Opinion ID: 329424
Heading Depth: 2
Heading Rank: 2

Heading: Allocation of United's Storage Costs

Text: 70 United urges that we find error in the Commission's systemwide allocation of the costs attributable to United's storage facilities. United's chief storage operations are in the Northern Zone, 79 where seasonal variations play the largest factor. In its proposed tariff United allocated the associated costs solely to its Northern customers, following its historical zone-gate method. The FPC, adopting the ALJ's decision and its staff's recommendation, spread the costs systemwide on the ground that all the customers benefited from the facilities. 71 The ALJ found that the husbanding of gas by putting it into storage in the summer makes more gas available to all United's customers during peak periods. There is also evidence that the use of storage reduces materially the costs of transportation and permits a more uniform daily rate of purchases by United from its suppliers, generally enhancing efficiency and minimizing costs. 80 With findings based on substantial evidence, and a rational use of the facts thus ascertained, there is no warrant for reversal.C. Increase in the Overrun Penalty 72 Louisiana 81 challenges the FPC's approval of United's proposal for an increase, from $3 to $10 per Mcf, in the penalty for unauthorized overruns, for gas taken by a customer in excess of its maximum contract demand. 82 Although the ALJ rejected United's proposal as premature, 83 since there had not been even one winter's experience after the $3 penalty had been approved in May of 1972, the FPC cited the use of a $10 penalty by a number of other pipelines, and approved it in view of the importance of curtailment programs today. 84 73 While Louisiana urges that the $3 penalty is sufficient, it admits that alternative fuels are either so expensive or so scarce that city gate customers in Louisiana will be hard pressed to restrict themselves to contractual requirements. 85 The Commission points out that United's penalty provision does provide for a waiver, at the option of the seller, in the case of an emergency beyond the control of the buyer. 74 This matter falls within the Commission's discretion, to impose a stringent burden on those who appropriate excessive amounts of a scarce resource in emergency conditions. 75 For the reasons stated, the Commission's orders are 76 Affirmed.