Opinion ID: 339939
Heading Depth: 1
Heading Rank: 6

Heading: flow-through of rate reductions and refunds

Text: 152 The issues remaining for our determination concern the extent to which rate reductions and refunds required of the producers in Texas Eastern's favor should be passed on to its customers, 492 including the treatment, in relation to refunds, that should be given to Texas Eastern's investment in Rayne Field. 493 The Commission's dealt with and disposed of these matters in Opinion No. 565, 494 but by Opinion No. 565-A deferred them for future consideration because their decision depended both upon the fact and the size of producer reductions and refunds which Opinion No. 565-A left unsettled. 495 We have discussed and resolved the latter problems, concluding that the producers must reduce their rates for the future and must refund the amounts charged above just and reasonable rates in the past. 496 The flow-through question thus returns to the fore. 153 In his Phase II decision, the presiding examiner directed Texas Eastern to deposit the customer refunds which he ordered 497 in escrow pending their disposition by the Commission in a later proceeding. 498 In consequence of the reduction of producer rates, 499 the examiner also directed Texas Eastern to lower the commodity charge in its systemwide rates by 0.2 cents per Mcf. 500 In Opinion No. 565, the Commission deviated from the examiner on both counts, or grounds now to be discussed. 154
155 Before the Commission, Texas Eastern argued that the Commission had not authority under Section 7 of the Act 501 to revise system wide rates which previously had been found to be just and reasonable. 502 The Commission deemed it unnecessary to address that contention. Texas Eastern had filed in another docket, under section 4(a), 503 a rate increase which included as a predicate its Rayne Field costs and that filing was then in hearing before an examiner. 504 The Commission felt that in those circumstances Opinion No. 565 may properly provide the basis for interim action in the other docket. 505 Accordingly, the Commission ordered Texas Eastern to file substitute rates to reflect any reduction in costs arising from these proceedings and in accordance with this opinion 506 The Commission specified that 156 As long as Texas Eastern is paying the producers for the gas and until the purchase price of $134,395,700 has been paid, and from then until complete amortization of the Rayne Field balances on Texas Eastern's books, 507 Texas Eastern's rates shall continue to reflect the cost of the Rayne Field gas at the applicable area rate, now 18.5 cents per Mcf. However, when the amortization of the Rayne Field balances has been completed, Texas Eastern, providing it is still selling gas from Rayne Field, shall file new rates to reflect the fact that it is not longer paying the producers but is merely paying royalties and other expenses. 508 157
158 On the subject of producer refunds, the examiner had felt bound by the Commission's Opinion NOs. 540 and 540-A, rendered in earlier litigation involving Texas Eastern. 509 Producers had collected rate increases from Texas Eastern but they were subsequently disallowed by the Commission, and a producer refund of some $10 million was generated as a result. Texas Eastern had not passed the increases on to its customers in the form of higher rates of its own. Texas Eastern sought the refund for itself, but he Commission held that the refund should flow through to Texas Eastern's distributor-customers for the ultimate benefit of the consuming public. 510 Reversing past practice, 511 the Commission established prospectively the principle that unless a pipeline filed a rate increase 512 tracking a supplier increase, it could not later assert a claim to a refund created by disallowance of the supplier increase. 513 Because of the prospectivity of this new requirement, it did not apply to Texas Eastern; but because Texas Eastern had nonetheless earned more than a reasonable margin of return, 514 the Commission directed a flow-through of the entire $10 million to its customers. 515 159 In the proceeding now before us, Texas Eastern did not file a tracking rate increase. The examiner found that Texas Eastern earned a fair return despite having paid too much for Rayne Field gas, 516 and held that [t]he reduction in its cost of gas should go to its customers. 517 The examiner further concluded that Texas Eastern's net investment of more than $20 million in Rayne Field 518 should be charged off to surplus. 