Pacific Gas And Electric Company v. Federal Power Commission

506 F.2d 33 (1974)


There were significant natural gas shortages during the 1970s. Pipeline companies were confronted with rationing based on current contracts or rationing based on the most efficient use. The companies feared civil lawsuits from companies with existing contracts. In 1971, D issues a Statement of General Policy in Order No. 431 directing pipeline companies to file tariff sheets with curtailment and rationing plans. The Order hinted that the plans should be based on end use and that plans approved by D will control and take precedence over any contractual obligations. Companies submitted plans reflecting a wide range of strategies. No clearcut strategy was present to guide anyone. D promulgated Order No. 467 without prior notice or opportunity for comment. It sets forth D's view of a proper priority schedule and expresses D's policy that the national interest would be best served by assigning curtailment priorities on the basis of end-use rather than on the basis of prior contractual commitments. D immediately received numerous petitions for rehearing, reconsideration, modification or clarification. Except for minor modifications to the Order, D otherwise denied the petitions for rehearing and intervention. Ps seek review claiming the Order was a rule and not a policy statement and thus was invalid for failing to follow the APA rulemaking procedures.