Opinion ID: 339939
Heading Depth: 2
Heading Rank: 1

Heading: The General Standard For Producer Rates

Text: 100 The purpose of the Natural Gas Act, the Supreme Court instructs, was to underwrite just and reasonable rates to the consumers of natural gas. 363 Its primary aim ... was to protect consumers against exploitation at the hands of natural gas companies. 364 Section 4(a) of the Act specifies that [a]ll rates and charges ... by any natural-gas company 365 on the sale of natural gas regulable by the Commissionshall be just and reasonable; 366 and by that section, any such rate or charge that is not just and reasonable is declared to be unlawful. 367 Nowhere does the Act in terms condone any rate or charge other than the one that would be just and reasonable. Nowhere does the Act suggest that a rate or charge above that which would be just and reasonable is not unlawfully excessive. Nor can it be gainsaid that [t]he Act was so framed as to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges. 368 101 The Commission's responsibility to hearken to these policies attaches at the very moment it is requested to certificate activities within its regulatory domain. Section 7(e) imposes upon it the duty to determine whether a proposed service, sale, operation, construction, extension, or acquisition ... will be required by the present or future public convenience and necessity. 369 By the same token, that section vests in the Commission control over the conditions under which gas may be initially dedicated to interstate use. 370 That authority extends indubitably to a determination as to whether the charges which a producer proposes to make for his gas are in the public interest. 371 Indeed, Section 7(c) of the Act itself originally articulated the intention of Congress that natural gas shall be sold in interstate commerce for resale for ultimate public consumption ... at the lowest possible reasonable rate consistent with the maintenance of adequate service in the public interest. 372 That objective, though no longer expressly stated, stands as a major congressional concern today. 373 102 To be sure, the Act does not require a determination of just and reasonable rates in a Sec. 7 proceeding as it does in one under either Sec. 4 or Sec. 5, 374 nor is a 'just and reasonable' rate hearing .. a prerequisite to the issuance of producer certificates. 375 The setting of the producer's initial price at the just and reasonable rate, were that course feasible, would, of course, contribute handsomely to the consumer-protection goal of the Act. But as we have seen, the exigencies of prompt initial certification of gas sales and pipeline extensions preclude, within the certification proceedings themselves, fullfledged investigations worthy of a just and reasonable appellation. 376 That is not to say that the Commission need not bend its best efforts to achieve an equitable price arrangement when it awards certification under Section 7. On the contrary, the very delay incidental to just-and-reasonable-rate investigations requires a most careful scrutiny and responsible reaction to initial price proposals of producers under Sec. 7. 377 [P]rice [is] a consideration or prime importance 378 in the certification process, and if unconditional certificates are issued where the rate is not clearly shown to be required by the public convenience and necessity, ... full protection of the public interest is not afforded. 379