Transmission Company (Florida Gas) to transport natural gas for Monsanto and ADC-Alabama.5 The Commission limited Florida Gas' transportation authority under both certificates to one year from the dates of the respective orders or until Florida Gas accepted a Part 284 blanket transportation certificate, whichever occurred first.6

On June 27, 1989, the United States Court of Appeals for the Fifth Circuit vacated and remanded to the Commission various orders authorizing interruptible transportation by Florida Gas, including the two certificates at issue here. The court held that the Commission had not developed specific facts or a reasoned explanation to support imposition of the one-year term limitation in these certificates. Citing the economic consequences to Florida Gas and its customers, the court stated that repeated filings to renew the certificates, along with the related filing fees, were unnecessary and rendered the Commission's action arbitrary and capricious.

In response to the order of the court, the Commission issued the December 20, 1989 order [49 FERC ¶ 61,375]. The Commission explained that its policy of limiting such certificates to one-year terms was appropriate in Florida Gas' case in view of allegations of undue discrimination in the administration of Florida Gas' transportation policy, including concerns expressed over a five-year period when Florida Gas was restructuring its system. The Commission also noted that, while Florida Gas is the only interstate pipeline in Florida, it provides transportation service to only one customer within that state, although in other states where it must compete with other pipelines, it does offer transportation services. Based on these considerations, the Commission stated that short-term certificates would provide it with meaningful remedies to address potential discrimination.

In their request for rehearing of the December 20, 1989 order, Petitioners ask the Commission to delete the one-year term from their certificates. They argue that the Commission again has failed to substantiate the need for the condition.

Monsanto's second request for rehearing (Docket No. CP87-57-011) challenges the Commission's order of January 26, 1990, denying appeals from staff action amending certificates that authorized interruptible transportation service on behalf of Monsanto and others for

* Docket No. CP87-57-000, 40 FERC 62,104 (1987).

5 Docket No. CP87-316-000, 40 FERC ¶ 62,194 (1987).

additional one-year terms. The order also denied motions of Florida Gas to reinstate certain expired interruptible transportation authorizations as well as to remove the oneyear term limitation from the authorization to transport on behalf of Monsanto. Monsanto sought a refund of filing fees.

In the January 26, 1990 order, the Commission followed its reasoning in the December 20, 1989 order. It emphasized its concern for assuring nondiscriminatory access to transportation on Florida Gas' system. The Commission also cited Florida Gas' pending application for a Part 284 blanket transportation certificate and found that because imposition of the one-year limitation was appropriate, the related filing fees were also appropriate. Finally, the Commission stated that had it amended Florida Gas' certificate effective as of the dates Monsanto sought, the result would have been to authorize transportation for 16 months, contrary to the policy of limiting such certificates to one-year terms.

In its request for rehearing, Monsanto alleges that the Commission's January 26, 1990 order denying Monsanto's appeal from the action of the Director of the Office of Pipeline and Producer Regulation (OPPR) is contrary to the mandate of the Fifth Circuit in the Florida Gas decision and merely reiterates the Commission's reasoning for originally imposing the oneyear limitation. It seeks to have that limitation stricken from its certificate. Monsanto also argues that because the one-year limitation is a nullity and because the Director of OPPR had clear notice that in light of the appeal to the Fifth Circuit and Florida Gas' submission of the certificate application and filing fees subject to the outcome of that appeal, the fees were paid under protest. Therefore, argues Monsanto, the fees paid on April 26, 1989, by Florida Gas should be refunded so that Florida Gas may reimburse Monsanto.

Monsanto's rehearing request also restates its earlier arguments that in the September 18, 1989 order [48 FERC ¶ 62,206], the Director of OPPR ignored the Florida Gas decision, the motion of Florida Gas for refund of filing fees, and the notice in the April 25, 1989 certificate filing that the application and filing fee were submitted under protest and subject to the outcome of the appeal. Monsanto also states that the September 18, 1989 order does not mention the issue of refunding the filing fees

and therefore does not constitute reasoned decisionmaking.

