Earl Warren

“ Thus the Commission in this case, as it often has in the past, [4] has declared that the use of gas under industrial boilers is an 'inferior' use, the assumption being that other fuels, particularly coal, are an adequate substitute [5] in areas where such other fuels abound. However, respondents, while conceding the premise that gas may be wasted where coal is readily available, argue that Congress has not awarded the Commission any powers over conservation; rather, this authority has veen reserved to the States. This contention is based on the legislative history of the Natural Gas Act. ”

“ In the present case the Commission was concerned with the effects this certification might have in the future on field prices generally. The Commission was attempting to consider not only the interests of consumers in New York but those in all States. To be compared with the problem before the Commission are the determinations that a consuming state commission may properly make in exercising authority over a direct sale. Certainly, the consuming State can regulate retail rates at which gas can be sold within the State. ”

“ These interests have presented extensive evidence on the economic, sociological, and technological aspects of fuel competition, and their representatives have strongly urged the Commission either to deny certificates on the general grounds of conservation or to attach restrictions which would severely limit the uses for which natural gas might be sold. ”

“ However, the FPC's staff argued vigorously that the public interest would suffer were Transco's petition granted. Among the grounds advanced were that the gas was to be transported for use under industrial boilers, this disposition being an 'inferior' use from the standpoint of conserving a valuable natural resource; that authorization of this and similar direct sales to major industrial users would result in pre-emption of pipeline capacity and gas reserves to the detriment of domestic consumers competing for gas supply ”

“ Ed.'s proposed 'inferior' use of gas under its industrial boilers would be wasteful of gas committed to the Commission's jurisdiction and, by the same token, would pre-empt space in pipelines that might otherwise be used for transportation of gas for superior uses. ”

“ There is a broader principle here which also stands in opposition to respondents' contentions. When Congress enacted the Natural Gas Act, it was motivated by a desire 'to protect consumers against exploitation at the hands of natural gas companies.' Sunray Mid-Continent Oil Co. v. Federal Power Commission, 364 U.S. 137, 147, 80 S.Ct. 1392, 1398, 4 L.Ed.2d 1623. To that end, Congress 'meant to create a comprehensive and effective regulatory scheme.' Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 520, 68 S.Ct. 190, 197, 92 L.Ed. ”

“ Price. As we read the opinion, the Commission's second objection to certification was based on its forecast that this and similar direct sales of gas at unregulated prices higher than those allowed in sales for resale [18] would attract gas to the high-bidding direct purchasers and thus lever upwards field prices both in direct sales and sales for resale.
Respondents claim that this 'policy' consideration masks the Commission's true purpose in this proceeding, which, according to respondents, is to bar direct sales absolutely, thus forcing all gas transactions into regulated channels. ”

“ Indeed, as respondents argue, such a flat rule would be doubly objectionable here because Congress has not given the Commission jurisdiction over direct sales. However, we cannot agree that the Commission propounded an absolute rule in this case. Examination of the opinion reveals recurrent reference to the absence of any one controlling factor; as the Commission stated, 'countervailing factors suffice to tip the balance against the grant of the authority requested by Transco.' 21 F.P.C., at 141. ”

“ Thus, it is especially adapted to space and water heating in urban homes and other buildings and to the various industrial hest processes which require concentration of heat, flexibility of control, and uniformity of results, Industrial uses to which it appears particularly adapted include the treating and annealing of metals, the operation of kilns in the ceramic, cement, and lime industries, the manufacture of glass in its various forms, and use as a raw material in the chemical industry. ”

“ Certainly such action would be contrary to our previous statements that the term 'public convenience and necessity' connotes a flexible balancing process, in the course of which all the factors are weighed prior to final determination. ”

“ The question in these cases is whether the Federal Power Commission has gone beyond the scope of its delegated authority in denying a certificate of public convenience and necessity under § 7 (e) of the Natural Gas Act of 1938, 52 Stat. 821, as amended, 15 U.S.C. § 717 et seq., 15 U.S.C.A. § 717 et seq. [1] The principal respondents [2] are Transcontinental Gas Pipe Line Corp. (Transco) , a pipeline company engaged in transporting natural gas in interstate commerce, and Consolidated Edison Co. (Con. Ed.) ”

“ No. 948 states that:↑ The passage excerpted and relied upon by the Court of Appeals should be read with reference to the footnote appended thereto. In this footnote, the Commission stated:↑ See the Commission's statement reproduced in S.Rep. No. 1234, 78th Cong., 2d Sess. 3-6. The Senate Committee itself recognized that, following the 1942 amendment to the Act, the Commission was directly concerned with conservation problems. ”