Court Opinion

ID: 7838545
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:50:46.55759+00
Date Added: 2024-06-11T15:56:14.845922
License: Public Domain

BAZELON, Chief Judge,
concurring in part, dissenting in part:
I agree with the result reached by the majority, remanding the El Paso final curtailment plan to the Federal Power Commission, and concur generally with much of *316its opinion. I take exception, however, to the majority's discussion of three specific elements of the plan:
1) Utilization of Gas for Electric Turbines
In Opinions No. 697 & 697 — A, the Commission has determined that the use of natural gas as boiler fuel should have a lower priority than other end uses; the Commission has also determined that the use of gas to power turbines which generate electricity should be considered boiler-fuel use, and accorded the same low priority. The majority affirms the priority given boiler fuel, but rejects the Commission’s conclusion with respect to gas used in turbines for electric generation. I would affirm both portions of the Commission’s decision. As the majority points out, Maj.Op. 185 U.S. App.D.C. at 295, 567 F.2d at 402, the Commission has found that turbine use is even less efficient than other sorts of “boiler fuel” use. J.A. 100. Since, as the majority virtually concedes, this finding is supported by substantial evidence, the Commission’s decision must be affirmed. See Mobil Oil Co. v. FPC, 417 U.S. 283, 94 S.Ct. 2328, 41 L.Ed.2d 72 (1974).1
The challenge to the Commission’s decision with respect to turbine use was raised principally by Arizona Electric Power Cooperative [AEPCO], which, in its brief, repeatedly refers to its situation as “unique.” Whatever injury AEPCO has suffered because of its allegedly unique situation could be adequately redressed by reclassification or an increased gas allotment, if appropriate, by petitioning for extraordinary relief.
2) Pre-existing Shortage in California
I agree with the court that remand to adjust base period data to account for after-acquired attachments of new (mostly high priority) users up to December 19, 1974, is proper. However, I disagree with the majority that the Commission’s consideration of pre-existing shortages of local and non-El Paso gas in California was insufficient, Maj.Op. 185 U.S.App.D.C. at 296, 567 F.2d at 403, and I see no need for remand for further consideration of that issue.
The record shows that the two California customers of El Paso, Pacific Gas & Electric Company and Southern California Gas Company, were partial requirements customers of the pipeline; that is, both had other suppliers than El Paso during and before the base period for computing volumetric entitlements. As the court acknowledges, Maj.Op. 185 U.S.App.D.C. at 303, 567 F.2d at 410, the Commission in Opinion No. 697 specifically discussed the question of pre-existing shortages suffered by these partial requirements customers due to reduced deliveries by their other suppliers. J.A. 434-39. However, the court feels that consideration fell “far short of providing a basis for justifying the FPC’s failure to provide some relief to the California users . ” Maj.Op. 185 U.S.App.D.C. at 303, 567 F.2d at 410.
Unlike the majority, I believe the Commission has complied with the terms of our remand in American Smelting & Refining Co. v. FPC, 161 U.S.App.D.C. 6, 23, 494 F.2d 925, 942 (1974), cert. denied, 419 U.S. 882, 95 S.Ct. 148, 42 L.Ed.2d 122 (1974) [ASARCO]. The ASARCO court required that the Commission “consider the pre-existing shortages in California and . . . enunciate findings with respect to that situation”. Id. The Commission has responded by reviewing the matter and relying upon two rational policies developed earlier and consistently applied here.
In Opinion No. 697 the Commission cited its earlier Opinion No. 647, in which it enunciated an approach of “allocatpng] the *317impact of curtailment equally, insofar as may be possible, upon full and partial requirements customers treating both in the same manner.” J.A. 435, citing Opinion No. 647, at 14. The Commission therein noted:
modification of our treatment of partial requirements customers might be necessary to protect small volume residential service in the event of extraordinarily severe shortages requiring curtailment in the highest priority categories.
Id. Under this exception for severe hardship, some full or partial requirements customers of a curtailed pipeline would be more severely curtailed so that a partial requirements customer could offset other shortages. Here, however, the Commission found:
