Court Opinion

ID: 7838339
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:42:56.26544+00
Date Added: 2024-06-11T15:56:12.072704
License: Public Domain

BAZELON, Chief Judge
(concurring in the result):
Unlike the majority, I would reach the question, “. . . whether [the FPC is] empowered to entertain and grant relief on a petition [for extraordinary relief] filed by an intrastate and therefore non-jurisdictional purchaser and distributor of natural gas.” 1 I would hold that the Commission has both the authority and the obligation to entertain petitions for extraordinary relief from ultimate consumers.
I have no quarrel with the majority’s view that the asserted gravity of the energy shortage requires petitioners for extraordinary relief to exhaust all alternative sources of supply, and alternative forms of energy, as well. But I would not distinguish, as the court does,2 be*256tween fuels locally available and those on the national or international market. (See discussion infra.) Nevertheless, I agree with the court that extraordinary relief is not warranted in the instant case. Instead of proving an emergency-like need for additional gas,3 petitioners sought extraordinary relief in order to collaterally attack the permanent El Paso curtailment plan, which is the subject of another proceeding in this court.4 Since all interested parties will have the opportunity to test that plan in other litigation, and since we have already accepted operation of the interim curtailment plan despite allegations of the specific flaws here protested,5 the majority properly declines to examine the validity of the permanent plan herein. Thus, the order of the Commission should be affirmed to the extent that it is based upon petitioners’ insufficient showing of entitlement to relief.
However, in its denial order of October 25, 1973, the Commission strongly suggested an additional, or alternative, jurisdictional ground for denying extraordinary relief:
In a situation analogous to the instant filing, the Commission denied a petition seeking extraordinary relief from the curtailment plan in effect on the system of an interstate pipeline company on the ground of intrusion into a matter of local concern. As in that case, the petitioners DWP and Edison, are not direct customers of the jurisdictional pipeline company, and consequently the relief sought by them are primarily of a local concern, which should properly be resolved by the Public Utilities Commission of the State of California. The Natural Gas Act (Section 1(b)) recognizes the state-federal dichotomy in natural gas regulation and, accordingly, any petition requesting extraordinary relief from a curtailment plan should be filed with this Commission by either the interstate pipeline company or the distributor customer of an interstate pipeline company.6
*257In their joint application for FPC rehearing, petitioners Department of Water and Power of the City of Los Angeles (DWP) and Southern California Edison Company (Edison) specifically argued that the Commission had erred in finding that it had no jurisdiction because their sought relief was a matter of local (or state) concern:
Although it has not actually so stated, it must be inferred from the Commission’s order that it denied jurisdiction to grant the relief sought by Petitioners. The Commission does not lack such jurisdiction. It is totally contradictory to say that the Commission has jurisdiction to establish curtailment plans for interstate pipelines and then take the position that it has no jurisdiction to grant relief from those plans when they subject a person to undue prejudice or disadvantage as prohibited by Section 4(b) of the Natural Gas Act.7
I agree. This view finds support in case law, as well as logic.
Recent decisions of the Supreme Court and this court have established the FPC’s authority to approve curtailment plans for interstate pipelines respecting direct sales to industrial customers and sales to distributors for resale. FPC v. Louisiana Power & Light Co., 406 U.S. 621, 92 S.Ct. 1827, 82 L.Ed.2d 369 (1972); Michigan Power Co. v. FPC, 161 U.S.App.D.C. 221, 494 F.2d 1140 (1974). However, this broad authority substantially affects federal-state division of regulation. Under FPC Order 467, curtailment is predicated on the end-use of natural gas by all ultimate consumers, including those whose purchases are regulated by state commissions. Thus, the FPC purports to make allocations covering entities not within its regulatory control. While it would leave matters of extraordinary relief as to those customers to state regulators, petitioners point out that state commissions may be very reluctant to grant such relief for fear that such grants might skew gas consumption patterns toward low priorities of end-use, endangering present quantities of interstate gas flowing under the FPC-sanctioned curtailment plan.
Jurisdiction cannot be established in the FPC merely by showing, “that the purpose of the [Natural Gas] Act is to protect the ultimate beneficiaries against exploitation by natural gas companies.” Mobil Oil Corp. v. FPC, 149 U.S.App.D.C. 310, 317, 463 F.2d 256, 263 (1971), cert. denied, 406 U.S. 976, 92 S.Ct. 2409, 32 L.Ed.2d 676 (1972). Thus, neither desire-ability of regulation nor an obvious regulatory omission makes for federal jurisdiction. But in Phillips Petroleum Co. v. Wisconsin,8 the Supreme Court enunciated the view that “the overriding congressional purpose [of the Natural Gas Act] was to plug the 'gap’ in regulation resulting from judicial decisions prohibiting . . . state regulation of many of the interstate commerce aspects of the natural-gas business.”
Similarly, the doctrine of “local concern” under the Act is not itself an absolute bar to federal regulation; while certain activities are exempt from federal control, that exemption applies, “provided that the rates and service of such person and facilities be subject to regulation by the several states.”9 Further, the Supreme Court stated in FPC v. Transcontinental Gas Corp.:10
