Court Opinion

ID: 7838415
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:45:38.698379+00
Date Added: 2024-06-11T15:56:13.318932
License: Public Domain

Opinion for the Court filed by Circuit Judge ROBINSON.
SUPPLEMENTAL OPINION ON PETITIONS FOR REHEARING
SPOTTSWOOD W. ROBINSON, III, Circuit Judge,
with whom TAMM, Circuit Judge, joins:
The Commission and the producers petition for rehearing and modification of our decision1 in several of its more important aspects. In substantial degree, their contentions merely echo arguments which have already been dealt with, and which we find upon reconsideration to merit no further discussion. There is, however, a recurring challenge which might be thought to draw support from *346a decision of the Supreme Court2 announced after rendition of our prior opinion, and to that we now give primary attention. There are, too, several points on which brief additional explanation is apt to promote clearer understanding of the scope and basis of particular holdings, and these we also address.3 Doing so, and concluding that no change in our original determination is warranted, we deny the petitions.
I
In Mobil Oil Corporation v. Federal Power Commission,4 the Supreme Court reviewed and sustained the order effectuating the Commission’s Opinion No. 598,5 the second of two major pronouncements in a proceeding to set area rates for natural gas produced in Southern Louisiana. Mobil followed by more than two months our earlier opinion in the case at bar. Since the events leading to Mobil, and the decision itself, introduce and define the principal matter we now speak to, we pause momentarily to summarize them.6
On September 25, 1968, a seven-year investigation by the Commission culminated in Opinion No. 5467 which, inter alia, established 18.5 cents per Mcf as the just and reasonable area rate, effective October 1, 1968, for onshore natural gas of the Rayne Field vintage,8 and directed refunds for gas sold subject to a refunding obligation during pendency of the investigation at prices exceeding the newly-fixed ceilings.9 On appeal, the Fifth Circuit affirmed,10 but authorized the Commission to reopen the proceeding and to readjust, retroactively as well as prospectively, the rate and refund provisions of its order should the public interest so require.11 The Commission formally reopened12 and, by adoption of the terms of a settlement proposal found to be supported by substantial evidence, promulgated a new rate order.13 That order, delineated in Opinion No. 598, set a maximum price of 22.375 cents per Mcf for “flowing gas” — gas delivered after August 1, 1971, the effective date of the new order, under contracts predating October 1, 196814 — and provided for escalation of the price contingent upon new dedications of gas to the interstate market.15 The new order also specified a formula for refunds, aggregating about $150 million,16 with a provision for work-off credits based on commitments of *347additional gas reserves to that market.17 The Fifth Circuit,18 and in turn the Supreme Court in Mobil,19 affirmed the order.
During most of the period covered by area ratemaking in Southern Louisiana, the Commission continued its quest for initial pricing of the Rayne Field gas, in suit, which had been certificated in 1959 and flowing through Texas Eastern’s pipeline system since then.20 On August 6, 1969, the Commission issued its Opinion No. 565 21 wherein it found that the public interest demanded conventionalization of some aspects of the parties’ lease-sale agreement to more nearly conform the transaction to an orthodox gas-sale contract.22 The Commission then fixed initial prices for the gas at 20 cents per Mcf — the in-line price — until October 1, 1968, the operative date of Opinion No. 546, and thereafter at the 18.5-cent just and reasonable area rate prescribed by Opinon No. 546,23 and directed producer refunds and pipeline flow-through on that basis.24 On rehearing, the Commission, in Opinion No. 565— A,25 reaffirmed the need to conventionalize 26 but in other critical respects changed its course. It held that the criterion for producer refunding, from certification onward, was the applicable area rate,27 but felt that because the probe for area rates had been reopened, initial pricing and refunding should be deferred pending its outcome.28 On further rehearing, the Commission adhered to those conclusions.29
In that posture, the litigation arrived in this court. We affirmed the Commission’s decision, reached in each of the opinions, to conventionalize the transaction.30 We agreed that a just and reasonable area rate in existence, rather than the in-line price in that instance, was the proper measure both of initial prices prospectively 31 and of refunds and refund flow-through occasioned by collections above that rate in the past,32 and to that extent we sustained Opinion No. 565-A.
We differed with that opinion, however, as to the deferral of refunds which it undertook to make. We 'concluded that the postponement could not be justified by the Commission’s desire to await finalization of just and reasonable rates for Southern Louisiana.33 We also concluded that the 18.5-cent area rate established in Opinion No. 546, though subject to possible revision, was the legally required basis for the Commission’s initial pricing activities — for charging in the future and, as well, for refunding on account of the past.34 We remanded to the Commission with instructions to proceed accordingly.35
These petitions for rehearing followed. In its petition, the Commission requested alternatively that we withhold our ruling pending the Supreme Court’s action in Mobil. That we have done, and since have given the petitions the most careful consideration in light of the Mobil decision. We perceive no reason justifying change in our original disposition, and accordingly we deny the petitions.
Lest, in traversing the maze of problems bred by this litigation, its main *348bearings have become obscured, we reiterate several important considerations to be borne in mind. The central questions are prices, refunds and refund flow-through, not as terminal determinations, but as arrangements, pending finalization of the financial rights and obligations of the parties.36 The duration and intensity of the instant controversy notwithstanding, the case has not advanced beyond certification — under Section 7 of the Natural Gas Act37 — of the sale of the gas in question for the interstate market, or beyond the occasion for financial relationships simply for that purpose.38 There has been no specific inquiry into rates or refunds under Sections 4 or 5 of the Act,39 nor yet any determination as to permissible departures, by way of contingent price escalation or refund workoff, from the base rate fixed in Opinion No. 598.40 All that has been done, and can be done at this stage, is of an interim ■ nature.