519 In Opinion No. 565, however, the Commission deemed Opinions Nos. 540 and 540-A distinguishable: 160 There is no supplier rate increase involved here, the annual expense of which Texas Eastern could have passed on to its customers through a rate increase filing, had it believed the rate increase could be justified. Instead, under the lease-sale (which will remain in existence, though gas payments therefrom are conventionalized,), the down payment, note payments and most of the other capital expenditures were reasonably treated by Texas Eastern as a capital investment, and as such in any rate case Texas Eastern could not have recovered anything more than the approved rate of annual return on such expenditures, depreciation, depletion and amortization, and certain expenses and taxes. 520 161 In consequence, the Commission held that it should not prescribe a complete flow-through by Texas Eastern of the refunds from the Producers. 521 On the other hand, to the Commission it was clear that Texas eastern could have filed rates including Rayne Field costs on the above basis 522 for the entire refund period. 523 The Commission reasoned: 162 A complete flow-through of the producer refunds would put Texas Eastern in the position of paying too much for part of the Rayne Field gas without any relief and then paying the just and reasonable price for additional gas until the Producers shall have received the full purchase price of $134,395,700, so that Texas Eastern would end up paying some $21,000,000 more than it had originally contacted to pay. However, to the extent the excessive payments in the years from 1959 to the present have fallen on its customers, Texas Eastern has already been reimbursed and the customers should receive a flow-through refund of that amount. 524 163 Looking then to the evidence, the Commission found that, on the basis of the excess of the actual per-Mcf cost of the gas, by virtue of the lease-sale arrangement, over an in-line price of 20 cents per Mcf, 525 Texas Eastern's customers had paid $23,848.919 of its Rayne Field costs through 1967. 526 To this the Commission added 46,080,371, representing an allocable part of the interest which the producers were to pay Texas Eastern, 527 making a refund to its customers of $19,929, 290 as of the end of 1967. 528 The amount of the refund, the Commission ruled, was to be brought up to date on the basis of 20 cents per Mcf of gas to October 1, 1968, and 18.5 cents thereafter, together with added interest. 529 The Commission directed Texas Eastern to calculate the total amount of the refund, subject to its approval, and to hold that amount for flow-through on the Commission's further order. 530 164 Thus the Commission arrived at he point at which it was able to address the investment which Texas eastern had made in Rayne Field while the lease-sale arrangement was in vogue. At the end of 1967, the net investment was $20,882,-996, 531 which Texas Eastern proposed to recoup in its entirety from the amount of the producers' refund. 532 The Commission accepted neither this proposal nor the examiner's conclusion that Texas Eastern should lose the whole investment through a charge-off to surplus. 533 Instead, the Commission took the view that the balance of the refund remaining after customer flow-through should be used to reduce the investment on Texas Eastern's books. 534 After flow-through to customers of $19.929,290 535 of the $31,449,000 refund, principal and interest, 536 there remained $11,519,710 537 for that application, with a consequent reduction of the net investment to $9,303.286. 538 That amount, the Commission said, Texas Eastern might keep on its books, other than as a rate-base asset, 539 for amortization from the Rayne Field gas sales to the extent possible after Texas Eastern completes payment to the producers of the $134 million contract price. 540
165 Such was the Commission's analysis and disposition of the flow-through issue in Opinion No. 565, but in Opinion No. 565-A it was completely discarded. Since, in the latter opinion, a 4-1 majority of the Commission ruled that no rate reduction or refund by the producers to Texas Eastern should be ordered before the rate for Southern Louisiana underwent further consideration, 541 There was, of course, no reduction or refund to be passed along. 542 For the same reason, neither a decision on flow-through nor a concomitant ruling on the investment balance was deemed possible. 543 So, over Commissioner O'Connor's dissent, 544 definitive action on these matters was deferred, 545 and the deferral was left standing by the order denying rehearing of Opinion No. 565-A. 546
