Opinion ID: 345561
Heading Depth: 2
Heading Rank: 2

Heading: The FPC Proceeding

Text: 10 Roughly concurrently with the FTC's investigation, the Federal Power Commission was conducting a ratemaking proceeding for the Southern Louisiana area. Since this proceeding figures prominently in the arguments of the gas producers, it will be discussed at this point. The FPC began considering area rates for Southern Louisiana in the early 1960's, (So La I ), but a final decision was not rendered until 1968. 12 Almost immediately, and while So La I was still under review by the Fifth Circuit, the FPC instituted a new proceeding (So La II ) to reconsider rates for the offshore portion of Southern Louisiana; 13 a few months later, the Commission expanded the proceeding to include the entire area. 14 11 The FPC was responding to numerous complaints that the supply-demand situation had changed significantly since the record in So La I was closed. The gas producers argued that present supplies were diminishing and that the rates established in So La I were inadequate to stimulate the development of new supplies. Various municipal distributors charged, however, that the producers were understating their reserves in reports to the AGA and were deliberately withholding natural gas. In December 1969 the FPC established procedures for the So La II proceeding and directed that a full evidentiary record be made on the reserve data question. 15 As part of a staff investigation into the accuracy of the AGA data, the FPC ordered producers to furnish data relating to uncommitted natural gas reserves in the Southern Louisiana area; 16 these estimates were confirmed by a staff-supervised spot audit. From an analysis of the pertinent Form 15 reports, the results of the uncommitted reserves study, and testimony from AGA officials, the FPC staff concluded that the AGA data was reliable. Following extensive evidentiary hearings before an administrative law judge, the record was certified to the entire Commission. 12 The FPC issued its decision in So La II on July 16, 1971 (shortly after the FTC resolution authorizing compulsory process in its investigation). The Commission discussed in some detail both the staff's investigation and the contentions of several intervenors that producers had underreported their reserves. 17 The Commission concluded that the AGA reserve data was reasonably reliable for the (ratemaking) purposes used herein. 18