[00:00:00] Speaker 05:
Number 12-1151 et al.

[00:00:03] Speaker 05:
Columbia Gas Golf Transmission LLC petitioner versus the Federal Energy Regulatory Commission.

[00:00:08] Speaker 05:
Mr. Floon arguing for petitioner range resources at Appalachia.

[00:00:12] Speaker 05:
Mr. Higgins arguing for petitioner Columbia Golf Transmission.

[00:00:15] Speaker 05:
Mr. Ediger for responding and Mr. Etchemendy for intervener.

[00:00:21] Speaker 02:
Good morning, Mr. Floon.

[00:00:22] Speaker 02:
You may proceed whenever you're ready.

[00:00:25] Speaker 09:
Thank you.

[00:00:27] Speaker 09:
Good morning, and may it please the court.

[00:00:28] Speaker 09:
My name is John Paul Floom.

[00:00:29] Speaker 09:
I'm appearing today on behalf of Range Resources Appalachia LLC.

[00:00:35] Speaker 09:
Range is a long-term firm shipper on the Texas Eastern and Columbia Gulf systems.

[00:00:40] Speaker 09:
They hold a 15-year contract that continues through 2032 for 200,000 decatherms a day of capacity on both pipeline systems.

[00:00:50] Speaker 09:
Range has no physical capability to monitor or manage the pressure differential between Texas Eastern and Columbia Gulf systems.

[00:00:58] Speaker 09:
And without action from this court reversing the FERC's decisions on the issues before the FERC and the orders under review here, Range will have no ability to guarantee that the gas that it delivers for shipment on Texas Eastern will ever make it to the Gulf system.

[00:01:14] Speaker 09:
This court owes FERC no deference in its interpretation of section 6.2 of Texas Eastern's tariff.

[00:01:20] Speaker 09:
That tariff provision specifically says that Texas Eastern is required to deliver gas at pressures as are available at the point of delivery and resulting from Texas Eastern maintaining a discharge pressure of 750 PS IG at the nearest upstream compressor station.

[00:01:38] Speaker 02:
And that would have been Danville.

[00:01:40] Speaker 09:
That would be the devil station.

[00:01:41] Speaker 09:
Yes, your honor.

[00:01:42] Speaker 03:
Yes.

[00:01:42] Speaker 03:
But I did not see in your complaint where you alleged that that

[00:01:49] Speaker 03:
750 pound pressure had not been maintained at Danville.

[00:01:56] Speaker 09:
Well, your honor, I respectfully the there's two points that I'd like to make about that.

[00:02:01] Speaker 09:
We did allege that in our complaint of Paragraph 24 of the range complaint where we discussed the applicability of the terror provisions and Texas Eastern's violation of those as well as our violation of our service agreement with Texas Eastern.

[00:02:14] Speaker 09:
But also, Your Honor, the court doesn't even need to get to that point necessarily.

[00:02:18] Speaker 09:
We need an undoing of this errant interpretation of the terror itself.

[00:02:22] Speaker 09:
If we accept, as a matter of fact, the FERC counsel in their brief, where they stated that we can re-submit our complaint, properly alleging those claims, as Your Honor has pointed out, perhaps we should have put it differently.

[00:02:36] Speaker 09:
We still have the legal error of FERC's interpretation of Section 6.2.

[00:02:40] Speaker 02:
I don't see in paragraph 24 where you alleged that there was less than 750 PSIG.

[00:02:51] Speaker 02:
Rather, it just quotes section 6.2.

[00:02:55] Speaker 02:
saying that the tariff requires Texas Eastern to deliver gas at pressures that are available at the point of delivery and resulting from pipeline maintaining a discharge pressure of 750 pounds per square inch gauge pressure at the nearest upstream compressor station, which is what

[00:03:14] Speaker 02:
what the tariff says.

[00:03:15] Speaker 09:
Certainly, your honor.

[00:03:16] Speaker 09:
There are two points on that again.

[00:03:18] Speaker 09:
The FERC then taking what we have put in our complaint, the FERC then interpreted section 6.2 to completely read out the resulting from the maintenance of a discharge pressure.

[00:03:27] Speaker 02:
They did.

[00:03:28] Speaker 02:
It's true.

[00:03:28] Speaker 02:
They did not quote that.

[00:03:30] Speaker 02:
But I guess my question is

[00:03:33] Speaker 02:
Is the inference, you're saying it was a necessary implication of what you've pleaded that the pressure was lower at Danville than it should have been because in the end, the pressure down at the interchange was lower.

[00:03:51] Speaker 02:
But is it entirely fair to assume the gas that's flowing 37 miles down a pipeline

[00:04:02] Speaker 02:
would lose a lot of pressure between the Danville station and the interconnect.

[00:04:07] Speaker 09:
That's a great question, your honor.

[00:04:08] Speaker 09:
And we would have loved it if her could actually ask the question and given us the opportunity.

[00:04:11] Speaker 02:
It's your burden.

[00:04:12] Speaker 02:
It's your burden.

[00:04:13] Speaker 02:
So without the allegation that the pressure at Danville was below what it needed to be and that that was the cause, it doesn't seem like you've alleged any violation of section six point two.

[00:04:28] Speaker 09:
Well, Your Honor, I would suggest that also in the reference to paragraph 37 of the joint complaint in that same paragraph 24 of the range complaint points out that there were some pressures that we had available from the Columbia Gulf system in the 2019 curtailment.

[00:04:43] Speaker 09:
And those pressures were well below the 750 PSIG limit that was at the Dandle or that Texas Eastern was required to maintain under its tariff.

[00:04:52] Speaker 09:
So we did allege that there was a mismatch between the 750 PSIG discharge pressure that should have been operating at the Dandle station and that the pressures that were apparent on the Columbia Gulf side of the system.

[00:05:04] Speaker 08:
Council, I think in paragraph 37 of the joint complaint, the essential argument is that Texas Eastern had capacity.

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Its MAOP was higher than the average delivery pressure that it would have needed.

[00:05:18] Speaker 08:
But it does not say that we know there was a breach of section 6.2 because if there was a 750 PSIG

[00:05:30] Speaker 08:
maintained at Danville, it would have been above X at Adair.

[00:05:34] Speaker 08:
Isn't that the kind of allegation and explanation you would have had to make to make this claim?

[00:05:40] Speaker 09:
Respectfully, Your Honor, we certainly believe we pled the the complaint properly and the allegations properly.

[00:05:46] Speaker 09:
You know, in hindsight, have we pled it differently that we probably would not be here before you today, hopefully.

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But the problem that we have with the the FERC decision is take just take as a fact or just take as an assumption here that we did not plead it properly.

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And FERC could have said that in its initial order dismissing the complaint that you didn't address the issues that are in the tariff.

[00:06:06] Speaker 09:
We'll leave those for another day.

[00:06:08] Speaker 09:
As FERC counsel has mentioned in the FERC brief, we have the right to replede these claims.

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The issue that we have is that FERC has improperly interpreted the tariff to read out the obligation.

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So even if we were to raise this claim in a future complaint,

[00:06:22] Speaker 02:
So they omitted it, but I don't think they're depending on reading it out.

[00:06:26] Speaker 02:
They're just not crediting the implication that you would like them to credit.

[00:06:31] Speaker 09:
I would suggest, Your Honor, that, unfortunately, the FERC and two instances in both the order on rehearing and the dismissal order stated that the tariff imposes no obligation on Texas Eastern with regard to minimum pressures.

[00:06:46] Speaker 02:
with regard to minimum pressures at their interconnect.

[00:06:52] Speaker 02:
You're saying that you read that as saying that there's no requirement of pressure at Danville.

[00:06:57] Speaker 02:
I think they're not even reading you to have alleged that, so their statement to that effect doesn't negate that.

[00:07:04] Speaker 02:
What they don't think you've alleged, they're not negating.

[00:07:07] Speaker 09:
And if that is how the court is viewing the FERC's determinations and that is how FERC counsel is willing to state that the agency is reviewing this, I don't think we have an issue at this point, Your Honor.

