Opinion ID: 362296
Heading Depth: 2
Heading Rank: 2

Heading: Coordination With National Ratemaking at the Level of Individual Applications

Text: 75 Pennzoil and United originally submitted their application for an optional certificate at a rate of 47 cents per Mcf. Following the FPC's remand for findings of the actual project costs, they amended their application to seek a rate of 80 cents per Mcf. Although the FPC refused to allow them to collect the amended rate during the pendency of the action, it certified the 80 cent rate in its final order. 76 New York vigorously protests the FPC's approval of the Pennzoil amendment. The FPC and Pennzoil respond that the approval was justified both by the facts of the case and by FPC precedent. Our prior analysis indicates that there will be a need to reassess the facts of the case on remand, and we do not find the weight of FPC precedent to support approval of the amendment. Therefore, we deem it appropriate to outline the factors requiring further consideration of the approval, leaving initial decision on the new factual background of the case to the Commission. 77 As we have discussed, the Commission must attempt to coordinate optional certification with national ratemaking at the level of the whole program, particularly with respect to double counting of high costs. For much the same reasons, the Commission must attempt to coordinate optional certification with national ratemaking at the level of individual applications, so that individual producers do not reap the benefits of both procedures. 71 78 In contending that there was precedential support for allowing this amendment, the Commission cited only one Commission action, which like the decision before us was barren of explanation of why amendment should be allowed. 72 In contrasting spirit are the well-reasoned orders, regulations and rulings affirmed on appeal, when tested that declined to allow a higher price, stating that such an amendment of an optional certificate application (to allow a higher price) secures no new benefit for the public while conferring a new benefit on producers. 73 For a short period, the FPC allowed producers applying under the optional procedure to receive the subsequently issued national rate if the producer could satisfy certain difficult criteria. Pennzoil asserts here that it would have met the criteria. 74 Even assuming this, the FPC by its nationwide ratemaking has apparently abolished the route by which producers could obtain the national rate. 75 This action reinforces the previous barriers against amendatory rate hikes. 76 79 The simple answer the courts have given in upholding this steadfast 77 FPC policy has been that amendments are an attempt to get the benefits of two distinct procedures, the optional procedure and the national ratemaking procedure. Producers reap an immediate benefit from filing under the optional procedure: after a nine month period of gestation, they can commence collecting the rate specified in their optional application instead of the national rate. Once they have filed for this benefit, they cannot also ask for the benefit of subsequent developments the way an applicant under the national ratemaking procedure can. A producer may benefit by one procedure, or the other, but not both. Ecce, Inc. v. FPC, 526 F.2d 1270, 1275 (5th Cir.), Cert. denied, 429 U.S. 867, 97 S.Ct. 176, 50 L.Ed.2d 147 (1976). Accordingly, we remand for further and reasoned consideration by the Commission of whether and under what conditions amendment of the optional certificate application may be allowed.