Before: Edwards, Chief Judge, Sentelle and Tatel, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 14, 1995
On Petition for Review of Orders of the Federal Energy Regulatory Commission
Opinion for the Court filed by Chief Judge Edwards.
In December 1993, the Federal Energy Regulatory Commission ("FERC") approved settlement agreements in several ratemaking cases involving gas transportation rates charged by Southern Natural Gas Company ("Southern") for the period from September 1989 through April 1993. Southern Natural Gas Co., 65 F.E.R.C. Para(s) 61,348 (1993); Southern Natural Gas Co., 65 F.E.R.C. Para(s) 61,347 (1993). The settlement agreements provide that rates for part of that period may be determined based on the estimated gas transported (the "throughput"), reduced to reflect gas transported at discounted rates. 65 F.E.R.C. Para(s) 61,348 at 62,840; 65 F.E.R.C. Para(s) 61,347 at 62,827.
Mississippi Valley Gas Company ("MVGC"), a Southern customer, opposed the settlement agreements, and asked FERC to reconsider them in light of the harmful effect of rate discounts and related throughput reductions on captive customers (such as MVGC), who must use gas and can only obtain it from one provider. *fn1 According to MVGC, discounts granted by Southern to meet competition from other gas pipelines ("gas-on-gas" competition) are inevitably unfair to captive customers and, thus, are both illegal under the Natural Gas Act *fn2 and inconsistent with FERC regulations and orders. FERC reviewed the settlement agreements and granted additional hearings with respect to some of MVGC's complaints, but dismissed its claim that Southern's throughput reduction for gas-on-gas discounts discriminates against captive customers. Southern Natural Gas Co., 67 F.E.R.C. Para(s) 61,156 (1994); Southern Natural Gas Co., 67 F.E.R.C. Para(s) 61,155 (1994).
MVGC promptly petitioned for review, initiating the instant action. Although MVGC undoubtedly was prudent in seeking judicial review, we find that review at this time would be premature, because MVGC may eventually obtain the relief it seeks in the course of the hearings still pending before FERC. Therefore, we dismiss MVGC's appeal as unripe, with the understanding that, if the pending FERC hearings do not grant MVGC full relief from the rate increases attributable to throughput reduction for gas-on-gas discounts, MVGC may challenge Southern's throughput reduction once the final rates have been established by FERC.
Between August 1989 and February 1992, Southern filed three proposed rate revisions (RP89-224, RP90-139, and RP92-134) with FERC to set its gas transportation rates for the period from September 1, 1989 through April 30, 1993. MVGC and other Southern customers contested the proposed changes, and FERC thereafter held hearings on the challenged rates.
On April 30, 1993, after FERC had received several volumes of testimony, but had not yet issued final orders in Southern's rate cases, Southern proposed a settlement of the RP92-134 case. On June 4, 1993, an Administrative Law Judge ("ALJ") certified that FERC could accept the settlement because the parties in opposition had raised no genuine issues of material fact to support their claims. Southern Natural Gas Co., 63 F.E.R.C. Para(s) 63,012 (1993). Southern then proposed a settlement of the RP89-224 and RP90-139 rate cases, and an ALJ certified that FERC could accept this settlement as well.
In December 1993, FERC issued two companion orders addressing Southern's settlement proposals, Southern Natural Gas Co., 65 F.E.R.C. Para(s) 61,348 (1993), and Southern Natural Gas Co., 65 F.E.R.C. Para(s) 61,347 (1993). These orders approved modified versions of Southern's settlement proposals, subject to the outcome of evidentiary hearings at which MVGC would have the opportunity to cross-examine Southern's witnesses on certain issues, including the question of whether Southern had improperly granted discounts to affiliated companies. *fn3 65 F.E.R.C. 61,348 at 62,839; 65 F.E.R.C. Para(s) 61,347 at 62,833-34.
Although these orders gave MVGC the possibility of relief on some issues, other concerns presented by MVGC were dismissed, including MVGC's assertion that reduction of Southern's throughput for gas-on-gas discounts was unfair and discriminatory. See 65 F.E.R.C. Para(s) 61,347 at 62,830 (FERC rejected MVGC's contention that throughput reduction to reflect discounts is improper because it found the claim raised no issue of material fact and was "contrary to Commission policy."); 65 F.E.R.C. Para(s) 61,348 at 62,843 (same). MVGC petitioned for review in this court after FERC denied its request for reconsideration of the throughput reduction issue ...