*1 m body duty expert whose determine burden Commission’s complicated acted administra- to administer a

composition It has the traffic. important Congressional field. mandate.2 tive task in a difficult pursuant here charged system with the body We should be loathe to interfere in our It is the one regulation as shown In Commission’s conclusions this field. July here, they present record, when, expertise, its order it decided proposed ex- are reconcilable with the directions 15, 1957, that intervenor’s it, majority, would as I see operation not result statute.3 The perimental holding fly directly Capitol’s of this objectionable here into the interference sitting court, banc, Bend en in Coastal WJTV. Communica- Television Co. v. Federal eight imposed condi- The Commission Comm.,4 tions I dissent. and therefore authorization, temporary tions of termina- made and not certain operation inter- for intervenor’s tion of any develop, ex- ference, but if should grant pressly specified only. experimental purposes In addition any provided later it has been involving applica- hearing

comparative regular operations commercial tions 12, they fea- found on sible, should be Channel preference be accorded is to NATURAL COM GAS OKLAHOMA experi- the intervenor virtue PANY, Petitioner, ment. v. imagine in which a field It is difficult COMMISSION, FEDERAL POWER competent Com- is less or the the court Respondent, making a simul- mission more so than in Pipeline Company of Amer Natural Gas comparison the field intensi- taneous ica, al., Intervenors. signals UHF trans- ties of and VHF No. 13783. single a common mitted from a site over Appeals United States Court path. area where a substantial District Columbia Circuit. viewing public percentage of 5, Argued Feb. neighbors 1958. UHF while have VHF sets sets, comparison can be an immediate May 22, Decided 1958. reception of the made of the identical programs time. If telecast at same opera- develop, interference should ceases; appears, if none WJTV has complaint.

no cause for Much can be learned in event. Results well obtained which go far will toward a resolution of the whole intermixture I think the conflict. encouraged, should be thwarted, I in its effort. think the court judgment

should substitute its 144-145, Co., 1940, 134, casting 309 U.S. Broadcasting S., 1943, 2. National v. Co. U. 437, 84 L.Ed. 656. S.Ct. 60 997, U.S. 63 S.Ct. L.Ed. U.S.App.D.C. 251, 255, 956, 234 F.2d 690; 686, dissentin Mr. Justice Reed’s Broadcasting cf. Storer 3. United States v. Transmission Gas Co. v. Co., Midwestern 351 U.S. 76 S.Ct. Commission, 1958, 103 1081; Federal L.Ed. Federal Com U.S.App.D.C. -, F.2d 660. munications Comm. v. Pottsville Broad *2 Judge, Bazelon, dissented. Circuit Tulsa, Carlson, Okl.,

Mr. John S. Supreme Oklahoma, bar Court of by special Court, pro vice, hac leave of Flaningan, Mr. A. with whom Washington, Norman C., brief, on D. was for petitioner. Russell, Washington,

Mr. Lee Robert C., respondent. D. for Messrs. Willard Gatchell, Counsel, W. General Federal Power Howard E. Wahren- brock, Solicitor, Federal Power Commis- sion, Kurtz, Attorney, A. and Alvin Fed- Commission, Washington, eral C., respondent. D. were brief on the Ross, Chicago, Ill., Mr. Clarence H. Washing Kratz, whom Mr. John A. C., ton, brief, D. was on the for inter venor, Pipeline Natural Gas ofCo. Amer ica. Raybourne Thompson, Houston,

