ELR Citation: ELR 20348
No(s). 72-2204 (D.C. Cir. Jan 21, 1974)

The Federal Power Commission has authority under §5(a) of the Natural Gas Act to establish, by interim order, a temporary curtailment plan to provide procedures for the allocation of gas among the customers of a natural gas company during periods of shortage. The Commission properly found the company's preexisting curtailment plan discriminatory, since it provided for cutting off supplies to out-of-state residential and small commercial full requirements customers before instate large industrial partial requirements customers would be subjected to curtailment. The court holds that end use is an appropriate consideration on which to base the assignment of priorities under a curtailment plan, and affirms the FPC's ranking which subjects all industrial uses to cutoff prior to the curtailment of any residential and small commercial uses. The court also rules that the Commission's order invalidates preexisting customer service contracts between the parties to the extent that these contracts reflect the illegal curtailment plan. Certain portions of the interim order dealing with the impermissibility of grouping, the inferior nature of boiler fuel uses, annual volumetric limits, storage withdrawal adjustment formula, and overrun penalties, are reversed as lacking statements of reasons, and remanded to the FPC for further consideration. The Commission properly deferred consideration of preexisting instate shortages to a final order. The court also rules that although the interim order was a major federal action, preparation of a NEPA impact statement was not required. Compliance with NEPA was not possible within the meaning of the statutory phrase "to the fullest extent possible" because of the statutory conflict between the dictates of NEPA and the Commission's duty under the Natural Gas Act to take effective interim curtailment action in the face of gas shortages.

Counsel for Petitioners
Jerome Ackerman
James R. McCotter
Covington & Burling
888 16th Street, NW
Washington, DC 20006

Counsel for Respondent
George W. McHenry, Jr. Solicitor
Leo E. Forquer General Counsel
Platt W. Davis, III
Federal Power Commission
441 G Street, NW
Washington, DC 20426

Counsel for Intervenor Southern California Gas Company
K. R. Edsall
P.O. Box 54790
Terminal Annex
Los Angeles, CA 90054

Counsel for Intervenor Department of Water and Power of the City of Los Angeles
Edward C. Farrell Asst. City Attorney
111 North Hope Street
P.O. Box 111
Los Angeles, CA 90051

Counsel for Intervenor San Diego Gas and Electric Company
C. Hayden Ames
Donald J. Richardson, Jr.
Chickering & Gregory
111 Sutter Street
San Francisco, CA 94101

Counsel for Intervenor Pacific Gas and Electric Company
Frederick Searls General Counsel
Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94106

Counsel for Intervenors General Motors Corporation and Johns-Manville Products Corporation
Edward J. Grenier, Jr.
Sutherland, Asbill & Brennan
1666 K Street, NW
Washington, DC 20006

Counsel for Intervenor Tucson Gas and Electric Company
Thomas F. Brosnan
Gallagher, Connor & Boland
821 15th Street, NW
Washington, DC 20005

Counsel for Intervenor Southern Union Gas Company
Robert J. Haggerty
1145 19th Street, NW
Washington, DC 20036

Counsel for Intervenor Southwest Gas Corporation
Charles H. McCrea
2011 Las Vegas Boulevard South
P.O. Box 1450
Las Vegas, NV 89101

Counsel for Intervenor Salt River Project Agricultural Improvement and Power District
Richard H. Silberman
P.O. Box 1980
Phoenix, AZ 85001

Counsel for Intervenor Shell Oil Company
Thomas G. Johnson
One Shell Plaza
P.O. Box 2463
Houston, TX 77001

Counsel for Intervenor El Paso Natural Gas Company
C. Frank Reifsnyder
Hogan & Hartson
815 Connecticut Avenue, NW
Washington, DC 20006

Counsel for Intervenor Arizona Public Service Company
Richard M. Merriman
Peyton G. Bowman, III
Reid & Priest
1701 K Street, NW
Washington, DC 20006

Counsel for Intervenor Southern California Edison Company
Alan M. Nedry
1801 K Street, NW
Washington, DC 20036

Counsel for Intervenor State of California and Public Utilities Commission of the State of California
John P. Mathis
J. Calvin Simpson
Lawrence Q. Garcia
5066 State Building
San Francisco, CA 94102

Counsel for Intervenors Nevada Industrial Customers
Henry F. Lippitt, II
626 Wilshire Boulevard
Los Angeles, CA 90017

FAHY, Senior Circuit Judge: I concur except with respect to the scope of the remand. Upon my study of the record, I conclude that the court should not disturb the Commission's interim plan regarding those parts thereof designated as follows in the court's opinion: (B) Withdrawals from Storage, (E) Volumetric Limits, and (F) Penalties. I would not require further consideration of these three subjects. In all other respects, I concur in Judge Tamm's opinion for the court.