166 There is, in the litigation before us, no demurrer to the Commission's jurisdiction to deal, as between Texas Eastern and the customers to which Opinion No. 565 applies, with any rate reductions or refunds receivable by Texas Eastern from the producers. 547 The gas in question entered Texas Eastern's pipeline at Rayne Field in Louisiana, and was transmitted and sold to distributors in other states for purposes of resale to the public. 548 No less than the producer's sales of the gas to Texas Eastern 549 were Texas Eastern's sales of the gas to those distributors activities within the regulatory domain of the Commission. 550 No narrower than the Commission's jurisdiction to prescribe rate reductions and refunds in the one case 551 was its jurisdiction to allocate the resulting benefits in the other. 552 And not less potent than the Commission's authority to allocate such benefits in ratemaking proceedings 553 was its authority to do so in section 7 proceedings. 554 The questions we encounter in connection with such allocations are not questions of Commission power, but are of an entirely different order. 167 We have held that the Commission cannot defer longer the rate reductions and refunds by the producers of Texas Eastern which conventionalization of the parties' lease-sale agreement demands. 555 In consequence, we have rejected the directives of Opinion No. 565-A and its accompanying order that disposition of reduction and refund issues be postponed. 556 We have also held that the producer refunds are to be computed on the basis of the just and reasonable rate of 18.5 cents per Mcf from the time at which Texas Eastern began to transmit the gas it drew from Rayne Field. 557 For that reason, we have disapproved so much of Opinion No. 565 as would have predicated the refunds on the 20-cent in-line price for slightly more than the first nine years of the production period. 558 These adjudications necessitate resolution of the problems related to allocation of the benefits of the rate reductions and refunds as between Texas Eastern and its customers. 168 We do not approach these problems on the broad premise that invalidity of an administrative decision undertaking to change an earlier administrative decision invariably reinstates the earlier decision. We realize that the agency may legally have a choice as to the action it will take in the matter, and that a court may not be able to say that the agency, had it known that the later decision would not pass judicial muster, would have left the earlier decision as its final action. On the other hand, it is obviously unnecessary to indulge further administrative consideration of problems as to which but one solution is legally open. 169 The Commission's power to modify its prior orders, we have said, is confined to changes which it may find necessary or appropriate to carry out the provisions of the Act. 559 Save as to the amounts of the allocations, 560 Opinion No. 565's treatment of flow-through of the rate reductions and refunds, we find, is fully consistent with policies fundamental to the Act. 561 On the other hand, deferment of flow-through issues--like deferment of the rate-reduction and refund issues themselves--which the Commission majority decreed in Opinion No. 565-A, we further find, in no way serves to foster the provisions or purposes of the Act. 562 We ultimately conclude, then, that Opinion No. 565, insofar as it effectuates legal mandates, is to be sustained as the Commission for further consideration in accordance with this opinion. 170
Refunds 171 The principles governing flow-through by a pipeline of rate reductions and refunds by its suppliers trace their origin to policy ingrained in the regulatory scheme of the Natural Gas Act. Since we have already had occasion to discuss that topic in another context, 563 a brief highlighting will suffice here. The great objective of the Act was the underwriting of just and reasonable rates to the consumers of natural gas. 564 The clear intention of Congress' was that natural gas shall be sold in interstate commerce for resale for ultimate public consumption ... at the lowest possible reasonable rate consistent with the maintenance of adequate service in the public interest. 565 The design of the Act is to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges 566 It is the Commission's responsibility in Section 7 proceedings to exercise control over the conditions under which has may be initially dedicated to interstate use. 567 to the end that full protection of the public interest 568 will be afforded. 172 The import of these considerations for flow-through of rate reductions and refunds to pipelines is evident. The rightful beneficiaries of such reductions are consumers when the prices they pay reflect excessive prices paid suppliers by the pipeline. To be sure, pipelines are entitled to charge their customers just and reasonable rates for gas sold them. 569 and a pipeline has a legitimate claim to retention of a rate reduction where it is absorbing excessive supplier-charges from revenues generated by just and reasonable rates of its own; 570 but no more than other natural gas entities subject to the Act can pipelines exact from their customers rates which are either unjust or unreasonable. 571 Retention by a pipeline of supplier-rate reductions is tantamount to overcharging customers when the pipeline is already a fair margin of return. 