Mr. Tex., Supreme bar Court Texas, pro vice, by special hac leave Court, with whom Messrs. John J. Wil- Washington, C., son, D. Warren M. Tulsa, Okl., brief, Sparks, were intervenor, Drilling, Inc., al. Oil et Mr. Strickler, Washington, C., H. D. Frank appearance entered an also inter- venor, Drilling, Inc., al. Oil Grandy point southern Oklahoma County, Bazelon, Bas Before Danaher southerly Judges. Oklahoma, Circuit thence tian, Coun- certain in Jack Wise fields Judge. BASTIAN, part Texas, Circuit ties in north central *3 350 miles. Producers’ distance of some opinion appeal This of an seeks review sought applications permission to sell and order of the Power Commis Federal gas in ac- deliver their to Natural and (Commission), Opinion 299 and No. sion cordance with contracts with Nat- their accompanying order of December ural. 80, (1956), 3d 277 16 F.P.C. 16 PUR January 22, 1957, amendatory of order Star), Company (Lone Lone Star Gas January 31, 67, 17 1957, and of F.P.C. order large buyer which had of been sole issuing 85, certificates F.P.C. 17 in gas appli- Texas, in northern filed a rival necessity pur of 7(c) cation under Act. Under § Act, 7(e) Natural Gas suant supply 80,- proposal this Lone Star would 1938, (Acts 21, e. of June as amended. gas Fritch, 000 Mcf of to Natural at Tex- 1942, February 7, 824; 556, c. 52 Stat. as, through pipeline a 230.5-mile which 83; July 25, 61 c. Stat. existing built in from its line 717f). 459; 15 Stat. U.S.d.A. § County, Cotton Oklahoma. Company Pipeline of Natural Gas (Pe- Company Oklahoma Natural Gas (Natural), in this America proceeding, an intervenor titioner) is, fifty for over and has been operated 1931 has since engaged years, in distribution of nat- gas pipeline Panhandle from the natural gas approxi- ural in Oklahoma. It serves and, Illinois, Joliet, in Texas field mately 335,000 ap- customers and uses together affiliate, Texas Illinois with its proximately 125 of billion cubic feet nat- supplies Pipeline Company, Natural Gas gas annually. purchases, ural It now gas requirements of entire natural expected purchase, ap- is proximately the future to Chicago metropolitan area. Natu- required sup- of its 60% existing capac- pipeline, which has ral’s ity plies in southern a maxi- Oklahoma at day, presently 510,000 per of Mcf per mum Mcf. being operated load more than 98% proceedings In the the Com- before growing factor. The record shows that mission, permission intervene in each for natural and unsatisfied demand granted proceedings and all of the sought to ac- Natural exists in this area. Petitioner, the Commission to Cities and, accom- this commodate demand Company, Upham Gas Gas Com- Service this, plish three inde- contracted with Corpora- pany, Utilities Consolidated Gas Sunray producers, pendent Mid-Conti- tion, Central Electric and Illinois Gas Company, Petroleum Oil Warren nent Light Company, Iowa Com- Drilling, Inc., inter- Corporation, and Oil Company, pany, Supply State Fuel buy proceeding, at an venors in City Chicago, Illinois. Natural large Mcf the initial gas 13.90 and Lone Star were each intervenors day 78,000 Mcf which reserves of involving proceedings application producers had discovered Jack those of the other. Counties, Texas. and Wise gas utility opposed intervenors Natural and In October its granting and, alternatively, of certificates producer-suppliers (hereinafter posed that, granted asked if certificates were Producers) applica- to as ferred made Producers, such certificates be condi- tions to certificates receiving tioned Producers no more pur- convenience and gas, which Mcf was al- 7(e) suant Act. Natural’s leged prevailing price to be sought permission application to extend Jack area of and Wise Counties. Chicago-Texas pipeline Panhandle Fritch, Texas, separate hearings southeasterly from After on the two through major gas-producing proposals, proceedngs areas of were consoli- ever, a consoli- rendered found that there was demand dated. The examiner authorized, applica- beyond supply rejected decision now dated approved those of Nat- Lone Lone Star to tion of Star authorized sell average 80,000 Producers, however, daily subject, ural an volume Natural daily Mcf of maximum reduction natural condition which effected a ato 100,000 charged point Mcf at the intersec- initial to be existing pipe- between Lone Star’s Producers. The examiner was line opinion was re- Natural’s south- condition line ern opinion quired Oklahoma. also re- the Commission’s quired al., Co., Natural, Lone Gas event re Cities Service *4 acceptance authorization, regarded Star’s (1955), as PUR 3d 3 which he controlling applica- to file the facts with the and not restricted to Commission an public tion for a certificate of case. conven- in that necessity ience and for facilities neces- parties excepted All examiner’s to the sary capacity to increase the sales of its permitted decision. The Commission system Fritch, Texas, Joliet, between and proceedings reopened for the in- to be Illinois, by 100,000 day. perMcf Lone troduction in evidence of matters that accepted plan, Star filed and Natural had occurred hearings, of the initial since close application pursuant to the Commis- including amendments to Only ap- sion’s order. Petitioner reducing contracts with Producers their pealed from the Commission’s decision. price by provi- 1(' initial Mcf with respecting price 7(e) sions escalation. Under of the Natural Gas § Act, authority the Commission has to is testimony, After further Commis- any qualified applicant sue a certificate to sion omission of an ordered the inter- applicant if it finds that the is able and mediate decision and examiner willing properly perform proposed issued its order of December service and that the service “is or will be granted again applica- That order required by or future tions Natural and Producers without necessity.” course, convenience and Of any price, pro- condition as did but it imposition section authorizes also vide: of conditions. grant “The of the here- certificates in shall not construed as a waiver Petitioner’s main contentions are that requirements granting Section the Commission erred in Act, of the Natural Gas or of imposing Section certificate to Producers without 154 of price condition, because, and Commission’s Rules was con- Regulations requiring tended, thereunder Natural’s exceeded filing prevailing of rate schedules for the the homa, in southern Okla- authorized, service herein and is and that Commission did not prejudice findings any or amake that the increased rate orders which proposed by have been “just or here- Producers was and rea- after be sonable,” made required by 4(a) Commission in as § any proceeding pending Act, now 717c(a). or here- 15 U.S.C.A. That § sec- against after ap- requires instituted or charges that all rates and plicants. Further, by any gas the action taken or made received natural com- proceeding in this pany “just shall reasonable,” not foreclose shall be and prejudice any proceedings nor any future provides “just rate that which is not objection relating operation or to the is and reasonable” unlawful. any price provision or related that, proceed- Petitioner asserts a gas purchase contracts herein in- for a certificate volved.” 7(e), under when § again challenged by party raising The order denied Lone Star’s is rate application pro- question for construction of its as to its substantial ness, reasonable- posed Commission, 4(a) imposes mandatory facilities. The duty how- § gas. pre- gas There is reserve well an essential no on the gas permission Counties, granting requisite Jack and Wise pro- Oklahoma, comparable sale, southern that that the to insure make the to posed gas proceeding. just involved and reasonable. this rates are reserve, areas, Act exclusive these further contends Petitioner gas casinghead gas gas, provisions of well not § but does state not gas au- well 4(a) apply is much more valuable a sale to be not shall casinghead gas. prohibi- 7(e); that the thorized against not 4(a) sales tion of § Counties, Star In Jack Lone Wise all-inclusive reasonable paying policy able to enforce a 4(a) Act; pervades the entire pays for more than it well ap- sales, applies hence it and all casinghead gas, was of which is commenced. plies as it a sale soon January 12(5 increased to Mcf does record claims the Petitioner Oklahoma, In southern Lone Star finding, support and the agreement as to the Petitioner have an find, increased did and are able to enforce “just rea- posed Producers policy paying *5 for both 10(5 Mcf as- error, Petitioner This gas sonable.” casinghead gas gas. This well and granting serts, requires order the Peti- a constitutes two-cent differential. aside since set the certificates be price has not its because tioner increased granting authorized the certificates price in in Jack the increase obtaining gas at its Natural’s in comparison results A Wise area. Counties and, higher cost to its customers a price Mcf 13.9(5 Natural’s cost to time, increased in being gas gas by results prices paid same oth- well for causing by an unwar- competing utilities gas purchasers in relevant areas shows er price prevailing advance ranted price in Natural’s line. is in area. foregoing support facts nec- is evidence of the An examination findings by conclusions reached the Commis- essary whether to determine denying appli in its order refusing to in its discretion sion abused etc., rehearing, Janu for cations issued the certifi- impose price condition ary 1957: Producers. cates issued “* -x- -x- js first, gas contended, reserve in Jack and Wise n largest remaining opinion protect fails un- that our (cid:127)Counties is in mid-conti- ultimate consumers natural dedicated reserve largest charges gas. area, from excessive one of the discov- for nent price years. contended that for the the United in recent is ered in States being by excessive, producers’ Produc- sales is This reserve was discovered prevailing presently and is estimated to above the in ers in 1952 gas. by exten- cubic area traversed Natural’s contain trillion feet of 2% sion; sufficient reason has with Producers that no Natural has contracted authorizing given justify for cubic of this been 750 billion feet Upham Company price; at such Gas have the sale Lone Star impact producers' prices approximately of the

