Opinion ID: 527537
Heading Depth: 4
Heading Rank: 2

Heading: February vs. August Effective Date

Text: 108 Article II, Part 4 of the Agreement provides that any changes in Panhandle's rates resulting from a Commission decision on the four reserved issues (including minimum bills) may be made effective only prospectively from and after a Commission order disposing of these issues. FERC reiterates its position that this language may reasonably be construed as referring to a final decision disposing of such questions on the merits (i.e., the August 19 order on rehearing). Cf. Public Service, 851 F.2d at 1557 (FERC reasonably concluded that parties intended effective date of Commission order to refer to final disposition of issues settled on rehearing, absent clear language to contrary) (citing with approval Panhandle Eastern Pipe Line Co., 41 F.E.R.C. p 61,018 (1987)). 109 MichCon assails FERC for focusing exclusively on the general statement in Part 4 while ignoring the specific provisions of Part 1, which describe the implementation of rate changes resulting from a Commission order concerning Panhandle's cost classification, cost allocation and rate design. Paragraphs C through E explain the different consequences that would flow depending on whether FERC's order concerning these reserved issues became effective before or within one year of the date Panhandle filed a rate that superseded the rate contained in the Agreement, or whether such order was issued over a year thereafter. 110 As Panhandle filed superseding rates in August 1985, more than one year before the issuance of FERC's 1987 order on the reserved matters, Paragraph E applies: 111 Within 45 days following issuance of such Commission order, any party may move for consideration of whether or not the tariff sheets ... should be revised prospectively as necessary ... and the Commission shall consider such motion. 112 Pursuant to Paragraph E, three days after Opinion No. 265 was published East Ohio moved to revise Panhandle's tariff by eliminating the minimum bill provisions. FERC resolved this petition, as well as MichCon's request for clarification filed March 23, through the issuance, on August 19, 1987, of Opinion No. 265-A. 113 On appeal, these two companies reiterate their argument that, under the terms of the Agreement, once the Commission published its decision concerning the reserved issues, it took effect immediately, and not at the time the Commission chose to issue an order on rehearing. 114 We find that Paragraph E does not require FERC's orders to be effective upon issuance; but rather, it directs the agency to consider motions to revise tariff sheets--a task the Commission discharged within a reasonable time period. Indeed, Part 1 (which contains p E) was designed not to establish an effective date, but to focus on the different scenarios that would result from the timing of FERC's issuance of an order on the reserved issues, whatever its effective date. 115 Thus, the contract's overall structure indicates that the Commission correctly concentrated on Part 4, which was intended to set the effective date. This conclusion is reinforced by contrasting the language of Part 1, describing a FERC order concerning  the cost and rate design issues (which could refer to any agency order on the merits) with Part 4's reference to an order disposing of  the issues (which suggests finality). Even if we assume that the parties employed the words concerning and disposing interchangeably, as some petitioners assert, the agency could place emphasis on either term. As the controlling Part 4 uses disposing, the Commission reasonably focused on this term and construed it sensibly. 116 Petitioners' second textual argument is that if the parties had intended to make decisions effective upon the date of a rehearing order, they would have done so explicitly, as they did elsewhere in the Agreement. See, e.g., Article VI, p 2 (the Commission order ... no longer subject to rehearing); Article XI, p 1 (same). Although the cited provisions indicate the parties' awareness of rehearing orders, these phrases refer to an anticipated FERC order approving the Agreement itself, not to the effective date of rate changes resulting from the Commission's decision on the reserved issues. 117