[00:07:19] Speaker 09:
We can re-raise the claims before FERC.

[00:07:21] Speaker 09:
Our concern is that we re-raise these claims at FERC.

[00:07:24] Speaker 09:
FERC says, no, we address that and said there's no tariff obligation.

[00:07:27] Speaker 09:
So right now we have what could be construed as a very broad reading of responsibilities or lack of responsibility under the tariff.

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that we are now precluded from raising in a subsequent complaint under 66.2.

[00:07:38] Speaker 03:
But how could the construction of the tariff, the tariff applies to, you know, to all shippers, right?

[00:07:50] Speaker 03:
The 750 pound requirement is in your, I guess, firm agreement with Texas Eastern, right?

[00:08:00] Speaker 09:
So, actually, Your Honor.

[00:08:02] Speaker 03:
How can the construction of the tariff

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undermine what they're required to do in the firm agreement.

[00:08:09] Speaker 03:
Am I missing something?

[00:08:10] Speaker 09:
Well, under FERC policy and precedent, Your Honor, the service agreement, actually the service agreement itself incorporates the tariff by reference.

[00:08:17] Speaker 09:
And under FERC policy and precedent, the service agreement cannot control over the generally applicable tariff provisions unless there is a specific provision that removes that right.

[00:08:27] Speaker 09:
The way that the service agreement itself is structured is it says that it's at the available pressure.

[00:08:32] Speaker 09:
But the base level default rule for all shippers on the system, as Your Honor points out,

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would be the tariff that the service agreement does not modify that obligation that Texas Eastern has to maintain that 750 PS ID.

[00:08:43] Speaker 09:
I see.

[00:08:45] Speaker 03:
So if we said that we don't read first opinion as essentially undermining the service agreement requirement that there be 750 pounds of pressure at the nearest compression compressor station

[00:09:05] Speaker 03:
that would alleviate the concern that you are articulating.

[00:09:09] Speaker 09:
With respect to section six point two.

[00:09:11] Speaker 09:
Yes.

[00:09:12] Speaker 09:
That is correct.

[00:09:12] Speaker 09:
Yes.

[00:09:13] Speaker 09:
We still believe we pled this properly and that should have been taken before the first.

[00:09:17] Speaker 09:
But yes.

[00:09:18] Speaker 02:
And is there anything in the record about how quickly natural gas loses pressure on a on a pipeline as it travels away from a compressor station.

[00:09:26] Speaker 09:
That would have been a question that we could have asked your honor in discovery which is why we wanted an evidentiary hearing range expected to receive an evidentiary hearing.

[00:09:33] Speaker 09:
Texas Eastern is the only party in the proceedings before the FERC.

[00:09:36] Speaker 09:
that has the information that we would have needed to prove up the claims about whether they were in violation of the tariff or not.

[00:09:42] Speaker 09:
Absent a hearing, we can't do that.

[00:09:44] Speaker 09:
FERC does not offer discovery rights to parties when they file a complaint.

[00:09:47] Speaker 09:
You have to have the process set for an evidentiary hearing before the rules at FERC apply for discovery.

[00:09:53] Speaker 09:
So we had no opportunity to really bolster the analysis.

[00:09:56] Speaker 09:
I'm sorry, John, did you have a question?

[00:09:57] Speaker 09:
No, please.

[00:09:58] Speaker 09:
To bolster our analysis of whether Texas Eastern was in violation of the tariff absent the hearing, complaint rules do contemplate that we would have a hearing with the ability to have discovered rights to prove up that claim.

[00:10:11] Speaker 02:
On your claim that you were similarly situated but not treated as well as other

[00:10:21] Speaker 02:
shippers, are the Liberty meter and the Kentucky Energy meter, do they have interconnects or not?

[00:10:30] Speaker 09:
They are meters with, I believe, local distribution companies, Your Honor.

[00:10:34] Speaker 09:
So they would be just essentially a meter off of the pipeline.

[00:10:38] Speaker 09:
They're not interconnecting with an interstate pipeline system.

[00:10:41] Speaker 02:
But there is an interconnect to a distribution

[00:10:43] Speaker 09:
I don't actually know that, Your Honor.

[00:10:46] Speaker 09:
I'm sorry.

[00:10:46] Speaker 02:
The reason I'm wondering is just whether if they don't interconnect, then that might be an explanation why they wouldn't experience the same reduced flows as at a dare.

[00:11:00] Speaker 09:
Well certainly so an interconnection your honor in the in the sort of industry sense of it would be a connection between an interstate and interstate and interstate.

[00:11:07] Speaker 09:
So in the context of I think it has you're describing it and I don't mean to put words in your mouth but they do interconnect with a facility.

[00:11:14] Speaker 09:
I believe that they are local distribution systems.

[00:11:17] Speaker 09:
It would simply be a meter measuring the amount of gas flow going from the Texas Eastern system to that.

[00:11:22] Speaker 09:
that system and that does point out the problem that we have here with respect to the similarity situated shipper context.

[00:11:27] Speaker 09:
Those two meters are on the same mainline path as the Adair interconnect.

[00:11:33] Speaker 09:
The fact that they received 80 percent of their nominated quantities during one of these curtailments and range received zero is a clear indication that range was treated differently treated in a not in a situation that could result in an undue discrimination against range.

[00:11:48] Speaker 09:
The fact that we were not presented with the opportunity to prove up our claims about being similarly situated is really an error of FERC in the application of its own rules and its own precedent.

[00:11:59] Speaker 09:
FERC has declared that that similarly situated context and that review is a uniquely and intensely fact-specific review.

[00:12:07] Speaker 09:
So that is something that we expected FERC to take into consideration.

[00:12:12] Speaker 08:
I would also... Can I ask a question about the reservation credit issue?

[00:12:17] Speaker 08:
Sure.

[00:12:17] Speaker 08:
As I understand it, I know this is simplifying, you're essentially saying you should be entitled, you would be entitled to 10 more days of reservation credits if force majeure was not properly declared, right?

[00:12:29] Speaker 09:
For one of the auditors, yes.

[00:12:31] Speaker 08:
For one of the, for the 2021.

[00:12:33] Speaker 08:
And what FERC said, at least in part, was that that was irrelevant because range had actually already withheld payment for those reservation credits.

[00:12:45] Speaker 08:
And what they say in the initial order and on rehearing is that for some reason means you're not entitled to relief in this proceeding.

[00:12:54] Speaker 08:
Do you I didn't see a response to that.

[00:12:57] Speaker 08:
holding in your briefs, do you have an argument about why that's incorrect?

[00:13:03] Speaker 09:
It's incorrect because, yes, we withheld payment, but we would have to make the payment.

[00:13:07] Speaker 09:
If the FERC determines that there was an appropriate declaration of a force majeure and we were not entitled to the full amount of reservation charge credits, then we would have to pay those to Texas Eastern.

[00:13:18] Speaker 09:
So you were basically seeking a declaration?

[00:13:20] Speaker 09:
Essentially, yes.

[00:13:22] Speaker 02:
I don't really follow that, and I guess we have to ask FERC,

[00:13:27] Speaker 02:
What's at issue is the net that's owed between the parties.

[00:13:33] Speaker 02:
And if it's not force majeure, then you would be entitled to withhold more of what you're withholding.

[00:13:42] Speaker 02:
If it is force majeure, you would have to pay for

[00:13:48] Speaker 02:
The first 10 days.

[00:13:49] Speaker 09:
So in the reservation charge crediting context, your honor, the if there is a force majeure outage, there's a 10 day safe harbor in which the pipeline is entitled to recoup the entirety of reservation charges from the shipper.

[00:14:02] Speaker 00:
Right.

[00:14:02] Speaker 09:
After that, there's a full payment or reservation of the reservation charge credits.

[00:14:06] Speaker 09:
We'll call them demand charge credit so we can avoid reservation on both sides of that statement.

[00:14:11] Speaker 09:
So the demand charge credits themselves are paid, sorry, there's a credit back to the shipper of the amounts that would have otherwise been owed.

[00:14:19] Speaker 09:
In a non-forescritter context, there is no 10-day safe harbor.

