Source: http://openjurist.org/424/us/494
Timestamp: 2013-06-18 07:37:05
Document Index: 498680061

Matched Legal Cases: ['§ 7', '§ 717', '§ 4', '§ 717', '§ 4', '§ 717', '§ 2', '§ 2', '§ 7', '§ 7', '§ 19', '§ 717', '§ 7', '§ 7', '§ 7', '§ 5', '§ 717', '§ 2']

The optional procedure introduced by Order No. 455 was designed to "lessen rate uncertainty which has prevailed since the early 1960's." Id., at 219. The procedure has several features. First, it permits producers to tender for FPC approval contracts for the sale of new natural gas2 at rates that may exceed the maximum authorized by the applicable rate order3 Second, the FPC will determine in a single proceeding whether the "public convenience and necessity" under § 7(c) of the Act, 15 U.S.C. § 717f(c), warrants the issuance of a certificate authorizing the sale and whether the rates called for by the contract are "just and reasonable" under § 4(a), 15 U.S.C. § 717c(a). Third, a permanent certificate issued by the Commission and accepted by the producer is not subject to change in later proceedings under § 4 of the Act,4 15 U.S.C. § 717c, and the rates may be collected without risk of refund obligations. 48 F.P.C., at 226. See 18 CFR § 2.75(d) (1975). Fourth, Order No. 455 authorizes inclusion in the permanent certificate of the abandonment assurance or "pregranted abandonment" called in question in this case. 18 CFR § 2.75(e) (1975).5 The authority to include assurance that the producer may abandon the sale at the end of the contract term is, however, to be exercised only upon appropriate findings by the FPC of public convenience or necessity, as required by § 7(b). Order No. 455-A, 48 F.P.C. 477, 481 (1972).
The entire optional procedure of Order No. 455 was attacked in petitions for review before the Court of Appeals, which upheld the order in all respects save the pregranted abandonment authority.6 In holding that § 7(b) requires a public-convenience-or-necessity finding by the FPC at the time of the proposed abandonment, thus precluding such finding at the time of certification, the Court of Appeals stated, 164 U.S.App.D.C., at 12, 502 F.2d, at 472:
Furthermore, the FPC may determine that Present supply and demand conditions require that pregranted abandonment be authorized in appropriate cases to encourage exploration for new gas and its dedication to the interstate market, since the unwillingness of producers to make indefinite commitments has made potentially available supplies inaccessible to the interstate market. We conclude therefore that an optional procedure encompassing pregranted authority intended to draw new gas supplies to the interstate market is clearly within FPC authority to permit abandonments justified by either Present or Future public convenience or necessity.7
Order No. 455 does not authorize specific abandonments. It merely establishes an optional procedure under which pregranted abandonment may be authorized in appropriate cases. Any pregranted abandonments approved under this procedure are subject to judicial review under the Act. See § 19(b), 15 U.S.C. § 717r(b). We should not presume, as the Court of Appeals did, that the Commission is not competent to make proper findings supported by substantial evidence and consistent with § 7(b) in approving pregranted abandonment. Rather, the question whether particular pregranted abandonment authorizations are beyond the Commission's expertise should await resolution in concrete cases. See FPC v. Texaco, Inc., 417 U.S. 380, 392, 94 S.Ct. 2315, 2323, 41 L.Ed.2d 141 (1974).8 It suffices for the purposes of this case that we read § 7(b) as leaving the timing of approval of abandonments to FPC discretion.9
We understand the Court of Appeals to read this passage as implying that a limited-term certificate would be barred by the Act, and that a permanent certificate with pregranted abandonment would also be barred since such a certificate, as the FPC concedes, Brief for FPC 22, is legally and functionally indistinguishable from a limited-term certificate.10 But the Court of Appeals' reading of Sunray II was patently erroneous. Sunray II in fact indicated that the FPC is authorized to issue limited-term certificates. The Court of Appeals for the Tenth Circuit had addressed that question at an earlier stage of the litigation and had held that the FPC was authorized to issue such certificates. Sunray Mid-Continent Oil Co. v. FPC, 239 F.2d 97 (1956), rev'd on other grounds, 353 U.S. 944, 77 S.Ct. 792, 1 L.Ed.2d 794 (1957) (Sunray I).11 Sunray II implicitly approved this holding in stating, 364 U.S., at 157, 80 S.Ct., at 1404: "There is no contention that the Commission was again indulging in the erroneous notion that it had no power to issue a limited certificate."
Thus, rather than imply that the Act forbids the issuance of a limited-term certificate, Sunray II approved the holding of the Court of Appeals for the Tenth Circuit that the Act permits the issuance of such a certificate.12 Sunray II therefore supports the conclusion we have reached and does not fortify the Court of Appeals' construction of § 7(b). In both the case of the limited-term certificate and the case of the permanent certificate with pregranted abandonment, the FPC determines at the time of certification that the present or future public convenience or necessity justifies the issuance of a certificate that allows discontinuance of service at a future date certain without need for further proceedings.
The procedure does not, however, limit the applicability of § 5, 15 U.S.C. § 717d. See 18 CFR § 2.75(d) (1975). The Commission noted in Order No. 455 that it was unable to "bind a future Commission not to invoke the prospective operation of Section 5"; the Commissioners further stated that "(t)o the extent that this Commission can grant certainty of rates, we do so." 48 F.P.C. 218, 223 (1972).
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