Court Opinion

ID: 185516
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:32:58+00
Date Added: 2024-06-11T17:26:16.415739
License: Public Domain

271 F.3d 1119 (D.C. Cir. 2001)
Amoco Production Company and BP Energy Company, Petitionersv.Federal Energy Regulatory Commission, RespondentWyoming Interstate Company, Ltd., Intervenor
No. 00-1492
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 2, 2001Decided November 30, 2001

Jon L. Brunenkant argued the cause for petitioners.  With  him on the brief was Cheryl J. Walker.  Frederick T. Kolb  entered an appearance.
Lona T. Perry, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With her on  the brief was Dennis Lane, Solicitor.
Daniel F. Collins, G. Mark Cook and J. Gordon Pennington were on the brief for intervenor.  Howard L. Nelson  entered an appearance.
Before: Edwards and Randolph, Circuit Judges, and  Williams, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge  Williams.
Stephen F. Williams, Senior Circuit Judge.

1
Amoco Production Company and its affiliate BP Energy Company (collectively,  "Amoco") appeal from four orders of the Federal Energy  Regulatory Commission.  We initially address the first three  orders, all revolving around the Commission's approval of a  rate settlement;  we uphold the Commission.  Then we address the fourth order, which turns out to be non-final and  thus beyond our jurisdiction.

2
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3
Amoco produces natural gas and ships some of it through  pipelines operated by Wyoming Interstate Company.  Wyoming Interstate filed for a rate increase in 1997 under  4 of  the Natural Gas Act, 15 U.S.C.  717c, and the new rates  went into effect subject to refund on December 1, 1997  (Docket No. RP97-375, the "1997 case").  After some procedural wrangling, the Commission issued an order approving a  contested settlement between Wyoming Interstate and all  parties except Amoco, which was severed so that it could  litigate its interests independently.  Wyoming Interstate  Company, 87 FERC p 61,339 (1999) ("June 1999 Order").1

4
The approved settlement provided different rates for each  of two separate periods.  Id. at 62,305.  For Period I, ending  December 31, 1998, the rates were the same as the settlement  rates approved by the Commission for Wyoming Interstate in  a prior case, Docket No. RP94-267 (the "1994 case")--rates  lower than those in Wyoming Interstate's 1997 filing.  Id. The rates for Period II (running from January 1, 1999 until  the effective date of Wyoming Interstate's next rate filing,  discussed below) were even lower.  Id.

5
Shortly after the approval of this contested settlement,  Wyoming Interstate filed a new  4 case, in which it sought  new rates effective January 1, 2000 (Docket No. RP99-381,  the "1999 case").  As a result, the period covered by the 1997  filing and settlement was "locked-in," i.e., it could not run  beyond a known date--here, the last day of 1999.

6
The Commission saw this new filing as altering the context  of the 1997 case.  Denying Amoco's petition for rehearing of  the settlement approval, the Commission not only stuck to its  approval of the settlement for shippers other than Amoco, but  extended the settlement to cover Amoco itself.  Wyoming  Interstate Company, Ltd., 89 FERC p 61,028 (1999) ("October  1999 Order").  Its reasoning was that there was no way that  Amoco could benefit from pursuit of its claims in the 1997  case.  It addressed three imaginable types of benefit:  (1) For  the locked-in period at issue, Amoco could not recover refunds under  4 of the Natural Gas Act because under  established law, the "floor" for a  4 refund calculation would  be the prior lawful rate, i.e., the 1994 settlement rates.  But  the 1997 settlement rates already secured by others were in  the case of Period I the same as the 1994 rates, and in the  case of Period II even lower.  So Amoco had nothing to gain  under  4.  Id. at 61,087-88.

7
(2) Nor could Amoco recover reparations in the 1997 case  under  5 of the Act, 15 U.S.C.  717d.  Given the complexity  of Amoco's main issue (whether customers should receive a  credit for a nearly $8 million dollar "exit fee" paid to Wyoming Interstate by Columbia Gas Transmission), the Commission could not finish the necessary hearing before the end of  the locked-in period.  As the Commission can award  5  reparations only prospectively from the date of a finding that  rates are not just and reasonable, Amoco had nothing to gain  under  5.  Id. at 61,088.

8
(3) Finally, the Commission reasoned, any finding in the  1997 case could not help Amoco with regard to the 1999 case. Again, the "floor" for refund purposes there would be the  prior lawful rate.  For purposes of the 1999 case, this would  be the Period II settlement rates, and Amoco's maximum  imaginable success in the 1997 case could not produce a prior  lawful rate even that low;  apart from the settlement of the  1997 case, there was no basis for any floor lower than the  1994 settlement rates.  Id. at 61,088-89.