[00:14:22] Speaker 09:
They're simply just, they take effect immediately.

[00:14:24] Speaker 09:
So the question becomes, what is owed to Texas Eastern from Range?

[00:14:29] Speaker 09:
And Range did withhold, assuming that they had full reservation charge credit and capabilities and were entitled to that difference.

[00:14:37] Speaker 09:
And as we get to FERC and if we have a final order from FERC about this, that we do owe that, that is the damage to range.

[00:14:45] Speaker 09:
And that's why we needed to have an understanding of the applicability of the force major declaration.

[00:14:51] Speaker 03:
But isn't the order written as if you're never going to have to pay that?

[00:14:55] Speaker 03:
I mean, that's the way I read it.

[00:14:58] Speaker 03:
Maybe I just wasn't paying close enough attention.

[00:15:01] Speaker 03:
The funds that you withheld.

[00:15:03] Speaker 03:
As if, like, there's no harm because you withheld those funds and you're never going to pay them.

[00:15:10] Speaker 09:
So your honor, respectfully, I don't know how FERC could think that.

[00:15:14] Speaker 09:
Its rules state that the reservation charges are owed to the pipeline.

[00:15:17] Speaker 09:
That's what the tariff requires and that's what the service agreement requires.

[00:15:21] Speaker 09:
I can't see an envisioned situation where FERC would have assumed that we get to keep those no matter what.

[00:15:27] Speaker 09:
So it does present a bit of a, I don't know what FERC was thinking, perhaps the FERC council can address that for you, but that certainly is a puzzling question for us as well.

[00:15:37] Speaker 02:
question about the interaction between the pipeline pressure claim and the force majeure argument.

[00:15:44] Speaker 02:
This is not the way they discussed it, but if FERC is correct, that it's on your client's head for not having written minimum pressure at the interconnect into its contract, and therefore,

[00:16:03] Speaker 02:
Texas Eastern has no obligation to maintain a minimum pressure at the Adair interconnect, then why is force majeure even relevant?

[00:16:15] Speaker 02:
Because when something happens on Texas Eastern's pipeline, there's no minimum pressure obligation to be violated there.

[00:16:25] Speaker 09:
That's a great question, Your Honor.

[00:16:26] Speaker 09:
That's another point that we did raise in our complaint with respect to the application of Section 17.1 of the tariff.

[00:16:32] Speaker 09:
It's not something that we briefed before this court.

[00:16:34] Speaker 09:
So we can, I can certainly address that if you'd like, but the point being, and this is an issue that that range has struggled with range, as I mentioned at the beginning of this, this argument for you has no ability to physically change how the gas is flowing on the system or increase or decrease pressures.

[00:16:50] Speaker 02:
It does have ability to write a contract up front.

[00:16:53] Speaker 02:
I read FERC's orders to say that's where the problem arose.

[00:17:00] Speaker 09:
And I agree with you that that is what FERC's orders say.

[00:17:02] Speaker 09:
I question, though, and I ask your honors to question as well, how is a shipper that has no optics into what the pressures are between two interstate pipeline systems supposed to know what the minimum pressure would be?

[00:17:14] Speaker 09:
And that's the real, for us at least as the shipper on the system, we don't know what the pressure is other than what the terrorist states is the 750 minimum that's going to be discharging from the upstream station and the 575 is the suction pressure on the nearest downstream station.

[00:17:29] Speaker 09:
We don't have any understanding if range had negotiated a 600 PSIG minimum at that point.

[00:17:34] Speaker 09:
Is that enough?

[00:17:35] Speaker 09:
Is it not enough?

[00:17:36] Speaker 09:
And so the question really that I think from a broad policy perspective that FERC never really took into account here is how is it that the shipper, the one entity that never has the ability to change the pressure supposed to negotiate about pressure?

[00:17:52] Speaker 09:
And that doesn't have any of the information related to the pressure other than MAOP.

[00:17:57] Speaker 09:
That's public information.

[00:17:58] Speaker 09:
Everything else is private.

[00:17:59] Speaker 02:
We can ask for it, but my understanding from having read their orders would be that is precisely why it would be incumbent on a shipper to write in a minimum pressure obligation, precisely because you don't have any ability once you're relying on them to ship.

[00:18:18] Speaker 09:
And that's a fair point, Your Honor.

[00:18:20] Speaker 09:
But I would suggest that how does the shipper know what the pressure should be?

[00:18:23] Speaker 09:
I agree that perhaps a shipper should, from a contractual perspective, make sure that they are covered under their contract as best as they can.

[00:18:30] Speaker 09:
They do have a tariff that says that, the pressure obligations.

[00:18:33] Speaker 02:
Just back on the force majeure issue for a moment.

[00:18:35] Speaker 02:
So there are these 10 days that either free pass for Texas Eastern or not.

[00:18:43] Speaker 02:
Can we tell from the record which days those are?

[00:18:47] Speaker 09:
I don't have the joint appendix sites in front of me your honor but I believe that they were the period between I think it was late May early June of 2021 through the end of July was the 2021 outage.

[00:18:59] Speaker 09:
So I believe it would be that first part of June of 2021.

[00:19:02] Speaker 09:
So if it's.

[00:19:10] Speaker 02:
Maybe May 28th to June 8th or something like that.

[00:19:14] Speaker 09:
Something in that time frame, yes.

[00:19:15] Speaker 02:
And then the period following that is a little unclear to me why it's zero for 23 days.

[00:19:26] Speaker 09:
So there were the nominated quantity that, so the force majeure doesn't necessarily only last for 10 days.

[00:19:32] Speaker 09:
Right.

[00:19:33] Speaker 09:
The outage that occurred there, at least for some of the lines that are

[00:19:38] Speaker 09:
that are at issue at the, or that connect with the Adair interconnect.

[00:19:42] Speaker 09:
The PHMSA had required that, or I guess they refused to grant a waiver to Texas Eastern to continue operating at its existing MAOP.

[00:19:53] Speaker 09:
With one of those lines in particular, there was no obligation to reduce the pressure.

[00:19:58] Speaker 09:
So that is also part of our consideration and concern here is what was the requirement for the

[00:20:04] Speaker 09:
for the declaration of the force majeure.

[00:20:06] Speaker 09:
But the point being, your honor, sorry, is that the pressure differential between the two pipeline systems at Adair continued for a period of way more than 10 days.

[00:20:18] Speaker 09:
That maybe was related or not to the force majeure.

[00:20:22] Speaker 03:
So with respect to Northern Natural.

[00:20:25] Speaker 03:
Yes, your honor.

[00:20:30] Speaker 03:
My reading of the case is that

[00:20:33] Speaker 03:
Well, one difference is that between, I guess, I'm not sure the right terms, kind of the downstream pipeline and the upstream pipeline, there was a minimum pressure agreement in the agreement between those two entities, which we don't have here, or at least explicitly.

[00:21:03] Speaker 03:
the bottom line is the court said just looking at or FERC said just looking at the tariff of the receiving pipeline there was no obligation with respect to adjusting pressures in order to

[00:21:25] Speaker 03:
be able to receive the gas from the other pipeline on the other side of the interconnect, so to speak.

[00:21:36] Speaker 03:
And that was really all they needed to do to hold to decide that case.

[00:21:42] Speaker 03:
And FERC says, you know, anything else we said there is dictum.

[00:21:47] Speaker 03:
So what's wrong with that way of looking at Northern Natural?

[00:21:52] Speaker 09:
And your honor, my colleague was was going to address the northern natural.

[00:21:55] Speaker 03:
Oh, I'm sorry.

[00:21:56] Speaker 03:
But I actually just to clarify, I can I can wait.

[00:21:59] Speaker 09:
OK, I can clarify if you wouldn't mind, your honor.

[00:22:01] Speaker 09:
And to those points, though, that just for for your benefit, there was not an existing firm service agreement between Northern Natural and A&R at the time of the order that had expired prior to that point.

[00:22:13] Speaker 09:
Number one and number two, just for clarification in the one that

[00:22:18] Speaker 09:
That before it expired, it had a minimum pressure obligation.

