Opinion ID: 270900
Heading Depth: 2
Heading Rank: 1

Heading: Refund Retention Orders:

Text: 6 United's Refunds. 7 The challenged orders relate to three United increased rate filings (F.P.C. Docket Nos. RP61-18, RP63-1, and RP65-1) filed January 18, 1961, June 15, 1962, and July 15, 1964, respectively. The rates became effective, after the statutory five months suspension period, June 15, 1961, January 1, 1963, and February 1, 1965. The first two increased rates were put into effect subject to refund after the suspension period. The rates proposed in RP65-1 were reduced, before becoming effective, in accord with a settlement agreement, between United and its customers, approved by the Commission order of December 23, 1964. 8 (1) In Opinion No. 428, 31 F.P.C. 1180 (May 14, 1964), Opinion No. 428-A, 32 F.P.C. 687 (September 2, 1964) and Opinion No. 428-B, 32 F.P.C. 879 (September 30, 1964), the Commission settled most of the issues in United's RP63-1 rate increase proceeding. In Opinion No. 428 the Commission found that United's rates in effect from January 1, 1963 were excessive and ordered United to refund the excessive rates to its pipeline customers and ordered all jurisdictional customers of United to flow through to their customers all refunds received from United. The customers were not required to make refunds, if they protested, until they had been afforded a hearing. 9 In Opinion 428-A the Commission denied a rehearing but modified the order relating to refunds by specifying that United should retain all refunds due its customers under Docket No. RP63-1, pending 'further order of the Commission directing disposition of those amounts'. Along with this modification, the Commission ordered United's customers, including the petitioner, to file reports indicating whether they would flow through or retain any amounts United might refund. The Commission, without passing on the contention that it could not order refunds by United's customers, explained the procedure as follows: 10 'Concededly, this is a novel question of great regulatory importance. But, we are here not concerned with the justness or reasonableness of these customers' present rates, per se. Rather, we are here faced with the proper and equitable distribution of a fund of money created by our own process. Under the Natural Gas Act we are concerned with the protection of the public interest involved in '   selling natural gas for ultimate distribution to the public.' Merely ordering United to make refunds to its immediate customers could not fully discharge our responsibilities. We think, however, some modification of ordering paragraph (J) is appropriate to conform to the procedure recently prescribed in our order approving a settlement in Humble Oil & Refining Company, 32 FPC 49, Docket Nos. G-9287 and G-9288, issued July 8, 1964, where we provided that Humble should compute and report the amount of potential refunds and retain these amounts subject to further order. In general we shall follow this procedure here.' 32 F.P.C. at 695 4 11 The same modifying order (No. 428-A) directed United to retain all refunds that might thereafter become due to the petitioners' customers and to United's jurisdictional customers as a result of an earlier United settlement (Docket No. RP61-18) approved by Commission order March 12, 1962. The Commission denied United's application for a rehearing in Opinion No. 428-B September 30, 1964. 12 In No. 22031 (Natural Gas) and in No. 22041 (Texas Eastern), the petitioners attack the order and Opinion No. 428, as modified by Nos. 428-A and 428-B, in United's last decided rate case No. RP63-1, ordering United temporarily to retain the amounts refundable to its customers under its 1961 and 1963 dockets. 13 (2) In the United 1964 Rate Settlement Approval Order, 32 F.P.C. 1515, (December 23, 1964) the Commission approved the settlement of all United's rate increase cases then pending before the Commission or this Court including No. RP65-1. The Commission again directed United to retain all amounts refundable to Texas Eastern under the 1962 United settlement (No. RP61-18) and 1964 opinions (No. RP63-1). The order also provides for retention of refunds arising under this new RP65-1 settlement. February 19, 1965, in denying Texas Eastern's application for a rehearing, the Commission explained its position as follows: 14 'Texas Eastern advances a number of reasons why it believes any refusal on the Commission's part to order United to pay over the amounts in question to it without condition or limitation would be legally or equitably unsound. We do not believe it necessary or appropriate to consider these claims here, since they are all considerations which Texas Eastern can restate and which we will consider in reaching our final determination upon the basis of the factual record made in the hearing to be held in this matter.    Texas Eastern will, of course, be fully heard on all relevant claims before we reach any conclusion adverse to its claims to entitlement to the refunds from United. We reiterate that we have not yet determined whether it is or is not entitled to retain any or all of such amounts. 15 However, Texas Eastern's apparent view that the Commission must decide the validity of its claims on the pleadings and cannot in the exercise of its discretion defer such determination until after it can do so in the light of a full hearing record in an ancillary proceeding in which other interested parties will also have an opportunity to present factual information and legal arguments they may deem material is clearly lacking in merit.' 33 F.P.C. at 304-305. 16 In No. 22462 Texas Eastern petitions for review of this settlement order.