Opinion ID: 252068
Heading Depth: 1
Heading Rank: 5

Heading: The Availability of ReplacementGas

Text: 62 The second ultimate determination upon which the Commission based its order is that there is sufficient unallocated gas on the American Natural system to replace the 127,000 Mcf of abandonment gas. This volume was to come from three sources: 'expansion' gas, 'overpumpage' gas, and 'reserve' gas. Petitioners vigorously assert that none of this gas can be used as replacement. 63 1. The expansion gas: This refers to the 57,000 Mcf resulting from the first-step expansion of American Louisiana's pipe line. Petitioners claim that the issuance of emergency, and later the permanent, certificates of public convenience authorizing expansion were predicated, at least in part, upon Commission determinations that Michigan Wisconsin's existing utility customers urgently needed this expansion gas. 45 From this they conclude that it cannot all be allocated to Michigan Consolidated. We agree that there is an inconsistency between certificating an expansion on the ground that it is needed by one market, and then permanently allocating the fruits of that expansion to another market. But we do not think this was beyond the authority of the Commission providing that it found, upon a valid comparison, that other markets were in greater need of the gas. The difficulty is, as we found earlier, that the Commission's comparison was not valid since it failed to accord proper consideration to the needs of Michigan Wisconsin's customers. Hence the determination of where this gas is needed most must await a proper comparison in further proceedings on remand. 64 2. The overpumpage gas: This refers to gas which the Commission suggested would be available on the American Natural system if Amercian Louisiana operated its 'spare' compressors full time and continually obtained gas from the fields at maximum contract demands. There is some conflict in the testimony as to the prudence of this procedure in terms of safety and the adequacy of gas reserves. And it is not altogether clear that American Louisiana's contracts with its suppliers allow it to take its maximum volumes on a permanent basis. But we cannot say upon the record before us that the Commission's action was arbitrary or unsupported by substantial evidence. 46 65 3. The reserve gas: This refers to the 59,885 Mcf of American Louisiana's initial capacity, originally reserved in Docket G-2306 for distribution to new Wisconsin markets in the event that Michigan Wisconsin prevailed in the Mid-west omnibus case. The expansion-abandonment hearings proceeded on the assumption that the reserve gas was available for allocation only in Docket G-2306. 47 By the time the Commission rejected Michigan Wisconsin's proposal to serve the new communities, the expansion-abandonment hearings had terminated and the Examiner had rendered his report denying abandonment. Thereafter, the Commission took the gas reserved in Docket G-2306, and allocated it in these expansion-abandonment proceedings. 66 Petitioners urge that this violates the Ashbacker rule 48 and elemental principles of procedural due process in two respects: (1) Those petitioners who were seeking gas for new markets and intervened only in Docket G-2306 suddenly found that the gas which had been reserved for disposition in those proceedings had been allocated in the abandonment case without notice to them or opportunity to be heard. (2) Other petitioners who had intervened only in these expansion - abandonment proceedings (mostly Michigan Wisconsin's existing customers seeking the expansion gas for their markets in Michigan and Wisconsin) were effectively precluded from asserting any claim to the reserve gas in any forum because they did not, and could not reasonably, anticipate that gas reserved for disposition in another proceeding would be allocated in this one after the hearing in this proceeding had terminated. 67 Although these contentions raise serious questions, 49 we need not decide them since the alleged lack of notice and hearing will perforce be remedied by the comparisons already required by this opinion on remand the Commission. 50 In such proceedings, the Commission will, of course, be free to consider the extent to which needs of any of the communities requesting gas service from Michigan Wisconsin have been met or are likely to be met by other natural gas pipe lines. 51