Document: 406 U.S. 621 92 S.Ct. 1827 32 L.Ed.2d 369 FEDERAL POWER COMMISSION, Petitioner,v.LOUISIANA & LIGHT COMPANY et al. UNITED GAS PIPE LINE al., Petitioners, v. LOUISIANA CO. Nos. 71—1016, 71—1040. Argued April 19, 1972. Decided June 7, Syllabus When United Gas Pipe Line Co. (United), a jurisdictional pipeline, experienced temporary shortages of natural gas supply forcing it to reduce deliveries its contract customers, the Federal Power Commission (FPC) asserted jurisdiction effect reasonable curtailment plan covering both direct sales customers and purchasers for resale. While proceedings were pending before FPC, Louisiana Light (LP L), customer United, brought this action in District Court against seeking enjoin LP L's plants pursuant any FPC-promulgated plans, including under FPC Order No. 431. L also sought from certification United's previously intrastate through Green System. The intervened, asserting that matters decision by would therefore invade primary jurisdiction. dismissed action, holding had exhaust administrative remedies. Appeals reversed, lacked curtail since Section 1(b) Natural Act makes applicable only reversed Court's on System, system was wholly intrastate. Held: 1. has power regulate interstate head 'transportation' § 1(b), prohibition proviso clause provision withheld rate-setting authority with respect such sales. Pp. 631—647. 2. determine whether System subject authority, erred deciding question. See Myers Bethlehem Shipbuilding Corp., 303 41, 58 459, 82 L.Ed. 638. 647—648. 456 F.2d 326, reversed. Gordon Gooch, Washington, D.C., Comm. William C. Harvin, Houston, Tex., Pennzoil Inc. Andrew P. Carter, New Orleans, La., La. Mr. Justice BRENNAN delivered opinion Court. 1 In 1971 promulgated 431 requiring every pipeline report be necessary because inadequate gas. A anticipating necessity required file revised tariff control all customers—industrial 'direct sales' purchasing their own consumption, 'resale' distribution ultimate consumers. 2 principal question here is Act, 52 Stat. 821, 15 U.S.C. 717, prohibits applying direct-sales times shortage. provides: 3 'The provisions shall apply transportation commerce, sale commerce resale public consumption domestic, commercial, industrial, or other use, natural-gas companies engaged sale, but not local facilities used production gathering gas.' (Emphasis supplied.) 4 subsidiary presented doctrine obliged federal courts case refer an initial determination certificate particular delivery when proceeding Commission. 5 Fifth Circuit held prohibited application regulations deliveries, held, further, neither court nor defer FPC's proceeding. 326 (CA5 1972). We granted certiorari, 405 973, 1198, 31 247 (1972). reverse. 6 * Respondent generates electricity at Sterlington-Electric Generating Station Ouachita Parish, Louisiana, Nine-Mile Point Jefferson Louisiana. burned boilers stations purchased Company petitioner 71—1040, contracts long standing. Sterlington are gas, initially certificated FPC. Sales been 'Green System' when, 1970, diverted 2.6% 'Black into System,' after which System.' 1970 also, concern during 1970—1971 heating season fall short demand, declaratory order approve proposed program customers. This culminated agreement among affected allowed carry out winter. 7 When, however, made supplemental filing February 1971, summer season, L, March filed diversity Western alleging breach asking injunctive relief implementation. asked judgment declaring system, did require certification. dismissal ground prior destructive was, fact, over issues time promulgating 431, response third plan. 8 opposition motions dismiss Court, argued without authorize programs affecting they deliveries. On 30, remedies both, 332 F.Supp. 692 (1971). dismissal. II 9 'jurisdictional' pipeline1 producers Texas supplying wholesalers, pipelines. supplies consumers throughout eastern half States Massachusetts peak-day commitment winter months totaling about 6,000,000 thousand cubic feet (Mcf). 10 as part pattern chronic Nation,2 found itself unable meet commitments peake demand periods.3 Indeed, days greatest expected much 20% more.4 October first consistent obligations contracts.5 Many some shortage, these terms complex identical filings Commission.6 established priority three groups, curtailed basis end use. These groups were, lowest first, industrial purposes, generate purposes; consumed domestic consumers; Co., F.P.C. Op. 606 Oct. 5, 1971. no distinction between 11 opposed others, primarily contracts. preserving objections, one customers7 agreed modified go while continued. 12 During same many pipelines reported serious applied assistance effecting plans. response, several emergency measures avoid major disruptions supplies. Orders 402, 35 Fed.Reg. 7511, 402A, 8927, authorized short-term purchases facing ensure storage fields filled. 