Federal Power Commission v. Transcontinental Gas Pipe Line Corporation

PETITIONER: Federal Power Commission
RESPONDENT: Transcontinental Gas Pipe Line Corporation
LOCATION: Circuit Court of Montgomery County

DOCKET NO.: 45
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 365 US 1 (1961)
ARGUED: Nov 15, 1960
DECIDED: Jan 23, 1961

Facts of the case

Question

Media for Federal Power Commission v. Transcontinental Gas Pipe Line Corporation

Audio Transcription for Oral Argument - November 15, 1960 (Part 1) in Federal Power Commission v. Transcontinental Gas Pipe Line Corporation

Audio Transcription for Oral Argument - November 15, 1960 (Part 2) in Federal Power Commission v. Transcontinental Gas Pipe Line Corporation

Earl Warren:

General, you may continue.

Mr. Chief Justice and may it please the Court.

Before proceeding my argument further, I'd like to go back to the question of Mr. Justice Brennan, and I was suggested during the recess that I may not have made my answer clear or may have not answered it correctly or may have been misunderstood.

In regard to the direct sales, I meant my answer to mean that there was a power to regulate the transportation, but not the rates for such direct sales.

I don't know whether my answer meant that to you or not, but that is the correct answer and that's what I intended by my answer.

Now the Court of Appeals didn't think that the Hope Natural Gas case was of any help in the decision of this case.

Although they referred to it, we think that it followed -- it did not decide this particular question, you recall in that opinion, the Court did say that while conservation was not a factor in determining just and reasonable rates, and there were two strenuous dissents in which Mr. Justice Jackson went at some length, talking about the importance of conservation in preserving this important fuel for superior uses.

And Mr. Justice Frankfurter also brought the dissent and joined in Mr. Justice Jackson's dissent there.

But in addition, the Court in the opinion went into the fact that in a transportation case and certification, that under Section 7, it was proper to consider conservation considerations and the Power Commission had that power and referred in a footnote to statements by the Power Commission in that regard.

Potter Stewart:

Now it's unquestionable of course that the Commission has no direct power as such over the -- over the use by customer of gas.

That is correct.

And it has no power as such to regulate the rates.

Potter Stewart:

At which he buys it.

Which he buys, where there's this kind of a transaction.

Potter Stewart:

Yes.

But the position of the Commission is that in determining the public convenience and necessity in whether to grant a certificate --

Potter Stewart:

For transportation?

That's right.

They have the right to consider the use that is to be made of the gas as to whether or not it is in the interest of public convenience and necessity.

Potter Stewart:

In other words, if this gas had been purchased as it was in Texas by Consolidated Edison and transported by a ship, by a tanker around through the Gulf of Mexico and at the coast of New York and delivered to Consolidated Edison up there, The Federal Power Commission wouldn't be in the picture at all.

No, I don't concede that point, Mr. Justice Stewart, because the Act says transportation interstate; it doesn't say by pipeline.

Potter Stewart:

So, it wouldn't be the use --

So it's still a question.

Now the examiner did use that example as though it would be conceded that there was no right to regulate, but the Act is specific in its terms in saying transportation interstate and we certainly would insist that while it hasn't been ruled on by the parties.

Potter Stewart:

I guess it's not done, is it?

There -- I think there are some possibilities of liquid gas and in relatively small amounts and it, as we say in the footnote to our brief, is a developing industry, and so -- but we do not concede, and we make it expressed in the brief that we do not concede that position.

Now the East Ohio case was completely disregarded by the Court of Appeals, it didn't even refer to it.

And you recall there the -- there was a basic issue in regard to whether or not, there had to be a coupling of the regulation of rates with transportation, in order to be able to control or have the power to control the transportation and the Court held two things.

One, was the right to regulate the rates within the State and also the power to certificate, power in the Commission, to certificate the transportation independently.

And in the Hinshaw Amendment when the Congress choused the holding of the Court in regard to the right to regulate the rates intrastate in such a transaction, it did not change at all, the power of the Commission to, as it was recognized by this Court, to control the transportation featured by the certification under Section 7.