*258when we are presented with an attempt by the federal authority to control a problem that is not, by its very nature, one with which state regulatory commissions can be expected to deal, the conclusion is irresistible that Congress desired regulation by federal authority rather than nonregulation.11
Additionally, this court held in Conway Corp. v. FPC,12 that the Commission has the power to consider matters “which would be completely non-jurisdictional taken by themselves, but are appropriate for consideration when germane to the meaningful execution of a jurisdictional function.” This reasoning, which presumably justifies looking to consumption by non-jurisdictional customers when allocating scarce supplies, should also compel FPC consideration of the petitions of non-jurisdictional customers for extraordinary relief to alleviate harshness in its broad and approximate allocations.
When Order 467 was promulgated, a chief objection was that its end-use based curtailment lacked flexibility, and might yield severe hardships when applied. Commission Order 467-A, entered after rehearing, recognized that “ . in setting out our statement of policy [in Order 467], we inadvertently omitted procedures to permit the pipeline companies to respond immediately to meet emergency situations that may occur during periods of curtailment.”13 Section 2.78(a) of 18 CFR was amended as follows:
The priorities-of-deliveries set forth above will be applied to the deliveries of all jurisdictional pipeline companies during periods of curtailment on each company’s system; except, however, that, upon a finding of extraordinary circumstances after hearing initiated by a petition . . . exceptions to those priorities may be permitted.14
The Order also made plain that full curtailment of all volumes within a priority category must precede any curtailment of the next highest priority category. Further, the Order provides that, “both the direct and indirect customers of the pipeline that use gas for similar purposes” must be “placed in the same category of priority.”15
The Commission now contends that ultimate non-jurisdictional consumers must convince their distributor or its pipeline to champion the consumers’ extraordinary relief request before the agency. In taking this position, the FPC ignores the potential conflicts of interest inherent in a market where sellers can readily distribute all available volumes to consumers with high-priority uses, and where the aggrieved consumer may happen to require gas for a lower priority use. The FPC appears to call, as well, for exhaustion of all local remedies before the state public utilities commission. In light of the federal role in curtailment plans, and the frequent need for expedited decision-making in extraordinary relief matters, I think such a requirement is unrealistic and improper. It undermines the very flexibility which Order 467-A was adopted to create, and as petitioners and intervenors 16 note, under*259mines the principle of end-use curtailment.
Further, if authority to grant relief resides solely (or in the first instance) in the state commissions, and if those commissions were to grant relief by applying intrastate gas supplies to lessen hardships imposed by operation of interstate gas curtailments (as the Commission and the majority suggest), the federal-state regulatory dichotomy would be severely compromised. The intrusion worked by recognizing federal jurisdiction to alleviate suffering caused by federally-sanctioned interstate curtailments is minor by comparison. We recently noted that, “Only an agency sufficiently aware of the overall state of natural gas supply and demand could possibly handle requests for emergency relief seriatim, and yet avoid the circumstance where relief grants, each with a de minimis impact upon competing consumers, cumulate in outright suffering for all.” United States Steel Corp. v. FPC, 166 U.S.App.D.C. 309, 310, 510 F.2d 689, 690 (1975). Clearly, if Order 467 is to operate as a general policy with nationwide effect, all exceptions and variances to interstate curtailments must be reviewed by one agency informed about national needs and priorities, rather than by fifty-one local ones adopting potentially inconsistent standards for relief.
At oral argument, the Commission cited its own order in another docket17 wherein it denied ultimate consumers the right to petition for extraordinary relief for the following reasons: (1) It would be unclear how rates covering relief gas would be set. (2) As the FPC has no direct control over intrastate transactions between distributors and ultimate consumers, there could be no enforcement to ensure that additional gas ordered from pipeline to distributor earmarked for a suffering ultimate consumer would actually reach him. (3) Such a grant might constitute undue discrimination to other customers.
I would respond as follows: (1) Relief gas can be sold under the same state-regulated terms as apply to non-relief volumes. All that the FPC would determine is whether the granting of relief is justified.18 (2) Grants of relief gas to the distributor and earmarked for the ultimate consumer could be conditioned upon receipt by the needy party, with appropriate penalties for noiiTcompliance. Further, if the views of the State of California and the California PUC are typical,19 the FPC might receive more enthusiastic enforcement support from state regulators than it has heretofore anticipated. (3) I fail to see how granting extraordinary relief on behalf of an ultimate consumer is any more discriminatory to competing gas customers than the FPC’s fantasy of having distributors/pipelines petition on behalf of their purchasers.
*260Although the unprecedented shortages asserted for curtailment by interstate pipeline companies were not contemplated by the Natural Gas Act, the FPC and the courts have construed the Act to meet emergencies. If curtailment of interstate volumes based upon end-use of ultimate consumers has created hardship for some consumers it is due to nationwide shortages and national allocation policy, matters beyond the competence and jurisdiction of state regulatory commissions.