Finally, Monsanto complains that despite the court decision and a request that the certificate become effective as of January 16, 1990 (the expiration date of the certificate then in effect), the authorization was granted to run one year from the date of the September 18, 1989 order. Monsanto states that although the early filing was intended to avoid another hiatus in service, it resulted in Monsanto paying double filing fees to receive approximately four months of service.

Discussion

By letter dated July 16, 1990, Florida Gas accepted the Part 284 blanket transportation certificate issued to it by the Commission in Docket No. RP89-50-000 et al. At that time, the Petitioners' challenges to the one-year term became moot and the Commission cannot now grant the requested relief. The section 7(c) certificates at issue in this proceeding have always contained a condition that they would expire at such time as Florida Gas accepted a blanket transportation certificate. That condition has never been challenged, and Petitioners now are in no different position than they would have been had the Commission issued the section 7(c) certificates for the longer terms originally requested. Therefore, Petitioners' requests for rehearing in Docket No. CP88-57-010 et al., are dismissed as moot. We will likewise dismiss as moot Monsanto's request for elimination of the one-year term in Docket No. CP87-57-011.

It is well established that challenges to conditions imposed in section 7(c) transportation certificates become moot when the pipeline accepts a Part 284 blanket certificate. In Northwest Pipeline Corp. v. FERC the United States Court of Appeals for the District of Columbia Circuit reviewed Commission orders imposing a rate condition on transportation certificates. The challenged certificates also contained a condition limiting their terms to the earlier of one year or the date on which Northwest accepted a blanket certificate. In holding the pipeline's challenge to the rate condition moot, the court found that

[i]n June 1988, Northwest voluntarily accepted this blanket transportation certificate, thereby terminating the earlier §7(c) certificates.... Since Northwest now operates under the Order 436 [FERC Statutes and

851 FERC 61,309 (1990).

9 863 F.2d 73 (D.C. Cir. 1988).

10 Id. at 76-77. See also Colorado Interstate Gas Co. v. FERC, 890 F.2d 1121 (10th Cir. 1989) (holding that CIG's acceptance of a blanket certificate, which

Regulations, Regulations Preambles 1982-1985¶30,665] blanket certificate, it is abundantly evident that no prospective relief is available with respect to the nowrescinded § 7(c) certificates. To the extent it seeks elimination of the T-6 rate in these certificates, Northwest's claim is, beyond reasonable dispute, moot.10

We also deny rehearing of our January 26, 1990 order insofar as Monsanto requests that the filing fee paid on April 26, 1989, by Florida Gas be refunded so that Florida Gas may reimburse Monsanto. Because the one-year term limitation was appropriately imposed in light of legitimate concerns on the part of the Commission, the filing fees were also appropriate.

Additionally, Part 381 of the Commission's regulations establishes the fees charged by the Commission for the services and benefits it provides.11 Section 381.109 establishes the procedure for obtaining refunds of fees. Refunds may be obtained only (1) if the related filing is withdrawn within fifteen days of the date of filing, or (2) if applicable, before the filing is noticed in the Federal Register, or (3) if the fee is inappropriately paid for a filing for which no fee is established. The regulation also provides for refund of fees paid in excess of the established fees. To obtain a refund, the applicant must file a motion requesting such a refund.

Although Monsanto paid fees that overlapped for a four-month period because the certificate filing was made early, we have previously explained that our policy is to grant such limited-term certificates to afford us the opportunity for annual review, not at 16-month intervals.

Monsanto has not established that it meets any of the criteria set forth in section 381.109. Rather, in the appeal from staff action that was, in part, the subject of our January 26, 1990 order, Monsanto asked, as it does here, that the filing fee be refunded to Florida Gas so that Florida Gas may reimburse it. Monsanto's agreement with Florida Gas to bear the filing fees is strictly a matter of contract between the parties. Monsanto is free to negotiate with Florida Gas for some relief from its selfimposed obligation. Nothing in the decision of the 5th Circuit requires us to refund the filing fees to any party.

