Opinion ID: 252068
Heading Depth: 1
Heading Rank: 7

Heading: Settlement Proposal

Text: 75 We think the Commission also erred in its treatment of the settlement proposal filed by Michigan Consolidated and that the Commission must reconsider the matter upon the remand of this case. 76 This proposal was filed after the original abandonment order was issued, but before the petitions for rehearing were denied. Under this proposal the full 127,000 Mcf of abandonment gas would be available to Panhandle during the winter months to satisfy space heating needs of its domestic and commercial customers. In summer months, however, Panhandle would be required to continue its sales to Michigan Consolidated, and, indeed, to step up its rate of delivery so that the same annual volume would be supplied. Michigan Consolidated offered to store this summer gas in its large underground fields in order to have it available to meet the winter space heating needs of its domestic and commercial customers. Michigan Consolidated further charges that neither Panhandle nor its utility customers are presently capable of storing this volume of off-peak gas, so that it will either be sold directly to industrial customers (which Panhandle favors) or will remain in the field (which would mean that Panhandle's pipe line was not being used to capacity all year round), The Commission did not pass upon these charges, however, for it refused to consider the settlement propsal 'whatever its merits,' and excluded American Natural and its customers from the post-abandonment allocation proceedings. 77 Even assuming that under the Commission's rules Panhandle's rejection of the settlement rendered the proposal ineffective as a settlement, it could not, and we believe should not, have precluded the Commission from considering the proposal on its merits. Indeed, the proposal appears prima facie to have merit enough to have required the Commission at some stage of the proceeding to consider it on its own initiative as an alternative to total abandonment. 56 The consuming public with which the Commission is concerned-- residential and commercial space heating users-- require large uninterruptible supplies during the winter months, but little or no gas during the other months. The settlement proposal promises to fulfill the Commission's announced objectives of distributing gas to this consuming public on the basis of need, even more fully than total abandonment. 78 Of course, there may be valid objections to the settlement proposal which the Commission has not explained, or which a hearing upon the proposal would reveal. Such considerations may merit modifcation or total rejection of the proposal. But we think that, since the Commission is charged with the duty of protecting the ultimate consumer from 'exploitation at the hands of natural gas companies,' Federal Power Comm. v. Hope Natural Gas, 1944, 320 U.S. 591, 610, 64 S.Ct. 281, 88 L.Ed. 33, it cannot refuse to consider a proposal which appears, on its face at least, consistent with that duty. 79 The Commission's orders will be set aside and the case remanded for further proceedings not inconsistent with this opinion. 80 On Petition of Federal Power Commission for Modification of Opinion and Rehearing 81 In its petition for rehearing in banc, which has been denied today by the court in banc, Panhandle argues that the Commission's action in rejecting Michigan Consolidated's settlement proposal was beyond this court's jurisdiction to review because the proposal was not included in a timely application for rehearing. The division of this court which heard this case deems it appropriate to comment upon this contention. 82 Panhandle's argument rests upon 19 of the Natural Gas Act. Subsection (a) provides that 'any person    aggrieved by an order issued by the Commission    may apply for a rehearing within thirty days after the issuance of such order.' And subsection (b) provides that 'no objection to the order of the Commission shall be considered by the court (of appeals) unless such objection shall have been urged before the Commission in the application for rehearing unless there is reasonable ground for failure so to do.' 52 Stat. 831 (1938), 15 U.S.C.A. 717r. See Federal Power Commission v. Colorado Interstate Gas Co., 1958, 348 U.S. 492, 75 S.Ct. 467, 99 L.Ed. 583. 83 On December 18, 1958, the Commission overruled the trial examiner's decision denying Panhandle's application and ordered total abandonment. Michigan Consolidated filed its settlement proposal on January 23, 1959-- fve days beyond the thirty-day period prescribed by 19(a). We point out, however, that under the Commission's own regulations 'any party (may submit) at any time offers of settlement or proposals of adjustment to all parties and to the Commission   .' 18 C.F.R. 1.18 (1949). We think this may be construed to authorize the Commission to consider such filings at any time while the case is in its bosom. Quite evidently the Commission did so construe it, for the Commission did not reject the filing of Michigan Consolidated's offer on the ground that the proposal was not included in a timely petition for rehearing. Instead, rejection was based on the ground that the offer was inconsistent with the Commission's order and unacceptable to Panhandle and some of its customers, This refusal was included in the Commission's opinion of February 23, 1959, denying rehearing. Within thirty days thereafter, Michigan Consolidated filed a petition for rehearing, seeking reconsideration of the Commission's action with respect to the settlement offer. The Commission rejected that petition by letter dated March 19, 1959; 57 Michigan Consolidated appealed from that action in No. 15144; 58 and the Commission conceded in its separate brief in that case that 'petition properly invokes this court's jurisdiction under Section 19 of the Natural Gas Act.' 84 The Commission, in its instant petition for modifcation or rehearing, makes no direct attack upon this court's jurisdiction, but it bitterly assails the court for 'a clear intrusion into the area of the Commission's exclusive responsibility.' It complains that it is: 'sheer madness to say that one of the contending companies could lie back with an alternative proposal until after the clock has struck, and then, wholly without warrant in the governing statutes or rules, ambush the Commission and force it to enter into another, new comparative hearing.' 85 We are not persuaded by this and other such hyperbolic assertions by the Commission. We still think that in the special circumstances of this case, the Commission erred in brushing aside the settlement proposal on the grounds that it was unacceptable to Panhandle and inconsistent with the abandonment order. The proposal contained no surprises. The Commission knew, or should have known, from its files and records that Panhandle's resale customers could not use all of the abandonment gas during the summer months, and that Michigan Consolidated had fields in which it could store summer deliveries. These matters, on their face, reflected the basis for an alternative to total abandonment, so apparently in the public interest, that their consideration at some point in the proceedings was indispensable to the validity of any public interest determination in support of total abandonment. In viewing the public interest, the Commission's vision is not to be limited to the horizons of the private parties to the proceeding. 59 86 Where, as here, a regulatory agency has ignored factors which are relevant to the public interest, the scope of judicial review is suffciently broad to order their consideration. These limits are not to be confused with the narrower ones governing review of an agency's conclusions reached upon proper consideration of the relevant factors. 87 The petition is denied.