Opinion ID: 351699
Heading Depth: 1
Heading Rank: 3

Heading: boilers

Text: 43 In ASARCO, supra, we reversed the subordination of boiler fuel uses to other end-uses provided in the interim plan because of the FPC's failure to articulate the reasons for such treatment. In Opinion No. 697, the Commission attempts to remedy this omission by listing three reasons supporting the lower priority for boiler fuel use: (1) alternate fuels could be more easily substituted for natural gas in boiler fuel applications than in other applications; (2) the increase in air pollution resulting from the use of alternate fuels could be more efficiently and economically controlled on boiler installations because of their larger size; and (3) economic disruption would be minimized by curtailing single large users such as boilers. (J.A. 431, Tr. 16,604-05). The second and third of these are persuasive. 44 Because the FPC is sustained on other grounds, the inadequacy of its first explanation will be considered only in footnote. 8 45 In the Commission's second explanation, the larger size of boiler installations, as compared with other natural gas users, is suggested as a reason for the more economical control of air pollution, which would result from the use of alternate fuels, by boilers rather than by other operations. There is sufficient record evidence for this conclusion. Among other testimony the Commission refers to the witness Markus on this point. (J.A. 99-102, Tr. 7050-7053). He draws a distinction between boilers at electric generating stations and boilers at industrial plants, with the former being both more efficient and more able to substitute alternative fuels. The basic difference is size; electric generating boilers are of a larger magnitude, and the witness notes that a large pollution control installation can control pollution at a lower cost per unit of fuel consumed than can a small installation. Most important, the witness gave testimony that the benefits to both kinds of boiler uses reflect efficiencies of scale not feasible for the operator of a typical industrial boiler. (J.A. 100, Tr. 7062). This testimony provides the Commission with an adequate defense for its pollution control argument. 46 In this connection, we recognize that the Arkansas-Louisiana and United Gas curtailment plans' boiler subordination mentioned above (see footnote 8) were not sustained on the pollution-control argument. The fault in each instance, however, was not a failure of logic but an absence of record support. At least for the El Paso system, that fault has now been corrected. 47 The last justification offered is closely patterned to the previous one. Since boilers are the largest users of natural gas, on a per plant basis, more natural gas can be curtailed with fewer plants affected if boilers are the first curtailed. The record portions cited by the FPC's brief are inapposite, but there is sufficient evidence already alluded to in the discussion of the second rationale to uphold this explanation. We note that the phrasing of this advantage has changed from that suggested by the Commission in the Arkansas-Louisiana and United Gas curtailment plans, supra. In those cases, the premise was that boilers could more easily substitute alternate sources of fuel, and for that reason the economic disruption from curtailment would be minimized by cutting back boilers first. The Commission no longer relies on that premise for the justification based on minimization of economic dislocation. 48 Opinion No. 697's inclusion of natural gas used by electricity-generating turbines within the boiler fuel category raises a separate problem. The interim curtailment order, Opinion No. 634, excluded gas-powered turbines utilized for electric generation from the definition of boiler fuel use (J.A. 341, Tr. 13,748), but this decision was reversed in Opinion No. 697. The stated reason for this change was that (a)s a practical matter, we cannot control the use of natural gas in electric generating boilers without including volumes available for use in gas turbines within the definition of boiler fuel use. (J.A. 506, Tr. 17,102). Turbine use has been found to be less efficient than boiler utilization for the generation of electricity. That finding is sustained on record evidence. See, e. g., J.A. 100, Tr. 7051. But the Commission went on from that fact to infer that natural gas allocated to turbine use would be diverted to electricity generation through boilers whenever possible. That step of inference is totally without support in any piece of evidence of actual diversion. On this record, it is entirely surmise. No doubt the Commission is entitled to a great deal of latitude in predicting how its orders will be applied by the industry. The Commission places its entire argument concerning this question on that proposition. 9 But Opinion No. 697 is not a new order, written as the Commission's first venture into curtailment. It follows upon an interim order, and changes in that interim order must be justified. (See Part I, supra ). In the absence of the slightest reference of abuse during the period of the interim order, there is nothing to sustain the Commission's change of mind on turbine fuel usage. Even if the provisions of section 4(b) of the Natural Gas Act, rather than the specific-finding of discrimination provision of section 5(a), were held to govern the promulgation of Opinion No. 697, there is lacking here any evidence of undue preference or discrimination. 49 The Commission also counters with the argument that, since the turbine-fuel objection is principally raised by Arizona Electric Power Company (AEPCO), it could seek a special reclassification. (Brief for Respondent at 58). That is an attractive suggestion, but courts must be careful not to close out legitimate claims on the hopes that they will be otherwise redressed. Perhaps Arizona Electric could obtain a reclassification, but to proceed by individual variance is to admit that the overall concept is valid. Arizona Electric does not allege particular facts whereby its situation should be distinguished from such a generally valid order, it attacks the fundamental basis for the order; Before commending Arizona Electric to the particular relief suggested by the Federal Power Commission, we would have to be convinced that the general plan was, indeed, sustainable. And that case has not been supported by substantial evidence.