173 The Commission possesses Section 7 authority to condition any certificate of public convenience and necessity which a pipeline seeks by an imposition of requirements designed to serve the public interest. 572 A requirement that a pipeline flow through reductions in its suppliers' rates, certainly where the pipeline does not claim that it own rates are too low, is an eminently reasonable condition in the public interest. Should either the pipeline or the Commission feel a need to reexamine the pipeline's rates, the remedies conferred by Sections 4 and 5 are available. 573 In the meantime, the flow-through gives consumers the protection which the Section 7 certification process is designed to extend.p4 174 Entitlement to refunds of excessive rates charged pipelines by suppliers rests upon similar considerations. The only real difference in principle results from the difference in character of a rate reduction as remediation for the future and a rate refund as restitution for the past. A pipeline does not merit a supplier refund rectifying exorbitance in a supplier rate simply because it was the pipeline that directly paid the supplier that rate. 575 The aim of the Act was to protect ultimate consumers of natural gas from excessive charges.... They were the intended beneficiaries of rate reductions ordered by the federal commission, though state machinery might have to be invoked to obtain lower rates at the consumer level. 576 If the pipeline's rates to its customers were pushed below a just and reasonable level by the pipeline's absorption of the supplier's excessive rates the pipeline's claim, of course, commands respect. 577 But, when, on the other hand, the supplier's overcharge has already been recouped by the pipeline through higher charges to customers, there is no foundation upon which such a claim can validly be asserted. In sum, the responsibility to dispose of a refund plainly cannot be discharged by payment of the fund to those who show no loss. 578
175 The presiding examiner concluded that in consequence of the reduction, through conventionalization of the lease-sale, of the rate which producers could obtain from Texas Eastern, the commodity charge in the latter's systemwide rates should be lowered. 579 In Opinion No. 565, the Commission did not reach Texas Eastern's contention that Section 7 did not authorize the course because it felt that another treatment would in any event be appropriate. 580 Since Texas eastern had pending before the Commission a Section 4 proceeding for a rate increase, sought partly on the basis of its Rayne Field costs, the Commission settled on a reduction of Texas Eastern's rates as an iterim step for the Section 4 proceeding. 581 Accordingly, the Commission ordered Texas Eastern to file substitute rates reflecting cost shrinkage arising from the instant proceeding, and to continue in effect rates reflecting costs at the applicable area rate until full payment to producers of the $134 million purchase price and amortization of the balance of the Rayne Field investment on its books, and thereafter to file new rates. 582 176 The Commission's general authority to issue interim rate orders is beyond question. 583 And indubitably, an interim order may decrease existing rates which are excessive. 584 The Commission might have entered an interim rate-reduction order in Texas Eastern's pending Section 4 proceedings on a finding that its rates were too high. 585 We see no infirmity in the action here arising simply from the fact that the Commission chose to promulgate such an order, on such a finding in the Section 7 proceeding as a step promoting the public interest in the Section 4l proceeding. 586 We accordingly accept the Commission's rate-reduction order for what it purports to be. 177 We hasten to add, however, that the Commission might also have passed the order as an exertion of its Section 7 authority. 587 Texas Eastern's sole challenge before the Commission to the examiner's method of rate-reduction flow-through was that the Commission lacked power in a Section 7 proceeding to revise systemwide rates previously found to be just and reasonable. 588 The Commission met that objection by issuance, for Texas Eastern's rate-increase proceeding, of the order on an interim basis upon a finding essentially that without flow-through of the reductions Texas Eastern's charges to customers would not remain reasonable. The Commission was equally free to flow through the reductions by an exercise of its Section 7 powers without encountering the criticism Texas Eastern offered. The methodology of Section 7 flow-through is an imposition of certification conditions pending any formal rate investigation that might be in order. 589 The very purpose of Section 7 certificate conditions is protection of consumers while the normally lengthy rate investigation is proceeding. 