Opinion ID: 305863
Heading Depth: 1
Heading Rank: 3

Heading: the alternate ii proposal

Text: 34 The Commission's rejection of MDG's Alternate II proposal poses no similar problem in regard to clarity or articulated findings. In its July 27 order the Commission stated: 35 The Examiner correctly, in our view, detailed defects in the [MDG] plan which have not been overcome. There is uncertainty as to precisely what communities would participate, what ownership interests each would have, what operation and maintenance responsibilities each would assume, how new communities might be accommodated, whether financing (even under a new Missouri 8% ceiling) is realistically available, and at what price natural gas could be purchased. In the circumstances, we cannot find that the [MDG] second alternate is required by the present or future public convenience and necessity. 36 II JA at 624-25. Following MDG's petition for rehearing, the Commission's September 21 order reiterated its previous finding that the uncertainties surrounding the project made its success too doubtful to warrant authorization: 37 Notwithstanding a plethora of evidence from the [MDG], our view is that uncertainty remains. By way of examples, the record is unclear as to what communities will actually and actively participate; it is wholly muddled as to the ownership interests of the communities; operating and maintenance responsibilities are unsettled; and although the joint venturers would undoubtedly welcome further participants, with the probable effect of reducing proportionate costs, there is no indication as to the terms on which this would be accomplished. 38 II JA at 640. 39 MDG's argument here proceeds along two separate lines: (1) several of the specific matters found by the Commission to be impermissibly uncertain-e. g. ability to finance the project, operation and maintenance plans, and ownership interests-are matters of purely local governmental concern outside the jurisdiction of the Commission; (2) the Commission's findings of uncertainty are not supported by the record. 40 The first of these arguments is premised on the fact that the MDG is not a natural-gas company within the definition of the Natural Gas Act, 12 and therefore its operation of the pipeline system proposed in this alternative would not be under the jurisdiction of the Commission. 13 There is some authority for their position that the Commission may not properly inquire into matters of local law 14 -such as ownership interests and operation and maintenance responsibilities-in determining whether to grant a Section 7(a) application to a local distribution system. But however that question may be answered in some contexts, 15 we are convinced that in the context of this case the Commission would have seriously abrogated their responsibility to protect the public interest if they were to grant an application for a venture whose prospects are as seriously clouded by uncertainty and doubt as that presented here. This Section 7(a) application does not present an ordinary request for inter-connection and service to a local community. Rather this application envisions the construction of a major transmission system opening a large geographical area including many local communities to natural gas service. In addition to the Commission's primary purpose under the Act to protect natural gas consumers, 16 Section 7(a) expressly requires that before ordering connection of and sales to a municipal distribution system the Commission must find such an order to be necessary or desirable in the public interest. The Commission would fail to meet either of these obligations if they were to approve an application as thoroughly obscured by uncertainty as the MDG Alternate II proposal. It is neither necessary nor desirable to approve an application in advance of the time that major questions concerning financing, participation, operation, and maintenance of the project are resolved. The public interest in such a project can be far more readily ascertained after such questions have been firmed up to some substantial degree. And it seems clear beyond question that the interests of the potential natural gas consumers in the area to be served, as well as the interests of the consumers presently being served by the interstate pipeline which would be ordered to provide gas to this project, 17 can best be protected when the Commission has some firm indications of the details of the project proposed in the application. 41 MDG's evidentiary contention is easily resolved upon consideration of the proper scope of our review on this appeal. We are constrained not only by the general doctrine that administrative action may not be reversed when supported by substantial evidence, but also by the explicit requirement of the Natural Gas Act that [t]he finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive. 18 The MDG has pointed to much evidence tending to demonstrate the feasibility of their proposed project. But the Commission has found that this evidence, when weighed against conflicting evidence in the record, leads only to the inference that the prospects for successful completion of the project are so darkly obscured by the veil of uncertainty that the requested Section 7(a) order would be unwarranted. It seems to us that the very existence of such broadly conflicting evidence of feasibility supports the Commission's finding of an invalidating uncertainty. We may not, therefore, reverse that finding or the Commission's consequent decision to deny approval of the requested Alternate II project. 42 The Commission's orders in these proceedings must accordingly be affirmed. 43 Judgment accordingly.