Court Opinion

ID: 8915114
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:41:45.436242+00
Date Added: 2024-06-11T17:08:54.353968
License: Public Domain

CORNELIA G. KENNEDY, Circuit Judge,
concurring in part and dissenting in part.
I agree with the majority that petitioners received adequate notice of the proposed rules here. I also concur in that part of the majority’s opinion upholding the Federal Energy Regulatory Commission’s definition of “facility in existence on November 9, 1978.” Congress explicitly required the Commission to define the word “facility” in section 201(c)(1) of the Natural Gas Policy Act (NGPA). The Commission exercised that power in a reasonable fashion, defining “facility” to mean all boilers at a work-site instead of individual boilers. If a “facility” was changed after November 9,1978, either by adding or subtracting boilers, it is no longer the facility that was in existence on November 9, 1978.
I respectfully dissent from the part of the majority opinion upholding the Commission’s definition of “average per day use” of natural gas. As I understand the majority, it reasons that “average per day use” is an ambiguous phrase the Commission is capable of “fine-tuning.” The majority holds that the Commission reasonably “fine-tuned” the phrase by measuring a “day” with respect to the availability of natural gas rather than with respect to the usual 24 hours. The majority supports its conclusion by noting that because the NGPA is a complex statute otherwise clear words such as “average” and “day” may not be what they seem at first glance; the Commission has broad discretion under the NGPA incremental pricing provisions; the statutory language and legislative history of the NGPA do not expressly contradict the Commission’s interpretation; and the Commission’s rule is fair, even-handed, and furthers Congress’ intent to exempt only small boilers from incremental pricing.
I cannot accept the majority’s analysis or conclusion for several reasons. First, I am unable to find that the Commission had authority to define “average per day use.” The Commission acted pursuant to section 501(b) of the Act, 15 U.S.C.A. § 3411(b), which authorizes it to define “accounting, technical, and trade terms” used in the Act. Neither the phrase “average per day use” nor the word “day” can be considered technical, trade, or accounting terms, even when used in a complex statute.* Thus, section 501(b) cannot be the source of power for the Commission to define “average per day use.” “[A]n administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.” S.E.C. v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943), quoted in Industrial Union Dept. v. American Petroleum Institute, 448 U.S. 607, 631 n.31, 100 S.Ct. 2844, 2858 n.31, 65 L.Ed.2d 1010 (1980); see also Ohio Ass’n of Community Action Agencies v. F.E.R.C., 654 F.2d 811, 817-818 (D.C.Cir.1981). Our limited power to review agency action requires that the Commission be reversed.
Even assuming the Commission had power to define “average per day use” under section 501(b), the Commission’s definition, far more than a “fine-tuning,” is not a reasonable construction of the language of section 206(a). “[T]he plain, obvious, and rational meaning of a statute is to be preferred to ‘any curious, narrow, hidden sense *537that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.’ ” Community Blood Bank of Kansas City Area, Inc. v. F.T.C., 405 F.2d 1011, 1015 (8th Cir. 1969). To an ordinary mind, “average per day use” means total use divided by number of days. An ordinary mind would not go about searching for hidden meaning in the word “days,” finally concluding that a day is the period of time in which a facility would use the quantity of natural gas that it would have used in 24 hours if natural gas were 100 percent available. Congress could, if it chose, define average per day use as the Commission did. Since Congress did not, the phrase bears its ordinary meaning. Contrary to the majority’s assertions, the Commission’s definition is inconsistent with the ordinary meaning of section 206(a).
Early in the rulemaking proceeding the Commission was of the view that it did not have “authority to revoke the statutory exemption apparently provided” in section 206(a) to large boilers that had not used much fuel in 1977. The Commission ultimately used section 501(b) to remedy this perceived potential inequity. The tortured definition of “average per day use” we have here is the result.
[N]ot infrequently administration reveals gaps or inadequacies of one sort or another that may call for amendatory legislation. But it is no warrant for extending a statute that experience may disclose that it should have been more comprehensive. ... For the ultimate question is what has Congress commanded, when it has given no clue to its intentions except familiar English words and no hint by the draftsmen of the words that they meant to use them in any but an ordinary sense.
Addison v. Holly Hill Fruit Products, 322 U.S. 607, 617-618, 64 S.Ct. 1215, 1221, 88 L.Ed. 1488 (1944). The majority may be correct that the Commission’s rule is “fair.” The trouble is that it is not what Congress commanded.