Our decision calls for prompt refunds by the producers and flow-through by the pipeline, subject not only to any unrealized offsets occasioned by the new area rate effective on and after August 1, 1971,41 but also to any other adjustments which further proceedings in this matter may indicate. The maximum effect of our decision is a present refund benefit to consumers for deliveries prior to that date, which in any event will be returned to the producers, up to the $134 million contract ceiling,42 *349through collections at just and reasonable rates for deliveries after that date.43 It may be that when all is said and done about Rayne Field gas, the return will be faster.
II
Irrespective of the status of the Southern Louisiana area rate investigation and of just and reasonable rates for that area when the Commission promulgated Order No. 565-A, by our lights it was clear error to delay the matter of producer refunds to the conclusion of the reopened rate proceeding. In Opinion No. 565, a Commission majority ordered refunds on a finding that the producers had been greatly overpaid for gas deliveries made through 1967.44 The majority in Opinion No. 565 — A did not dispute that finding, but postponed all refunds on the theory that they should be predicated on whatever just and reasonable rate for Rayne Field gas eventuated from the reopened inquiry as to appropriate rates for the area.45
In our earlier opinion, we deemed that action a disregard of the Supreme Court’s admonition that “it is the duty of the Commission, ‘where refunds are found due, to direct their payment at the earliest possible moment consistent with due process.’ ” 46 We were unable to distinguish the refund deferral ordained by Opinion No. 565 — A from the deferral which the Court had previously condemned in its Callery decision.47 We *350pointed out that “[e]ven assuming the nonexistence of any just and reasonable rate which might function as the basis for immediate refunds by the producers, that office could readily have been performed by the in-line price which the Commission ascertained in this very proceeding.”48 As we read the Court’s Mobil opinion,49 it does not overrule Callery, or affect our application of Callery in this case.
The Commission and the producers still urge nonetheless the propriety of the postponement on the ground, advanced in Opinion No. 565 — A, that it promoted equality of treatment vis-á-vis other producers in Southern Louisiana.50 We rejected that argument in our previous opinion,51 and for even stronger reasons we do so again. The deferral discountenanced in Callery presumably would in similar degree have served the cause of producer equality, but in neither case could deferrals have done so without completely sacrificing the interest of consumers in prompt refunds for excessive initial prices.52 In each case that interest complements the consumers’ statutory entitlement to “the lowest possible rate consistent with maintenance of adequate service in the public interest,”53 a matter with which Section 7 historically has maintained a vital concern.54 Moreover, the Supreme Court’s Mobil decision confirms our earlier suspicion55 that equality in refunding among Southern Louisiana producers might be an illusory goal.56 No more now than when we originally decided this case can we condone the refund deferral which the Commission indulged.
Ill
Beyond the delay in refunding commanded by Opinion No. 565 — A is the problem of the rate therein selected as the basis for refunds. All are agreed that the applicable area rate ultimately upheld in Mobil controls the parties’ financial relationships after August 1, 1971, the date the rate became operative. For Opinion No. 565 and its accompanying order specified that pipeline-producer payments would rise prospectively to the area rate, and to levels fixed by subsequent revisions thereof,57 and the theory underlying the majority’s disposition in Opinion No. 565 — A was to the same ef*351feet.58 By the same token, all pipeline charges, producer refunds and flow-through of those refunds became similarly affected from that point onward.59 The issue was and is the rate appropriate for computation of producer refunds and pipeline flow-through on account of gas deliveries prior to the effective date of the 1971 rate order.
We concluded in our original opinion that neither Opinion No. 598 nor its related order itself undertook to extend the Commission’s retroactive refund formula60 toward resolution of that question.61 We pointed out that the settlement agreement underlying Opinion No. 598 stated unequivocally that its provisions would not dispose of any issue confronting us in this litigation; 62 that the refund provisions of the settlement agreement were expressly made subject to that exclusion;63 that Opinion No. 598 expressly adopted the refund provisions of the settlement agreement as written; 64 and that the order accompanying Opinion No. 598 defined the transactions subject to refund in terms excluding the gas deliveries involved here.65 We said that “[w]e need not, in these circumstances, consider whether Opinion No. 598 could in any event affect the refund and flow-through issues which [in the instant case] the Commission was called on to resolve several years previous to its promulgation,”66 for “[t]he critical fact is that Opinion No. 598 left those issues untouched.”67 All applicants for rehearing seem to concede the validity of that conclusion, and we continue our alliance with it.
The controversy now before us arose, it will be recalled, from administrative proceedings conducted under Section 7 of the Natural Gas Act.68 Section 7 mirrors the will of Congress “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.”69 This objective crowns the Act’s mandate that “[a]ll rates and charges” for such gas “shall be just and reasonable,” 70 and that “any such rate or charge that is not just and reasonable is declared to be unlawful.” 71 The just and reasonable rate is the one and only price standard set by the Act for the gas it governs, a standard which all charges must ultimately meet.
To be sure, at least before the advent of area72 and national73 gas-pricing, the Commission, very properly, certificated sales of gas for which no just and reasonable rate was extant, and utilized inline prices as initial prices pending establishment of just and reasonable rates.74 The justification for that methodology *352was the unfeasibility of determining just and reasonable rates within the framework of a Section 7 certification proceeding,75 and the consequent need for some other pricing arrangement while the usually protracted rate investigation moved forward toward ascertainment of precisely what rate would be just and reasonable.76 The initial price in such circumstances thus functioned simply as an interim price, enduring only until the just and reasonable rate could be set and appropriate adjustments between suppliers and consumers for interim deliveries could be made.77
