William A. Mogel on Apache Corp. v. FERC, 2010 U.S. App. LEXIS 26275 (D.C. Cir. Dec. 28, 2010)

William A. Mogel   By William A. Mogel, Attorney at Law

In this Emerging Issues Analysis, attorney William A. Mogel discusses Apache Corp. v. FERC, 2010 U.S. App. LEXIS 26275 (D.C. Cir. Dec. 28, 2010), [enhanced version available to lexis.com subscribersunenhanced version available from lexisONE Free Case Law, in which the D.C. Circuit Court of Appeals upheld a lease between two interstate pipelines despite a customer's contention that the lease would adversely affect customers.

Interstate Natutal Gas Pipeline

“This decision appears to be an anomaly of the 1985 regulatory policy expressed in FERC Order No. 436 that interstate natural gas pipelines are ‘open access’ and must provide nondiscriminatory transportation service to all shippers without ‘undue discrimination or preference’ as to the quality, duration, categories, prices, volumes or classification of service,” writes William Mogel. “Apache lets stand a FERC Order that sanctions a pipeline's giving preference for use of its capacity to a lessee providing firm and interruptible service over an existing interruptible customer."

“What makes Apache troubling,” explains the author, “is that the court (1) didn't require a FERC fact-finding but assumed that the lease obviated the need for Midcontinent to build additional pipeline facilities; (2) didn't examine whether it was appropriate to apply the Islander East policy to an intrastate pipeline over which FERC has limited jurisdiction; and (3) didn't question whether the Islander East policy is inconsistent with the industry-wide mandate of nondiscriminatory open access and transparency and encouraging competition. Instead, the court cobbled together a decision that approved the lease arrangement but permitted a later challenge by Apache.”

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William A. Mogel, Esq., focuses his practice on energy law. He has extensive experience with federal and state issues affecting the electric and natural gas industries. He regularly represents clients before FERC, state regulatory commissions and courts. Mr. Mogel founded and currently serves as Editor-in-Chief Emeritus of the Energy Law Journal, and he is also a Director of the Foundation of the Energy Law Journal. He serves as a co-editor of Energy Law and Transactions, and the editor of Regulation of the Gas Industry, both published by LexisNexis Matthew Bender and available at The Store.

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