627 F.3d 881
D.C. Cir.2010Background
- Trans-Alaska Pipeline System (TAPS) shippers and Alaska challenged FERC's 2005-2006 interstate rates, previously governed by the TSA's rate methodology (TSM).
- FERC replaced the TSM with Opinion No. 154-B methodology, and ordered refunds below the 2004 rate level, applying ICA § 15(7).
- Carriers argued for using TSA-derived rate-base balances (including accelerated depreciation) to determine unrecovered base; Alaska argued rates discriminated against intrastate rates and breached ICA provisions.
- FERC rejected the TSA write-up and certain deferred-return treatments, and began accounting for DR&R costs and potential refunds, prompting challenges from carriers and Alaska.
- Issue areas include whether FERC’s methodology and refunds were lawful, whether the TSA’s precedential effects bar the new methodology, and whether ripeness issues barred review.
- The panel held most challenges unripe, affirmed FERC’s orders except for pathways deemed unripe, and partially addressed refundability and timing questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Use of TSA rate-base balances after 2004 | Carriers argue TSA balances improperly recharacterize capital recovery. | FERC properly relied on TSA-derived balances to compute unrecovered base under 154-B. | Not arbitrary; affirmed use of TSA-derived balances. |
| One-time rate-base write-up under TOC/TOC-like transition | Carriers entitled to a one-time rate-base write-up under 154-B transition. | No comparable write-up; transition justified not to burden investors. | Rejected; no arbitrary action by FERC. |
| Treatment of 2005 depreciation in 2006 rate base | Miscalculation affected 2006 unrecovered rate base. | Any miscalculation had no impact on the 2006 refunds under review. | No impact on the challenged refunds; upheld. |
| Sea Robin-style limits on refunds with a new methodology | ICA § 15(7) refunds cannot be ordered when new methodology used. | Sea Robin does not bar refunds; rates can be limited to pre-filing levels depending on context. | Not barred; Sea Robin misread; refunds and new methodology permissible under ICA § 15(7); however issues may be unripe. |
Key Cases Cited
- Sea Robin Pipeline Co. v. FERC, 795 F.2d 182 (D.C. Cir. 1986) (burden of proof and refundability under NGA/ICA analogies; Sea Robin framework discussed)
- Amoco Production Co. v. FERC, 271 F.3d 1119 (D.C. Cir. 2001) (pre-existing lawful rate as floor for refunds under NGA/ICA framework)
- East Tennessee Natural Gas Co. v. FERC, 863 F.2d 932 (D.C. Cir. 1988) (pre-filing rates and refund constructs under NGA similar to ICA considerations)
- Council of Forest Industries v. ICC, 570 F.2d 1056 (D.C. Cir. 1978) (need for actual competitive injury in discrimination claims)
- Harborlite Corp. v. ICC, 613 F.2d 1088 (D.C. Cir. 1979) (competitive injury framework for discrimination claims)
- Abbott Laboratories v. FTC, 387 U.S. 133 (Supreme Court 1967) (ripeness and adjudication standards for agency actions)
- FTC v. Standard Oil Co., 449 U.S. 232 (Supreme Court 1980) (administrative procedure and timing considerations in agency rulings)