[00:22:22] Speaker 09:
That's correct, yes.

[00:22:23] Speaker 09:
And just to be clear, to align the parties correctly in the way of thinking about this, ANR and Columbia Gulf are both the downstream pipeline.

[00:22:33] Speaker 09:
Northern Natural and Texas Eastern are both the upstream pipeline in this context.

[00:22:37] Speaker 02:
So just to circle back on something that I think you answered, if

[00:22:43] Speaker 02:
If there were no minimum pressure obligation at the Adair interconnect for the reasons relating to the interpretation of the tariff and agreements, then that would undercut the importance of the force majeure or not finding because range would not be owed any credits.

[00:23:07] Speaker 02:
Is that right?

[00:23:10] Speaker 09:
In the context of these two care talents, yes, Your Honor, that's correct.

[00:23:14] Speaker 09:
We will be owed nothing if you were to rule in that sense.

[00:23:17] Speaker 09:
Yes.

[00:23:19] Speaker 02:
Thank you.

[00:23:19] Speaker 09:
All right.

[00:23:19] Speaker 09:
Thank you very much.

[00:23:20] Speaker 02:
I think you've reserved a couple of minutes.

[00:23:21] Speaker 02:
We did.

[00:23:22] Speaker 02:
I did two minutes, Your Honor.

[00:23:23] Speaker 02:
Yes.

[00:23:23] Speaker 02:
We'll give you time, even though we took you over.

[00:23:25] Speaker 02:
Thank you very much.

[00:23:26] Speaker 09:
Appreciate it.

[00:23:30] Speaker 02:
I believe we're next hearing from Mr. Higgins.

[00:23:36] Speaker 04:
Thank you, Your Honor.

[00:23:36] Speaker 04:
Good morning.

[00:23:37] Speaker 04:
Matthew Higgins for Petitioner of Columbia Golf.

[00:23:40] Speaker 04:
I have three points to make this morning.

[00:23:41] Speaker 04:
First, why Columbia Golf has Article 3 standing.

[00:23:44] Speaker 04:
Second, why FERC departed from its past precedent without reasonable explanation.

[00:23:49] Speaker 04:
And third, why the interconnection agreement and FERC's misinterpretation of that agreement merits remand.

[00:23:55] Speaker 04:
And I'd like to quickly start with standing, though I'm also happy to get writing the Judge Wilkins questions if he prefers.

[00:24:01] Speaker 04:
But if I may, Columbia Gulf standing is very clear from Trillo's affidavit.

[00:24:08] Speaker 04:
First, he makes very clear that from the 2019 and 2021 curtailments,

[00:24:13] Speaker 04:
Columbia Golf suffered significant administrative and operational harm.

[00:24:17] Speaker 04:
And that's a point that FERC's briefs don't really get into.

[00:24:21] Speaker 04:
But administratively, FERC was required before the curtailments to issue the notices at JA 177 to 185.

[00:24:29] Speaker 04:
And that comes directly from FERC's regulations.

[00:24:32] Speaker 04:
And we submit that is enough to constitute a concrete injury under Article III.

[00:24:37] Speaker 02:
I think you said FERC was required to issue the notices.

[00:24:39] Speaker 02:
But you mean Columbia Golf.

[00:24:40] Speaker 02:
Oh, no.

[00:24:40] Speaker 04:
I meant Columbia Golf.

[00:24:41] Speaker 04:
Excuse me.

[00:24:41] Speaker 04:
I misspoke, Your Honor.

[00:24:42] Speaker 04:
Yes.

[00:24:42] Speaker 04:
Yeah, and that's under 18 CFR 284.13 D. Columbia Gulf is required to issue those notices before curtailing ranges.

[00:24:51] Speaker 08:
That kind of injury is only redressable if it happens again, right?

[00:24:55] Speaker 04:
You want us to make a... Yes, so we have a concrete injury that comes from these curtailments and then we have a substantial risk that these curtailments will happen in the future

[00:25:05] Speaker 04:
based on what Trillo said in his affidavit, that the conditions that existed in 2019 and 2021, the pressure differentials that existed that gave rise to these curtailments, the conditions are even worse now after the Louisiana express pipeline went into service.

[00:25:22] Speaker 04:
And based on those conditions, Columbia Golf has taken steps to mitigate the risk of that substantial, the substantial risk of harm coming in the future from those curtailments is taking Texas Eastern's gas, which is lower pressure and looping it around its own pipeline, its own system.

[00:25:42] Speaker 04:
to a compressor station 12 miles away, compressing that gas, sending it back down, and then which allows the gas to actually enter into Columbia Golf's system.

[00:25:51] Speaker 04:
Without that workaround, it would not be able to receive Texas Eastern's gas.

[00:25:56] Speaker 04:
And because of that workaround, Columbia Golf is using its compressor without any compensation.

[00:26:03] Speaker 04:
There's additional maintenance costs.

[00:26:05] Speaker 04:
There's additional operational costs to that, which Columbia Golf otherwise would be

[00:26:10] Speaker 04:
allocating, reserving for its paying customers, instead it is using to compress Texas Eastern's gas.

[00:26:16] Speaker 03:
FERC says that that's a voluntary kind of obligation you're taking on and that's not sufficient to confer standing.

[00:26:27] Speaker 04:
Correct.

[00:26:27] Speaker 04:
I think what FERC's argument is is kind of in two parts.

[00:26:31] Speaker 04:
One, I think they're saying it's voluntary or self-imposed because they don't

[00:26:34] Speaker 04:
believe the Columbia gas is harmed from the curtailment.

[00:26:38] Speaker 04:
They don't believe the Columbia gas suffers the concrete harm when it curtails range of service.

[00:26:43] Speaker 04:
But of course it does.

[00:26:44] Speaker 04:
It suffers the administrative harm that I referenced, the JA 177 to 185.

[00:26:50] Speaker 04:
And there's massive operational harm when ranges lower pressure gas does not come in to Columbia golf system.

[00:26:56] Speaker 04:
There's a void and Columbia golf needs to scramble daily to fill that void.

[00:27:01] Speaker 04:
And this is laid out in Trillo's affidavit.

[00:27:03] Speaker 04:
It needs to use third party storage from gas.

[00:27:05] Speaker 04:
It needs to get

[00:27:05] Speaker 04:
excess gas from other pipelines in order to have enough gas in its system so that the pressure is high enough so that its system actually works.

[00:27:14] Speaker 04:
It also needs to stay in constant communication with range throughout these curtailments, which is another type of operational harm.

[00:27:22] Speaker 02:
This reminds me of something that was a little bit mysterious to me in the record, which is why

[00:27:27] Speaker 02:
the flow levels between June 9th of 2021 and July 1st of 2021 were zero.

[00:27:36] Speaker 02:
When I thought that there was some pressure on Texas Eastern and why was it not being

[00:27:46] Speaker 02:
Why did Columbia Gas go all the way down to zero?

[00:27:49] Speaker 04:
Yeah, so the flow levels from range were zero because that gas was lower pressure, but there was other gas on the pipeline that was higher pressure that was needed in order for the pipeline to function properly.

[00:28:01] Speaker 02:
Range had a reservation and so I just don't understand why some of range's gas wasn't going.

[00:28:08] Speaker 04:
So none of Rangers gas could be going at that point because the imbalance had grown so high.

[00:28:13] Speaker 04:
Once the imbalance had grown as high as it did, accepting Columbia gas wasn't

[00:28:19] Speaker 04:
Columbia Gulf wasn't able to accept any of Ranger's gas because that was lower pressure.

[00:28:24] Speaker 01:
Other shippers gas on the same pipeline at the same place or no.

[00:28:29] Speaker 04:
Not not on the Texas Eastern pipeline but kind of where the Texas Eastern pipeline at the interconnect around that area other other gas was flowing through gas needed to be at that point on the pipeline in order for the pipeline to actually function properly.

[00:28:45] Speaker 04:
It just could not have come through the Adair interconnect.