The majority relies on the fact that Congress did not specify that “days” referred to 24 hour periods, either in the statute or the legislative history, so there is nothing to contradict the Commission’s interpretation. Congress’ failure to further define such a clear word cannot be support for the reasonableness of the Commission’s highly unusual definition. We should rejoice on those occasions when Congress uses plain words to manifest its intent, not allow administrative agencies to subordinate Congress’ intent to their own. The NGPA assuredly contains complex provisions, and the Commission may certainly address those complexities. It does not follow that the Commission has the same broad discretion when administering those parts of the NGPA that are clear, and “average per day use in the month of peak use” was clear until the Commission made it otherwise.
As the majority notes, Congress meant through section 206(a) to exempt small, not large, industrial boiler fuel users of natural gas from incremental pricing. This was not the only congressional concern, however. The legislative history shows that Congress was also concerned that the NGPA was too complex, that it would be a regulatory nightmare. Ohio Ass’n of Community Action Agencies v. F.E.R.C., supra, 654 F.2d at 820-824, and accompanying footnotes. There is no reason to reject the simple rule passed by Congress for deciding what was a small industrial boiler and what was not. Records that show how much gas industrial boilers used in each month of 1977 already exist and are easily accessible, so computing actual average per day use would be very straightforward. The virtues of such simplicity, in terms of reduced costs of administration and compliance, are obvious.
The Commission’s rule deletes those virtues from section 206(a). The Commission’s “average per day use” depends on measuring deviations from the “normal delivery level,” but nowhere does the Commission explain how to find a “normal” delivery level. Petitioners argue that their records do not show the extent to which individual facilities were subject to curtailment and the Commission does not contradict this. No records show which boiler facilities re*538sponded to curtailment by .asking for more gas than they otherwise would, thereby receiving a “normal” delivery level even during curtailment. No records are easily available to show when delivery level was below normal during times of curtailment for reasons unrelated to the curtailment, such as labor problems, raw material supply problems, lack of consumer demand, or mechanical difficulties. The costs of resolving any of these questions will be high, and the Commission’s rule may well be impossible to apply.
To be sure, one may pay a price for simplicity. In this case Congress’s language might result in some large industrial boilers being exempted from incremental pricing, because their average per day use of natural gas during the month of peak use in 1977 might have been reduced by any one of a number of factors. The clear mandate of section 206(a) demonstrates that Congress decided the danger of some large boilers slipping through the cracks was a price worth paying for an easily administered rule that gave the right result most of the time. Indeed, the price Congress paid for its simple rule might be very small. The Commission notes in its brief that few large users of natural gas were curtailed throughout 1977.
Underlying the Commission’s desire to deviate from Congress’ clear language in section 206(a) appears to be the assumption that, had Congress thought about the problem of year-long gas curtailment in 1977, it would not have passed the law that it did. Congress’ thoughtfulness, or lack thereof, does not alter the Commission’s inability to amend the statute, but I doubt that the Commission is correct. Congress was acutely aware of the 1977 curtailments of natural gas. They were the impetus for the NGPA.
For all of these reasons, I find the Commission’s rule inconsistent with the language and policy of section 206(a). I also find the Commission’s definition of “average per day use” arbitrary. Section 206(aX2)(B)(ii) required the Commission as a preliminary matter to determine whether a 300 Mcf ceiling on the “average daily rate of use during a month of peak use” during calendar year 1977 would result in the small boiler exemption applying to more than 5 percent of the total volume of natural gas used as a boiler fuel in 1977. In discharging this function, the Commission used 24 hour days and calendar months. Then, section 206(a)(2)(B) states that a “small boiler” is one with “an average per day use of natural gas as a boiler fuel during the month of peak use during calendar year 1977” of not more than 300 Mcf (emphasis added). In determining the “month” of peak use the Commission sensibly used ordinary calendar months. It did not calculate what would have been the month of peak use had there been no gas curtailment in 1977. However, when it came time to interpret “average per day use” the Commission suddenly departed from a straightforward calendar-based analysis to define a day in terms of normal delivery level. It is arbitrary to treat these very similar statutory provisions so differently unless there is explicit support for doing so, and there is none. The arbitrary definition of months and days is another ground requiring reversal.

 To hold that using ordinary words in a complex statute makes them “technical, trade, or accounting terms” would amount to an amendment of section 501(b). It would authorize the Commission to define every word in the NGPA.