As we stated in our first opinion, however, “[i]t is evident . . . that use of the in-line price as the yardstick for the initial-price determination on certification cannot be justified in situations where a just and reasonable area rate for gas of the vintage in question has already been established.”78 We said that while the in-line price could properly be adopted as the initial price when no just and reasonable rate had been promulgated,79 “only the presence of an overriding consideration promoting an identifiable legislative purpose can justify administrative displacement of the just and reasonable rate through approval of another rate for gas to which the Act applies.”80 We concluded that “the Commission is legally compelled to peg a producer’s initial price at a previously ascertained just and reasonable rate unless some consideration effectuating a countervailing congressional policy is shown on balance to outweigh the congressional interest in ‘just and reasonable rates to the consumers of the natural gas.’ ” 81 In sum, it was and still is our view that absent justification of that caliber, a just and reasonable rate is to be preferred over an in-line rate as the measure of the producer’s charge for gas sales authorized by a Section 7 certification.
With this position the Commission has manifested full agreement in other cases,82 as ultimately it did in the case at bar. True it is that a majority of the Commission in Opinion No. 565 ruled that the certification should be conditioned upon an initial price geared to the in-line price for gas delivered prior to October 1, 1968, the date on which the just and reasonable rate set by Opinion No. 546 for gas of Rayne Field vintage was to take effect.83 But a majority in Opinion No. 565 — A held supersessively that the initial price should be fixed at the 1968 just and reasonable rate from the time the gas began to flow in 1959,84 a stand wholly consistent with our own. *353The difficulty was that in the latter opinion the Commission also concluded that Opinion No. 546 did not represent a final determination of just and reasonable area rates,85 and that payments to producers should continue at the in-line price and producer refunds should be deferred until a firm area rate was forthcoming.86
In our previous opinion we disagreed with the Commission that the accompanying circumstances “rendered Opinion No. 546 so tentative in character as to support the Commission’s refusal in Opinion No. 565 — A to employ the 18.5-cent just and reasonable rate as the initial price to be paid to the producers for gas delivered after the effective date of that rate.”87 On the same ground, we disagreed with the position that that rate could not serve as the predicate for refunds by the producers on account of deliveries before that date at higher prices.88 Our disagreement continues for the reasons which we then detailed,89 and which now we may briefly highlight.90 The 18.5-cent just and reasonable rate was established in a full-blown rate investigation extending over a period of seven years.91 On applications for rehearing, the Commission again approved that rate,92 although later it prepared to take another look at it.93 On appeal to the Fifth Circuit, the rate determinations in Opinion No. 546 were “sustained in full,”94 though with leave to the Commission to reopen its order and revise the rates in light of new evidence.95
That was the situation when the Commission issued Opinion No. 565 — A.96 It seemed to us that the 18.5-eent rate dif*354fered insufficiently from any other rate — which inherently would be subject to change in the public interest — to lose its character as the legally appropriate criterion for the initial price which the producers in suit thenceforth would be allowed to exact,97 and for the measurement of refunds occasioned by past exactions.98 We accordingly held “that neither the susceptibility of the 18.5-cent area rate to modification upon [an appropriate] finding nor the ongoing administrative inquiry into the propriety of such a finding was adequate justification for the Commission’s decision in Opinion No. 565 — A to ignore it.”99
We recognize that in consequence of administrative and judicial stays the 18.-5-cent rate never went into general operation 100 but that,' We think, is immaterial. The question was not whether Rayne Field producers were limited in their charges by the rate per se, but whether their initial prices should have been fixed and their refunds calculated in accordance with that rate pending either its reaffirmation or promulgation of a new rate. The fact that producers selling gas at previously Commission-approved prices were unaffected by the stayed 18.5-cent rate did not answer the question whether that rate, in lieu of the in-line price, should have been taken as the point of reference for initial prices and refund obligations for producers whose sales until then were entirely unregulated. While, when Opinion No. 565 — A was announced, the 18.5-cent rate was in suspension as an operative price ceiling, it nonetheless represented the Commission’s considered and best judgment as to what a just and reasonable charge for Rayne Field gas should be.
The same could not be said for the in-line price — the going field price 101 —for which the Commission opted instead. As we said in our first opinion, the Supreme Court has warned that where the Commission has decided “to rely solely upon contemporaneous contract prices in setting initial rates, there can be no assurance that an initial price arrived at by the Commission will bear any particular relationship to the just and reasonable rate.” 102 And even subsequent to announcement of our opinion, the Court has similarly declared that “the prevailing price in the market place cannot be the final measure of ‘just and reasonable’ rates mandated by the Act.”103 We reiterate that the in-line price for Rayne Field gas would have been the legitimate benchmark for the initial producer-price and for the initial producer-refund had the Commission been unable to more closely approximate the just and reasonable rate.104 We remain of the view, however, that with the still unrevised 18.5-cent just and reasonable area rate available, the Commission was legally obligated to give it preference. It bears repeating that Congress has specified that “[a]ll rates and charges” for jurisdictional gas “shall be just and reasonable,” 105 that “any” other such rate is unlawful,106 and that the Commission’s duty was to fix the producers’ initial price “at the lowest possible reasonable rate consistent with the maintenance of adequate service in the public interest.” 107 We think these pro*355visions preclude the Commission, when setting initial rates and computing initial refunds, from settling for second best.108
Petitions denied.