[00:28:47] Speaker 02:
So there's another there's another

[00:28:49] Speaker 02:
pipeline, another analogous to Texas Eastern that Columbia Gulf effectively turns to at that point.

[00:28:58] Speaker 04:
That's my understanding, yes, Your Honor.

[00:28:59] Speaker 04:
The Columbia Gulf needs to get this additional gas that comes from excess gas from other pipelines and third-party storage, and that gas does not come through the Adair interconnect.

[00:29:10] Speaker 04:
It comes through other sources.

[00:29:12] Speaker 02:
So it wouldn't have been possible at that time for Columbia Gulf to, let's say, isolate a lower pressure segment of its pipeline to receive more than the zero decotherms during that period.

[00:29:21] Speaker 02:
Correct.

[00:29:21] Speaker 04:
That's the abnormal mode that Trillo discusses in his affidavit.

[00:29:25] Speaker 04:
It isolates part of this pipeline, one of its three pipelines, which is supposed to be going south.

[00:29:30] Speaker 04:
It pushes Texas Eastern's gaff north, compresses it there, and sends it back down.

[00:29:35] Speaker 04:
But that's only possible if the pressure differential is manageable.

[00:29:39] Speaker 04:
And during the dates that

[00:29:41] Speaker 04:
Your Honor, the pressure differential is not manageable.

[00:29:47] Speaker 02:
So you said you were going to talk about the interconnect agreement?

[00:29:52] Speaker 04:
answer judge Wilkins question first starting with northern natural and specifically first treatment of the Columbia golf terror.

[00:30:00] Speaker 04:
So the terror for the receiving pipeline in northern natural was A and R and it has substantially identical language to Columbia golf's tariff and what northern natural said is that that tariff language

[00:30:11] Speaker 04:
applies, because to answer your honor's question, there was no agreement in effect between the delivering pipeline and the receiving pipeline.

[00:30:18] Speaker 04:
At paragraph 23, Northern Natural is very clear that that agreement expired.

[00:30:24] Speaker 04:
So it's ruling at paragraph 23, which relates back to A&R's argument of paragraph 14, what Kirk said was that it agreed that that provision

[00:30:39] Speaker 04:
the provision again in A&R's tariff, which is substantially identical to Columbia Golf's tariff, that it requires Northern Natural, the shipper, to deliver gas to A&R at pressure sufficient to enter the pipeline.

[00:30:50] Speaker 04:
And then at 23, it said we also concur with A&R's interpretation of its tariff requirements.

[00:30:56] Speaker 04:
So in Northern Natural, FERC applied substantially identical language

[00:31:01] Speaker 04:
which included the word shipper, to the delivering pipeline.

[00:31:05] Speaker 04:
And here, it simply did not.

[00:31:06] Speaker 04:
And kind of more than that, it didn't even acknowledge that in Northern Natural, it applied this substantially identical tariff language to delivering pipeline.

[00:31:16] Speaker 04:
And that unexplained about face on this tariff interpretation is an independent basis for Bakader.

[00:31:23] Speaker 04:
If there are no further questions on Northern Natural's interpretation of

[00:31:29] Speaker 04:
the tariff and how that relates to Columbia Golf's tariff.

[00:31:33] Speaker 04:
I would conclude by noting that FERC only really offers a paragraph responding to its differential treatment of this tariff language, and it is a loan basis for remand so that FERC can acknowledge its past precedent and then

[00:31:48] Speaker 04:
either apply that past precedent, that interpretation of substantially identical tariff language, can apply that to Columbia golf, can knowingly abandon it, or offer some sort of explanation for why this substantially identical language applied in a previous case doesn't apply to this case.

[00:32:05] Speaker 04:
And then second, and apart from the tariff language, for alternatively ruled, and this again under

[00:32:12] Speaker 04:
substantially identical facts and separate from the tariff, that delivering pipelines would be responsible to modify its facilities to actually make deliveries.

[00:32:21] Speaker 04:
And the order on review, FERC's main rationale for not applying that rule was that in Northern Natural, the delivering pipeline was the plaintiff, and here the delivering pipeline, or here Columbia Golf Receiving Pipeline was the plaintiff.

[00:32:34] Speaker 04:
But under Kentucky Municipal and this court's other precedents,

[00:32:37] Speaker 04:
You know, past precedent counts as past precedent, regardless of which party raises that argument.

[00:32:43] Speaker 03:
But I guess what I'm not understanding in your Northern Natural argument is that in Northern Natural paragraph 23, FERC does say that section 11.1 of NR's tariff

[00:33:01] Speaker 03:
specifies that gas be delivered at a pressure sufficient to allow gas to enter A&R's system.

[00:33:10] Speaker 03:
Yes, FERC acknowledges that that statement is there.

[00:33:14] Speaker 03:
Yes, that identical language is in Columbia Gas's tariff.

[00:33:20] Speaker 03:
But what FERC holds is that that doesn't mean

[00:33:28] Speaker 03:
that Columbia Gas has any, I'm sorry, that in that situation A&R has any kind of obligation with respect to

[00:33:46] Speaker 03:
changing its system or decreasing pressure or anything in order to receive the gas, which was in effect the relief that was being sought in northern natural.

[00:34:02] Speaker 03:
And so they had no occasion to rule on

[00:34:15] Speaker 03:
what the kind of obligations were of the, of, of, I guess they were saying that, that this is, Northern Natural was, was seeking a remedy vis-a-vis A&R,

[00:34:44] Speaker 03:
And FERC said you're not entitled to that remedy, essentially.

[00:34:51] Speaker 04:
Correct.

[00:34:52] Speaker 04:
FERC says you're not entitled to that remedy because any obligation to perform a system modification would lie with the delivering pipeline, which in that case was Northern Natural.

[00:35:01] Speaker 04:
So what this court says counts as past precedent is not just the result that FERC comes to, which Your Honor Wilkins correctly knows is the result was nothing was ordered.

[00:35:10] Speaker 04:
What it also looked at is the steps that FERC takes to reach that result, and the steps that FERC took to reach that result were saying the receiving pipeline has no obligation to modify its system in order to receive the delivering pipeline's lower pressure gas because those obligations rested with the delivering pipeline.

[00:35:28] Speaker 04:
And that is the rationale, I think, very clearly that FERC used, and that's the rationale that we would ask them to reasonably explain why it doesn't apply here, and they simply haven't.

[00:35:37] Speaker 02:
I thought their understanding was that the language in 4.02e of the interconnection agreement just requires both parties be assured of having the physical capacity to deliver or receive gas through the interconnection to the maximum allowable operating pressure, just giving each

[00:36:01] Speaker 02:
pipeline the flexibility to operate up to their maximum allowable operating pressure, but that without a contract term requiring a minimum pressure that just doesn't support the claim that it violates that provision when they don't operate at a minimum pressure.

[00:36:19] Speaker 04:
Right, so this is separate from our Northern natural argument.

[00:36:21] Speaker 04:
Northern natural applies only when it's inconsistent with the contractor obligation.

[00:36:25] Speaker 04:
But no, absolutely.

[00:36:26] Speaker 04:
The 402e contract we think is very clear based on the word therefore between the first and second sentence.

[00:36:33] Speaker 04:
The first sentence is all about pressure.

[00:36:35] Speaker 04:
It's all about being able to operate at the pressures up to the MAOP.

[00:36:40] Speaker 04:
And the second sentence is all about having physical capacity to enable those types of pressures.

[00:36:46] Speaker 04:
I think what FERC is saying is there's a physical capacity requirement in sentence two, and in sentence one, there's a kind of pressure discretion.

[00:36:54] Speaker 04:
But the word therefore links those two sentences.

[00:36:57] Speaker 04:
I mean, if the physical capacity that Your Honor pillored

[00:37:01] Speaker 04:
is referring to doesn't relate back to the pressure in sentence one, there's no reason to link these two sentences together with the word therefore.

[00:37:09] Speaker 04:
We think it is a plain pressure requirement, it is a plain requirement to be able to deliver pressure up to the levels of the receiving party's MAOP, and obviously Texas Eastern has not done that in this case.

[00:37:23] Speaker 08:
Can I go briefly back to Northern Natural?

