Court Opinion

ID: 9458715
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:00:04.941862+00
Date Added: 2024-06-11T17:35:52.323070
License: Public Domain

ON PETITION FOR REHEARING
PER CURIAM:
The Public Service Commission of the State of New York has requested us to *371reconsider our opinion of 29 March 1972 affirming the orders of the Federal Power Commission. We hereby deny New York’s petition for rehearing; however, we believe a short statement in explanation of our action is appropriate.
One of the important factors in reaching our decision was the temporary character of the FPC order under review (Order 441 remains in effect only through 31 December 1972), and our belief that it represented a justifiable experiment in the continuing search for solutions to our nation’s critical shortage of natural gas. See opinion at 367-368, 369-370. The principal justification for allowing rate base capitalization of advance payments made by the pipeline companies — and the implicit approval in principle of such payments to producers —was to provide additional capital to producers to stimulate exploration and development activities that would result in easing the gas shortage. Fundamental to the concept of any experiment is the assumption that the data developed from the experience thereunder will be subjected to meaningful review, analysis, and evaluation before the experimental practice is allowed to continue or to become institutionalized as a more permanent procedure.
In approving this temporary order, we had no intention of abridging that concept nor of approving capitalization of advance payments beyond its stated expiration date without the FPC having first carefully evaluated the experience under Order 441 to determine whether its justifying objectives are being satisfactorily met at an acceptable level of ultimate economic cost to the nation’s gas consumers. We would accordingly expect that the FPC will not continue, or extend the effective date of, the practices authorized by Order 441 without further proceedings in which New York and all other interested parties will be given the opportunity to demonstrate the effectiveness or the futility of this experiment.