. Public Serv. Comm’n v. FPC, No. 24,716, 177 U.S.App.D.C. 272, 543 F.2d 757 (1974), hereinafter cited “Op.”.

. Mobil Oil Corp. v. FPC, 417 U.S. 283, 94 S.Ct. 2328, 41 L.Ed.2d 72 (1974).

. See notes 42, 43, 46, 108, infra.

. Supra note 2.

. Southern Louisiana Area Rate Proceeding (Opinion No. 598), 46 F.P.C. 86 (1971), on rehearing (Opinion No. 598-A), 46 F.P.C. 633 (1971), aff’d sub nom., Placid Oil Co. v. FPC, 483 F.2d 880 (5th Cir. 1973), aff'd sub nom., Mobil Oil Corp. v. FPC, supra note 2.

. We have already, in our previous opinion, referred quite extensively to area ratemaking in Southern Louisiana. See Op. text at ns. 69-75 & pts. V(B)(2), VII. See also Mobil Oil Corp. v. FPC, supra note 2, 417 U.S. at 292-300, 94 S.Ct. at 2338-2341, 41 L.Ed.2d at 86-90; Placid Oil Co. v. FPC, supra note 5, 483 F.2d at 885-892.

. Southern Louisiana Area Rate Proceeding (Opinion No. 546), 40 F.P.C. 530 (1968), on rehearing (Opinion No. 546-A), 41 F.P.C. 301 (1969), aff’d sub nom., Austral Oil Co. v. FPC, 428 F.2d 407 (5th Cir.), on rehearing, 444 F.2d 125, cert. denied, 400 U.S. 950, 91 S.Ct. 241, 27 L.Ed.2d 257 (1970).

. Southern Louisiana Area Rate Proceeding (Opinion No. 546), supra note 7, 40 F.P.C. at 544, 636, 648.

. Id. at 626-628, 652-654. By the end of 1970, the refunds ordered totaled some $375 million. Mobil Oil Corp. v. FPC, supra note 2, 417 U.S. at 293 & n. 8, 94 S.Ct. at 2326 & n. 8, 41 L.Ed.2d at 87 & n. 8.

. Southern Louisiana Area Rate Cases (Austral Oil Co. v. FPC), supra note 7.

. 428 F.2d at 421, 444 F.2d at 126-127. See Op. text at ns. 409-413 and n. 413.

. Southern Louisiana Area Rate Proceeding, 44 F.P.C. 1638 (1970) (order reopening and consolidating proceedings.)

. Southern Louisiana Area Rate Proceeding (Opinion No. 598), supra note 5.

. Id. at 105, 135-138, 142-143.

. Id. at 138-139, 143.

. Id. at 140 n. 140.

. id. at 140-141, 145-148.

. Placid Oil Co. v. FPC, supra note 5.

. Mobil Oil Corp. v. FPC, supra note 2.

. See Op. pt. I.

. Texas Eastern Transmission Corp. (Opinion No. 565), 42 F.P.C. 376 (1968). See Op. pt. 1(D).

. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 382-393.