[00:37:26] Speaker 08:
Yes, please.

[00:37:26] Speaker 08:
Because what the court focuses on is 11.1 says explicitly that Northern Natural, the shipper, is obligated to deliver at a pressure sufficient to allow the gas to enter Grant's border's existing pipeline system, and it rests on that.

[00:37:42] Speaker 08:
Yes.

[00:37:42] Speaker 08:
Are you telling us that there's the exact same language as in Texas Eastern's tariff?

[00:37:47] Speaker 08:
It's the exact same language.

[00:37:48] Speaker 08:
I'm happy to read it for your honors.

[00:37:50] Speaker 08:
Why are we talking about the interconnection agreement in section 6.2?

[00:37:53] Speaker 08:
That's in Texas Eastern's tariff.

[00:37:58] Speaker 04:
It's in Columbia Golf's tariff.

[00:37:59] Speaker 04:
I'm sorry, your honor.

[00:38:00] Speaker 04:
The section 6.2 argument relates to the delivering pipeline, Texas Eastern.

[00:38:06] Speaker 04:
Our Columbia Golf tariff argument relates to Columbia Golf's tariff.

[00:38:11] Speaker 04:
And again, it's also JA 4344, the joint complaint.

[00:38:15] Speaker 04:
Paragraph 75 lists side-by-side ANR's tariff, the receiving pipeline in Northern Natural, and Columbia Golf's tariff.

[00:38:23] Speaker 04:
Both say, Columbia Golf says SIPR shall deliver gas or cause gas to be delivered to transporter at the receipt points at a pressure sufficient to allow gas to enter the system.

[00:38:34] Speaker 04:
ANR's tariff, which again is in the complaint.

[00:38:36] Speaker 04:
There's no procedural bar on this question at all.

[00:38:38] Speaker 04:
It's in the complaint, in the order, in the rehearing order.

[00:38:40] Speaker 04:
Squarely presented to this court says shipper shall cause the gas to be delivered at the receipt.

[00:38:45] Speaker 02:
I'm sorry, tell me what page you're at so I can follow as you're reading.

[00:38:48] Speaker 02:
Oh, sure.

[00:38:48] Speaker 04:
Sorry.

[00:38:49] Speaker 04:
Opening brief 49.

[00:38:50] Speaker 02:
Oh, I thought you were in the JA in the joint complaint.

[00:38:54] Speaker 04:
List them both.

[00:39:01] Speaker 04:
Yeah, it's J.A.

[00:39:02] Speaker 04:
909 is where A&R's tariff is, Columbia Golf's tariffs at J.A.

[00:39:06] Speaker 04:
4344.

[00:39:07] Speaker 04:
But the opening brief lists them both apply to shippers.

[00:39:11] Speaker 04:
In Northern Natural, again, very squarely said that language imposes an obligation on the delivering pipeline to deliver gas at pressure sufficient to enter into the receiving pipeline system.

[00:39:22] Speaker 04:
FERC has not acknowledged that order.

[00:39:25] Speaker 04:
FERC simply says

[00:39:26] Speaker 04:
that Texas Eastern is not a shipper, therefore this provision does not apply, this provision from Columbia Golf's tariff.

[00:39:32] Speaker 04:
But again, you know, FERC has this past precedent and it has not acknowledged it, and by not acknowledging the past precedent, it commits kind of a textbook example of arbitrary and capricious reasoning.

[00:39:48] Speaker 03:
I'm not sure that I follow that argument.

[00:39:57] Speaker 03:
FERC says that Northern Natural was not a shipper.

[00:40:06] Speaker 03:
And so the tariff says shipper shall cause.

[00:40:14] Speaker 03:
So FERC says that means that it was really up to range.

[00:40:21] Speaker 03:
to cause the gas to be at a pressure sufficient to enter Columbia Golf's system.

[00:40:33] Speaker 03:
And Range could have done that if they had written their service agreement differently, but they didn't.

[00:40:42] Speaker 03:
And so that's how they harmonize Northern Natural.

[00:40:48] Speaker 03:
Isn't that what they do?

[00:40:50] Speaker 04:
I don't think so.

[00:40:50] Speaker 04:
They never acknowledge that in Northern Natural on their orders on review and the rehearing petition or rehearing order and even the briefs before this court, they never

[00:40:59] Speaker 04:
acknowledge paragraph 23, which squarely applies substantially identical tariff language, referring to a shipper, as Your Honor said, applying that language to a delivery and pipeline.

[00:41:09] Speaker 04:
That's what FERC did.

[00:41:10] Speaker 02:
But it's clear that shipper in Northern Natural was actually Northern Natural, whereas here they're saying the shipper is range and range had the, I'm just repeating the premise of

[00:41:23] Speaker 02:
Judge Wilkins question, but also that whole discussion wasn't really central to the holding in Northern Natural, was it?

[00:41:31] Speaker 04:
Well, two things.

[00:41:31] Speaker 04:
Northern Natural did acknowledge that shipper in other contexts in the industry does refer to customers of pipelines.

[00:41:37] Speaker 04:
That's at paragraph 29.

[00:41:39] Speaker 04:
It calls Madison Gas Electric.

[00:41:41] Speaker 04:
It says the only existing or potential shipper to comment is a customer at the pipeline.

[00:41:47] Speaker 04:
But nevertheless, it applied.

[00:41:48] Speaker 04:
that language, the substantially identical language, to a delivering pipeline.

[00:41:52] Speaker 04:
So in Northern Natural, FERC was aware of the tension.

[00:41:56] Speaker 02:
But that wasn't really a holding.

[00:41:58] Speaker 04:
No, I think it was, Your Honor.

[00:41:59] Speaker 04:
It was the first basis.

[00:42:01] Speaker 04:
I mean, paragraph 23 and 25 are the reasons for which FERC denies the delivering pipelines.

[00:42:10] Speaker 04:
Petition it says you in in Northern in Northern natural It says the receiving pipeline does not have an obligation to lower its pressure because the receiving pipelines Tariff governs and the receiving pipeline Imposes an obligation on the delivering pipeline to raise their pressure and then at 23 and 25 says that if modifications are necessary The record was incomplete.

[00:42:32] Speaker 04:
It says if modifications are necessary

[00:42:35] Speaker 04:
those obligations rest with the delivering pipeline.

[00:42:38] Speaker 04:
And that comes directly from the tariff.

[00:42:39] Speaker 04:
There's a tariff-based reasoning for why those obligations rested with the delivering pipeline at paragraph 23.

[00:42:46] Speaker 04:
And there's a non-tariff-based reasoning at 25.

[00:42:49] Speaker 04:
And neither one of those has FERC given a reasonable explanation for why they would not apply squarely to this case.

[00:43:00] Speaker 02:
You haven't addressed the basis that FERC relied on, which was that the

[00:43:04] Speaker 02:
402e argument was forfeited, wasn't preserved.

[00:43:12] Speaker 04:
Their main argument, I think, is that this court need not reach the merits of the 402e legal challenge because there was an alternative basis for dismissing the 402e claim.

[00:43:25] Speaker 04:
But that's not required for two reasons.

[00:43:26] Speaker 04:
First, I'd say FERC largely relies on the BDPCS case.

[00:43:30] Speaker 04:
But in BDCPS, it's very different from this case.

[00:43:33] Speaker 04:
Here, the merits decision was effectively a dismissal with prejudice.

[00:43:38] Speaker 04:
And the ruling about the sufficiency of the complaint

[00:43:40] Speaker 04:
was a dismissal without prejudice.

[00:43:43] Speaker 04:
Columbia Golf and Range would have been free to file a new complaint that wouldn't essentially be futile if there weren't the merits.

[00:43:49] Speaker 01:
Would not have been free?

[00:43:51] Speaker 04:
Yeah, correct.

[00:43:52] Speaker 04:
Essentially what FERC is asking Columbia Golf and Range to do, as I understand their brief, they say we're free to file a new complaint with these claims raised.

[00:44:02] Speaker 04:
And respectfully, we don't think that's a path that BDCPS requires, given how different the facts are.