590 The mechanism of Section 7 condition-imposition is not ratemaking; indeed, ratemaking incidental to a levy of such conditions is unnecessary and inappropriate. 591 Texas Eastern's point fails both as to the avenue the Commission took and the one it could have taken. 178 The woes of rate-reduction flow-through do not end at this point, however, for the disposition ordained in Opinion No. 565 was soon cast aside. In Opinion No. 565-A, the Commission substituted the 20-cents in-line price for the 18.5-cent area rate as the basis for a producer rate-schedule filing to reflect what the Commission then deemed the appropriate producer reduction. 592 The Commission also concluded that it would not be in the public interest to require a new rate filing by Texas Eastern to track the 20-cent producer rate for the stated reason that such a filing might result in only a temporary reduction to its customers, and thus would bring about only a condition of instability without commensurate benefits. 593 Instead, the Commission levied on Texas Eastern a contingent liability to make refunds in the future to the extent that its actual rates exceed rates reflecting a 20-cent producer rate. 594 179 We have seen that the objective of initial gas-pricing in Section 7 certification proceedings must constantly be protection of consumers against exorbitance during the period prior to establishment of of firm prices by the ratemaking process. 595 We have held that the initial price which Texas Eastern should have been directed to pay its Rayne Field producers was the 18.5-cent rate by the 20-cent rate are totally at war with these vital considerations. Leaving Texas Eastern's too-high rates operative obviously sacrifices the interest of its customers in the lowest possible reasonable rate consistent with the maintenance of adequate service in the public interest, which was, we have said their due. 597 No more with respect to Texas Eastern than to the producers was the Commission's apprehension of a condition of instability sufficient justification for diluting that interest. 598 Nor is a refund liability an adequate substitute for the rate reduction which the Commission spurned. 599 180 In this posture of the case, it is clear that as a matter of law Opinion No. 565-A is erroneous and Opinion No. 565 is right in its treatment of rate-reduction by Texas Eastern. We must, then, set Opinion No. 565-A aside on that score. By the same token, since the Commission had no perceivable legal alternative to the disposition it assigned that matter in Opinion No. 565, we sustain the Commission's position in that respect.
181 For some time the Commission appears to have allocated supplier refunds between pipelines and their customers by application of a simple principle. Entitlement depended upon whether the pipeline had increased its rates to accommodate the increase in the supplier rates. If it had, customers got the refund; if it had not, the pipeline was preferred. 600 That rule, so far as it goes, plainly harmonizes with the aims and philosophy of the Act, 601 and we encounter no difficulty in sustaining it as a major thesis in the allocative process. 182 In 1968, in its Opinions Nos. 540 and 540-A, as we have explained, the Commission superimposed upon that principle the requirement that a pipeline contending for a refund resulting from a supplier-rate increase later disallowed must have filed a tracking rate increase of its own. 602 The justification for this requirement is that the effect of absorption of the supplier increase on the pipeline's earnings position, and consequently on the relative equities of the pipeline and its customers in respect to the refund, can be suitably ascertained only when subjected to close scrutiny. 603 The Commission held that Texas Eastern, the pipeline there involved, could not retain a supplier refund where it had not filed a tracking rate increase and did not show that it had earned less than a reasonable margin of return during the period in question. 604 183 On review of that ruling in the Fifth Circuit, the Commission was sustained. 605 The court rejected Texas Eastern's primary argument that it was entitled to the refund as restitution for the sum it paid, as an increased cost, to its suppliers without passing that cost on to its customers: 184 Our view is that the Commission was authorized to see to disposition of the refunds in question on the basis of the purpose of the Act to protect ultimate consumers of natural gas. It must be borne in mind that the Commission created the refunds by disallowing supplier rate increases and by requiring that the sums in question be retained by the suppliers pending determination of entitlement. Texas Eastern could have filed rate increases to track the supplier increases. It chose not to do so for reasons of its own. One reason, no doubt, was that the Commission could have investigated the rates in the light of Texas Eastern's earnings. 