While it ostensibly seeks rehearing of the January 26, 1990 order, Monsanto principally complains that the Commission's September 18, 1989 order does not mention the issue of

caused three individual certificates to expire, mooted the claims based on, inter alia, imposition of a oneyear term limitation.)

11 18 C.F.R. Part 381 (1990).

refunding the filing fees. Monsanto does not challenge our disposition of that issue in the January 26, 1990 order in which we determined that the filing fees were appropriate. Because it has raised only arguments previously addressed by the Commission in the January 26, 1990 order, and because it does not meet the criteria of section 381.109, we deny Monsanto's request for rehearing on that issue.

The Commission orders:

(A) Petitioners' requests for rehearing in Docket Nos. CP87-57-010, et al., and CP87-57-011 are dismissed as moot insofar as they relate to the one-year term limitation in the now-terminated section 7(c) certificates.

(B) Monsanto's request in Docket No. CP87-57-011 for rehearing and refund of the filing fee paid by Florida Gas on April 26, 1989, is denied.

I. Introduction

On January 4, 1991, Williams Natural Gas Company, Larson Family Farms and Randal Loder (purchasers) filed a request for rehearing of the Commission's order granting rehearing issued December 5, 1990 (53 FERC ¶ 61,319) and a motion to strike affidavits. On that date Hawley Management Company, agent for the successor to Northern Pump Company (seller) filed a request for rehearing and petition for waiver of refunds and interest. On January 16, 1991, seller, together with Ensign Operating Company (Ensign) and Amoco Production Company (Amoco), other working interest owners in the subject well, filed an answer to the motion to strike affidavits. On January 22, 1991, purchasers filed an answer to seller's petition for waiver of refunds and interest. On February 14, 1991, seller filed a request to confirm and extend the stay of refund requirement granted on October 3, 1989 (49 FERC

61,045) until a final order is issued herein, and to cover the period pending court review of Commission orders. On February 26, 1991, purchasers filed an answer in opposition to the request to confirm and extend stay.

The December 5 order reversed a prior Commission order (48 FERC ¶ 61,192, at p. 61,708 (1989)) and reinstated the Natural Gas Policy Act of 1978 (NGPA) section 108 stripper well determination for seller's Danner No. A-1 well located in Finney County, Kansas.

II. Background

On May 21, 1986, the Commission issued an order granting the request of the Kansas Corporation Commission (Kansas) to reopen and remand to Kansas its determination that the

Danner No. A-1 well is a seasonally affected stripper gas well (35 FERC ¶ 61,207). On February 17 and May 23, 1988, Kansas issued orders revoking its prior determination that production from the well was seasonally affected and the orders also revoked Kansas' determination that the well qualified as a stripper well. On July 21, 1988, the revocation of the seasonally affected qualification became final when the Commission took no action to reverse that decision.

On March 27, 1989, the Commission reopened the final well category determination that the well qualified as a stripper well under section 108, noting that the Commission's May 1986 order had only reopened and remanded to Kansas the seasonally affected determination but not the stripper well determination. The March 27, 1989 order stated that it appeared that in making the subject determination, untrue statements of material fact were relied upon or necessary material facts were omitted from the original application in 1979 because Kansas in its February 17, 1988 order noted that testimony had revealed that it was Northern Pump's practice to partially close the valve on the well. Further, it was not clear how Northern Pump had determined the number of production days in calculating the well's average production during the qualifying period.

On August 3, 1989, the Commission vacated the stripper well determination finding that Northern Pump had made no statement in the course of the stripper well application in 1979 concerning the operating practice of restricting the valve on the well, and also failed to explain its method of estimating production days to show its compliance with section 271.803(d) of the regulations. Accordingly, the Commission

found good cause to vacate the stripper well determination and ordered refunds.

