Opinion ID: 457683
Heading Depth: 1
Heading Rank: 3

Heading: change in zone boundaries

Text: 36 We uphold the Commission's decision to shift Great Lakes' Central Zone/Eastern Zone boundary. As the ALJ determined, and the Commission confirmed, substantial evidence presented by Mich Con demonstrated that the previous zone arrangement was not reasonable. 5 37 Mich Con, we have already recounted, see supra pp. 509-510, showed that the delivery points on the Great Lakes system formed three clusters, and that the Central Zone/Eastern Zone boundary line cut through the middle cluster of delivery points. Mich Con urged, persuasively, that the previous boundary placement violated the ratemaking principle that zone rate differentials should reflect transportation cost differentials. First, Mich Con observed, by dividing the zones in the midst of closely clustered delivery points, the Central/Eastern boundary created a significant rate differential where no significant transportation cost differential existed. Second, Mich Con pointed out, by placing some second-cluster delivery points and the third-cluster delivery points--some 200 miles away--in the same (Eastern) zone, the old boundary fail[ed] to reflect a significant cost differential that does exist between deliveries to points in the westernmost portion of the Eastern Zone and deliveries to points in the easternmost portion of that zone. Initial Decision, 17 F.E.R.C. at 65,103. 38 None of the participants before the agency disputed the existence of the three delivery point clusters, and none could convincingly attack the reasonableness of the conclusions drawn from the cluster analysis. The record we review, in short, provides ample justification for the ALJ's finding of substantial evidence that the present zone boundaries are unduly discriminatory and preferential. Id. at 65,105. 39 Petitioner Natural, opposing the change, argues that the previous zone boundaries deserve deference because they had been unchanged for ten years. Brief of Petitioner, Natural Gas Pipeline Company of America at 32. But all the respect due an existing rate was afforded in this instance when the ALJ tested Mich Con's position under the burden of proof analysis clarified in Transco. Natural also objects that the ALJ did not adequately consider Natural's suggestion that a fourth zone be created. The ALJ observed: Natural has not presented this proposal in any detail. Consequently, its effect is unknown and it surely is not supported by substantial evidence. Initial Decision, 17 F.E.R.C. at 65,105. We find this observation accurate and adequate. Further objections raised by Natural, while accorded our full attention, do not warrant discussion.