FPC v. Texaco Inc.

PETITIONER: Federal Power Commission
LOCATION: The White House

DOCKET NO.: 72-1490
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 417 US 380 (1974)
ARGUED: Feb 19, 1974
DECIDED: Jun 10, 1974

Ben F. Vaughan III - for petitioners in No. 72 1491
Christopher T. Boland - for respondents in both cases
Mark L. Evans - for petitioner in No. 72 1490
Peter H. Schiff - for respondents in both cases

Facts of the case


Media for FPC v. Texaco Inc.

Audio Transcription for Oral Argument - February 19, 1974 in FPC v. Texaco Inc.

Audio Transcription for Opinion Announcement - June 10, 1974 in FPC v. Texaco Inc.

Byron R. White:

72-1490 and 72-1491 are here from the Court of Appeals for the District of Columbia Circuit.

That Court set aside an order of the Federal Power Commission, which terminated the direct regulation of the rates of small producers of natural gas and substituted a scheme of indirect regulation, which would work through the review and regulation of the purchased gas cost of large producers and pipelines and who are the customers of the small producers.

The Court of Appeals thought that the Commission had abandoned the statutory standard for the review of rates, namely the just-and-reasonable standard prescribed by the Act, and therefore, it set aside the Commission’s order and this even on the assumption that a scheme of indirect regulation would be permissible under the Act.

We agree with the Court of Appeals that had the Commission abandoned the just-and-reasonable standard, that it would have exceeded its powers.

But the United States says that -- claims here with some force that the Court of Appeals misread its order and that when properly understood, yet indicated no intention, whatsoever to describe the statutory standard for judging of the acceptability of gas rates.

We have looked at that order with some care, however, and it is ambiguous to say the least, and does not measure up to what is normally required for an acceptable order of the Regulatory Commission.

We think the Commission should reconsider that order and accordingly, we vacate the judgment of the Court of Appeals and direct that the case be remanded for further proceedings before the Federal Power Commission.

Mr. Justice Stewart took no part in the consideration or decision of this case.