185 Here the Commission afforded Texas Eastern the opportunity to justifying its entitlement to the refunds on a earnings basis without the concomitant risk of an investigation of its rates as would have been the case in the event of rate filings. This procedure was adopted to protect Texas Eastern in the face of the change in Commission policy as to disposition of refunds. This was a fair approach from the standpoint of protecting the interest of Texas Eastern and the consumer. To adopt Texas Eastern's position that it is, ipso facto, entitled to the refunds by virtue of having paid and absorbed them would be to countenance rate making by the producer-suppliers and Texas Eastern outside the protective ambit of Sec. 4(e). This approach would do violence to the statutory scheme by avoiding, to the extent the refunds exceed a fair return to Texas Eastern, any rate regulation whatever except under Sec. 5 of the Act. 606 186 We agree with the Fifth Circuit that the requirement of a tracking rate increase is amply supported by the goals sought by the Act. In Opinion No. 565, however, the Commission held that the fact that Texas Eastern did not file such an increase did not totally bar it from sharing in the refunds ordered by the producers. Disagreeing with the examiner, the Commission distinguished Opinions Nos. 540 and 540-A on grounds hardly characterizable as irrational. Instead of a supplier-rate increase which might have been tracked by a pipeline increase filing, there was a lease-sale transaction involving a large capital investment which was not itself susceptible of tracking. 607 The conventionalization of the lease-sale upon which the Commission decided was partial only--for purposes related to payment for Rayne Field gas, but not for all others. 608 With the Rayne Field investment remaining a capital item because unconventionalized, Texas Eastern could have tracked only the expense by-products of the investment--depreciation, depletion and amortization--together with Rayne Field expenses and taxes which were not capitalized. 609 Beyond that, the evidence, by the Commission's appraisal, established that Texas Eastern had passed on to its customers less than $14 million of some $76 million in Rayne Field expenditures--the excess of the actual per-Mcf cost of the gas under the lease-sale formula over a 20-cent in-line unit price. 610 187 On this analysis, the Commission in Opinion No. 565, required Texas Eastern to flow through nearly $14 million of the producers' refund, together with an aliquot portion of the interest thereon charged the producers, 611 and permitted Texas Eastern to apply the remainder of the refund in reduction of its investment. 612 This disposition of the refund issue encounters opposition from both pipeline and consumer viewpoints, and on divergent grounds. Texas Eastern, claiming the entire refund, asserts that capitalization of the bulk of its Rayne Field expenditures was not only a prudent decision 613 but also a sound accounting practice, particularly because of the resemblance of those expenditures to prepayments for gas in conventional purchases, 614 and that no part of the investment could have been passed on to customers through the medium of a tracking rate increase. PSC, on the other hand, claiming all of the refund for consumers, argues that as a matter of accounting capitalization of the expenditures was unauthorized by the Commission's regulations, 615 and that the Commission's computation of the amount of the customer overcharge was of dubious validity because no cost of service for the period in question was ever found. 616 188 By our assessment, we cannot compel the Commission to accept any of these claims. The question is not how we ourselves would dispose of these arguments but whether the disposition the Commission chooses is arbitrary or otherwise inconsistent with law. 617 Factual findings by the Commission, when supported by substantial evidence on the record as a whole, are conclusive upon the courts. 618 And [t]he judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body. 619 We see nothing that would exempt this case from those rules. 189 Looking first to Texas Eastern's contentions, we start from the premise that a public utility's investors have a general right to recoup from consumers the full amount of the capital outlay they have devoted to the public service. 620 But investors have no right to a second recovery of so much of their investment as consumers have already repaid. 