9
Accordingly, the Commission terminated the hearing  scheduled for the 1997 case and approved the settlement for  all parties.  Id.  It subsequently denied rehearing.  Wyoming Interstate Company, Ltd., 89 FERC p 61,303 (1999)  ("December 1999 Order").

10
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11
Amoco first attacks the Commission's June 1999 Order  approving the 1997 settlement as to the parties other than  itself.  Amoco argues that there was no "substantial evidence" that the settlement rates were "just and reasonable." But this misstates the issue.  All the non-Amoco shippers  agreed to the settlement.  As it was "uncontested" as to  them, the only burden on the Commission was to find that it  was "fair and reasonable."  United Municipal Distributors  Group v. FERC, 732 F.2d 202, 207 n.8 (D.C. Cir. 1984).  See  June 1999 Order, 87 FERC p 61,339 at 62,308.  The Commission clearly recognized the distinction, and that is why it  initially did not force the settlement on Amoco.  Id. at  62,309-10.  Amoco does not even try to argue that there was  not substantial evidence to support the Commission's finding  that the settlement met the less stringent "fair and reasonable" standard.

12
Amoco's next claim is that the Commission's October and  December 1999 Orders erred in concluding that, after Wyoming Interstate's 1999 filing, Amoco had nothing to gain from  pursuit of its claims in the 1997 case.  Specifically it attacks  the third element in the October 1999 Order--the conclusion  that a  5 finding that the "just and reasonable" rates were  below even the 1997 Period II settlement rates could not  benefit Amoco in the 1999 case.  Amoco asserts that there is  a potential benefit:  Such a lower rate, it claims, could become  the "floor" for  4 refunds in the 1999 case.

13
Amoco's argument fatally confronts the text of  4(e) of the  Natural Gas Act, 15 U.S.C.  717c.  That section provides  that in the period after a gas carrier has filed new rates, and  the same have been suspended and put in effect subject to  refund, the Commission may require the carrier"to keep  accurate accounts in detail of all amounts received by reason  of such increase," and that the Commission may order refunds of "the portion of such increased rates or charges by its  decision found not justified."  4(e), 15 U.S.C.  717c(e)  (emphasis added).  It was this text that led the Supreme  Court in Federal Power Commission v. Sunray DX Oil Co.,  391 U.S. 9 (1968), to hold that the refund obligation extends  only to rate increases found improper.  There the Court dealt  with whether the Commission could order refunds by carriers  that had been charging rates in accordance with a certificate  of convenience and necessity under  7 of the Act, 15 U.S.C.  717f, in the absence of a condition in the certificate allowing  such a refund.  The Court looked to  4, and found that any  ambiguity in the refund provision itself ("the portion of such  increased rates or charges by its decision found not justified")  was resolved by the accounting provision, which was limited  to "amounts received by reason of such increase."  Id. at 24  (internal quotes omitted).  "If it had been intended that the  refund obligation should extend to greater amounts, the  accounting requirement logically should have extended to  them also."  Id.  The Court went on to point out an anomaly  that any other interpretation would create:

14
It would be anomalous to treat an increased price as a trigger for a refund obligation which would leave the producer with a smaller net return than if it had never increased its price at all. Id.

15
In Distrigas of Massachusetts Corp. v. FERC, 737 F.2d  1208 (1st Cir. 1984), the First Circuit applied Sunray under  conditions virtually identical to ours.  Distrigas had been  charging a FERC-approved settlement rate, and then filed a  rate increase to take effect July 1979.  Id. at 1222.  Adjudicating that filing, the Commission found that the "just and  reasonable" rates were lower than the settlement rate, but  refused to order refunds based on a benchmark lower than  the pre-July 1979 rate.  Id. at 1224.  The court upheld the  Commission.  Then-judge Breyer wrote for the court that  under Sunray, FERC could order refunds only for amounts  exceeding "the pre-existing lawful rate," there the settlement  rates in effect prior to the 1979 filing.  Id.  Judge Breyer  observed that the Court had derived this conclusion "from the  language of the statute and from the fact that, otherwise, a  firm asking for an increase could end up considerably worse  off than if it had not requested one."  Id.

