Home » Case Summaries » 1996 » Public Util. Comm'n of State of Cal. v. Federal Energy Regulatory Comm'n

 
 

Public Util. Comm'n of State of Cal. v. Federal Energy Regulatory Comm'n

 

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On March 17, 1993, Mojave Pipeline, a natural gas company operating in California and Arizona, applied to the Federal Energy Regulatory Commission (FERC) for certification to construct its proposed “Northward Expansion,” which would extend their existing system 290 miles northward to a point just southeast of Sacramento, California, and involve construction of 222 miles of high pressure extensions that would connect to the receipt facilities of the Northward Expansion shippers. The Natural Gas Act (NGA), administered by FERC, controls transportation and sale of natural gas in interstate commerce. If the NGA applies to a natural gas project, the natural gas company must obtain a FERC-issued certificate of public convenience and necessity.

Because nearly all of the proposed facilities and potential customers of the Northward Expansion would be in California, the Public Utilities Commission of the State of California (CPUC), and the Pacific Gas and Electric Company (PG&E), plus several other interested parties, protested Mojave’s proposal primarily on the grounds that CPUC, not FERC, has jurisdiction over the proposed expansion. FERC, believing it had exclusive jurisdiction, issued a NGA certificate to Mojave, authorizing it to construct the pipeline. PG&E and CPUC filed petitions for review of FERC’s decision. However, while these appeals were pending, Mojave Pipeline decided to refuse the certificate FERC had issued. FERC then filed two motions with the Ninth Circuit: one to dismiss the appeals as moot, and a second for leave to issue an order to vacate all orders regarding Mojave’s application. Subject to leave of the Ninth Circuit, FERC also issued an order vacating all such orders, including those under judicial review.

The interesting point in this case is that in the Ninth Circuit’s estimation, CPUC and PG&E remained “aggrieved” within the meaning of the NGA by FERC’s earlier orders. Nonetheless, over CPUC’s objection, the court agreed that the appeals were now moot. Because the only relief CPUC requested was that FERC’s order be vacated, the court had no ongoing controversy between FERC and CPUC. In addition, no exception to the mootness doctrine applied. The case did not present an issue capable of repetition while evading review, and Mojave’s decision to abandon its project did not fall within the “voluntary cession” exception. FERC could not assume jurisdiction until another application was filed.

In addition, the court found no collateral consequences that CPUC or PG&E would suffer if the orders were not reviewed, even though PG&E had argued that they had entered into long-term contracts with reduced rates to meet the anticipated competition from Mojave. The Ninth Circuit found no exception for the “mere possibility of continuing, present, adverse effects” and stressed that “the collateral consequences must be legal effects that would arise because of FERC’s opinion in this case.” As a result of this reasoning, the court granted FERC leave to vacate its prior orders and directed FERC to dismiss the entire Mojave proceedings, regardless of the previous effects on CPUC or PG&E.

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