Federal Power Commission v. Hunt

1964-03-30

Headline: Commission can bar price increases on temporarily certificated interstate natural gas sales, upholding consumer protections and limiting producers’ ability to raise contract rates during emergency authorizations.

Holding: The Court held that the Federal Power Commission may condition temporary certificates by prohibiting producers from increasing the certified initial price while the permanent-authorization hearing is pending.

Real World Impact:

Limits producers from raising certified initial prices during temporary emergency authorizations.
Gives consumers short-term protection from sudden gas price spikes.
Leaves open how broadly price conditions can apply to permanent certifications.

Topics: natural gas regulation, energy pricing, consumer protection, agency power

Summary

Background

A group of natural gas producers, represented by the Hassie Hunt Trust and others, sought temporary permission to sell gas in interstate commerce because of alleged emergencies. The Federal Power Commission granted seven temporary certificates but attached a condition: producers must keep the initial contract price from rising (the Commission set an 18¢ per Mcf. guideline rather than the producers’ proposed 20¢). The Court of Appeals struck down that no-increase condition, and the Supreme Court agreed to review the question.

Reasoning

The Court framed the question simply: may the Commission attach a no-increase price condition to a temporary certificate issued under §7 while a permanent-certification hearing is pending? The Court said yes. It explained that §7 allows temporary certificates in emergencies and authorizes reasonable terms and conditions to protect public convenience and necessity, while §4 governs changes in rates only after gas is permanently certificated. Allowing producers to file higher rates under §4 during the temporary authorization would nullify protective §7 conditions and risk irreparable price effects. The Court relied on the Act’s text, the legislative history, and prior decisions to conclude the Commission may impose such temporary conditions.

Real world impact

Producers must accept temporary price limits when the Commission grants emergency temporary certificates, limiting their ability to raise contract prices immediately. Consumers and pipelines gain short-term protection from sudden price spikes while permanent hearings proceed. The ruling leaves open how broadly the Commission may condition permanent certificates and warns about docket delays that can disadvantage either side.

Dissents or concurrances

Justice Harlan (joined by Justice Stewart) dissented, arguing the Natural Gas Act and prior cases do not justify this result and that Congress, not the Court, should decide the issue.