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

Heading: Refund Release Order (Humble Refunds)

Text: 17 In No. 22870 Texas Eastern petitions for review of an April 21, 1965 order (RP65-27) directing Humble Oil & Refining Company to release a portion of refundable amounts the Commission had ordered frozen July 8, 1964 (32 F.P.C. 49, 52). In that order the Commission explained at length its purposes and proposed procedure: 18 The purchasers of gas under the various rate schedules to which this settlement proposal relates are all natural gas pipeline companies subject to our jurisdiction under the Natural Gas Act, and many of these purchasers in turn have customers who are natural gas pipelines. Some of these pipeline customers of Humble or of Humble's customers are required under express provisions of outstanding orders of this Commission to flow through to their customers all or part of any of the refunds they may receive from Humble as a result of this settlement; others may choose to do so in the absence of such express provisions. But in view of our duty to insure that the ultimate consumers of gas actually receive all of the benefits of our rate regulation to which they may be entitled, we shall take action here to assure that, within the limits of our jurisdictional reach, the refunds to be ordered actually flow to those parties legally and equitably entitled thereto. 19 We are not here determining that a pipeline purchaser from Humble or one down the line in the chain of resales between the producer and ultimate consumer are never entitled as a matter of law or equity to retain all or part of the refunds received from a supplier. We conclude only that merely because a pipeline is under no special express requirement to flow refunds through to its customers and did not previously pass on to its customers the producer's price increase (or higher gas costs arising from sales temporarily certified at prices higher than that fixed in the settlement), does not determine that it is entitled to retain such refunds. 20 In the April order before us, the Commission directed Humble to release a portion of its refunds to United, Southern Natural Gas Company, and Texas Gas Transmission Corporation. At the same time it directed these three companies to defer the flow-through of any portion of these refunds attributable to Texas Eastern. 5 No. 22870 was not consolidated with the cases now before us. However, because of the similarity of No. 22870 with the cases now before us, the Court and the parties considered the petitioner's motion for a stay and the respondent's motion to dismiss the petition.