[00:44:08] Speaker 02:
But it is available to you.

[00:44:11] Speaker 04:
We believe our understanding is that it is available to us.

[00:44:14] Speaker 04:
I mean, the best case scenario, we believe this court shouldn't do that because it would be a big waste of judicial resources.

[00:44:21] Speaker 04:
I mean, we would file a complaint before FERC knowing that they would deny the 402E claim, file a request for a hearing knowing FERC would deny that, and then file another petition before this court.

[00:44:33] Speaker 04:
asking them to review the same 402e language that we're asking this court to review today.

[00:44:38] Speaker 04:
And I note, too, that the BDCPS case came on a very different, like the question came before the court in a very different way.

[00:44:45] Speaker 04:
Here FERC reached out and decided the 402e claim without it being in the complaints, without Columbia Golf or Range raising that issue.

[00:44:54] Speaker 04:
And then it was saying that, upheld that ruling and the rehearing request.

[00:44:58] Speaker 04:
And then it's saying,

[00:44:59] Speaker 04:
that this court is barred from hearing the merits.

[00:45:02] Speaker 04:
So the facts are very different from BDCPS.

[00:45:04] Speaker 04:
I'd say the facts are different enough that that holding does not apply here.

[00:45:08] Speaker 04:
And for the reasons I explained about the waste of judicial resources, there's no reason to not review the 402E claim given the lack of controlling precedent and the waste of judicial resources that will come about from that.

[00:45:24] Speaker 04:
If there are no further questions,

[00:45:27] Speaker 04:
Thank you.

[00:45:27] Speaker 02:
And I gather you've also asked for a couple of minutes for rebuttal.

[00:45:32] Speaker 02:
Yes.

[00:45:33] Speaker 02:
We'll give you a couple of minutes.

[00:45:43] Speaker 02:
Morning, Mr. Edgar.

[00:45:44] Speaker 06:
Morning.

[00:45:46] Speaker 06:
I'm Scott Etterger for the Federal Energy Regulatory Commission.

[00:45:51] Speaker 06:
Thank you for hearing this case.

[00:45:53] Speaker 06:
I'd like to start with some of the procedural issues and the disconnect between scope of the complaints that were filed in this case and what's being asserted on appeal.

[00:46:05] Speaker 06:
The commission was very clear in its orders that we think the petitioners here have the issues backwards.

[00:46:13] Speaker 06:
The commission was very clear that it need not consider arguments raised related to the upstream compressor station and related to the interconnection agreement.

[00:46:26] Speaker 06:
It said that very clearly in the rehearing order, paragraph 9 and note 34.

[00:46:32] Speaker 06:
And the commission pointed out in the following paragraph, rehearing order, paragraph 10, JA 970, that the complaints govern the scope of the proceedings.

[00:46:43] Speaker 06:
So it's fair to confine the petitioners here to the scope of their proceedings.

[00:46:48] Speaker 06:
and proceedings and there's a fairness element to this because the commission's rules 18 CFR 385 713 D do not permit and in fact prohibit answers to rehearing less so it's not fair.

[00:47:03] Speaker 06:
to the respondent in this case, Texas Eastern, to be chasing a moving target.

[00:47:09] Speaker 06:
So there's good reason for the commission to dismiss arguments related to the upstream compressor station and the interconnection agreement.

[00:47:18] Speaker 06:
I do want to address paragraph 24 of the range complaint.

[00:47:24] Speaker 06:
That seems to be the paragraph that range feels is most compelling and I would,

[00:47:31] Speaker 06:
The Commission pointed out in paragraph 9 and note 39, JA 969 to 970, that the complaints never demonstrate that Texas Eastern failed to operate the upstream compressor station, which is the Danville Compressor Station, at 750 pounds.

[00:47:56] Speaker 06:
That's point number one.

[00:47:59] Speaker 06:
Point number two is there's the complainants never demonstrated that there's a connection between such failure to operate as 750 and what happened at the border at the interconnection

[00:48:14] Speaker 06:
between Texas Eastern and Columbia Gulf.

[00:48:18] Speaker 06:
We know that pressure will diminish as the pipeline goes on.

[00:48:23] Speaker 06:
And there's roughly 38 miles between Danville and the interconnection here.

[00:48:31] Speaker 06:
And so we would expect the pressure to decrease somewhat.

[00:48:34] Speaker 06:
And there's nothing in this record to provide that causality.

[00:48:41] Speaker 02:
So it's your position that it is not a reasonable inference from the allegations of the complaint that Danville must have been operating below 750 pounds per square inch, given the concerns about the lower pressure at the Adair interconnect.

[00:49:03] Speaker 06:
I think that's absolutely correct.

[00:49:06] Speaker 06:
And I would add a reference as well to 18 CFR 385206B.

[00:49:11] Speaker 06:
This is the commission's regulations addressing what a complaint should do.

[00:49:15] Speaker 06:
And a complaint should do two things.

[00:49:17] Speaker 06:
It should clearly identify the action or inaction and explain how it violates the applicable statutory standards.

[00:49:25] Speaker 06:
And if I may say this, these are sophisticated parties in this case.

[00:49:30] Speaker 06:
And there's a lot about this case that's very confusing.

[00:49:33] Speaker 06:
But this would not be difficult to say in a complaint.

[00:49:36] Speaker 06:
We allege Texas Eastern is not operating upstream compressor station at 750 full stop.

[00:49:43] Speaker 06:
It's as simple as that.

[00:49:44] Speaker 06:
And then to ask, and our order 602 that the petitioner cite on reply

[00:49:53] Speaker 06:
They quote a couple sentences.

[00:49:55] Speaker 06:
The commission goes on in that order and explains that, yes, they're right.

[00:50:01] Speaker 06:
There is often information that's only within the control of the respondent.

[00:50:08] Speaker 06:
But in that case, you should provide what you can.

[00:50:11] Speaker 06:
And then you should ask for the information that you want.

[00:50:16] Speaker 06:
And the commission will decide such things on a case by case.

[00:50:20] Speaker 06:
basis.

[00:50:21] Speaker 06:
And so that wasn't done here and I would suggest to your honors that that just further drives home the point that this was not the claim that was advanced in these complaints and the commission was absolutely correct to reject it.

[00:50:39] Speaker 02:
Didn't the commission just leave out when it quoted the section 6.2

[00:50:46] Speaker 02:
the requirement that delivery pressures had to result from maintaining a discharge pressure of 750 PSIG at the nearest upstream compressor station.

[00:50:54] Speaker 02:
I mean, that raises a little bit of a question mark in whether the commission is dealing with that allegation, which was plainly alleged and was in the agreement.

[00:51:09] Speaker 06:
But the commission quoted the tariff, certainly, in paragraph 38 of the initial order.

[00:51:17] Speaker 06:
But the parties never, the complainants here never alleged, excuse me, that that was the basis for the complaints.

[00:51:26] Speaker 06:
The assertions from the get-go were that Texas Eastern had an obligation at the interconnection to deliver gas that actually complied with whatever pressure Columbia Gulf was operating at, and they derived that rule really from their misinterpretation that we may get to about Northern Natural.

[00:51:50] Speaker 06:
That's really their theory, and that's really what range is after here.

[00:51:56] Speaker 06:
business about the upstream compressor station was never part of the original complaints.

[00:52:02] Speaker 06:
If I may also add one more bit to that.

[00:52:06] Speaker 06:
In its answer, Texas Eastern pointed out that there lacks a clear explanation.

[00:52:13] Speaker 06:
They said this at Texas Eastern answer to the range complaint at page 3.

[00:52:18] Speaker 06:
This is at JA 613.

[00:52:22] Speaker 06:
And then as you know, the commission in its rehearing order pointed out that in subsequent filings, there were many subsequent filings after that, that there's no mention of section 6.2 whatsoever.

[00:52:35] Speaker 06:
So the commission said that in rehearing order paragraph 9, which is at JA 969 to 970.

[00:52:46] Speaker 06:
So it just drives some of the point that Texas Eastern said you didn't make it clear and they didn't follow up and make it clear.

