Panhandle Eastern Pipe Line Co. v. Public Service Commission
Headline: Court upholds Indiana’s power to regulate an interstate pipeline’s direct sales to large industrial customers, allowing the state to require tariffs, reports, and oversight of rates and service.
Holding: The Court held Indiana may require an interstate pipeline to file tariffs and reports and regulate its direct sales to large industrial users because Congress did not remove state authority and the commerce clause does not forbid such regulation.
- Allows states to require tariffs, reports, and oversight of interstate pipelines’ direct industrial sales.
- Protects local utilities from losing industrial customers and revenue to unregulated pipeline sales.
- Leaves federal-state cooperation intact; federal agency can address conflicts if they arise.
Summary
Background
An interstate pipeline company moved natural gas from producing fields into Indiana and sold gas both to local utility companies and directly to large industrial users like Anchor-Hocking and a DuPont plant. The Indiana Public Service Commission ordered the pipeline to file tariffs, rules, and annual reports as the first steps toward possible state regulation of rates and service. The pipeline sued to block enforcement; the Indiana Supreme Court upheld the Commission, and the U.S. Supreme Court reviewed that decision.
Reasoning
The main question was whether the commerce clause or the federal Natural Gas Act stops Indiana from requiring those filings and from regulating direct sales to industrial consumers. The Court explained that Congress, in the Natural Gas Act, took federal control over transportation and sales for resale but deliberately left direct sales for consumption to the states. The commerce clause, by itself, does not forbid state action here. The Court therefore concluded the state may require filings and may regulate such direct industrial sales, and it affirmed the Indiana court.
Real world impact
This ruling lets Indiana continue to require tariffs and other filings and to oversee rates and service for big industrial gas buyers in the State. It helps protect local utilities and consumers from losing revenue and preserves cooperative federal-state regulation under the Natural Gas Act. The decision is not a final ruling on any specific rate order; future orders could still be challenged and federal agencies could address any real conflicts.
Dissents or concurrances
Justice Jackson agreed with the result in a concurrence. Justice Murphy did not participate in the case.
Ask about this case
Ask questions about the entire case, including all opinions (majority, concurrences, dissents).
What was the Court's main decision and reasoning?
How did the dissenting opinions differ from the majority?
What are the practical implications of this ruling?