(cid:127)contracted for the same approximately amount, Natural’s struc- in Oklahoma which leaves any will be most Further harmful. cubic feet uncommitted to ture trillion purchaser. connection, sought Oklahoma Natu- has not nor in this Petitioner nothing purchase is contends that there un- ral does seek it gas, purchase basis of which the record on the for it does committed Texas; purchases any gas find that rates could and sales producers wholly and reason- state (cid:127)are within the Oklahoma of able, regulatory authority, such, requirement im- said to be con- .and 7(e) Act, pays posed of the for Section which Petitioner trols said, evidenced, accompanying order, and further it In the Mat- opinions and Company, certain ters of Cities Service Gas argued al., G-2569, al., Thus et decisions. court docket No. is- concluding proceed- that we erred in sued November ‘A impact Natural was on Oklahoma of this nature can is not paramount concern place not matter of intended to take of a ceeding in this case. under Section 4 5or ”Act.’ we likewise “These contentions ele- find merit. The to be A dominant factor this case is the ultimate ment of Chicago need more area. consid- factor to be sumer but one The Commission found unsatisfied determining upon the con- ered Chicago demands exist and are in- involved venience and creasing phenomenal rate, at a and the pointed given Here, as case. we demand in the future will over and opinion accom- No. 299 and out in capacity above the sales of Nat- order, panying elements over- other existing system 510,000 ural’s Mcf may ensue increases as balance day. Natural’s need has been rendered produc- from certification more acute underground storage fact that Herscher prices Natural at the ers’ sales to Illinois, field in Indeed, may be men- authorized. expected develop daily which was wheth- some doubt exists tioned that supply 1,500,000Mcf, can be relied on calling producer authorizations er only 430,000 per day. Mcf producer prices would or lower *6 The statute makes the issuance of a Significant- could be consummated. ly, dependent upon certificate “public of Chicago, repre- City necessity,” convenience and there, has not sents consumers sought delegates power it to the Commission the rehearing opinion No. duty finding. to make that accompanying order. And al- and though Commission, by knowledge expert pub- have considered we continuing contact with natural relating to Oklahoma lic interests gas industry, qualified serves, to make the de- it Natural and the customers terminations fact and evaluations we are unable to conclude that those policy which the interests, issuance a certifi- either as a matter of law requires. particular cate on the basis outweigh case, facts in this more granting or denial of a cer pertinent represented by interests public convenience and tificate neces Natural and consumers it serves. sity peculiarly ais matter within the dis prevailing prices “Nor do the cretion the Commission. The Commis the area such other related data imposing price action in sion’s condi producing as market and to condi- tion on the issuance of a certificate was justify tions as are available to us upheld Service-Signal in Cities Oil su producers’ conclusion that Sunray pra; and in Mid-Continent Oil prices or will are excessive have the Co. v. Federal Power Cir., impact which violent Oklahoma Nat- 1956, 239 F.2d reversed on * * * envisages. ural With re- grounds, 944, other 792, U.S. 77 S.Ct. spect to the contention that the 794, upholding 1 L.Ed.2d rates have not been ducers’ shown authority Commission’s to refuse to im reasonable,’ ‘just require- to be pose conditions on the issuance of cer imposed by ment to be section said tificates, the court said: Act, 7(e) of the it suffices to com- entering ment, without into “Just has au- lengthy question, thority impose upon discussion of this conditions opinion so, too, we stated in that as No. 288 issuance of a certificate authority impose mission, Cir., 1956, refuse to 238 F.2d cer conditions.” tiorari denied 353 U.S. 77 S. Ct. 1 L.Ed.2d 720. It is contended 7(e) provided: Under it is that the erred in follow “The Commission shall have the granting that case and in certifi power issuance to attach cate to Producers without the con certificate [of dition. necessity] and the exercise of rights Signal reason- supra, thereunder such In Oil Cities Service Gas Company proposed able and conditions as the purchase terms processed Signal convenience and “residue” from Oil may require.” southern Oklahoma at rate of 120 petitioner Mcf. This and Lone Star were plain It is obvious that proceeding. intervenors in that In de- congressional meaning is to vest termining Signal the sale of Commission with the discretion attach Cities Service should be conditioned terms, including rate conditions. being per Mcf, reduced to 100 fitting discre should there the Commission stated: and, in the absence of an abuse (cid:127) discretion, inter courts should not injury “In the face of admitted such abuse here. fere. find no We many parties proceeding, in this we are convinced that a rate structure in a contends that Petitioner prevailed which has in this area 7(e), proceeding under certificate for some time should not be dis- being by produc paid where the showing turbed more sub- being paid then oth is above er appears stantial than this record area, specific ers change necessary such a impose a condition or must either that the level to which the rates are justness and reasonable determine changed to be is itself price, proceeding un as in a ness of the and reasonable.” 5,15 717c, 4 and U.S.C.A. 717d. der §§ §§ words, is contended that the other Signal appealed. *7 Ap- The Court of situation, no in such a peals for the Third Circuit held that the discretion must one of the two but take Commission’s that the 4(a) think not. Section courses. We required that objective of the states the substantive the certificate be conditioned at the 100 reasonable; Act, rates be it does that supported by rate was substantial evi- specify procedure which this the pointed dence. The Signal court out that objective pro is to be That attained. failed to proposed establish that the rate 4(d), 4(e) prescribed cedure is §§ per Mcf was reasonable to the 5(a). The Commission cannot be re purchaser existing or that the rate of every pro quired certificate to convert per unjust Mcf was to the seller. ceeding proceeding. As the into a that, Petitioner proof here contends no in In the Matter of said having been offered that the rate was G-3045, Tamborello, FPC Docket Nos. reasonable, the Commission’s deci- (1955): al., 15 F.P.C. sion should be set aside. We do not holding agree “Such would not be this conclusion. Com- contrary plain language to the mission stated that its decision in Cities prevent Service-Signal act but also us solely from was made on the exercising judgment presented and discre- basis case, facts in that delegated by Congress.” us and added: “ * * * clearly Petitioner relies also on Cities Serv the basis for supra, Sig proceeding ice Gas Co. affirmed sub. nom. decision in is not necessarily controlling & any nal Oil Gas Co. v. Federal Power Com in future any involving “Nor do we con- consider that proceedings the rates Signal imposed independent pro- dition should the cer- be in other producers, issued tificates quiring to the ducer.” pro- their the reduction of case, Star, In Lone Petitioner that posed price opin- our Natural. In purchasing the Cities Service same were ion No. the Matters Cities casinghead, type gas, e., under simi- i. Company, Service Gas G-2569, docket Nos. under contracts hav- lar conditions and al., et. clear we made it ing substantially same characteris- particular pre- circumstances They provisions. price tics identical sented in each case of decisive sharing supply were the same sources of importance determining in whether Also, from the same area. it was clear imposed condition like that paying 12(5 Mcf effect of Signal should case be attached price upward would be to drive the produc- issuance certificate to Oklahoma, and Lone southern Star er. include These circumstances compete and Petitioner would have against any convincing which a extent to show- higher new level. ing has been made result of 10(5 Commission found Mcf price proposed, prices prevailing price in the area. question other sales the area in opinion case, In its in the increased, keeping will be in mind Commission stated: such relevant factors as kind and gas purchased “As to the degree quantity sold, producers, Natural from the un- competition present area, parties’ der the amendments to these producer the extent which con- contracts contained the record in question tract other resembles reopened proceedings, But sales contracts in the area. for the initial volumes of is 13.9 case, showing convincing in this cents Mcf on a 150 B.t.u. ba- has been made that as result of including sis, dehydration However, charge. as detailed here- between Natural and tract inafter, with increase envisaged ducers, the results we through-put anticipated, there would opinion No. 288 will come about. very little difference between the compet- Nor are satisfied we that the cost to delivered at itive conditions in the Jack proposal Fritch own under its Wise Counties area are such under that of Lone Star. Accord- fixing justify upon 11 cents as the ingly, although record does not prevailing price.” *8 determining afford a basis for what are unable to We state that facts precise ‘just and reasonable’ rate developed hearings support at the not do gas is for the sold to Natural under findings the Commission’s and conclu- its producers, contracts with sions. view of all the circumstances in this Finally, insofar as this is con- court case we conclude cannot cerned, question would seem to have convenience and upon by passed been court Flori- quires only this certificate issue Advisory da Economic v. Council Fed- gas if the rate at which this is sold U.S.App. eral Power proposed price is less than the 251 F.2d D.C. certiorari 13.9 pro- cents. The matter of the 996, where, point denied 78 S.Ct. on the subject ducers’ rates is to our con- language involved, particularly used we tinuing supervision and control and appropriate here: appears therefor, if sufficient reason “Suppliers’ can be considered the basis of Rates. Petitioner developed factual appro- record in an claims the Commission should have priate proceeding hearing under the Act. held a rate to determine the through charged per day, spot purchases received lawfulness of the rates to be by long-term The gas suppliers. in- rather than contracts. But this proposed extention, quiry may to in a rate referred resolved be Extension,” ceeding proceeding was “the record as Oklahoma rather than in a per 240,000 capacity to m.c.f. have a for a certificate through day planned pass necessity, and was and the gas fields, highly productive in declin- Oklahoma did abuse its discretion large which, eventually, from volumes in the in- the matter to consider gas purchased. The imme were to proceeding. be The rates sub- stant continuing proposal, however, ject take diate was to Commission’s long- day 80,000 per and, jurisdiction, sufficient m.c.f. about whenever independent they contracts three appears, be term with taken reason up. Counties, producers City and Wise Jack Pitts- Petitioner cites replace burgh U.S.App.D.C. the un This Texas. F.P.C. [99 v. gas. spot dependable purchase requiring 237 F.2d as 741] rates consider these Commission to By (2) producers for au- the three applicable be- now. That case 80,000 thority sell Nat- m.c.f. to alleg- cause future correction ural. possible under the ed was not defects By (3) Company (Lone Lone Star Gas presented in that circumstances Star), competing authority to extend question Here, rates case. facilities Natural’s southern own corrected, may always need if be.” supplying purpose terminus though case We considered this have gas requirements. Natural’s additional standing claim serious- Petitioner —a point proposal was The Lone Star’s by respondent ly and inter- controverted by building that, of lesser extension expressed make views The above venors. buying capacity than Natural’s and pass unnecessary on this for us to Natural, lower at a point. 80,000 100,000 m.c.f. of could deliver petition for review day Fritch terminus Dismissed. pipeline Natural Natural’s at cost to compared cents m.c.f. Judge of 20.6 (dissent- BAZELON, Circuit cost of m.c.f. about cents ing). proposal. under Natural’s own review en- here under was order following proceedings tered Petitioner Oklahoma Natural Gas applications: (Oklahoma together Company Natural), By Pipeline Company Star, companies (1) Gas Lone certain with purchasing other (Natural) authority America in the Texas and Okla- operate tapped an extension of its homa fields to be the Oklahoma build City Extension, Chicago, in- southern terminus and the from its line through opposition Texas, applications Fritch, southwestern tervened in County, point independent produc- Oklahoma, in Wise of Natural to a taking gas Texas, opposition mainly purpose of Their for the ers. based *9 producers.1 allegedly independent excessive from certain on the initial contract proposal price based two called for under was on Natural’s contracts Natural’s producers. City Chicago ever-expanding (a) The demand the factors: with Chicago market, gas argued price ultimately far in ex this would for in its higher deliver,2 capacity (b) to reflected in consumer rates in cess its be argued part Chicago. undependability The other of that of its intervenors 80,000 higher gas supply, price substantially was some m.c.f. producer “independent” is one with Midwestern Gas Transmission Co. v. 1. An See corporate Commission, with an affiliation inter Federal U.S. out pipeline company. gas App.D.C.-, state 258 F.2d 660. prices prevailing quiring delivery field than the a mid- to at be made tapped by way point the extension areas to be on the Extension Oklahoma they raising prices Fritch, would rather at result in than Texas. gas they pay purchase in have to for (2) It eliminated the im- condition those areas. posed by the examiner that the contract Chicago prices City prevailing Oklahoma be field The reduced to the price. support Lone Natural intervened in application. Star’s (3) Since main Natural’s line from Chicago operating Fritch to sub- was I stantially only capacity full and could 1, 1956, February presiding On 80,000 purchased accommodate the m.c.f. deny- initial examiner issued an decision producers replacement from the as a for ing grant- application spot Lone Star’s purchase gas, producers, required those of Natural and Natural, aas condition to the only condition that the contract grant, but price on apply ninety days to within prevailing field authority be reduced expand capac- its main line Counties, Texas. Wise ity by 100,000 in Jack and m.c.f. considering While Commission applicants accepted The various exceptions parties grants the various as conditioned the Commis- decision, initial the examiner’s Natural timely applica- sion and Natural made a producers and the amended their con- authority expand tion for main by reducing tracts the initial capacity required by line as the Com- accelerating m.c.f., one cent but authority sought, mission. The how- maintaining provisions, escalation ever, “thus expansion by 185,000 was for an average price per the same Mef over per day, 100,000 m.c.f. rather than initially pro- life of the contract as was specified. m.c.f. The vided contract.” The 85,000 per day pre- extra sumably m.c.f. reopened then the record to these reflect consist, part, at least amendments directed purchased that evidence along in southern Oklahoma proposal also be received to Natural’s the route of the Oklahoma Extension. carry up 200,000 per day in m.c.f. arguments principal here, also the Oklahoma Extension. In the course before the relate to the reopened hearings, Lone Star price of the Natural is to receive supply made an offer to Natural producers. from the Some discussion of increasing scale, up on an necessary reaching before 200,000 per day by July m.c.f. specific issues in the case. accepted offer, only but application condition that its own II granted. customary prevailing practice On December in the Texas and Oklahoma fields Opinion issued its No. 299 and the ac- gather involved here is for the seller to companying order here under review. gas, liquids extract the from it and disposition The Commisdon’s of the case purchaser. then deliver it to the More- differed from initial decision in the although over, provide contracts following respects: adjustments downward for B.T.U.3 granted (1) applica- content less there is cus- producers, tomarily provision upward tions of Natural and the adjust- but Star, limiting also that of Lone lat- ments for B.T.U. content over 1000. however, ter, delivery to a producers originally a maximum Natural and the had *10 daily 100,000 negotiated load m.c.f. price and an aver- per for fifteen cents age 80,000 daily m.c.f., gathered load of gas and re- for to m.c.f. be delivered

