Rate Regulation: Pipelines Administrative Law Scope of Judicial Review

摘要

In August 2002, Tennessee files a request to amend its tariff under section 4 of the Natural Gas Act (15 U.S.C. 717c). The request deals with the creditworthiness of shippers using Tennessee' pipeline system. After staff review, the FERC conditionally approves the revision subject to the filing of some revised tariff sheets. Tennessee challenges the FERC conditional approval decision arguing that FERC has failed to satisfy its burden to show mat uie extant tariff language is unjust or unreasonable. FERC rejects the motions for rehearing. Held: petition denied. The scope of judicial review of FERC orders is deferential, applying the arbitrary, capricious, and abuse of discretion standard. Nonetheless, FERC must be able to demonstrate that it made a reasoned decision based on substantial evidence in the record. In reviewing the record and the need for the "reservation" changes being proposed by Tennessee, the court finds that FERC has provided several rationales for its initial order requiring a modification to the proposed tariff revision, as well as for its denial of Tennessee's motion for rehearing.