418, 19173, similar following usual procedures. 13 It insufficient 36 7505. recommended revisions, '(c)onsideration should given volumes equivalent interruptible large boiler fuel where alternate fuels available.' Finally, provided: 14 'Jurisdictional have responsibility instance adopt appropriate tariffs. Such tariffs, if approved Commission, will respects notwithstanding inconsistent contracts, nonjurisdictional, entered date approval tariff.' compliance immediately became hearing order. announced interim decision, 606, finding revising latest slightly, remanding examiner. November 2, plan, modified, went full effect. appeal others Circuit.8 Also, based introduction Black 7(c)9 continued operation portion (the System) generating station. application, constructed operated intrastate, 'illegal' very small quantity cause whole come 16 9, 1972, 610 within thus certification; remanded trial examiner 'public convenience necessity' standard 7. 17 Appeals' reversal Court10 issue rested view '. . form continuing companies. right veto must give abandonment use facilities, two functions express exemption (in 1(b)) regulatory consumptive bars agency intervention.' F.2d, 338. 18 injection theretofore establish record showed 'the flow bar occasional irregular, well minimal. entire separate unit, physically located entirely Therefore, undisputed facts show channel constant channel. regulation substantially essentially localized matter committed Louisiana's jurisdiction.' 339—340. III 19 1938 broad powers 'to protect exploitation hands companies.' Hope 320 591, 610, 64 281, 291, 88 333 (1944). Transcontinental 365 1, 81 435, 445, 377 (1961); Sunray Mid-Continent Oil 364 137, 147, 80 1392, 1398, 1623 (1960). To end, Congress 'meant create comprehensive effective scheme,' Panhandle Eastern Public Service Comm'n, 507, 520, 68 190, 197, 128 (1947), dual state authority. Although exclusive, broadly complementary reserved States, so there 'gaps' private interests subvert welfare. congressional blueprint guided judicial interpretation language defining jurisdiction, 20 'when dispute arises transaction scope we inclined approach problem negatively, raising possibility 'no man's land' created. Compare Guss Utah Labor Relations Board, 353 77 598, 603, 601. That say, borderline explicit ask can practicably area and, find cannot, then impelled decide governs.' supra, U.S., 20, S.Ct., 445. 21 litigation poses orderly plans involving insists include counsels inquiry consequences contention premises. 22 Thirty-seven percent total Under argument, volume exempt forced accept burden sharply reduced directsales received service. schools, hospitals, homes completely dependent uses. could 560,000 Mcf cold dire consequences, burdening them deprive up 1,500,000 Mcf. 23 From practical point view, position may produce seriously inequitable distribution. users 'interruptible services,' recognized minimal importance user that, upon happening certain events, shut off little notice. Nevertheless, need sufficient trigger service able being drastically curtailed. alternative means available additional cost, yet homes, schools suffer lack adequate 24 Can prevent inequity hardship? Insofar purport Pennsylvania West Virginia, 262 553, 43 658, 67 1117 (1923), operate withdraw current whereby supplied constitute interference commerce. But even extent constitutionally promulgate inevitable result varied agencies, interpreting countless number different variety rules. conflicting results necessarily allocations determined simply ability each pump desired pipeline. Moreover, example, forbidden contracts.11 Besides, empowered State, national interest.12 Cf. supra. unavoidable conflict producing consuming contradictory cannot possibly equitably resolved courts. With problems mind, desirability uniform abundantly clear. emphasized, 335, does granted. turn analysis statute withheld, argues, IV 25 '(t)hree things drew power, delegated agent, were: (1) commerce; (2) resale; (3) sale.' Comm'n Indiana, 516, 195. Each independent grant though Act's 'sales' limited resale, applies regardless transported ultimately sold retail wholesale. East Ohio 338 464, 468, 70 266, 268, 94 268 (1950).13 26 argues creates complete regulations.14 answer Curtailment opening sentence '(t) he ..' rejected construction swallow proviso's disagree. 27 impetus furnished study industry 1935—1936.15 increasing concentration vast economic threat unreasonably high prices most acute wholesale distributors clout obtain equitable State rates charged another thought, decisions, outside States. Utilities Rhode Island Attleboro Steam Elec. 273 83, 47 294, 71 549 (1927); Missouri ex rel. Barrett Kansas 265 298, 44 544, 1027 (1924). 