3. British thermal units. 644 tailgates gasoline higher figures, price un- producers’ at the extraction, B.T.U. the the gathered gas 14.2 plants. contracts would be cents Before the or. per m.c.f., made, however, Supreme 15.15 than 13.9 were Court cents rather the n by Phillips cents as found the on held i Petroleum v. Co. State Wisconsin, 1954, 74 the 1050 B.T.U. 347 U.S. S.Ct. basis the assumed figure. examiner, presiding 98 L.Ed. The since selling jurisdiction adjustment producers had he eliminated B.T.U. over the gas provision, commerce. had to make a at wholesale in interstate no occasion finding In content what the examiner found to be an to what the B.T.U. as gas escape jurisdiction, al- effort to The would be. neg- though producers required provision, restored the take Natural finding. gas Its at do lected make its the well-head and its own own gathering, being assumption adoption price reduced to Natural’s mere figure compensate. per as fourteen cents m.c.f. to to what the B.T.U. would contrary addition, required pay not, was does in the face evidence Natural record, per dehydra finding toas one-fourth cent m.c.f. amount to a as figure. charge and, stands, As content the record there- B.T.U. ungathered gas required adjust fore, pay price over an higher Concluding price.4 ed amended contracts less high price prevailing per perhaps should exceed the 13.9 cents m.c.f. and as price, per field 15.15 the examiner ordered m.c.f. as cents lowering base but also Nor make did adjustment. upward price elimination of finding gathering the to the cost of as figure B.T.U. above “assumed” in the tracts) m.c.f. taking cent by T.U. charge. dehydration amendment of the contracts was found The the Commission to be 13.9 cents reduction basis,5 including employed price provided by This ungathered gas base and 0.65 cents for adding 1000. from the testimony the Commission was to it as is arrived at on a original 1050 B.T.U. of a cents post-hearing dehydration cent (a one B. m.c.f.6 ord discloses it is what cent between cost at 1.4 cents gas. A Star Since the issues comparison Natural of fields necessary witness But no Natural witness 15.3 cents and 17.55 cents which Natural actual with those at 2.4 as to those gathered of this cost ascertain in this cents. would m.c.f. prevailing 15.3 cent —17.55 was made as proposes to estimated that prices. Thus the case what be. would and a Lone relate range cost rec- tap, producer witness. One of the question: witnesses the. Two fields are predicted tapped initially would have Texas area to be B.T.U. content of 1073 and and the a Lone Star Extension southern Oklahoma through witness estimated ex- 1146. At at those area Oklahoma provided

4. The formula contracts is: _ _ ,. , , content . . . B.T.U. Adjusted x ^ase ™rice Priee=-100Ü- printed e., opinion and 16.3 cents 15.3 cents I. between 6. Commission’s basis; figure 15.6 between gives 1050 B.T.U. joint appendix B.T.U. 1073 B.T.U. 16.6 on a 528), cents and cents (J.A. from the record but “150” opinion, basis; reported 16.55 and 17.55 between cents generally from the typographical B.T.U. on a 1146 basis. cents be a seem to , F.P.C. error.

