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Arizona Corp. Comm'n v. Federal Energy Regulatory Comm'n

ELR Citation: 35 ELR 20037
Nos. No. 03-1206, (D.C. Cir., 02/11/2005)

The D.C. Circuit held that the Federal Energy Regulatory Commission (FERC) properly modified the terms, set forth in earlier settlements, under which three natural gas shippers must ship gas over the lines of the El Paso Natural Gas Company. FERC did not err by converting the shippers' contracts from full requirements to contract demand arrangements, thereby obligating them to pay for additions to capacity necessitated by growth in their demand. The record contains substantial evidence of capacity curtailments on El Paso's mainline severe enough to render firm service unreliable and thus justify FERC's action. And FERC did not merely protect the gas company from an "improvident bargain," as the shippers allege, but exercised its authority to prevent "the imposition of an excessive burden" on third parties.