United States Court of Appeals, District of Columbia Circuit
November 14, 2017
Petition for Review of Orders of the Federal Energy
Jeffrey K. Janicke argued the cause for petitioner. With him
on the briefs were James R. Choukas-Bradley and Joshua L.
P. Gregg and Randolph Elliott were on the brief for amicus
curiae American Public Gas Association and American Public
Power Association in support of petitioner. Delia D.
Patterson entered an appearance.
G. Pacella, Deputy Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. On the brief
were Robert H. Solomon, Solicitor, and Ross R. Fulton,
Jennifer N. Waters was on the brief for intervenor Todd
County, Kentucky in support of respondent.
Before: Griffith and Wilkins, Circuit Judges, and Randolph,
Senior Circuit Judge.
Wilkins, Circuit Judge
consider a Petition for Review challenging the Federal Energy
Regulatory Commission's assertion of Natural Gas Act
jurisdiction over the transportation and sale of natural gas
for resale from the City of Clarksville, Tennessee to the
City of Guthrie, Kentucky. See Order Granting
Service Area Determinations, City of Clarksville,
Tennessee, 146 FERC ¶ 61, 074 (2014); Order Denying
Reh'g, City of Clarksville, Tennessee, 155 FERC
¶ 61, 184 (2016). Clarksville challenges the
Commission's exercise of jurisdiction as contrary to the
plain language of the Natural Gas Act ("NGA"), 15
U.S.C. §§ 717-717z, and contrary to longstanding
reasons explained below, we grant the Petition for Review and
vacate FERC's Order Granting Service Area Determinations
and Order Denying Rehearing to the extent they are
inconsistent with this opinion.
enacted the Natural Gas Act, ch. 556, 52 Stat. 821 (1938)
(codified as amended at 15 U.S.C. §§ 717-717z),
with the principal aim of "encourag[ing] the orderly
development of plentiful supplies of . . . natural gas at
reasonable prices, " NAACP v. Fed. Power
Comm'n, 425 U.S. 662, 669-70 (1976), and
"protect[ing] consumers against exploitation at the
hands of natural gas companies, " Fed. Power
Comm'n v. Hope Nat. Gas Co., 320 U.S. 591, 610
(1944). Along with those main objectives, there are also
several "'subsidiary purposes'. . . includ[ing]
'conservation, environmental, and antitrust'
issues." Pub. Utils. Comm'n of Cal. v.
FERC, 900 F.2d 269, 281 (D.C. Cir. 1990) (quoting
NAACP, 425 U.S. at 670 & n.6).
vests FERC with broad authority to regulate the
transportation and sale of natural gas in interstate
commerce. 15 U.S.C. § 717c; see also Schneidewind v.
ANR Pipeline Co., 485 U.S. 293, 300 (1988) ("The
NGA long has been recognized as a comprehensive scheme of
federal regulation of all wholesales of natural gas in
interstate commerce." (citations and internal quotation
marks omitted)). To achieve this objective, Congress equipped
the Commission with a variety of regulatory tools, one of
which captures the focus of this Court's review.
Section 7(c) of the Act, a natural gas company must obtain a
certificate of public convenience and necessity from FERC
prior to "undertak[ing] the construction or
extension" of any natural gas facility for the
transportation of natural gas in interstate commerce. 15
U.S.C. § 717f(c)(1)(A). The Act defines a
"natural-gas company" as a "person engaged in
the transportation of natural gas in interstate commerce, or
the sale in interstate commerce of such gas for resale."
Id. § 717a(6). A "person"
"includes an individual or corporation."
Id. § 717a(1). The Act specifies that a
corporation "shall not include municipalities, "
which are defined as "cit[ies], count[ies], or other
political subdivision[s] or agenc[ies] of a State."
Id. § 717a(2)-(3).
7(f)(1) permits FERC to make a service area determination, by
which it can authorize an entity primarily engaged in the
local sale or distribution of natural gas but subject to the
Commission's jurisdiction because its facilities cross
state lines, to construct, enlarge, or extend its facilities
to meet market demand without prior FERC approval. 15 U.S.C.
§717f(f)(1); Intermountain Mun. Gas Agency &
Questar Gas Co., ...