In reviewing the record in the instant proceeding, we find no indication that the reduced supplies available to the California partial requirements customers from sources other than El Paso, in combination with a curtailment of entitlements from El Paso prorated equally . will result in a shortage of such severity as to warrant special treatment for the partial requirements customers.
J.A. 435. Moreover, the Commission has indicated that its general policy for regulating curtailments2 contemplates pipeline-by-pipeline regulation. Therefore, a partial requirement customer impacted by curtailment on each of its supplier pipelines cannot ordinarily expect any one of those suppliers to make whole the customer’s shortfall. Because a partial requirements customer’s expectations from any given supplier may respond elastically to shortages and oversupply, the Commission has chosen here to base future entitlements upon past volumes taken from El Paso. It subverts the Commission policies of equal curtailment of full and partial requirements customers and pipeline-by-pipeline regulation to suggest, as the court does, that the two California customers’ historic takes must now be disregarded in favor of spongy estimates of the volumes which would have been taken had customers been allowed to lean more heavily upon El Paso to overcome other supply shortages.
This court recently affirmed a Commission decision not to permit a municipality to interconnect with an interstate pipeline and thereby obtain an allocation of its gas offsetting curtailments by the municipality’s own interstate pipeline supplier. City of Huntingburg v. FPC, 180 U.S.App.D.C. 96, 555 F.2d 1033 (1977). As applied to a partial requirements customer of several interstate pipelines, that decision seems to buttress the Commission policy of pro rata curtailment of all customers by pipeline within end-use categories. Because California customers could use or procure alternative fuels to make up their deficits, and were not in a worse position to do so than East-of-California customers, the Commission refused to permit exception to its policy against allowing adjustments to the El Paso entitlements to take up the slack. This, it seems to me, was reasonable and comports with the decision in Mobil, supra. I would affirm the Commission on this issue.
3. Compensation
I find most troubling the majority’s extended discussion of “compensation schemes” — i. e., plans whereby those pipeline customers who are relatively less affected by curtailment would be required to provide cash compensation to those customers relatively more affected. I agree with the majority’s narrow holding on this subject, namely, that in the absence of a definite plan offered (or agreed to) by the parties, the Commission did not err in refusing sua sponte to fashion a compensation plan. In my view, however, much of the majority’s discussion of compensation is irrelevant to this case, and unnecessary to its holding. In particular, I see no need for us to reach the broader issue — with which we grappled in Transcontinental Gas Pipe Line *318Corp. v. FPC, 183 U.S.App.D.C. 145, 562 F.2d 664 (1976) [Transco ] — of whether the Commission has authority under the Natural Gas Act to approve and regulate compensation among distributor customers of a jurisdictional pipeline. The issue raised in Transco was permissive in nature — i. e., does the Natural Gas Act allow compensation which has been agreed to by the parties, or does it flatly bar it on jurisdictional grounds? The majority there held that factual material about the nature and duration of shortage was necessary to guide the court in its interpretation of the statutory standards of “just and reasonable” and “non-discriminatory” rates in the novel context of alleged extreme shortage and allocation by end-use priorities. Here, the question posed is a simpler mandatory one: Does the Act require compensation in conjunction with end-use curtailment, and does it therefore preclude the Commission from approving a final curtailment plan based upon end-use without providing compensation? I have little difficulty answering this latter question in the negative, and I therefore join the court’s holding that “nothing in the Natural Gas Act’s instructions to the Commission to promulgate non-discriminatory rates requires a compensation scheme,” where the Commission believes justice can be done without one, and none has been endorsed by the parties.

. Without in any way urging it as a ground for decision, I note that the proposed national energy policy, S. 1468, 95th Cong., 1st Sess. (1977), favors conversion from natural gas to coal by utilities engaged in the generation of electricity.

. Orders 467 & 467-B, codified as 18 C.F.R. § 2.78.