645 reopened many hearing, pass Natural and which the tension will the presiding tap Texas to the proposes to next. As examiner's determina- longer applicable. price, recites: tions decision are no the initial It unduly burden this order to highest is conceded that the “It attempt specify findings those currently being price paid for nat- which are still material and which gas contracts in the ural * * * supported by are substantial evi- Counties area Jack-Wise dence and those which are not. Ac- per Mcf.” 11^ cordingly, we shall set forth our area, the southern Oklahoma As to the own determinations modi- lieu presiding examiner noted in the initial fying adopting the examiner’s (1) had decision referring decision, however where Co., recently found in Cities Service Gas findings appropriate particular (1955), al., 3 affirmed sub 12 P.U.R.Sd Signal Oil & v. Federal nom. Gas Co. the examiner which still subsist.” 1956, Commission, Cir., F.2d 3 238 “determination” the Commis- 923, 771, 1957, 353 certiorari denied U.S. respect prevail- sion made with to the 1 77 L.Ed.2d “that S.Ct. ing price in the Texas field was the fol- being paid more than Mcf was lowing 10^5 : ** any gas purchased *,” for finding “Nor are we satisfied (2) supported that this was also competitive by conditions Jack record. and Wise Counties area such as overrule or The Commission does not justify fixing upon 11 cents as findings. challenge even examiner’s prevailing price.” says: merely It arriving “In determinations 11 Since cents was conceded to be the follow, highest we have considered price paid7 and there since un- proceedings, entire record these controverted evidence in the record that including presiding examiner’s gas competition there is pur- “keen” for comprehensive on the decision initial area,8 chases in the hearing. However, of vari- because not, contrary pointing could changes parties’ proposals ous record,9 evidence find otherwise. January 1957, Opin- court, after the date of in this but the brief contains no price paid by ion No. support Lone Star record If references. for in the Texas field to 12 escalated cents 30,- assertion lurks somewhere in this page m. f. record, c. But in its I have not found it and opinion order, parties dealt with the then- none of the has called it to onr existing of 11 cents m. f. e. attention. Nor was 1 cent escalation even re- says that, 9. The Commission to be the subsequent deny- ferred to order “prevailing” price, cent must ing rehearing. comparative pur- For apply quantity to the same kind and poses, therefore, proper it seems ques- as the contract here price. is, use we also the 11 cent gas-well tion. The here involved is perhaps, noting producers’ worth gas, casing-head gas (a by- rather provide contracts also for product petroleum refining), and these future escalations. But see 154.- large gas. contracts call for volumes of 94(a), (c) Regu- of the Commission’s that, though The examiner found much lations, .154.94(a), (c). C.F.R. sold in Jack and Wise Coun- Despite casing-head gas, uncontradieted evidence of ties is considerable vol- competition gas-well gas in the Texas field umes of are also sold at (J.A. 80-32), majority figure. asserts that, He cent also found though many purchase Lone Star been able to “enforce” a contracts low-price policy. No such gas, are for small volumes some are presiding very made running either examiner up substantial volumes 12,000 per day. the Commission. The assertion c.m. f. There is evi- apparently dence, moreover, Star, based similar asser- that Lone in its producers pays purchases, made in their brief cent *12 646 finding not, therefore, contract. the Commis- could not on the base a

I do read although Moreover, had expression as that contract dissatisfaction sion’s field prevailing been made months before some seven determination that price Serv- Counties was Commission’s decision Cities in Jack and Wise ice, supra, found per there II cents m.c.f. prevailing price cents. to be ten field field, respect Oklahoma With to the And if it be said that the Commission suggests indirectly when not have known of the contract finding case instant examiner’s certainly Service, it it decided Cities finding in own the Cities Service April re- on when knew of it case, prevailing price supra, is that the Petroleum affirmed in Pan American Corp., higher are per m.c.f. no 10 cents al., Opinion mimeo- No. being gas is erroneous. finds graphed opinion 13-14, pp. its Cities higher price than sold' in that field at finding prevailing field Service that the per This is based 10 cents m.c.f. price in field the southern Oklahoma showing upon by con- that one Natural 10 cents.10 April 19, on tract was made at a sale Oklahoma field up, To sum these the facts about higher question price. The contract price: exam- The was not offered iner, therefore, evidence. prevailing price of 1. The correctly to refused Texas field m.c.f. is cents was submitted sider the contract when it prevailing hearing to an attachment after the as is southern Oklahoma field 10 cents producers. He also brief rejected one of the m.c.f. support the as record argument by producers made Oklahoma 3. The at which the pur- gas Natural, “one-shot” contract was a to sell trans- contracted by utility could an electric chase lated to the same terms at which the foregoing on field have had no effect 10 cent field cent and repeated. He apply, prices because it would not and 17.55 between 15.3 found: m.c.f. cents nothing record as to “The shows Ill buyer oper- or its the nature of the ations, present or future. With preliminary question to An additional scanty information, no useful such our be considered before we address by attempt- purpose be served attack on selves Oklahoma Natural’s possible speculate order the contention the Commission’s contract effect of that Oklahoma Natu intervenors general price in southern Okla- level aggrieved” “party within the ral not a homa.” meaning 19(b) of the Natural Gas Act, 717r(b), therefore overrule U.S.C.A. did standing petit this maintain examiner and contract made order doing so, part Without ion.11 record. My brethren, though finding large it unneces- small volumes alike. None of sary pass question, findings on note this are contradicted these standing Natural’s claim to Oklahoma Commission. “seriously controverted has been majority cent asserts that 10. The spondent and intervenors.” At least with agree- fixed “an in Oklahoma is regard respondent, this observation between Lone Star and Okla- ment” to be in error. The statement would seem far I So have been homa Natural. respondent’s questions presented in find, assertion, ma- like the able jority’s reference to the stand- brief makes no respect assertion ing question. price (supra 8), note is based Texas allegation unsupported altogether producers’ brief. *13 deed, rec imposed in There is abundant evidence before the initial decision argues price already show, condition, ord to as Oklahoma Natural Natural had found, gas presiding large pro- and as examiner contracted with one purchases con ducer in its southern Oklahoma that Natural’s under at substan- tially producers prevailing price13 start above the tracts with field stages nego- upward price spiral and in the southern was in the advanced of field Natural tiation Oklahoma where Oklahoma with others. is obvious that buys gas, detri to the with its latter’s direct Commission of certification producer ment detriment Oklahoma Extension and to the ultimate and price it no evi sales at a consumers serves. There between 15.3 and is cents contrary.12 Yet the 17.55 ready dence to show the cents m.c.f. Natural willing prospect pay Commission concludes “the ad- that similar changes price price producers vanced Oklahoma Natural Oklahoma along consequence price proposed extension, in route lat- gas producer keep is ter will their contracts for Nat- Natural’s available long-term paramount ural too remote be a rather that make matter concern in tracts with Oklahoma this case.” Natural at prevailing price. much lower field It is validity of We need not consider the say no answer to that Natural Oklahoma this Commission’s conclusion in aggrieved will not be until the Commis- gard, because, apart whether from sion sales produc- certifies Oklahoma price spiral not an result Oklahoma will withholding present ers to Natural. The purchases, from Natural’s Texas it from the market of which Oklahoma beyond question the certification that buy present could otherwise constitutes aggrieve project Natural’s will Oklahoma aggrievement and it is “direct imme- by removing from available injury” flowing diate from the The the market. that found Pittsburgh City of certification. v. Fed- begin- purchases “only the Texas are Commission, 1956, eral Power 99 U.S. ning phase program in Natural’s to se- App.D.C. F.2d gas” supplies cure needed and that conclude, therefore, I that Oklahoma “Natural intends for addi- to contract standing Natural has under the Natural gas” “highly volumes of in tional petition I Gas to maintain Act productive areas in southern Okla- question reach now the whether the Com- homa” In- traversed its extension. mission’s order stand. expert witnesses on Numerous testified tho contract the refutation. The parties. Many rely various behalf of the Commission cannot on now the con- opinions price giving their that them stated tract without Oklahoma Natural along Ex- evidentiary route of the Oklahoma all refute chance to its effect. sharply would rise as a tension result to the second matter relied As on purchases I have of Natural’s Texas. the record shows a one testimony contrary price found no cent between differential Lone purchases. refers to none in its Texas Star’s Oklahoma points opinion. 11 cent Because an Texas does support things up push price, conclu- two a 10 cent Oklahoma it First, the one sion: contract made does not follow that a 15.3 cent or 17.55 April 19, 1955, on a rate Oklahoma will cent Texas have no effect higher (see Moreover, 10 cent m. than c. f. Oklahoma. if the two fields supra, p. 22) spiral; economically today started are so unrelated second, pays maintained, that Lone Star less differential can be they Oklahoma As Texas. does not follow that will remain un- matter, shown, they joined by pipe- as I have to tho first related after are argue tapping Natural wished to be- Oklahoma line the reserves both fields. type fore the examiner was the imposition that has no of contract effect 13. After tho rate condi- prevented doing market, appears tion, from but that contract have been rejected the examiner so because both terminated. nothing or certificate IV of the Natural Act visions Gas ground upon principal we responsibility the Fed- makes it urged certification to set aside the attempt to> eral Power Commission to project Extension Oklahoma price a judgment exercise” the pipeline of what any de- to make failed pay instance first should justness rea- termination *14 field in which it takes from a tois the sonableness of gas. purchased previously “That has not the independent producers for pay the says responsibility,” the The the extension. to be carried in Further, applicants.” the “is the position its in Commission’s stated grant argues, the Commission its opinion as follows: con- leave the certificates does not here “ ** * although Accordingly, price unprotected be- sumer interest afford basis the record does not provides: cause the order determining precise what grant “The of the certificates ‘just for the l’ate is reasonable’ shall be construed as a herein con- sold to Natural under its requirements waiver of Sec- producers, in view tracts with the Act, or of tion 4 of the Natural Gas in this case all circumstances 154 of the Commission’s 'Section we cannot conclude Regulations thereunder Rules necessity requires requiring filing of rate schedules only if that this issue certificate authorized, for the service herein is less rate which this sold ** * any prejudice find- and is without proposed price. than the ings or orders been or which have .producers’ rates The matter of the may by the Com- hereafter be made continuing subject super- our proceeding pend- any mission now sufficient vision and control and if ing by or or hereafter instituted therefor, appears reason can against applicants. Further, a factual rec- sidered on basis of proceeding the action taken in this developed appropriate pro- ord in an any prejudice shall not foreclose nor ceeding under the Act.” proceedings objection re- future rehearing denying In its order the Com- lating any operation to the mission further stated: gas pur- provision or related “ * * * respect to the con- With chase herein involved.” contracts producers’ tention that rates arguments of these re- assessment ‘just have not been shown to be regu- quires an examination reasonable,’ requirement said to be provisions lation the Natural Act. Gas 7(e) Act, imposed of the Section an examination shows Such first comment, it suffices to without en- filing requirement the rate § tering any lengthy into discussion of protect Act does not the consumers’ question, that as we stated every 4(c), interests. Under § * * *, ‘A [Cities Service] gas company natural must file with the ceeding of this nature can not and is Commission charges. schedules its rates and place to take the not intended of a provides 4(d) “no Section proceeding under Section or 5 of change by any natural-gas shall be made ” the Act.’ company any such rate” fil- here, brief filed its with the Commission “new sched- suggests14 By 4(e) “any functions with ules.” when such new gard performed only filed,” rates are to be schedule is the proceedings hearing concerning or 5 §§ hold the lawfulness argues and, pending Act. hearing, Natural Gas It that “there of the rate explicit point argument.