. 173 U.S.App.D.C. at p. 250, 524 F.2d at p. 411, n. 3.

. 173 U.S.App.D.C. at p. 249, 524 F.2d at p. 410: “. . . we agree that the gravity of the energy shortage . . . requires users of scarce fuels to exhaust their intrastate remedies before they seek assistance from the FPC.” (emphasis added). In my view, existence of any untapped alternative sources of gas casts doubt upon a petition for extraordinary relief. Where, as here, there is allegation of hardship attributable to curtailment of interstate supplies, I would not require formal attempts to obtain state commission reallocation of intrastate supplies as a prerequisite to seeking FPC assistance. I would require exhaustion of alternatives in the marketplace.

. 173 U.S.App.D.C. 254-255, nn. 25-33,524 F.2d 415 nn. 25-33, and text adjacent thereto. I note that the Commission statement in TETCO, relied upon by the majority to require a demonstration of exhaustion of local remedies, in fact requires proof that, “. . . all available sources of natural gas and alternative fuels have been exhausted . . . ” without reference to locality.

. City of Wilcox and Arizona Electric Power Cooperatives, Inc., et al. v. FPC, (D.C.Cir. No. 74-2132).

. American Smelting and Refining Co. et al. v. FPC, 161 U.S.App.D.C. 6, 30, 494 F.2d 925, 949 (1974).

. J.A. 106. Pertinent portions of the Natural Gas Act are set forth below:
§ 717. Necessity for regulation of natural gas companies.
(a)As disclosed in reports of the Federal Trade Commission made pursuant to S.Res. 83 (Seventieth Congress, first session) and other reports made pursuant to the authority of Congress, it is declared that the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest.
(b) The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.
(c) The provisions of this chapter shall not apply to any person engaged in or legally authorized to engage in the transportation in interstate commerce or the sale in interstate commerce for resale, of natural gas received by such person from another person within or at the boundary of a State if all the natural gas so received is ultimately consumed within such State, or to any facilities used by such person for such transportation or sale, provided that the rates and service of such person and facilities be subject to regulation by a State commission. The matters exempted from the provisions of this chapter by this subsection are declared to be matters primarily of local concern and sub*257ject to regulation by the several States. A certification from such State commission to the Federal Power Commission that such State commission has regulatory jurisdiction over rates and service of such person and facilities and is exercising such jurisdiction shall constitute conclusive evidence of such regulatory power or jurisdiction. (June 21, 1938, ch. 556, § 1, 52 Stat. 821; Mar. 27, 1954, ch. 115, 68 Stat. 36.)

. J.A. HO.

. 347 U.S. 672, 682-83, 74 S.Ct. 794, 799, 98 L.Ed. 1035 (1954).

. Natural Gas Act, § 1(c), 52 Stat. 821, as amended 68 Stat. 36, 15 U.S.C. § 717(c). For full text of subsection see note 6, supra.

. 365 U.S. 1, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961).

. Id. at 28, 81 S.Ct. at 450.

. 167 U.S.App.D.C. 43, 510 F.2d 1264, 1272 (1975), cert. granted, 44 U.S.L.W. 3279 (U.S. Nov. 11, 1975).

. 49 FPC 217, 218.

. 18 CFR § 2.78(a)(ll) (1974), recodified as 18 CFR § 278(a)(2) (1975).

. 49 FPC 217, 219.

. Intervenor San Diego Gas & Electric Company notes that the FPC had held the door open to petitions for extraordinary relief by all aggrieved parties to the El Paso proceedings in Opinion No. 634-A, one of the FPC actions establishing the interim El Paso curtailment plan: “We realize that there may be situations where alternate fuel facilities exist but for good reason the capability does not exist. As noted in other curtailment cases, any party who finds itself in a position such as this and can clearly show the Commission that such a situation exists is free to ask for extraordinary relief at any time.” Opinion No. 634-A at 3. San Diego specifically took no position on the merits of DWP and Edison’s claims, asking only that the court find that ultimate consumers may petition for extraordinary relief before the FPC. Intervenor General Motors asked *259the court to reject any arguments that the Commission is powerless to assure enforcement of an extraordinary relief grant, but deemed reasonable a requirement that all local commission remedies must first be exhausted. Intervenors the State of California and the California Public Utilities Commission state forcefully their view that, “the curtailment problem in this case does not lend itself to a solution solely at a local level and cannot be characterized as being one of strictly local concern.” Br. at 5. California states that 80% of the gas consumed in-state is subject to FPC jurisdiction, and that it is “delusion to believe that [its] State Commission has sole or practical control over allocations of interstate gas supply . . ” Id. at 6. California suggests that the appropriate treatment of a petition for extraordinary relief would be FPC denial or grant buttressed by whatever local commission actions are necessary to effectuate the FPC order. In their reply brief, California and California PUC contend that the state commission’s jurisdiction over intrastate natural gas and oil is far less extensive than the FPC suggests, and raise serious doubts that emergency relief could be granted to ultimate consumers by the state.

. Panhandle Eastern Pipe Line Company, Docket No. RP71-119, issued September 28, 1973, 50 FPC 961, 963-64, appearing as appendix B, FPC Brief.

. In this way, all petitions for emergency relief would be centrally handled, and could be decided upon the basis of their comparative merits and urgency.

. Br. at 7-9.