16
Distrigas applies here.  For the 1999 case, the "floor"  cannot be lower than the Period II settlement rates.  Conceivably Amoco might object that, in distinction to Distrigas,  the settlement rates governing the 1997-99 locked-in period  were neither uniformly agreed to nor found to pass the  relatively demanding standards for a contested settlement. But if the 1997-99 settlement rates are removed from the  picture, the language of  4 would drive the Commission back  to the 1994 rates--which are higher than the Period II  settlement rate.  Thus any refund "floor" lower than the  Period II settlement rate would--in the face of Sunray and  Distrigas--leave Wyoming Interstate "considerably worse off  than if it had not" made the 1997 or the 1999 filings.

17
Amoco also claims that the Commission failed to abide by  two of its own precedents--Panhandle Eastern Pipe Line  Co., 77 FERC p 61,284 (1996), and Southern Natural Gas Co., 65 FERC p 61,347, at 62,827 (1993).  Amoco is mistaken.  In  those cases the Commission simply recognized that when a  carrier files first one  4 rate increase and then another, the  rate found "just and reasonable" in the first case may become  the "floor" in the second. Nothing in either case addressed  the situation presented here.

18
We affirm the Commission's orders approving the settlement for all shippers, including Amoco.

19
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20
In response to motions for clarification of the December  1999 Order approving the settlement, the Commission set  some ground rules for litigation of the 1999 case.  Specifically, it ruled that under the settlement all shippers other than  Amoco were bound in the 1999 case by the settlement's  resolution of the Columbia exit fee issue discussed above. Wyoming Interstate Company, Ltd., 90 FERC p 61,294 (2000)  ("March 2000 Order").

21
Amoco sought rehearing, arguing that it should be able, if  it prevailed in its position on the Columbia exit fee, to have  that ruling applied to the rates charged other shippers,  regardless of their position on the issue.  Its reasoning was  that those rates severely impacted the price Amoco could  obtain at the wellhead.  (Thus, for example, it could not  normally receive more at the wellhead than the market value  in the destination market, less transportation costs.)  Amoco  saw itself in a position parallel to that of buyers at the end of  FERC-regulated electricity transmission systems, which under certain circumstances we had held were entitled to challenge rates agreed to by the relevant transmission companies  and all the shippers.  Southern California Edison Co. v.  FERC, 162 F.3d 116 (D.C. Cir. 1999);  Tejas Power Corp. v.  FERC, 908 F.2d 998 (D.C. Cir. 1990).  Compare FERC Brief,  filed Oct. 9, 2001, in Interstate Natural Gas Association of  America v. FERC, D.C. Cir. No. 98-1333, at 48 n.12 (observing that "lower prices for transportation under maximum rate  regulation translates to a greater share of the delivered price  of gas being retained by the producers").

22
In two orders issued September 27, 2000, the Commission  rejected Amoco's argument.  Wyoming Interstate Company,  92 FERC p 61,256 (2000);  Wyoming Interstate Company, 92  FERC p 61,257 (2000) ("September 2000 Order").  The first  is an order approving the non-Amoco shippers' settlement of  the 1999 case, and the second is an order addressed to  Amoco's litigation of the 1999 case and denying Amoco's  petition for rehearing of the March 2000 Order.  Amoco seeks  review only of the second.

23
We have no jurisdiction over the September 2000 Order. Although  19(b) of the Natural Gas Act, 15 U.S.C.  717r(b),  affords authority to review an "order" of the Commission, this  has long been understood to encompass only "final" orders. See, e.g., Canadian Association of Petroleum Producers v.  FERC, 254 F.3d 289, 296 (D.C. Cir. 2001);  Papago Tribal  Utility Authority v. FERC, 628 F.2d 235, 238-40 (D.C. Cir.  1980) (construing the substantively identical text of the Federal Power Act, 16 U.S.C.  825l(b), as requiring a final  order);  United Municipal Distributors Group, 732 F.2d at  206 n.3 (holding that the Papago analysis is applicable to the  Natural Gas Act).  The Commission's position on the indirectinterests issue can affect only the 1999 case, which the  Commission has yet to adjudicate.

24
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25
The petitions for review of the June 1999, October 1999 and  December 1999 Orders are denied, and the petition for review  of the September 2000 Order is dismissed.

26
So ordered.

Notes:

1
  The parties have included in the Joint Appendix only type script versions of the Commission orders under review, rather than  the published versions.  As our opinions are more communicative to  the bar if we cite pages in the published versions, the typescript  copies are of little use to us.  We have in the past commended use  of the published version (blown-up), see Union Electric Co. v.  FERC, 890 F.2d 1193, 1194 n.1 (D.C. Cir. 1989), and counsel seem  generally to have followed our hint.