14. Natural’s brief makes an of this * * 5(a) proceeding under § “A operation new may suspend the long delay in and, entail long if is certain to months five rate for as decision, there final terms of expires increased suspension damage undoing way done comple- before effective rate becomes period.” public in the interim may require com- to the hearing, tion pany at 15. P.U.R.3d refund a bond to furnish unjustified. ultimately found Thus, amounts unless the consumer protection afforded duty protect power provisions of suspension refund rates interest reasonable noted, applies to situa- 4(e), proceeding, it is 7(e) the § certification company new rate files a essentially unpro- tions where remain interest must existing changing rate. schedule And, interest remains if that tected. filing initial apply of an very does unprotected, to be would seem there *15 here. involved regulation rate such as is any purpose little gas industry.15 Supreme sure, improper rate natural initial an To be case, Phillips 5(a) may Act 347 U.S. Court said under § attacked be page page 800: at provides: 74 S.Ct. which against ex- “Protection of consumers Commission, after “Whenever natural-gas ploitation at hands of hearing upon motion had own companies primary aim of the State, complaint any mu- or Natural Gas Act.” commission, nicipality, or State 7(e) distributing company, provides: find that shall Section of the Act “ * * * charge, rate, any or classification a certificate shall be is- observed, charged, demanded, or col- any qualified applicant sued to natural-gas company by any lected therefor, authorizing the or whole any transporta- connection any part operation, sale, serv- subject gas, of natural tion or sale ice, construction, extension, or ac- jurisdiction Commis- to the quisition application, covered regulations, rule, sion, any or that applicant if it is found that the is affecting practice, or contract willing properly able and to do the charge, rate, un- or classification perform acts the service unduly unreasonable, just, discrimi- posed provi- and to to the conform natory, preferential, the Commis- or require- sions the Act and the just and sion shall determine ments, rules, regulations rate, charge, classifica- reasonable thereunder, and that rule, regulation, tion, practice, or proposed service, sale, operation, thereafter observed to be contract construction, extension, acquisi- or force, fix the and shall same tion, to the extent authorized ** *.” order certificate, required by is or will be present public notoriously or 5(a) proceedings conven- But future § necessity; long ience and provision complicated otherwise such and no application temporary suspension shall be denied. for even made power Commission shall have the amounts received rates or for refund of may attach to the issuance portions ul- the certifi- of rates as under such timately rights cate and to the exercise of As found to be unlawful. be granted thereunder such reasonable said in the Cities Serv- terms and ease, supra: conditions as the ice making important “Pricing sist it sound and function effective.” is the most Oonnole, regula- regulation. General Considerations: Indeed all other A Na- Pains, tory processes one, tion’s Natural-Gas lead to this are sub- Geo.L.J. (1956). may judged it, be ac- ordinate they cording degree to which as- Report convenience and sion. In its 1949 Annual to Con- quire. [Emphasis supplied.]” gress, p. example, 114: it said at “provisions Act,” proposals One' of “The rate in connection applicant pipe be able must found with the lines and services new willing perform, carefully analyzed all rates is that must ascer- be “just 4(a). statutory require- be and reasonable.” tain whether Moreover, the itself has said ments of nondis- reasonableness and justness that the reasonableness crimination are met.” the rate in a show is a “vital element” Report, p. In its 1951 it said at 109: proposed “that the or will service “To assure that reasonable required by be or future nondiscriminatory are estab- rates necessity.” convenienceand Cities lished for all new services author- case, And Service P.U.R.3d at 14. proceedings ized in certificate Congress enacting 7(e) intent determine the effect of new con- give oppor Was to “the presently struction effective ** * tunity to the char scrutinize rates, applica- each new certificate con acteristics of the rate structure in tion filed with the Commission must nection construction with the carefully analyzed be from a vital time when such extension at a viewpoint.” readily matters can public modified as the *16 p. Report And at 127 of it may interest demand.”16 certify stated: therefore, not, Commission could producers’ Natural’s extension the issuing Commission, “The in cer- being by required public as the sales pipelines tificates for new and exten- necessity convenience without some existing pipelines sions of into new pro in the determination areas, certification market must the review just ceeding that the contract rate was posed (1) rates to ascertain whether and reasonable. project economically feasible, the (2) in those That the rate feature of a cases where the subject jurisdiction in a rates are natural service is vital element Commission, the service should of the tory whether whether statu- the- question (cid:127) by public requirements required reasonable- be certified necessity proposi- is a ness and nondiscrimination are convenience recognized by met.”17 the Commis- tion often Cong., adequate H.R.Rep. 1290, and maintain 77th 1st service at No. ratea by Sess., prevailing (1941); in lower than cited the court those in 2-3 the ter- ritory Oil, page served, being Signal at 774. See to be 238 F.2d the inten- S.Rep. Congress effect, 948, also, tion of that to the same Cong., No. natural shall Sess., (1942). sold in 2d be interstate commerce for 77th change public presently significant consumption in sale for domestic, ultimate for .The commercial, industrial, Act effected the Act of Natural Gas 49, possible February 7, 1942, 83, use at 56 Stat. other the lowest c. reason- able rate 7 of Act of June consistent with the which amended maintenance adequate 556; 7, 824, by public service c. Stat. inter- (c) striking thereof est.” out subsection substituting (c) subsections 17. We note from the record in an- grant through (g), Commis- was to other certification case which we have impose power conditions. sion the recently reviewed, Midwestern Gas original (c), subsection Even under Transmission Co. v. Federal power however, the Commission’s supra note that the Com- beyond ques- duty "rates were consider .to mission, overruling presiding exam- provided: That subsection tion. requirement complete iner’s under- applications passing for certifi- on “In presented lying rate data be in connec- necessity, convenience and. cates preliminary proceeding with a to de- give shall considera- due Commission requirements, market termine said: applicant’s ability to render tion to eventually information “This must be persuade Supreme the Com- What it takes to Court’s until the was certify with- mission that it should not Phillips on June decision pipe indicated out a rate determination is producers’ independent rates Service, supra, “subject de- its decision Cities be lines were considered day cided the same as Tamborello. jurisdiction of the Commission.” application Phillips an Cities Service involved effect The immediate 12 cents certificate sell Commission’s immense increase following Phillips southern Okla- m.c.f. from the same year workload. pre- here, times where the five homa area involved received vailing field m.c.f. 10 cents many applications as in certificate preceding The Commission years decision.18 said: twelve injury producer Moreover, independent “In the face admitted certifi problems many parties proceeding, presented applications in this cate substantially we rate struc from there are convinced different those prevailed area ture which has this dealt with tofore certifying pipelines.19 some time should not be disturb showing policy post adopted ed without a more substan has therefore poning justness appears record that tial than determination on change necessary producers’ rates to reasonableness pro if, the level to which the rates proceeding subsequent rate changed posed is itself presented to be basis the evidence prop proceeding, appears and reasonable. We find that certification applicants Tamborello, herein have certificate er 11 P. to do so. Re See - that a (1955). failed to But demonstrate U.R.3d deciding Mcf is neces de level 12 cents purpose the rate whether sary or that may safely postponed, the interest termination presentation requires *17 requires which issuance of proceeding “the of basic the certification charged.” a certificate dictates a as to the rates to be facts necessary 12 to en of evidence rate of cents is Ibid. “If on the basis such feasibility sure appears ex the economic of to the commission that project.” justness reason P.U.R.3d at [12 16.] amination into the may parity specific rate inde While with field ableness of a of an pro pendent producer alone be sufficient for determination in a certificate a justness ceeding required, ample of and reasonableness there is of rate,20 authority appropriate disparity the statute for substantial with field sufficiently proceeding.” price inquiry is a be made in that reliable index of td unjustness and unreasonableness Ibid. April 4, 1958, presented in issued connection with the final in Pan American Corp., Petroleum determination of et al. and overall what necessity 20. City of Detroit Federal U.S.App.D.C.-, v. Power Com quires.” 258 F.2d 108 1955, mission, U.S.App.D.C. 260, 97 230 060. 810, F.2d certiorari denied Panhandle Report of Federal 18. Power Annual Pipe City Detroit, Eastern 1956, Line Co. v. 1955, p. 87. Commission 829, 34, 352 U.S. 77 S.Ct. 1 D.Ed.2d 413, however, Tamborello, See, 11 48. Pan American supra 19. Re P.U.R.3d Petro See question Corp., (1955). al., 19, basic is the leum et 417 A note where apply pro- containing one which should to on a record extent very showing production, little rates return-on-rate-baso cost of ducers’ rate-fixing reasonable, which has been held proceeding, in a method developed 4§ rate regulation a rate 25 enter- below cent involving large prevailing price. prises com- field investment But cf. Union Oil supra California, pared Connole, al., revenue. See Co. of et with F.P.C. 100 problems, (1956); Corp. 15, For at 560-61. other Bel Oil note v. Federal Opinion Commission, Cir., the Commission’s No. 255 F.2d seo preclude services, post-Phillips rute to certification without a for new first in its Indeed, Report rate its ad- determination. Annual watered the Commission pro- suspension say merely ministration of rate the statement down to 4(e) giving Act, vision of practice the Commis- it “has followed the * * * guide “principal proposed sion’s in de- rates. consideration to the termining * * suspend whether or not to Report (1955) 135. *.” Annual comparison been of the year, And fur- the next proposed price prices in the with field say ther watered down its statement Corp., area.” Pan American Petroleum prac- generally that it “has followed the al., Opinion April issued No. pro- giving tice of consideration * * mimeographed opinion, p. If *23 posed rates 2 cents over the an index field rate was magnitude administrative of the unjustness and unreasonableness in generated justify by Phillips may task case, the Cities Service it is difficult greatly request en- for a see how 4.3 cents 6.55 cents over larged appropriation. staff and field cent Jack Wise some, even, call for new in the view of disregarded Counties in- can be give legislation. however, not, It does stant case. change any warrant changes Congress the statute.24 Unless here The Commission was confronted recognized law, as the Commission project involving purchases of with a Service, is no “there basis Cities above cent at from 39 cent to distinguish commission’s Having failed, prevailing price. field power of a with issuance reference to strong serious the face of ‘independent producer,’ to an certificate proposed un- tentions that power here, exercise Act,21 4(a) make of the lawful under § pipeline reference to ‘interstate justness determination ** ap- company’ act The same *. rate, the Commis- reasonableness plies 12 P.U.R.3d at 11. to both.” argues required is not sion now proceeding. in a Therefore, to do so certification ad- however difficult the above, Annual in its may be, shown problem As I have Reports the Com- ministrative decision, prior Phillips analyze must mission review recognized require- rate as vital element ducers’ proposals in it examine rate ment that of whether determination *18 by The proceedings.22 required difficul- project certification is the extension examining necessity. fea- rate public in the And ties entailed convenience and applica- producer if, ap- of the swarm basis of there analysis, tures of on the its apparently Phillips brought by pears question as to the tions a substantial place rate, may a new proposed it lawfulness of the induced certify required by Act. project Natural Gas the interpretation on not as the recognized six its public in un- the convenience and it had Whereas that, is, the Reports question. under resolves It less it that of Annual previous Act, proposed course, rates within the discre- review” Commission’s “must it proceeding certificates applications postpone for a rate tion to in involved Advisory —, Supra, U.S.App.D.C. Coun 257 Economic 22. 103 F.2d Florida 21. Cf. 1957, Commission, (1950) 650; Report also Annual Power see Federal v. cil 643, 152, 115-16; 110; (1952), (1953), in F.2d U.S.App.D.C. 251 112. id. id. 102 position the Commission’s it Report 88; (1956) also Annual see 23. just required consider not that (1957) 89. id. suppliers’ reasonableness ness Mississippi Corp. any River Fuel See v. claim absence “in rates Commission, Cir., *** Power 202 3 Federal unreason either rates 899, 902-903, respect certiorari dismissed any unlaw F.2d other high ably inor " 988, 1138, 1953, « Respondent’s # L. * 345 U.S. 73 S.Ct. 97 13833, No. ful Ed. brief, p. 24.

