Opinion ID: 402324
Heading Depth: 2
Heading Rank: 1

Heading: the ohio p.u.c. petition

Text: 6 Ohio P.U.C. asserts, and the Commission does not dispute, 6 that FERC lacks statutory authority to regulate local distribution companies and their retail customers, to decide initially whether the retail customer or the distributor should bear the costs of conversion, or to order Columbia to reimburse retail customers directly for their conversion expenses. Relying on these premises, and arguing that FERC may not accomplish indirectly that which is beyond its authority to accomplish directly, Ohio P.U.C. concludes that the Commission is powerless to remedy the inequities perceived. Ohio P.U.C. Brief 12, 13. FERC has no back door jurisdiction, Ohio P.U.C. insists, to follow up a state commission order directing a distributor to recompense conversion costs paid by its retail customers with a FERC order directing the pipeline to reimburse the distributor. The state commission order is action wholly within the state's domain and such state action, Ohio P.U.C. contends, is untouchable by FERC. 7 Ohio P.U.C. misperceives the nature of the Commission action at issue. Under section 4 of the Natural Gas Act, 15 U.S.C. § 717c, it is FERC's charge to insure that all rates within its purview are just and reasonable 7 and that no rate is unduly discriminatory. 8 In the decisions under review, FERC concluded that unless the LNG conversion costs directly or indirectly incurred by a distributor were spread systemwide, Columbia's rates as to that distributor would be unduly discriminatory, unjust and unreasonable. J.A. 30, 37-38, 93, 124. It therefore ordered such distributors reimbursed. See supra pp. 393-394. FERC's action, correctly comprehended, is clearly within its statutory authority; in essence, the Commission did nothing more than set the rate for a sale in interstate commerce of natural gas for resale for ultimate public consumption.... 15 U.S.C. § 717(b). 9 8 From the vantage point of assuring that Columbia's rates to distributors are just and reasonable and not unduly discriminatory, it is immaterial whether the LNG conversion costs were initially incurred by the distributor or by an end user to whom reimbursement from a distributor was ordered by a state commission. The result in both situations is the same: the distributor has shouldered alone a financial burden that other distributors, with no right to preferential treatment, have escaped. And FERC's remedy for the undue preference in both instances is the same: spread the costs systemwide to insure that Columbia's interstate wholesale rates are just and reasonable and not unduly discriminatory. 10 It is well settled that the Commission may consider nonjurisdictional activities and transactions (here, the retail customer's costs and the reimbursement order of the state commission) when it fixes the rates for interstate wholesale sales which are subject to its jurisdiction. Panhandle Eastern Pipe Line Co. v. FPC, 324 U.S. 635, 646, 65 S.Ct. 821, 826, 89 L.Ed. 1241 (1945). Cf. FPC v. Conway Corp., 426 U.S. 271, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976). 11 9 We therefore conclude that the Commission did not act beyond its authority when it decided that a distributor is entitled to reimbursement if a state commission orders the distributor to bear conversion costs initially incurred by end users. We now turn to Corning's contention that the Commission erred in failing to order reimbursement when the state commission has not ordered the distributor to recompense its retail customers.