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03/09/61 Minneapolis Gas Company, v. Federal Power Commission

March 9, 1961

MINNEAPOLIS GAS COMPANY, PETITIONER

v.

FEDERAL POWER COMMISSION, RESPONDENT, SHAMROCK OIL AND GAS CORPORATION, INTERVENOR.



Before PRETTYMAN, WASHINGTON and DANAHER, Circuit Judges.

UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT. 1961.CDC.25

March 9, 1961.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE PRETTYMAN

PRETTYMAN, Circuit Judge.

This is a petition to review orders of the Federal Power Commission. *fn1

The Shamrock Oil and Gas Corporation (which we shall call "Shamrock") was an independent producer of natural gas. It had had contracts for some years with an interstate pipeline company. The contract rates were 8 cents and 9 cents per Mcf. The contracts provided for one increase of one cent per Mcf during the twenty-year terms of the agreements. Minneapolis Gas Company, our petitioner, is a local distributor which purchases its supply of gas from the interstate pipeline company, party to these contracts. Shamrock filed with the Commission new schedules of its rates, proposing the increases. The Commission issued an order by which it entered upon a hearing concerning the lawfulness of the proposed rates. By the same order it suspended the new schedules pending the hearing and decision thereon. The hearing proceeded before an Examiner. Shamrock presented three witnesses and seventeen exhibits. The Examiner inquired, "Does that now complete the direct case by Shamrock?", and counsel for Shamrock replied, "Yes, that concludes our direct." Counsel for the Commission moved to dismiss the proceedings, on the grounds that the data presented did not discharge the statutory burden upon the applicant and the evidence furnished no basis for a determination as to the justness and reasonableness of the proposed new rates. The Examiner inquired whether any counsel in the proceeding desired to cross-examine Shamrock's witnesses or to offer any evidence of their own. All counsel answered both questions in the negative. Thereupon the Examiner fixed dates for the filing of briefs and declared the hearing concluded. In due course the Examiner issued a decision, in which he concluded that Shamrock had failed to sustain its burden of proof, and he granted the motion to dismiss the applications. Exceptions to the decision were made. The Commission entered an order, in the preliminary parts of which it recited, inter alia:

". . . we believe it is neither necessary nor appropriate nor in the public interest for us to inquire further into the justness and reasonableness of the rates here involved for we are of the opinion that the rates fall within the zone of reasonableness and that the proceedings should be terminated leaving the proposed rates in effect."

And it recited:

"Taking into consideration all of these factors, the low price of this gas in relation to other prices in the area, the small increase requested, the fact that it is the only increase provided for in the contract during its 20-year term, the evidence of increased costs to Shamrock since the contract was executed and the need for still further investments in the future we are of the opinion that the rates of Shamrock are just and reasonable to the consuming public, and that further proceedings are unnecessary."

The Commission found:

"It is necessary and appropriate to carry out the provisions of the Natural Gas Act to terminate the above-entitled proceedings, to deny the motion for oral argument and to deny the alternative request to reopen the proceedings."

Thereupon the Commission terminated the proceedings.

The Natural Gas Act makes available to the Commission two distinct courses of action in respect to rates. These are in Sections 4(e) and 5(a) of the Act. *fn2 The former relates to new rates. Thirty days' notice of such rates must be given by the company to the Commission. *fn3 This section (4(e)) provides, so far as here pertinent:

"Whenever any such new schedule is filed the Commission shall have authority . . . to enter upon a hearing concerning the lawfulness of such rate . . .; and, pending such hearing and the decision thereon, the Commission . . . may suspend the operation of such schedule . . ., but not for a longer period than five months beyond the time when it would otherwise go into effect . . .. If the proceeding has not been concluded and an order made at the expiration of the suspension period, . . . the proposed change of rate . . . shall go into effect. Where increased rates or charges are thus made ...


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