The U.S. Court of Appeals for the District of Columbia Circuit has ruled in favor of the California Public Utilities Commission (CPUC) in a gas industry dispute with the Federal Energy Regulatory Commission (FERC), deciding that the FERC cannot withhold interstate certification for a natural gas pipeline to attempt to correct what the FERC perceives as discrimination in intrastate tariffs approved by the CPUC for the same pipeline.
The court explained that the "Hinshaw Amendment" to the federal Natural Gas Act gives the states exclusive authority over the rates and services of any state-regulated pipeline that receives interstate gas "within or at the boundary of a state if all of the gas so received is ultimately consumed within the state."
It added that the FERC had also improperly interfered with CPUC regulation when it (the FERC) had attempted to reduce the rate of return on interstate service to compel the pipeline to operate its intrastate services under a "rolled-in" rate structure using mileage-based rather than "postage stamp" rates.
The case had involved Pacific Gas Transmission, a subsidiary of Pacific Gas and Electric Co., which sought to build a pipeline from the Canadian border to the California-Oregon border. Altamont Gas Transmission Co. v. FERC, No. 91-1369, Aug. 23, 1996, 92 F.3d 1239 (D.C.Cir.).
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