Fpc v. Moss, 424 U.S. 494 (1976)

Federal Power Commission v. Moss

No. 74-883

Argued December 3, 1975
Decided March 3, 1976
424 U.S. 494

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

The Federal Power Commission (FPC), for the purpose of "stimulat[ing] and accelerat[ing] domestic exploration and development of natural gas reserves," by order established an "optional procedure for certificating new producer sales of natural gas." Under the order, producers may tender for FPC approval contracts for the sale of new natural gas at rates exceeding the maximum authorized by the applicable rate order; the FPC will determine in a single proceeding whether the "public convenience and necessity" under § 7(c) of the Natural Gas Act (Act) warrants the issuance of a certificate authorizing the sale and whether the contract rates are "just and reasonable" under § 4(a); and a permanent certificate issued by the FPC and accepted by the producer is not subject to change in later proceedings under § 4, and the rates may be collected without risk of refund obligations. At the time it issues the certificate, the FPC may also authorize the producer to abandon the sale at the end of the contract term if such abandonment is warranted by the "public convenience or necessity" under § 7(b), and the producer, when the contract expires, is then free to discontinue deliveries to the original purchaser without having to demonstrate again that abandonment comports with the public convenience or necessity. Petitions for review were filed attacking the entire optional procedure, but the Court of Appeals upheld the order except for the pre-granted abandonment authority, which the court held contravened § 7(b) of the Act. Under that provision, no natural gas company shall abandon its facilities or service subject to the FPC’s jurisdiction without FPC approval, based upon a finding by the FPC that "the present or future public convenience or necessity permit such abandonment."

Held: An optional procedure encompassing pre-granted abandonment authority intended to draw new gas supplies to the interstate market is clearly within the FPC’s authority under § 7(b) to permit abandonments justified by present or future public convenience or necessity, the timing of the abandonment approval being within the FPC’s discretion. The order, which does not authorize specific abandonments, merely establishes an optional procedure under which pre-granted abandonments, subject to judicial review, may be granted in appropriate cases, and the question whether particular abandonment authorizations are beyond the FPC’s expertise should await resolution in concrete cases. In both the case of the limited-time certificate (which the Court of Appeals, by an erroneous construction of Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137, thought was barred by the Act) and the case of the permanent certificate with pre-granted abandonment, the FPC properly can determine at the time of certification that he present or future public convenience or necessity justifies the issuance of the certificate allowing discontinuance of service at a future date without need for further proceedings. Pp. 499-504.

164 U.S.App.D.C. 1, 502 F.2d 461, reversed in part and remanded.

BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, BLACKMUN, and REHNQUIST, JJ., joined. BURGER, C.J., filed an opinion concurring in the judgment, post, p. 505. STEWART, POWELL, and STEVENS, JJ., took no part in the consideration or decision of the case.