Court Opinion

ID: 7863211
Source: CourtListenerOpinion
Date Created: 2022-09-08 18:14:24.947548+00
Date Added: 2024-06-11T16:31:01.616602
License: Public Domain

SENTELLE, Circuit Judge,
concurring.
I am in full concurrence with the majority’s resolution of this petition. I write separately only to express my disagreement with the majority’s conclusion that “Texas Gas is unclear on whether opportunities for price arbitrage are enough to justify a new cash-out mechanism absent actual under-recovery of costs.” Maj. Op. at 408.
In Texas Gas the Commission stated:
When price arbitrage occurs, the pipeline is, in essence, required to sell gas to its customers at below market levels and buy gas from them at above-market levels. As demonstrated by Texas Gas’ situation, this can lead to the pipeline incurring a substantial underrecovery of costs. There is no reason to make the correction of such a problem contingent on a showing that the imbalances are causing operational problems. It is not just and reasonable to require pipelines to underrecover their costs, and ... the Commission did not require such a thing in Order No. 637.
Texas Gas, 97 FERC at 62,634-35 (emphasis added); see also Texas Gas, 96 FERC at 62,218-19. It appears to me that the Commission by this reasoning made it clear that opportunities for price arbitrage are sufficient justification for a proposal to modify a pipeline’s cash-out mechanism even in the absence of actual arbitrage.