The Federal Energy Regulatory Commission (FERC) has issued an order denying rehearing, effectively allowing Mojave Pipeline Co. (MP) to construct and operate its Northward Expansion Facilities in California (Docket No. CP93-258-007). The FERC has already issued five substantive orders in the proceeding.
Especially contentious was the clash with the California Public Utility Commission (CPUC) over jurisdiction, leading to a February 1995 FERC order holding that the Northward Expansion was an interstate pipeline subject to federal oversight. To support its finding, the FERC cited a District of Columbia Circuit Court ruling that gas commingled with other gas flowing in interstate commerce becomes interstate gas [Oklahoma Natural Gas Co. v. FERC, 28 F.3d 1281 (D.C. Cir. 1994)].
This time around, Pacific Gas & Electric Co. (PG&E) argued that the FERC's interpretation of the Natural Gas Act's (NGA) local distribution exception was irreconcilable with its recent Notice of Proposed Rulemaking on electric industry restructuring (Mega-NOPR). PG&E claimed that the FERC should adopt a "primary function" test to distinguish local distribution from interstate transmission.
The FERC declined, noting that the Energy Policy Act of 1992 specifically prohibits the FERC from ordering retail access, and that the Mega-NOPR's local distribution definition was developed with that in mind. It added that the Natural Gas Act includes no such prohibition regarding interstate pipelines.