On December 5, 1990, the Commission granted rehearing of the August 3 order, finding that there was no omission of material fact in the original application because pinching the valve was a known custom in the trade in the Hugoton Field, and moreover, there was only a minimal effect on production from partially closing the valve, and that production days were accurately calculated because the well was open to the line every day. Applying Order No. 336, the Commission ordered sellers to pay refunds with interest for all production from the date after the Danner No. A-1 well initially disqualified until December 7, 1983, and after December 7, 1983 for the periods when production exceeded 60 Mcf per day.

III. Requests for Rehearing

Purchasers' request for rehearing may be summarized as follows: (1) regardless of whether the original stripper determination is revoked, refunds are due for all production from the date the Danner No. A-1 first disqualified, (2) there is substantial evidence in the record to support Kansas' revocation of the section 108 determination, and (3) untrue statements of material fact were relied upon or material facts were omitted in the section 108 application. Seller's request for rehearing is essentially a petition for waiver of refunds and interest which is discussed below.

The substance of purchasers' first argument is that the continuing qualification provisions of Order No. 336 cannot be applied to the Danner No. A-1 well because the well disqualified as a stripper well based on the 90-day production period from September 1, 1979 to November 30, 1979. Citing Bowen V. Georgetown University Hospital, 488 U.S. 204 (1988), purchasers argue that application of Order No. 336 which became effective December 7, 1983, to the Danner No. A-1 well constitutes prohibited retroactive rulemaking.

Purchasers' argument is unavailing. Until Order No. 336, once a well became disqualified, the seller could not collect the stripper well price until it filed a new application. Order No. 336 provided that after December 7, 1983, a well which had been determined to be a stripper well would continue to maintain its stripper well status even though the well overproduced. However, once such a well subsequently produced within the production limits, the seller could resume collecting the section

1 Effective December 7, 1983, a stripper well maintains its stripper well status even if production exceeds the 60 Mcf/d average, and when production falls below that amount, gas produced from the well

108 price without filing a new application for determination.

In Order No. 336-A (FERC Statutes and Regulations, Regulations Preambles 1982-1985 30,529, at p. 30,843) the Commission stated:

The Commission intended the disqualification and requalification rules adopted in Order No. 336 to apply not only to any well that receives an affirmative determination on or after December 7, 1983 but also to any well that received an affirmative section 108 determination prior to December 7, 1983, regardless of whether that well subsequently disqualified as a stripper well prior to that date. The Commission's intent in adopting these procedures in Order No. 336 was to require only one determination for a stripper well. Thus, the rules in Order No. 336 are applicable to stripper wells that disqualify or disqualify and requalify, provided they have received an affirmative section 108 determination.

Since the Danner well's stripper well determination has been reinstated as a result of the December 5, 1990 order the provisions of Order No. 336 apply.

As the Commission also observed in Order No. 336-A (FERC Statutes and Regulations, Regulations Preambles 1982-1985 ¶ 30,529, at p. 30,843), Order No. 336 did not permit collection of stripper well prices for gas produced from disqualified wells before the effective date of the rule. It merely eliminated filing requirements from the effective date of the rule to enable production from previously classified stripper wells to qualify prospectively as stripper well production after periods of disqualification without further filings. The rule did not affect refund obligations incurred prior to the effective date of the rule if section 108 prices were collected during periods of disqualification or during qualifying periods where new applications had not been filed. Consequently, no retroactivity is involved.

Purchasers, relying on Williston Basin Interstate Pipeline Co. v. FERC, 816 F.2d 777 (D.C. Cir. 1987), cert. denied, 108 S. Ct. 748 (1988) (Williston) and L&B Oil Co. Inc., v. FERC, 665 F.2d 758 (5th Cir. 1982) (L&B), next argue that the Commission impermissibly ignored substantial evidence in the record supporting Kansas' revocation of the section 108 determination. Purchasers assert that by such action the Commission exceeded its authority under NGPA section 503(b) as articulated in Williston to determine the narrow question of

once again qualifies for the section 108 price without the need to file for a new determination. Order No. 336, FERC Statutes and Regulations, Regulations Preambles 1982-1985 ¶ 30,496 (1983).