Opinion ID: 184672
Heading Depth: 2
Heading Rank: 2

Heading: Consistency with Agency Precedent and Policy

Text: 16 FERC must always give reasons for suspending proposed rate changes. See 15 U.S.C. § 717c(e). We review suspension decisions to determine whether the reasons given are in some way [ ] related to FERC's interim or ultimate inquiries. Exxon Pipeline Co. v. United States, 725 F.2d 1467, 1473 (D.C.Cir.1984). 7 Even if this test is satisfied, however, remand ... for further articulation of reasons is appropriate if FERC impos[es] two different suspension lengths in cases that [a]re absolutely indistinguishable, and ... fail[s] to offer even summary reasons to explain the difference. Id. at 1474; cf. Bush-Quayle '92 Primary Comm. v. FEC, 104 F.3d 448, 453 (D.C.Cir.1997) ( 'an agency changing its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored, and if an agency glosses over or swerves from prior precedents without discussion it may cross the line from the tolerably terse to the intolerably mute'  (quoting Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970)). Energy Associates argue that FERC's decision runs afoul of this second test because the Commission departed without explanation from the principles laid down in Tennessee I and the precedential effect of the later decision in the same case affirming the suspension order, Tennessee Gas Pipeline Co., 71 F.E.R.C. p 61,399 (1995) (Tennessee II). 8 As noted above, in Tennessee I FERC suspended incremental rates proposed for decrease for one day and other rate increases in the same filing for five months. 9 17 As Energy Associates claim, the relevant facts addressed by FERC in its Tennessee opinions appear comparable to those in this case. Both rate filings involved numerous individual rate changes and a net increase in revenue for the pipeline. Like Transco's, [332 U.S.App.D.C. 345] Tennessee's filing also decreased certain incremental rates (the NET/T-180 rates). The X-319 and X-320 rates include some allocated costs; although not explicitly discussed inTennessee I or II, a third opinion issued eight months later makes clear that the NET/T-180 rates included a proportionally allocated share of systemwide O&M and A&G costs. See Tennessee Gas Pipeline Co., 74 F.E.R.C. p 61,174, at 61,608-09 (1996). 18 Despite these similarities, FERC stated that suspending Tennessee's decreased rates for five months would be harsh and inequitable, but reached the opposite conclusion here and upheld the five month suspension for the X-319 and X-320 rates. Contrary to Exxon's requirement that it explain the different outcomes, FERC did not mention Tennessee I or II at all. 19 The three reasons FERC did give in Transco I for denying Energy Associates' request--the decreased rates were part of an overall rate case filing that reflects increases and decreases in various costs, it is not clear that the shortened suspension period would allow Transco to fully recover its costs, and the decreased rates appear to contain both direct and allocated costs--also fall short of satisfying Exxon. Each reason refers to facts that appear to be identical in the Tennessee I and II filing. Moreover, the first two reasons were explicitly considered and rejected in Tennessee II. The pipeline in Tennessee II argued that isolating the NET/T-180 rates was improper because they were part of an integrated package. Tennessee II, 71 F.E.R.C. at 62,583. FERC responded: 20 In a rate filing in which many revised tariff pages and rate schedules are filed, the Commission may accept some revised tariff sheets as filed, suspend some sheets, and reject others. The Commission has never considered itself bound to accept, suspend, or reject as a single package all the individual tariff sheets that compose a rate filing. 21 Id. at 62,584 (footnote omitted). The pipeline also argued that putting the decreases into effect five months before the increases could cost it $1.5 million. See id. at 62,585. FERC noted the relative insignificance of this amount in the context of a proposal with an $820 million cost of service. 10 See id. The Commission further explained that under the NGA a pipeline bears the risk that rate changes will take effect at different points, see id., and that the alternative would force the customers with the rate decrease ... to pay the higher, unsupported rates for at least five months, and possibly longer, with no possibility of refunds. Id. at 62,585-86. The third reason (direct and allocated costs), while not explicitly considered in Tennessee I or II, appears inconsistent with FERC's response to a similar argument in Tennessee II. The pipeline there asserted that the decrease in the NET/T-180 rates was attributable to a shift of certain costs from those rates to others slated to be raised. 11 See id. at 62,585. The decreased and increased rates were therefore partially linked because, if the Commission ultimately found that the shifted costs did not belong in the increased rates, those costs would likely be returned to the NET/T-180 rates. Similarly, if FERC determines that Transco's proposal places too great a share of the systemwide costs in the increased rates, the decreased rates could ultimately go up. Yet FERC did not consider this possibility sufficient to require identical suspension periods in Tennessee II. It is hard then to see why the presence of some unspecified allocated costs in the X-319 and X-320 incremental rates justifies a different conclusion. 22 The adequacy of the additional reason given by the Commission for suspending X-319 and X-320 for five months in the order on rehearing in this case requires further exploration of FERC's new motion filing rule. Before the new rule came into being, whenever FERC suspended a proposed rate for a [332 U.S.App.D.C. 346] nominal period such as one day, it typically ordered the pipeline to put the new rate into effect promptly thereafter; no motion was required. See id. at 62,586-87. Decreases were usually given a minimal, or momentary suspension. Id. at 62,584. These norms reflected FERC's policy, followed in Tennessee II, of assuring prompt implementation of rate decreases. 23 The new motion rule, however, makes it difficult if not impossible for the Commission to maintain that norm because a pipeline can delay implementation after the briefest of suspensions in the case of rate decreases simply by withholding the required motion. Yet in promulgating the motion rule FERC reiterated that the prompt implementation policy for decreases remained intact. Speaking to the new rule (and other changes), the Commission stated that it was not changing its substantive rate policies in this rulemaking, but rather bringing its filing requirements and procedures up to date to match its current substantive policies. Order 582, 60 Fed.Reg. at 52,962. FERC also spoke directly to the concern that a pipeline could block prompt implementation of a decrease: 24 Usually the Commission accepts a proposed rate decrease without suspension. Where the Commission does not suspend the effective date of a proposed decrease, a ... motion is not required and the proposed decrease goes into effect on the date proposed by the pipeline in its filing. However, it may be appropriate, under certain circumstances to suspend a rate decrease and in such instances a motion to place the rates into effect would be required; for example, where it may not be clear initially if it is a rate decrease due to pancaked cases. 25 Order 582-A, 61 Fed.Reg. at 9616. 12 This latter statement in particular reveals FERC's awareness of the problem created by the motion rule and its decision to work around it by accepting decreases without suspension in ordinary cases. When the rule was challenged on appeal FERC also told this court that there is no reason for assuming that the Commission will depart from its policy of attempting to place decreased rates into effect promptly. Br. for Resp't at 19, JMC Power Projects v. FERC, 116 F.3d 941, 1997 WL 358188 (D.C.Cir.1997) (unpublished disposition) (Addendum to Initial Br. of Pet'rs). 26 Given these assurances, FERC is not in a position to rely on the new motion rule as a principle reason for suspending the X-319 and X-320 rates for five months without some further explanation of the rule's impact on its previous substantive policy as to suspensions of rate decreases. Like the three prior reasons offered in Transco I, the fourth reason given on the denial of rehearing does not satisfy Exxon's requirement that the Commission justify any decision to treat Transco's rate change filing differently from similar proposals in Tennessee I and II and other cases, and is inconsistent with its pronouncements on the purpose and effect of its new motion rule.