, 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); 

Order 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 longstanding 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 

development of plentiful supplies of . . . natural gas at 
3

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 objectives, 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 

transportation and sale of natural gas in interstate commerce. 

15 U.S.C. § 717c; see also Schneidewind v. ANR Pipeline Co.,

485 U.S. 293, 300 (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 certificate of public convenience and necessity 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 other 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 

subject 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 FERC ¶ 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 transport 

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 serves 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’s 
5

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 waiver 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 that 

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 gas 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 footnote 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 natural 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 transport 
6

and sell gas to Guthrie for resale and consumption in Kentucky 

because Clarksville is a municipality as defined by the NGA. 

Relying on prior FERC orders, Clarksville argued that FERC 

lacked jurisdiction over these transactions because the NGA 

excludes municipalities from the ambit of FERC’s jurisdiction. 

Although 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 operation” 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 regulatory 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. 15 (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 to 
7

authorize [Clarksville’s] existing transportation service for 

Guthrie without affecting its otherwise non-jurisdictional 

activities and facilities.” Id. Thus, Clarksville could continue 

to transact with Guthrie under the terms of the existing 

contract.

III.

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 to 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 constitutional 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 the 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. Defs. of Wildlife, 504 

U.S. 555, 560-61 (1992)). 

Clarksville plainly satisfies the first requirement that it 

seek rehearing before FERC. But the Commission contends 
8

that Clarksville is not “aggrieved” because, notwithstanding 

the orders at issue, Clarksville can continue to transport and 

make sales for resale to 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, Clarksville 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 affected its business 

decisions regarding the provision of new services to other 

entities outside of Tennessee. Id. at 15; 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 be 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 requirements, 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 additional 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 agency “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 

curiam). If the Court determines that “Congress has directly 

spoken to the precise question at issue,” and “the intent of 
10

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 respect 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 interpretation 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, 297 (2013) (emphasis omitted), and the court 

will defer to the Commission’s reasonable 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 necessity 

issued by the Commission authorizing such acts or 

operations[.]

15 U.S.C. § 717f(c)(1)(A). Again, the NGA defines a “naturalgas 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 an 
11

“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. 

20-25, 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 municipalities acting as 

municipalities. Cf. Intermountain, 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 jurisdiction 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[.]”); Tenn. 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 jurisdiction.”); 

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 

pipeline); Tex. Gas Transmission Corp., 3 FERC ¶ 61,135, 
12

¶ 61,405 (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 not 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”); Sales 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. Public

Utilities Commission of California (CPUC), 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 issue – 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 defines 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 “person 
13

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 315-16. 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 subdivisions 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 

coordination” 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. Tenn. 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 

citations 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). 

It is not entirely clear, however, that a regulatory gap 

would result if FERC could not exercise jurisdiction over 

Clarksville’s sale of natural gas to Guthrie. At 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 Pet’r 14. If 

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 even 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 (1937) 

(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. on Interstate & 

Foreign Commerce, 74th Cong. 16-17 (1936) (statement of 

Dozier A. DeVane, 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 (stating 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 

(1950) (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 for 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 Fifth Circuit emphasized “the convergence of three factors

– (1) interstate transmission by a natural gas company, (2) 

Commission certification, and (3) the state’s acquiescence in 
16

(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 Intermountain, 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 ¶ 61,074, 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 reason 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.