Opinion ID: 544590
Heading Depth: 3
Heading Rank: 1

Heading: Anticompetitiveness

Text: 5 FERC has established a presumption that minimum bills are anticompetitive and therefore prima facie unlawful under section 5 of the Natural Gas Act, 15 U.S.C. Sec. 717d. We upheld this presumption in East Tennessee Natural Gas Co. v. F.E.R.C., 863 F.2d 932, 935-40 (D.C.Cir.1988). See also Tennessee Gas Pipeline Co. v. F.E.R.C., 871 F.2d 1099, 1104 (D.C.Cir.1989). Transco attempted to rebut the presumption of anticompetitiveness and to justify its minimum bill by showing that its minimum bill is no more onerous than the purchase obligations into which its customers have voluntarily entered. To this end Transco introduced into the record a stipulation that some of its contract demand customers are entering into long-term firm contracts with producers and that these contracts contain take-or-pay obligations. 1 FERC responded: 6 Irrespective of the quality or sufficiency of this evidence, it is not relevant to rebut the presumptive anticompetitiveness of Transco's minimum bill. Transco submits that the purposes and effects of a minimum bill and a take-or-pay obligation are the same. However, it ignores the fact that a contractual obligation with a non-pipeline supplier is voluntary, whereas a pipeline minimum bill is not. 7 October 3 Order, 45 FERC p 61,001 at 61,001 (1988). The Commission properly explained that Transco's stipulation shed no light on the competitiveness of Transco's minimum bill. That some of Transco's customers have entered voluntarily into contracts with third party producers containing provisions which in some respects resemble minimum bills does not in any way demonstrate that a minimum bill imposed as part of a mandatory rate schedule is anything other than anticompetitive. Customers desiring service under Transco's CD rate schedule would be obligated to accept the minimum bill. This would, in effect, prevent them from entering into those contracts with producers that Transco finds analogous unless they were willing to pay a deficiency charge for falling below 65% of their contract demand. Such a provision is demonstrably anticompetitive and Transco has admitted as much by stating that the function of a minimum bill is to provide a measure of discipline on customers' purchasing decisions.... Brief for Petitioners at 25. A decision by a customer to voluntarily bind itself to take-or-pay obligations bears only the most superficial resemblance to the imposition of an involuntary minimum bill.