653 Commission, determining v. Federal Power the Council complicated task of the justness 152, 155, 1957, U.S.App.D.C. 251 pro- 102 of the reasonableness 78 conditioning S.Ct. F.2d denied rate, certificate certiorari by posed 7 996, majority2 said: filing That in which the rate. of a lower Cities Service was followed course “Petitioner claims the Commis- and, respect other to rates hearing with rate should have held a sion many cases.25 producer rates, other the lawfulness to determine the Commis- course And is the charged gas sup- by rates to be “ necessary” to follow it is sion has said inquiry may pliers. re- be But this be arrived at proper rate cannot a when proceeding rather solved rate a pro- agreement in the certification proceeding a than in for a certificate 110; ceeding. Report (1952) Re Annual necessity, convenience and Tamborello, The at 416. 11 P.U.R.3d and the not abuse Commission did imposition rate a condition declining its discretion in public, protect also but pro- sider the instant matter proponents the rate. ceeding. [Citing Panhandle East- against non- protected would be Pipe ern Line v. Co. Federal damage rate a inherent refundable Commission, 297, U.S.App.D.C. pro- ultimately in a 5§ held excessive F.2d certiorari denied ceeding. imposed rate If the 335 U.S. 94 L.Ed. S.Ct. thought low, the too be condition is 402.]” protect proponents themselves can pur- not clear court whether the contracting higher rate26 ported (1) merely hold Com- utilizing relatively speedy corrective required mission was not conduct machinery 4 of the Act. § hearing proceeding a certification a rate imposing rate alternative to type it conducts under take certification condition Act; (2) Commission is proceeding re- whatever evidence be required never to make determina- pro- quired support that the justness tion of the and reasonableness posed rate is reasonable. suppliers’ of ceeding, rates in a certification aspect the rate Whether certifica- legality even when the searching proceeding tion need be substantially ques- rates is hearing may depend upon tion, question if even can particular the circumstances case hearing. solved and need not be decided now. holding first was the If the only that, I would hold when substan- foregoing alternatives, de- Florida question justness tial exists as posi- cision is inconsistent reasonableness of rates involved in here, for I have not I would take application, a certificate suggested Commission’s deter- impose if it does not a rate condition and *19 justness reasonable- mination of satisfy it if does not the evidence depend upon a full- ness of rates need proposed itself rates are hearing. rate scale reasonable, certify proj- cannot prop- the second alternative is the If being required by public ect as language, interpretation of the court’s er necessity. venience and followed, not be I it need because think V dictum, followed, and should not be it is my wrong. I do not consider view is fore it is It is dictum because be- Advisory closed Florida Economic the case before the court one was cause See, example, Report granted 1958, 25. 938, Annual 355 U.S. certiorari 78 (1953) 112; (1954) 430, id. 128. 2 L.Ed.2d 420. S.Ct. Memphis Light, procedural 26. Cf. &Gas Water Di dissented in that ease 27. I Commission, issues, reaching ques- vision v. Federal rate without U.S.App.D.C, majority. F.2d considered tions - project’s cost, proposed not which the rates were mine the de- rather than high unreasonably pend illusory, claimed be “either on it. It is not at all there- respect fore, or in It pipe- other unlawful.”28 to ascertain what wrong authorizing completely pay it divorces line is before justness costly rates it to reasonableness construct for trans- facilities porting requirements public from the conven- also to market. Note necessity apparently per- ience and that the in Panhandle East- ern, certify project operation mits the Commission to did not authorize the considering project without even the rate ele- without consideration justness and ment. reasonableness of the rates. postponed a rate determination until case, upon The Panhandle Eastern construction, postponed after but it also majority which the in Florida relied operation until had reasonable rates been Advisory Council, gives Economic no effect, imposed filed. In a rate condi- support proposition for the tion, leaving specific amount to be de- may certify project Commission quired by termined after construction costs were public convenience ascertained. regard validity without proposals language of the rate in it. Our inherent Eastern- in Panhandle finding require” Panhandle Eastern cer- that “the Act does not pipeline project satisfactory tified a on two condi- “a rate schedule” does company mean, context,29 tions: approval that the not obtain S.E.C. when read in proposed plan of its of financ- the Commission need not consider ing going company, posed and that the before rates as an element of both eco- operation, feasability into public file a schedule “ade- nomic quate charges necessity, and reasonable rates and in case where the lawful- proposed consistent with the interest.” We ness of the rates is substantial- upheld certificate, saying, ly though question. Thus, with re- we also spect question: to the rate Act requires “The said the Act no toas chang- require, ability, obviously does not financial because we did illusory require, costs certify it would be think that the Commission project considering that rates be fixed begins.” appli- before construction U.S.App.D.C. page ability carry at cant’s financial out. page ques- reading language F.2d 883. A The rates in fair of our in' Pan- tion in expressly Panhandle Eastern handle requires were those Eastern is that the Act charge findings pipeline proposed which the certain the- —that applicant Upon willing perform able and customers. those rates the cost pipeline and that construction of the convenience and ne- cessity bearing. require have an obvious It would service— illusory therefore that as to matters indeed be for the Com- which are com- ponents findings, require separate company of the two spec- mission ify findings specific made, long its rates need be so before construction Suppliers’ they reasonably proven even certified. rates are altogether They rates, different matter. deter- record. Lawfulness no less Supra supported by findings proof note 21. ability satisfactory or a financial require said: We schedule. The Act does not *20 Michigan- findings. Commission found “The find, The Commission did willing properly evidence, Wisconsin is ‘able and Michigan- the sufficient perform the acts and to do the service Wisconsin ‘has secured substantial res proposed.’ finding, This like that of erves of natural has submitted necessity, proof convenience and is ex reasonable of the financial and eco-‘ ” pressly required by 7(e) feasibility project.’ of the Act. of its nomic supported t U.S.App.D.C. We-think is. page 299, 169 also substantial F.2d a e says, denc evi Panhandle' 883. page component PER CURIAM. capacity, ais financial required statu- expressly appellant’s of both of the appeal convic- This fromis may not findings. tory D.C.Code, The Commission 22-2204 for violation findings statutory make (1951), a vehicle. unauthorized use necessary com- sidering their affecting each of find substantial We no error question ponents substantial rights. as which exists. Affirmed. the order I would set aside Com- case and remand the