621 Here the Commission, in Opinion No. 565, found that Texas Eastern's customers had been charged nearly $14 million of its net investment balance of some $20 million through rates that were higher than they should have been. 622 The Commission also found that some of Texas Eastern's expenditures were expense items 623 --and not prepayments treatable as capital items 624 --for which a tracking rate increase might have been sought, 625 and allowed if the sought-after increase survived the test of reasonableness. 626 190 Our examination of the administrative record convinces us that these facts, upon which the Commission mainly rested the refund flow-through framed in Opinion No. 565, are well supported. Our appraisal of the conclusion which the Commission drew from those facts is that they are neither arbitrary nor unreasonable. We therefore are not at liberty to direct action which is at variance with the Commission's decision in Opinion No. 565 to require Texas Eastern to flow through to its customers a portion of the refund equal to the amount of Texas Eastern's investment recovery in the form of customer charges which were higher than they otherwise would have been. We recognize, of course, that the refunding aspects of Opinion No. 565 may have lost their vitality by reason of supersession by the suspension provisions of Opinion No. 565-A, notwithstanding the invalidity of the latter. 627 But the fact remains that as a court we cannot assume the Commission's prerogatives by ordering a course of action it is not legally obliged to take. 628 191 For similar reasons, and contrary to PSC's position, we cannot disregard the Commission's determination in Opinion No. 565 that the residue of the refund should be applied to reduce the net balance of Texas Eastern's investment in Rayne Field. Given the breadth of administrative authority to set practices which are matters purely of desirable accounting, 629 we perceive no basis for disturbing the Commission's conclusion that some $20 million of Texas Eastern's unrecovered Rayne Field expenditures have been properly capitalized. And given the expert testimony underlying the Commission's finding that a substantial portion of those expenditures had not been passed on to Texas Eastern's customers, 630 we are unable to say that ascertainment of Texas Eastern's cost of service was prerequisite to allocation to it of an equitable share of the refund. 631 As Commissioner O'Connor was later to observe,[t]o flow through the entire amount of the refund would preclude Texas Eastern from recovering its costs, 632 and [t]he effect would be that consumers for the past ten years would receive gas at a price below its cost to the pipeline and below the just and reasonable rate. 633 This, he declared, to me is unconscionable, 634 and it may well be to other commissioners too. 192 Were the only issue emerging the legal vulnerability of Opinion No. 565, we would affirm its treatment of refund flow-through. The litigation, however, is further complicated by the course the Commission subsequently took in Opinion No. 565-A. Producer refunds were deferred pending reconsideration of the area rate for Southern Louisiana, leaving nothing to flow through to Texas Eastern's customers. 635 The legal effect of that action is our final inquiry. 193 As we have previously ruled, the Commission erred in postponing refunds by the producers to Texas Eastern. 636 We need not duplicate our earlier analysis and discussion of relevant legislative policy, or of the substantial body of judicial precedent, demanding speedy refunding by natural gas companies for the protection of consumers. It suffices to point simply to the Supreme Court's admonition, specifically referable to customer refunding, that the Commission had the duty, where refunds are found due, to direct their payment at the earliest possible moment consistent with due process. 637 The postponement of producer refunds and, in consequence, of refund flow-through by Opinion No. 565-A was plainly a default in that responsibility and it follows that the facet of Opinion No. 565-A must be disapproved. In the case at bar, there must be producer refunds; 638 and with no apparent justification for total retention by Texas Eastern, its customers must share in them. 194 But notwithstanding that, and though we leave untouched the flow-through principles which the Commission applied in Opinion No. 565, we must reject the amounts which that opinion would have respectively allotted to Texas Eastern and its customers from the producer refund. The Commission, for part of the relevant period, calculated the refund on the basis of the in-line unit price of the gas delivered to Texas Eastern. 639 Since we have held that the proper basis for computation was the just and reasonable rate throughout that period, 640 the refund will be larger than the Commission believed it to be. 641 We must, then, remand the case to the Commission in order that the amount of the producers' refund and the portions thereof to be retained and to be flowed through by Texas Eastern, may be recalculated. 195