28 pressures enacted 252 23, 40 279, 434 (1920), sustained 'direct' sales, moreover, deemed acute, rate setting covered exception clear legislative history proviso. original phrasing was: 29 'Provided, nothing construed fix charges distributed locally low-pressure mains only.' Hearing H.R. 11662 Subcommittee House Committee Interstate Foreign Commerce, 74th Cong., 2d Sess., (1936) (emphasis supplied). 30 changed words charges' subsequently deleted, committee confirms finally phrased nevertheless meant restricted setting. H.R.Rep.No.709, 75th 1st (1937), states: 'It urged connection earlier bills inserted subsection follows: "Provided, locally.' 33 'In misunderstanding thought omit present bill reasons, intended policy prompted inclusion: First, surplusage interpreted interpreted, second, been, likelihood, source confusion way. For felt effort reason inclusion might exempted publicly owned distributing company, not, course, intended. believed purposes proviso, assuming provision, fully language—'but gas." 34 author version, General Solicitor National Association Railroad Commissioners, confirmed interpretation. 4008, 143. Thus, Congress' exclusively setting, wise base plainly embraces quantities transport, created 'a 'afford complete, permanent bond protection Atlantic Refining 360 378, 388, 79 1246, 1253, 1312 (1959). 'Therefore, attempt nature, commissions deal, conclusion irresistible rather than nonregulation.' 28, 450. 37 Comprehensive already mentioned, practically beyond competence agencies. aware casts doubt constitutionality considered deliberations cited regulation. (1936). 38 stated aspects Eastern, 523, 199, said: 39 '(T)he interrupting largely related control, accommodation various states.'16 V Since responsibilities possess devise responsibilities. agencies interest free, 'within ambit statutory make pragmatic adjustments called circumstances.' Pipeline 315 575, 586, 62 736, 743, 86 1037 (1942). assures degree flexibility providing that: 41 perform acts, prescribe, issue, make, amend, rescind orders, rules, Act. .' 717o. 42 section, width measured conferred. Surely Commission's generous authority.' Permian Basin Area Rate Cases, 390 747, 776, 1344, 1364, 312 (1968); see 385 89—90, 87 265, 269, 181 (1966). substantive governing evaluation 4(b) Act: 'No company shall, undue preference advantage person prejudice disadvantage, maintain unreasonable difference rates, charges, service, respect, either localities classes service.' 717c(b). 45 Two procedural mechanisms enforce antidiscriminatory 4(b). As effect, proceed 5(a).17 5(a) procedure substantial disadvantages, rendering unsuitable afford interested parties reasonableness taking remedial observed delay incident (as 'practices' 'contracts') reviewable appears nigh interminable.' 389, 1254.18 addition prescribed prospective application. chosen process 4(c), (d), (e).19 provisions, pipeline's amendments unless suspended If challenged motion deems appropriate, suspend amended five months, becomes completion hearings. hearings, proving fair. 46 All necessitating allocation schemes existing tariffs adequate. conditions arise desirable place filing, implement it, employ working guideline hearings continue. arrangement, requirement submit enables utilize unique knowledge customers' needs, substitute sources, relevant considerations. our 17, 444, 'veto power' exercised 7(c) 7(b). reject argument grounds. dealt consider proceedings. noted limited. here, unlike Transcontinental, involve inapplicable. Secondly, way discrimination expressly deals 'service,' invoke deal programs, purpose. 48 Amici permitting take despite contrary Co.v. Mobile 350 332, 76 373, 100 373 (1956). case, unilaterally change making 4. cause, acting mandate 16, develop rational arrangements. Our Corp. govern since, case: 49 '(D)enying impairs remain paramount modify interest.' 344, 381. 50 conclude authorizes method exercise. VI 51 Station, those regulable minimal,' '(t)he Louisiana'; concluded 339 340. conducting circumstance, 638 (1938). 'is obviously precise procedures originating (agency). (agency's) last word, assuredly first.' Marine Engineers Beneficial Assn. Interlake S.S. 370 173, 185, 1237, 1243, 418 (1962). Review due course 19(b) 717r(b). disposition acted reaching decision. Reversed. 53 STEWART took cases. 