A federal appeals court in Washington, DC on Friday vacated a 2003 FERC order that called for Columbia Gas Transmission Corp. to install and pay for meters on 55 wells that Nicole Gas Production purchased from the natural gas pipeline six years ago.

Columbia challenged the orders in the U.S. Court of Appeals for the District of Columbia Circuit, claiming that FERC lacked jurisdiction to order the pipeline to install meters on Nicole’s wells (Court Case No. 04-1049). Nicole Gas gathers natural gas from the wells, which then flows over gathering lines owned and operated by Columbia and enters Columbia’s interstate gas transmission system.

In its initial order in June 2003, the Federal Energy Regulatory Commission responded that Columbia’s gathering services were subject to the agency’s jurisdiction because they were “in connection with” the pipeline’s interstate transmission services. However, the Commission abandoned the “in connection with” rationale on rehearing, the court said.

The Commission instead argued that the filed rate doctrine “authorizes [it] to enforce [Columbia’s] tariff language requiring installation of meters on gathering facilities, regardless of whether FERC” would have jurisdiction “in the absence of such language,” according to the court ruling. The filed rate doctrine bars a regulated entity from charging rates for its services other than those filed with the Commission.

The court, however, saw things differently. “FERC cites no case, and we cannot find one, in which a court has permitted the Commission to use the filed rate doctrine as such a jurisdictional boot-strap,” the three-judge panel said in its decision.

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