view proceedings. further mission for

CLARK, Appellant,

Samuel W.

v. PAYNE, al., as Members of Alan W. Beverage Control Board the Alcoholic EVANS, Appellant,

Wilbert G. Columbia, Harry for the District of Friedman, Appellees. v. America, No. 14286. UNITED STATES Appellee. Appeals United States Court 14277. No. of Columbia District Circuit. Appeals Court of

United States Argued May 1958. Columbia Circuit. District of 12, 1958. June Decided May 7, Argued Rehearing Petition for In Banc Denied 22, 1958. May Decided Sept. U.S.App.D.C. 122, also F. See Clark, appellant pro Mr. W. se. Samuel 2d 379. Pair, Corp. B. Asst. Mr. Hubert Coun- Doherty (appointed H. Mr. Cornelius Columbia, for sel District of with court), Washington, C., D. for Gray, Corp. Chester whom Messrs. H. appellant. Counsel, Korman, Principal D. Milton Harry Alexander, Mr. T. Asst. U. S. Counsel, Corp. Asst. and William W. Washington, C., Atty., D. with whom Corp. Pavis, Counsel, were Asst. on the Gasch, Atty., U. Oliver S. Carl Messrs. brief, appellees Payne, and others as Asman, Jr., and Robert Belcher J. W. Beverage members of the Alcoholic Con- Attys., Washington, C., U. S. D. Asst. Board trol for the District Columbia. appellee. on the brief for were Schwartz, Washington, Mr. Morris D. Carroll, Messrs. Lewis Asst. U. S. C., Philip D. whom Messrs. P. Atty., Stirling, Tillman and E. Asst. U. Marenberg Becker, and Martin S. Wash Atty. filed, at the time record was S. ington, C., brief, ap were D. on Washington, C., appear- D. also entered pellee Friedman. appellee. ances Fahy K. Miller, Before Prettyman, Wilbur Before K. Mil Wilbur Judges. Judges. Bastian, Circuit Circuit Burger, ler