Court Says California Shippers Due Refunds
The Federal Energy Regulatory Commission got it right, finding
an access fee charged to interstate shippers by Southern California
Gas was illegal - but then dropped the ball in failing to order
$800,000 in refunds, the D.C. Court of Appeals said in a decision
handed down May 22 (No. 97-1028).
The charge to shippers on Kern/Mojave Pipeline (the only
interstate pipeline that has successfully penetrated state
boundaries and jurisdiction) to access SoCal's distribution
facilities through a new connection at Wheeler Ridge, CA,
originally was approved by the California Public Utility
Commission. The access charge for interstate shippers was separate
from distribution charges which were levied on end users. The
charge and the CPUC authorization were challenged before the CPUC
and the FERC as being outside state jurisdiction, and the CPUC
subsequently annulled the tariff. The state commission, however,
ruled that a refund was inappropriate.
Shippers appealed to FERC and the Commission found the CPUC
never had the authority to make the tariff applicable to interstate
shippers. But the federal agency also declined to order the
refunds, saying that because SoCal was an intrastate pipeline
subject to the Hinshaw Amendment FERC lacked authority to require a
refund. FERC Commissioner (now Chairman) James Hoecker dissented on
the issue saying the Commission in the past had ordered intrastates
to make refunds.
On rehearing, FERC changed its explanation to say it would let
the state agency deal with the refund issue. The three -judge panel
led by Chief Judge Harry Edwards found FERC "failed to provide a
logically coherent, reasonable explanation for delaying the refund;
furthermore, the delay itself was clearly inequitable." The court
said SoCal had "collected a windfall profit" from an illegal charge
and remanded the refund issue to the Commission.
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