ing, 10 the Commission held that North Penn's quarterly PGA filing properly reflected CD volumes of 25,139 Dt per day because the September 14 Director's letter order granted retroactive to November 1, 1989, certain abandonment of service authorizations to Tennessee pursuant to section 7(b) of the Natural Gas Act down to that CD level. With regard to further contract demand reductions to 22,139 Dt per day, effective November 1, 1990, the Commission believes that Order Nos. 490 and 490-A would authorize abandonment down to that level pursuant to the January 30 contract where the parties agreed to such abandonment. In Order No. 490-A, the Commission stated:

If the parties agree to terminate the contract or to modify their sales and purchase obligations under the contract, the abandonment is effective in accordance with the parties' agreement... When abandonment occurs by mutual agreement, the former purchaser must notify the Commission within thirty (30) days of the effective date of the abandonment.12

Accordingly, the Commission will allow 13 North Penn to reflect the lower 22,139 Dt per day CD in its PGA effective November 1, 1990, provided North Penn complies with the reporting requirements of Order Nos. 490 and 490-A.14 Because of the uncertainty over this issue, and the fact that this order will likely issue more than thirty days after the effective date of the abandonment, the Commission will allow North Penn to comply with these reporting requirements within 30 days after the date this order issues. Moreover, the Commission

concludes that Order Nos. 490 and 490-A apply to any further reductions agreed to under the January 30 contract, subject to North Penn's timely compliance with the Order No. 490 reporting requirements as such further abandonments may occur.

Standby Charge Issue

North Penn requests clarification to permit it to collect immediately standby charges by allowing it to include such charges in the rate sheet of its current quarterly PGA filing as a separate component rather than having to wait to recover such charges in a later PGA proceeding. On December 21, 1990, North Penn filed a tariff sheet to revise its PGA clause to include a provision to allow North Penn to track standby charges that North Penn incurs from CNG on an as-billed basis. In its December 21, 1990 filing, North Penn also requested waiver of sections 154.301 through 154.310 inclusive, to track such charges through its PGA. By order issued January 18, 1991 [54 FERC

61,087], the Commission accepted and suspended North Penn's tariff sheet, effective March 1, 1990, subject to refund and conditions.15 Because of North Penn's request for specific waiver and our action in the January 18, 1991 order disposing of this issue, North Penn's request for clarification is now moot.

The Commission orders:

(A) North Penn's request for rehearing is granted.

(B) North Penn's request for clarification is dismissed as moot.

10 North Penn Gas Co. (Docket No.

TQ90-3-27-002 et al.), 53 FERC ¶ 61,221 (1990).

Prior to the issuance of the August 27, 1990 order, Tennessee had not amended its tariff sheets or service agreements on file to reflect the reduced contract demand levels authorized by the January 30, 1990 contract. Therefore, at the time of issuance, the August 27 order was correct in requiring North Penn to refile its rate to reflect contract demand levels of 31,568 Dt per day as reflected in Tennessee's tariff. The Tennessee order, which referenced the abovementioned January 30, 1989 contract and which granted Tennessee section 7(b) abandonment, was issued on September 14, 1990, after the August 27, 1990 order in this proceeding was issued.

On November 30, 1990, Tennessee Gas Pipeline Company (Tennessee) filed tariff sheets to implement an out-of-cycle purchased gas adjustment (PGA), which increased by 22.96 cents per Dth its commodity gas rate component. Tennessee requested an effective date of December 1, 1990. The increase was requested by Tennessee because of increases in the spot market price of gas that were not contemplated in Tennessee's quarterly PGA filing effective October 1, 1990. On December 27, 1990, the Commission issued a letter order (December 27 order) accepting the tariff sheets, effective December 1, 1990, subject to refund.1 Applications for rehearing of the December 27 order were filed jointly by Consolidated Edison Company of New York, Inc., the New England Customer Group, and Long Island Lighting Company (Consolidated Edison et al.). For the reasons discussed below, we shall deny the requests for rehearing.

Rehearing Request

Consolidated Edison et al., argue that the Commission violated the filed rate doctrine when on December 27, 1990, it allowed Tennessee to place its November 30, 1990 out-of-cycle PGA filing into effect on December 1, 1990. Consolidated Edison et al., note that the Commission's public notice of Tennessee's filing established a date for protests, comments and interventions of December 12, 1990. Consolidated Edison et al., contend that between the Idate of Tennessee's filing and the date established for intervention the Commission took no action on Tennessee's filing. Thus, according to Consolidated Edison et al., the CD sales rate in effect on the Tennessee system as of December 12, 1990 was not the rate reflected in Tennessee's November 30, 1990 filing, but its previously filed and accepted CD sales rate.

Citing Louisiana Power & Light Co., 16 FERC 61,019, at p. 61,033 (1981), Consolidated Edison et al., argue that absent the consent of the customer, a rate filing cannot be made effective prior to the date the Commission actually accepts the filing. Consolidated Edison et al., maintain that the only way in which the pipeline may place a nonconsensual rate increase into effect on one day's notice is if the Commission issues an order accepting the filing prior to the pipeline's requested effective date.