. Id. at 383-390, 403.

. Id. at 393-398, 404-405.

. Texas Eastern Transmission Corp. (Opinion No. 565-A), 44 F.P.C. 1079 (1970).

. Id. at 1081-1085, 1092.

. Id. at 1084, 1088, 1097-1107.

. Id. at 1087-1088, 1097-1107.

. Texas Eastern Transmission Corp., 44 F.P.C. 1471 (1970) (order denying rehearing).

. Op. pt. III.

. Op. pts. V(A), (B).

. Op. pts. V(C), (D)(2), VI(B)-(E), (G).

. Op. pt. V(D)(1).

. Op. pts. V(B), (C), (D)(1).

. Op. text at ns. 143-144.

. See Atlantic Ref. Co. v. Public Serv. Comm’n, 360 U.S. 378, 388-392, 79 S.Ct. 1246, 1253-1255, 3 L.Ed.2d 1312, 1319-1321 (1959); Op. pt. III(A).

. Act of June 21, 1938, ch. 556, 52 Stat. 824, § 7, as amended, 15 U.S.C. § 717f (1970).

. See Atlantic Ref. Co. v. Public Serv. Comm’n, supra note 36, 360 U.S. at 388-392, 79 S.Ct. at 1253-1255, 3 L.Ed.2d at 1319-1321.

. As amended, 15 U.S.C. §§ 717c, 717d (1970).

. See Southern Louisiana Area Rate Proceeding (Opinion No. 598), supra note 5, 46 F.P.C. at 138-139, 140-141, 142-148.

. See Op. text at ns. 646-649.

. The Commission asserts that we erred in holding that the doctrine laid down in United Gas Pipeline Co. v. Mobile Gas Serv. Corp., 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373 (1956), and FPC v. Sierra Pac. Power Co., 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed. 388 (1956), precluded abrogation of the contract limitation of $134 million as the total price which the pipeline was to pay to the producers. We adhere to our earlier discussion and decision of that matter. Op. text at pts. 1V(B), (C)(2). The Commission also asserts that we ventured outside the judicial domain when we instructed the Commission to increase the pipeline’s payments beyond the $134 million by an amount equal to the time value of the monies called for by the Commission-rearranged payment schedule. Op. text at ns. 341-349. We believe that we do not usurp an administrative prerogative when we direct a step which the Commission is legally bound to take. That is the situation here.
A Commission majority has repeatedly and consistently held that the parties’ lease-sale disserved the public interest, and at least twice has held that the transaction should accordingly be conventionalized. Op. text at ns. 345-347 and references in ns. 345-346. As we have explained, “limiting [the pipeline’s] financial liability to the contract price and [through conventionalization] spreading its discharge over a longer period of time [ ] would cause the producers to receive less than the quid pro quo for which they had contracted because the value to the producers of the money to be paid over the longer time span would be less than its value by the payment schedule embodied in the lease-sale arrangement,” Op. text at n. 340; and various members of the Commission have recognized that the producers are entitled to relief. Op. text at n. 344 and references in n. 344. As we have declared “[e]xcept as the exigencies of the public interest demanded, the Commission was no more at liberty to alter the lease-sale contract to the prejudice of the producers than to do so in their favor.” Op. text following n. 340. Obviously, such prejudice could be avoided only by awarding the producers the time value of the money due them under the contract, a need which even the pipeline seemingly had recognized, Op. at n. 348, and which even now it does not dispute.
We realize that a court may not compel an administrative agency to pursue a particular course of action when another is open to it. FPC v. Idaho Power Co., 344 U.S. 17, 20, 73 S.Ct. 85, 86-87, 97 L.Ed. 15, 20 (1952). See also note 108, infra. We have held that the Commission could not solve the problem by extending the pipeline’s payments over the life of the field, Op. pts. IV(B), (C)(2), and no one has suggested any other feasible alternative to the one we directed, nor have we been able to conceive of any. Nor can it be realistically *349argued that the Commission might, as an alternative, have refused to certificate the sale of the gas in question in any form. As far back as 1968, when the Commission first decided to conventionalize the parties’ lease-sale, almost half of the estimated volume of recoverable gas in the field had flowed through the pipeline to interstate points, and the Commission made it plain that it was too late in the day to reverse the transaction. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 383. As we see it, the Commission’s well-nigh irrevocable commitment to conventionalization left it no legally available choice than the increase we ordered.

. For this reason, we cannot agree with the producers that they face financial loss in consequence of our decision. They are assured of ultimate receipt of the $134 million price for which they contracted, together with compensation for the rearranged timing in payment. See Op. pts. IV(B), (C)(2). See also note 42, supra.

. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 390, 403-405. The presiding examiner had found that the producers collected through 1967 $21.8 million — with interest, $31.4 million — more than deliveries at the 20-cent in-line rate would have commanded. Texas Eastern Transmission Corp., 42 F.P.C. 455, 460 — 461 (1968) (examiner’s Phase II decision). The Commission adopted that finding in Opinion No. 565. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 393-405. The bases of the Commission-directed refunds were the 20-cent in-line rate to October 1, 1968, and the 18.5-cent just and reasonable rate thereafter. Id. at 390, 403-405. Although we disagreed with the first element of that formula, Op. pts. V(B)(1), (C), (D)(2), we found no fault with the Commission’s conclusion that refunds were due. Op. pt. V(D).

. Texas Eastern Transmission Corp. (Opinion No. 565-A), supra note 25, 44 F.P.C. at 1081, 1087-1088.

. Op. text at n. 464. The quotation is from United Gas Improvement Co. v. Callery Properties, 382 U.S. 223, 230, 86 S.Ct. 360, 364, 15 L.Ed.2d 284, 290 (1965), in turn quoting FPC v. Tennessee Gas Transmission Co., 371 U.S. 145, 155, 83 S.Ct. 211, 216-217, 9 L.Ed.2d 199, 206 (1962). Once again we reject the contention that the Commission had no duty, as distinguished from the prerogative, to order refunds in the case at bar. As we said earlier, “[t]he Commission was not merely at liberty to require immediate refunds but, where refunds are due, it also had ‘the duty ... to direct their payment at the earliest possible moment consistent with due process.’ That duty charts the only course in keeping with the purpose of the Act ‘to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges.’ ” Op. text at ns. 467-468 (footnotes omitted), quoting in turn, FPC v. Tennessee Gas Transmission Co., supra, 371 U.S. at 154, 83 S.Ct. at 216, 9 L.Ed.2d at 205-206, and Atlantic Ref. Co. v. Public Serv. Comm’n, supra note 36, 360 U.S. at 388, 79 S.Ct. at 1253, 3 L.Ed.2d at 1319. See also FPC v. Sunray DX Oil Co., 391 U.S. 9, 37, 88 S.Ct. 1526, 1541, 20 L.Ed.2d 388, 406 (1968); United Gas Improvement Co. v. Callery Properties, supra, 382 U.S. at 230, 86 S.Ct. at 364, 15 L.Ed.2d at 290.

. Op. at ns. 462 — 168. In United Gas Improvement Co. v. Callery Properties, supra note 46, the Supreme Court reversed a judicial *350holding, practically identical to the Commission’s administrative holding here, that refunding of excessive charges following certification should await establishment of the just and reasonable rate. 382 U.S. at 230, 86 S.Ct. at 364, 15 L.Ed.2d at 290.

. Op. text at n. 460. That was the course approved in Callery, 382 U.S. at 226-228, 86 S.Ct. at 362-364, 15 L.Ed.2d at 287-289. See also FPC v. Sunray DX Oil Co., supra note 46, 391 U.S. at 37-38, 40-47, 88 S.Ct. at 1540-1541, 1542-1546, 20 L.Ed.2d at 405-406, 407-412. We also concluded that the applicable area rate established by Opinion No. 546 would more properly than the in-line rate have performed that function, Op. pts. V(B)(1), (2), (C), (D)(2), a point we discuss further in Part III hereof.

. Supra note 2.

. See Texas Eastern Transmission Co. (Opinion No. 565-A), supra note 25, 44 F.P.C. at 1087-1088. The only other ground averred in Opinion No. 5665-A was that the 18.5-cent just and reasonable area rate for gas of Rayne Field vintage had not been finally determined. Id. We address that ground in Part III, infra.

. Op. text at ns. 476-484.

. See Op. text at ns. 481-482. See also FPC v. Tennessee Gas Transmission Co., supra note 46, 371 U.S. at 154-155, 83 S.Ct. at 216-217, 9 L.Ed.2d at 205-206.

. See text infra at note 69.

. See Atlantic Ref. Co. v. Public Serv. Comm’n, supra note 36, 360 U.S. at 388-389, 79 S.Ct. at 1253-1254, 3 L.Ed.2d at 1319-1320. Op. text at ns. 369-373.

. As we pointed out in our prior opinion, the extent to which the deferral of refunds could promote producer equality “might depend in part upon whether initial prices allowed producers were all fixed at the same level, since those prices established refund floors.” Op. at n. 481. See FPC v. Sunray DX Oil Co., supra note 46, 391 U.S. at 21-23, 24, 88 S.Ct. at 1532-1534, 20 L.Ed.2d at 396-399.

. The Court found that the refund formula eventually adopted for the Southern Louisiana area impacted producers unequally, but that the differences were justified by other regulatory concerns. 417 U.S. at 321 — 327, 94 S.Ct. at 2352-2354, 41 L.Ed.2d at 102-105.

. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 390, 403.

. See Texas Eastern Transmission Corp. (Opinion No. 565-A), supra note 25, 44 F.P.C. at 1084, 1088.

. Op. text at ns. 646-649.

. See text supra at notes 16-17.

. Op. text pt. VII.

. Op. text at n. 657.

