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Southern Union Gas Company v. Federal Energy Regulatory Commission, City of Willcox, Arizona, Southern California Gas Co., Asarco, Inc., Gas Co. Of New Mexico, El Paso Municipal Customer Group, El Paso Natural Gas Co., Pacific Gas and Electric Co., Southwest Gas Corp., Apache Powder Co., the Public Utilities Commission of the State of California, Intervenors. Southwest Gas Corporation v. Federal Energy Regulatory Commission, Asarco, Inc., Gas Co. Of New Mexico, El Paso Municipal Customer Group, City of Willcox, Arizona, El Paso Natural Gas Co., Apache Powder Co., the Public Utilities Commission of the State of California, Southern California Gas Co., Intervenors

Citations: 840 F.2d 964; 268 U.S. App. D.C. 257; 1988 U.S. App. LEXIS 2885Docket: 87-1085

Court: Court of Appeals for the D.C. Circuit; March 7, 1988; Federal Appellate Court

Narrative Opinion Summary

This case involves a challenge by Southern Union Gas Company and Southwest Gas Corporation against the Federal Energy Regulatory Commission (FERC) regarding its refusal to reopen an investigation into a gas curtailment plan established under a settlement agreement approved seven years prior. The petitioners sought a reevaluation of the plan due to significant changes in the regulatory landscape and market conditions. The court denied the petitions for review, affirming FERC's discretion not to investigate, as supported by the General Motors precedent. The petitioners argued for a hearing under the Natural Gas Act, asserting that recent changes rendered the curtailment plan unjust and unreasonable. However, the Commission determined that no material factual issues justifying a hearing were raised and suggested alternative procedural avenues for addressing the petitioners' concerns. The decision emphasized the importance of negotiated settlements and the challenges of revisiting such agreements without substantial new evidence. The court found the Commission's actions and reasoning adequate, upholding its decision not to conduct a further investigation into the curtailment plan or El Paso's purchasing practices, and denied the petitions for review.

Legal Issues Addressed

Application of General Motors Standard

Application: The court applied the General Motors standard, concluding that the Commission's actions were satisfactory and the petitioners' objections were largely disagreements with the Commission's conclusions.

Reasoning: Under the General Motors standard, the Commission's actions challenged by petitioners are deemed satisfactory.

FERC's Discretion in Investigation Decisions

Application: The Federal Energy Regulatory Commission exercised its discretion not to investigate the gas curtailment plan, determining that the petitioners' allegations lacked sufficient merit and suggesting alternative procedural avenues.

Reasoning: The Commission maintained its discretion not to initiate an investigation, as affirmed by the General Motors precedent, which holds that such decisions are largely unreviewable unless it's shown that the agency failed to consider relevant factors.

Legal Standards for Hearings under the NGA

Application: The petitioners did not demonstrate material factual issues to warrant a trial-type hearing under the Natural Gas Act.

Reasoning: However, it is determined that no trial-type hearing is required because no material factual issues necessitating resolution were presented.

Settlements and Regulatory Changes

Application: Despite regulatory changes and market shifts, the Commission found no basis to reopen the settlement agreement or deem the curtailment plan unjust or unreasonable.

Reasoning: The Commission decided not to open an investigation into El Paso's purchasing practices, reaffirming its previous stance.