54 POWELL consideration transports label sometimes refers Staff Report Supply Demand 1971—1990 (1972): emergence shortage past years marks historic turning point—the growth uninhibited Not Nation's proven reserve inventory lower states shrinking years, parts country refuse requests new confronted fact reserves states, American Association, dropped 289.3 trillion 1967 259.6 10.3 drop three-year period. Furthermore, approximatey 95 unavailable increased old customers.' Id., xi. fluctuates day day. Nationally, peak occur months. air conditioning increases consumption. taken recitals petitions draw evidence accuracy except argue significant actually exists. limits freedom Appeals. orders Administrative Procedure 554(e). cases contain dealing curtainment litigation, indicate vary year themselves slightly systems. informs us objecting party appealed now Columbia. review denied. extension engage undertake therefor, acquire extensions thereof, force issued authorizing acts operations 717f(c). Argument heard month 606. January 610. La.Const., Art. 6, highlighted contrast amicus brief statement Chairman York case. submits: 'Historically, advantages do supply. Their proximity attracts industries raw material operate. costs delivering commercial particularly attractive applications. surprising, therefore, higher proportion industrial-commercial firm states. utilizes 84% plant generation comparison averae 37%. 'Louisiana's economy heavily availability firm. reliable uninterrupted State-wide investment category clearly reflects predominance petroleum, refineries chemicals represented $465,297,370 76% $609,578,850 1970. Apart function, state's electric utilities generators. 'Thus, welfare hinges greater volumes. Otherwise, frozen below level. true plays dominant role overall electrical sources coal, imported liquefied inexpensive hydroelectric power.' Brief Amicus Curiae 2—3. (1961), prefer summed re Cabot P.U.R.(N.S.) 443 (1936): 'There who believe conservation resources. They developed benefit few individuals future. resources ought conserved probably field government future accomplish more industry. viewpoint. I thoroughly agree Commissioner Burritt, how denial petition work vote application; results? northern southern York. Apparently, far extraction Pennsylvania, control. possible remove exhausted. 'Further, state, say developed. directly amount indirect doubtful accomplished. receives boundaries exports adjoining properly voluntary government. Neither operative attention steps conserve urgently needed. conferred resources, what gained 90 per cent general public, inference saving enrich stockholders. Let assume facts. Who gain benefited deprived profits petition? tapped petitioner. There tapping determining where, whom sold. restriction imposed York, Pennsylvania; areas serve, assurance beneficially viewpoint 'As stated, am heartily favor resources; specific granting people York? definite, known, sure. denied, benefited? point. speculative uncertain. assure Is likely benefits merely group locality another?' sale. What said relevance 'Respondents contend, word business transporting hire followed resales, whereas neither. limitation. Despite unqualified 'transportation commerce,' respondents qualify transport sell rely declaration 1(a), referring selling 'and' unseverable refuted disjunctive itself. pointed Comm., 195, 128, things: '(1) And 'sale' viewed subjects equally important places respondents' unduly restrict policies reemphasized 1942 passage amendment broadening pipe lines. 56 83. pointing vested 'any unplanned lines conserving country's valuable exhaustible energy resources.' hold like phrase 'interstate commerce' aptly describes movements Ohio's high-pressure lines.' 468—469, (1950) (footnotes omitted). added clarification otherwise 1(b). (1950). described second quoted necessary, specified therein fairly affirmatively stating previous bills, invite contention, however unfounded, elimination negative broaden act, included bill.' H.R.Rep. 709, (1937). S.Doc. 92, pt. 84—A, 70th submitted Dec. 31, 1935. Panhandle, receiving subjected consistently area. support position, managed surprisingly, prime example presenting difficulties. 'Whenever complaint municipality, commission, rate, charge, classification demanded, observed, charged, collected rule, regulation, practice, unjust, unreasonable, discriminatory, preferential, just classification, thereafter force, order: Provided, increase contained currently schedule accordance company; decrease unlawful, rates.' 717d(a). Of hearing, sections provide, '(c) rules (not less sixty 21, 1938) designate, keep open convenient inspection, schedules showing classifications, practices, together manner affect relate services. '(d) Unless relating thereto, thirty days' notice public. keeping inspection changes good shown, allow herein provided specifying published. '(e) Whenever commission initiative complaint, once, formal pleading notice, enter concerning lawfulness service; thereon, thereby writing reasons suspension, longer period effect.' 717c(c), (e).

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