. Op. text at n. 658.

. Op. text at n. 659.

. Op. text at n. 660.

. Op. text following n. 660.

. Op. text following n. 660.

. Act of June 21, 1938, chi. 556, 52 Stat. 824, § 7, as amended, 15 U.S.C. § 717f (1970). See Op. pt. III(A).

. Atlantic Ref. Co. v. Public Serv. Comm'n, supra note 36, 360 U.S. at 388, 79 S.Ct. at 1253, 3 L.Ed.2d at 1319. See discussion in Op. text at ns. 369-373.

. Natural Gas Act § 4(a), 15 U.S.C. § 717c(a) (1970).

. Id. See also FPC v. Texaco, Inc., 417 U.S. 380, 394-395, 94 S.Ct. 2315, 2324-2325, 41 L.Ed.2d 141, 154-155 (1974).

. See, e. g., Permian Basin Area Rate Cases (Continental Oil Co. v. FPC), 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968); Mobil Oil Corp. v. FPC, supra note 2.

. See Just And Reasonable National Rates For Sales Of Natural Gas From Wells Commenced On Or After January 1, 1973, And New Dedications Of Natural Gas To Interstate Commerce On Or After January 1, 1973 (Opinion No. 699),-F.P.C.2d-(June 21, 1974).

. See FPC v. Sunray DX Oil Co., supra note 46, 390 U.S. at 37-38, 40-47, 88 S.Ct. at 1540-1541, 1542-1546, 20 L.Ed.2d at 405406, 407-412; United Gas Improvement Co. v. Callery Properties, supra note 46, 382 U.S. at 226-228, 86 S.Ct. at 362-364, 15 L.Ed.2d at 288-289. See also Op. text at ns. 388-391.

. See Atlantic Ref. Co. v. Public Serv. Comm'n, supra note 36, 360 U.S. at 389-392, 79 S.Ct. at 1253-1256, 3 L.Ed.2d at 1319-1321. See also Op. text at n. 388.

. See Atlantic Ref. Co. v. Public Serv. Comm’n, supra note 36, 360 U.S. at 389-392, 79 S.Ct. at 1253-1256, 3 L.Ed.2d at 1319-1321. See also FPC v. Sunray DX Oil Co., supra note 46, 391 U.S. at 18-20, 88 S.Ct. at 1531-1532, 20 L.Ed.2d at 395-396; United Gas Improvement Co. v. Callery Properties, supra note 46, 382 U.S. at 226-228, 86 S.Ct. at 362-364, 15 L.Ed.2d at 288-289; Op. text at n. 389.

. See FPC v. Sunray DX Oil Co., supra note 46, 391 U.S. at 19, 21-22, 25-26, 88 S.Ct. at . 1531-1533, 1534-1535, 20 L.Ed.2d at 395-397, 399; United Gas Improvement Co. v. Callery Properties, supra note 46, 382 U.S. at 226-228, 86 S.Ct. at 362-364, 15 L.Ed.2d at 288-289. Op. text at n. 391.

. Op. text following n. 391. Compare Hunt Oil Co. v. FPC, 424 F.2d 982, 986 (5th Cir. 1970); Phillips Petroleum Co. v. FPC, 405 F.2d 6, 9 (10th Cir. 1969).

. See Op. text at ns. 388-391.

. Op. text following n. 396.

. Op. text at n. 399.

. See Hunt Oil Co. v. FPC, supra note 78, 424 F.2d at 986; Phillips Petroleum Co. v. FPC, supra, note 78, 405 F.2d at 9. See also Permian Basin Area Rate Cases (Continental Oil Co. v. FPC), supra note 72, 390 U.S. at 822 n. 114, 88 S.Ct. at 1388-1389 n. 114, 20 L.Ed.2d at 367 n. 114.

. Texas Eastern Transmission Corp. (Opinion No. 565), supra note 21, 42 F.P.C. at 383-393, 403-405.

. Texas Eastern Transmission Corp. (Opinion No. 565-A), supra note 25, 44 F.P.C. at 1084, 1087-1088.

. Id. at 1087-1088.

. Id.

. Op. text following n. 413.

. Op. text at ns. 414--423.

. Id.

. The history of area ratemaking in Southern Louisiana is adequately summarized in our earlier opinion, text at ns. 69-75 & pts. V(B)(2), VII, and in others. Mobil Oil Corp. v. FPC, supra note 2, 417 U.S. at 288-300, 94 S.Ct. at 2326-2341, 41 L.Ed.2d at 84-90; Austral Oil Co. v. FPC, supra note 7, 428 F.2d at 415-421; Placid Oil Co. v. FPC, supra note 5, 483 F.2d at 885-892. Only the status of the rates which the Commission established in the original Southern Louisiana area rate proceeding is relevant here.

. See Southern Louisiana Area Rate Proceeding, 25 F.P.C. 942 (1961) (order instituting proceeding); Southern Louisiana Area Rate Proceeding (Opinion No. 546), supra note 7.

