July 1, 2001
L.A. Loves a Loophole
There's no getting around it...
Authors lost their case. The bright line is preserved.
Unfortunately, PUBLIC UTILITIES FORTNIGHTLY did not caution its readers that a recent article ("Gas Pipelines and the Hinshaw Amendment: Conflicts Loom as the 'Bright Line' Fades Between Federal and State Jurisdiction," April 1, 1997, p. 36) is actually a thinly disguised brief for claims that a series of tribunals has rejected, including the U.S. Supreme Court. A warning from the editors would have saved valuable time for readers searching for more substantive coverage of the utility industry.
The authors claim that a decision of the U.S. Court of Appeals for the District of Columbia interpreting the Hinshaw Amendment (em Altamont Gas Transmission Company v. FERC, 92 F.3d 1239 (1996) (em threatens to upset the current federal-state scheme of regulation under the Natural Gas Act and to erode the Act's protections of interstate shippers. The authors of these claims are the very attorneys that represented one of the losing parties in the Altamont case. They presented basically the same claims in their petition for rehearing and suggestion for en banc of the Altamont decision. Both the panel and the full court denied the rehearing. The authors also presented these claims in their petition to the U.S. Supreme Court for a writ of certiorari. The Supreme Court has just denied the petition, thus indicating that the court does not share the authors' misgivings about the Altamont decision.
In other words, the authors' claims about the impact of the Altamont decision have failed to convince any of the tribunals before which they have been made. Even the Federal Energy Regulatory Commission opposed these claims and the petition for certiorari. It is easy to see why (em the Altamont decision in fact preserves the very "bright line" between federal and state jurisdiction that the authors claim has blurred.
The case arose from a major expansion of the pipeline facilities of Pacific Gas Transmission Co. and a matching expansion of the pipeline facilities of Pacific Gas and Electric Co. in California. PGT applied for a certificate of public convenience and necessity from the FERC, while PG&E applied for a certificate of public convenience and necessity from the California Public Utility Commission. PG&E applied to the CPUC for its certificate because PG&E was a "Hinshaw" pipeline, which was exempt from the FERC's jurisdiction under Section 1(c) of the Natural Gas Act (the "Hinshaw Amendment"). Although the FERC was urged to take jurisdiction over PG&E's
expansion facilities because of the companies' coordinated activity, the FERC found "nothing inappropriate about such coordinated activities" and continued to treat PG&E as a "Hinshaw" pipeline, exempt from the FERC's jurisdiction.
In Altamont, the District of Columbia Circuit agreed with the Commission's treatment of the two companies because the court could not "on this record hold that the Commission was unreasonable (em that is, that PGT and PG&E unduly discriminated against interstate shippers by coordinating their activities" (92 F.3d at 1246). The court's affirmation of the FERC on this issue was not disputed in the petition for rehearing to the District of Columbia Circuit or