Discussion

The Commission denies rehearing. NGA section 4(d) provides that pipelines may not change rates "except after 30-days' notice to

153 FERC 61,470 (1990).

2 See Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, (D.C. Cir. 1990).

The Commission sees nothing in the language of NGA section 4 so restricting the Commission's waiver power. Section 4(d) provides that the required "notice shall be given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect." Thus, the required notice is given by the pipeline's filing, not the Commission's order on it. Here, Tennessee on November 30, 1990, made the required filing setting forth the precise changes in rates that it proposed to implement, and its proposal to place those rates into effect on December 1, 1990. Thus, Tennessee's November 30, 1990 filing gave notice that the pipeline sought to put into effect higher rates on December 1, 1990. Tennessee's customers therefore were on notice that the rates paid on and after December 1, 1990 were provisional only and subject to change depending upon the Commission's action.2 This case is thus not like the situation where a pipeline tries to change rates to be retroactively effective on a date before the date of filing, and customers had no notice when they made their purchasing decisions that the rates paid were subject to change.

The Commission notes that this case is completely distinguishable from the Louisiana Power & Light Co. case cited by Consolidated. There, our decision turned not on lack of authority to permit the requested effective date, but rather on a finding that good cause for waiver of the required notice had not been shown, and the Commission suspended the filing for five months based on the fact that it could be unjust and unreasonable.

However, in this case we find good cause for granting the requested waiver. As we noted in the December 27 order, the Commission's regulations require gas costs to be as accurately stated as possible under the Assessment of Past Performance Test of section 154.306 of the Commission's regulations. Since spot price surveys reported in trade publications in early

Order Granting Request to Remand

Background

On October 6, 1989, the Commission issued an order which accepted, as modified, the settlement of Questar Pipeline Company's (Questar) section 4 rate case in Docket Nos.. RP88-93-000 and RP88-40-000 (Phase I settlement), and remanded the case to the ALJ for the development of a record on whether the settlement meets the goals of the Rate Design Policy Statement1 (designated Phase II of the proceeding). During the ensuing months the parties filed direct and rebuttal testimony on the rate design issues set for hearing.

However, on October 9, 1990, Magnesium Corporation of America (MagCorp) requested that the procedural schedule in the Phase II proceeding be suspended and that the record as currently developed on the remanded issue of rate design be certified to the Commission. MagCorp sought to waive a live hearing and the issuance of an Initial Decision claiming that the record is sufficient to support a decision by the Commission on whether the Phase I settlement complies with the Rate Design Policy Statement.

On October 15, 1990, the ALJ suspended the procedural schedule and required the submission of position statements (limited to ten pages) addressing the issue of whether the Phase I settlement complied with the Rate Design Policy Statement.

On November 20, 1990, based upon MagCorp's motion and the position statements filed by the participants to the proceeding, the ALJ issued an order certifying the record in the Phase II proceeding to the Commission on the

1 Questar Pipeline Company, 49 FERC ¶ 61,018 (1989).

2 18 C.F.R. § 385.708 (1990).

remanded issue of rate design. The ALJ indicated that all participants waived cross-examination and the need for an evidentiary hearing. The ALJ stated that there were no material facts in dispute and that the issues presented on the discrete remanded issue of rate design are solely ones of policy. The ALJ concluded that a sufficient record had been developed for the Commission to determine whether the Phase I settlement or Questar's newly proposed rate design (described in its direct testimony and position statement) achieved the goals of the Rate Design Policy Statement.

On December 17, 1990, the Utah DPU filed what it styled as a brief on exceptions to the ALJ's November 20, 1990 order, claiming that an Initial Decision was required in this proceeding. Utah DPU argues that an Initial Decision by the ALJ is required by due process and Rule 708 of the Commission's Rules of Practice and Procedure.2 Utah DPU states that no motion for waiver of an Initial Decision was filed with the Commission pursuant to Rule 7103 and, therefore, there was no basis for the certification of this case to the Commission. Utah DPU argues that an Initial Decision should be issued to address whether or not the Policy Statement even applies to Questar and the impact of various rate design proposals on various classes of customers, and that the parties should be allowed to file briefs. Various parties filed responses opposing Utah DPU's request. They argue, among other things, that there are no contested issues of fact, the policy issues are ripe for decision, there is no constitutional due process right to an Initial Decision, and an Initial Decision would unduly delay a final resolution in this proceeding.

Discussion

Rule 704 of the Commission's Rules of Practice and Procedure provides that “[a]fter testimony is taken in a proceeding, or a phase of a proceeding, the presiding officer will afford every participant an opportunity to: (a) Submit written initial briefs and (b) Submit

3 18 C.F.R. § 385.710 (1990).

4 18 C.F.R. § 385.704 (1990).