. Southern Louisiana Area Rate Proceeding (Opinion No. 546-A), supra note 7, 41 F.P.C. at 306-309. The Commission felt that the importance of more abundant gas supplies from offshore areas of Southern Louisiana called for a new investigation of the adequacy of price ceilings for offshore gas, id. at 307-308, but that “[t]he reasons for instituting a new proceeding do not apply to the onshore prices at this time.” Id. at 308. It was nearly nine months later that the onshore ceilings were brought into the new investigation. See Op. text at ns. 406 — 408.

. See note 92, supra.

. Southern Louisiana Area Rate Cases (Austral Oil Co. v. FPC), supra note 7, 428 F.2d at 444.

. Id. at 444-445. See also Op. text at ns. 409-413 & n. 413. The court clearly contem- ' plated that these rates remain in effect wnue the new rate investigation proceeded, for it stated that “[t]he maximum rates which the Commission has set are to remain in effect throughout the new proceeding, which may last for years.” 428 F.2d at 421 n. 27. The fact is, however, that by reason of administrative and judicial stays these rates never actually operated. See Mobil Oil Corp. v. FPC, supra note 2, 417 U.S. at 298, 94 S.Ct. at 2340, 41 L.Ed.2d at 89.

. Slightly more than two months after announcement of Opinion No. 565-A, the Supreme Court declined to review the Fifth Circuit’s decision in the Southern Louisiana Area Rate Case (Austral Oil Co. v. FPC), supra note 7, 400 U.S. 950, 91 S.Ct. 244, 27 L.Ed.2d 257 (1970) (denying certiorari). It was nearly a year after Opinion No. 565-A, in which the Commission decided to await the outcome of the new investigation, before it issued its decision therein. Southern Louisiana Area Rate Proceeding (Opinion No. 598), supra note 5. Finding the terms of a settlement proposal endorsed by numerous parties to be just and reasonable and supported by substantial evidence in the extensive administrative record amassed, the Commission set new rates, effective August 1, 1971, higher than those fixed in Opinion No. 546. 46 F.P.C. at 103-110, 135-138, 142-143. The Commission also prescribed a formula for refunds consequent upon *354deliveries of gas prior to that date. Id. at 140-141, 146-148. With that, the Commission declared that Opinions Nos. 546 and 546-A— the original Southern Louisiana area rate prescriptions — “now perform no office.” 46 F.P.C. at 102.

. Op. text at ns. 414-423.

. Op. text at ns. 472^75 & pt. V(D)(2).

. Op. text following n. 423.

. See note 95, supra.

. See Op. text at n. 44.

. The Commission requests clarification of our directions regarding flow-through to Texas Eastern’s customers of producer refunds accruing to Texas Eastern prior to the effective date of the 1971 area rate. See Op. text at ns. 673-676. In Opinion No. 565, the Commission formulated a flow-through plan which we deemed objectionable only to the extent that it utilized the 20-cent in-line price as the basis for computations for part of the relevant period instead of the 18.5-cent area rate throughout. Op. pt. VI(G). In Opinion No. 565-A, however, the Commission deferred the matter of refund flow-through in its entirety, and we held that it erred in doing so. Op. text at ns. 635-638, 669-670. We said that the Commission must calculate, after due regard for Texas Eastern’s Rayne Field investment, the amount to be flowed through on the basis of the 18.5-cent rate, and after updating the computation must order flow-through as soon as practicable. Op. text at ns. 673-676. The Commission asks whether on remand it has discretion to refashion, in some undisclosed manner, the flow-through plan, or whether it must employ the plan it constructed in Opinion No. 565.
It was not our purpose to bind the Commission to the flow-through methodology specified in Opinion No. 565, even as revisable in light of our criticism. We reviewed that methodology because some of the parties attacked it and, since the Commission did not disapprove it in Opinion No. 565-A, because it thus appeared that the Commission might still resort to it eventually. See Op. pt. VI(G). But we took pains to state that we did not proceed “on the broad premise that invalidity of an administrative decision undertaking to change an earlier administrative decision invariably reinstates the earlier decision,” but in the realization “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 latter decision would not pass judicial muster, would have left the earlier decision as its final action.” Op. text following n. 558. See also note 42, supra. We added our recognition “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.” Op. text at n. 627. It is for the Commission, not us, to say whether in properly revised form the Opinion No. 565 flow-through plan survives, and if not just what, within the limitations we imposed, the plan shall be.

. Op. text at n. 393, quoting FPC v. Sunray DX Oil Co., supra note 46, 391 U.S. at 25, 88 S.Ct. at 1535, 20 L.Ed.2d at 399.

. FPC v. Texaco, Inc., supra note 71, 417 U.S. at 397, 94 S.Ct. at 2326, 41 L.Ed.2d at 156.

. See Op. text at ns. 460-461.

. See text supra at note 70.

. See text supra at note 71.

. See text supra at note 69.