[00:52:57] Speaker 08:
One argument they clearly did preserve is, as you said, northern natural.

[00:53:00] Speaker 08:
And it seems today, at least, they're focused more on the fact that there is similar language here in Columbia Gulf's tariff, not the proposition that it created some sort of generally applicable default rule.

[00:53:12] Speaker 08:
So could you just explain your response to their argument about paragraph 23 of the decision and the fact that Columbia Gulf has the same tariff obligation, please?

[00:53:26] Speaker 06:
The, I would say this, the commission, ironically, I think Northern Natural is actually a good case for what the commission did here.

[00:53:35] Speaker 06:
The commission followed the Northern Natural pattern, and the commission said this in its initial order at paragraph 62.

[00:53:46] Speaker 06:
This is at JA 869.

[00:53:50] Speaker 06:
What Northern Natural did was it analyzed the certificate obligations

[00:53:55] Speaker 06:
the tariff and the contracts in that case, and they found that A&R had no obligation to Northern Natural.

[00:54:06] Speaker 06:
And that's in Northern Natural Paragraph 20.

[00:54:12] Speaker 06:
Paragraph who?

[00:54:15] Speaker 06:
I'm sorry?

[00:54:16] Speaker 01:
You said paragraph 20?

[00:54:17] Speaker 06:
Paragraph 20 of the Northern Natural Order, where the commission says we're going to consider the merits of the claim by Northern Natural, and we conclude that there hasn't been a violation of the tariff, the contract, ANR's tariff, ANR's contractual obligations, and certificated service obligations.

[00:54:37] Speaker 03:
It said that there is no violation by ANR, right?

[00:54:42] Speaker 03:
It wasn't that issue whether Northern Natural was in violation, right?

[00:54:49] Speaker 06:
That's right.

[00:54:50] Speaker 06:
Northern Natural's obligations weren't before the commission.

[00:54:53] Speaker 06:
And that begs the question.

[00:54:54] Speaker 06:
I think it's unclear on what did Northern Natural have a contractual obligation to its shippers to deliver at some pressure.

[00:55:05] Speaker 06:
I don't think that issue was before the commission in that case.

[00:55:10] Speaker 03:
Let me ask you this.

[00:55:12] Speaker 03:
Does Columbia Gulf's tariff include a definition of the term shipper?

[00:55:20] Speaker 06:
I'm sure it does, and I don't think the precedent here could possibly be read to read in and to make Texas Eastern a shipper on Columbia Gulf's system.

[00:55:38] Speaker 03:
So why did

[00:55:40] Speaker 03:
The commission refer to Northern natural is having an obligation under the A and R tariff.

[00:55:51] Speaker 06:
If the A and R tariff language at issue spoke of an obligation of shippers, the that case is complicated because there had been a contractual relationship between Northern natural and A and R, but that had expired.

[00:56:10] Speaker 06:
And what the commission is saying here is that, and they say this in paragraph 64 of the initial order, that Northern Natural was not a ship or under

[00:56:31] Speaker 06:
excuse me, the Rehearing Order, Rehearing Order Paragraph 13, this is at JA 972, that Northern Natural was not a shipper under A&R's tariff.

[00:56:41] Speaker 06:
And I will point out that the commission is entitled to deference and interpretation of its precedence and

[00:56:59] Speaker 03:
I mean, I see that it made that statement, but did it explain why they called them a shipper in Northern Natural?

[00:57:06] Speaker 03:
They didn't.

[00:57:08] Speaker 06:
It may have been because of Northern Natural had been a, there had been a contractual relationship previous.

[00:57:16] Speaker 03:
But I mean, I guess that's the point, like under kind of the theory of, you know, chinnery, et cetera.

[00:57:29] Speaker 03:
We don't try to discern what the commission was thinking from the briefs or your able presentation in court.

[00:57:41] Speaker 03:
We need to have the commission say what it meant and give adequate reasoning.

[00:57:47] Speaker 03:
And how is that adequate reasoning of why it was distinguishing its precedent?

[00:57:58] Speaker 06:
I think the key, again, of the Northern Natural Order is the paragraph I was just referring to, paragraph 20, which I would say is the central holding of the Northern Natural Order.

[00:58:14] Speaker 06:
order and that's what the that's exactly how the commission characterized it in the in the initial order in this case in paragraph sixty two just J eight sixty nine which is this is what the commission did in northern natural it analyzes and our certificate obligations its contractual obligations and its tariff and it found that it had no obligation but I guess you say that it would been very easy for them to plead

[00:58:44] Speaker 03:
You know, at the nearest upstream compressor, they didn't maintain 750 pounds pressure.

[00:58:57] Speaker 03:
It would also have been very easy for the commission to say, well, when we said in Northern Natural that Northern Natural had an obligation to provide

[00:59:10] Speaker 03:
pressure sufficient to enter into A&R's system.

[00:59:18] Speaker 03:
What we meant by that was X, and that's not true here for this reason, or, you know, we think that that statement was dictum and here's why, or, you know,

[00:59:37] Speaker 03:
we've rethought that precedent and we're not following it anymore.

[00:59:41] Speaker 03:
They could have done any of those things, but they did none of them.

[00:59:46] Speaker 06:
Well, I think they, they did, your honor.

[00:59:48] Speaker 06:
And in the rehearing order in paragraph 13, they, they did point out that, that Northern naturals obligations weren't before the commission and that that language was, was dictated.

[00:59:59] Speaker 06:
And the commission said in any event there, there is no such rule.

[01:00:02] Speaker 06:
I would point out as well that,

[01:00:05] Speaker 06:
I don't think Northern Natural really applied such a rule.

[01:00:08] Speaker 06:
I think the better reading of Northern Natural and the reading that the Commission took was that the Commission in Northern Natural resolved the case by looking at its obligations.

[01:00:18] Speaker 06:
And we'd submit that that's exactly what the Commission did in the case before you today.

[01:00:23] Speaker 03:
Here's what I don't get.

[01:00:26] Speaker 03:
If it is, as you say,

[01:00:29] Speaker 03:
the proper reading of Columbia Golf's tariff to say that the shipper shall cause, that shipper doesn't apply to Texas Eastern.

[01:00:41] Speaker 03:
It applies to Texas Eastern's customers, so to speak.

[01:00:45] Speaker 03:
That they shall cause the gas to be delivered at sufficient pressure.

[01:00:52] Speaker 03:
That that's the proper way to read the Columbia Golf's tariff.

[01:00:57] Speaker 03:
How is that administrable when really it is the delivering pipelines like the Texas Easterns of the world that really keep up with the proceedings when

[01:01:22] Speaker 03:
um, Columbia Golf, you know, expands its system and gets a new certificate, etcetera.

[01:01:29] Speaker 03:
I mean, I understand that shippers can and do, um, comment and participate in those proceedings.

[01:01:39] Speaker 03:
But isn't the party that would make more sense to play the central role in those proceedings, the other pipelines that are delivering gas to the interconnects

[01:01:54] Speaker 06:
uh... that cut a couple points on that uh... and just what can say i think range was a participant from the girls on certificate proceeding here the one that added the compression uh... so they were a participant and and i think that the commission was spot on and and paragraph seventeen of the rehearing order j a nine and seventy-five uh... when it said range had an opportunity to protect itself here and and i think the way you do this is you have

[01:02:21] Speaker 06:
interconnecting pipelines and you can link them up and we see that from exhibit B to the service agreement which is at JA 814 which has a space, it's one of the more important pieces in this record, which has a space

[01:02:36] Speaker 06:
which indicates where the delivery pressure should be.

[01:02:40] Speaker 06:
And in all caps conspicuous language, it says that it Texas Eastern child deliver at the pressure available.

[01:02:50] Speaker 06:
That was the space that range could have negotiated for something with with Texas Eastern and could have linked up its

[01:03:00] Speaker 06:
its pipeline such that you'd have a smooth transition.

[01:03:05] Speaker 02:
Just from the Commission's perspective, what do you envision that these parties who have this ongoing contract moving forward for many years would do?

[01:03:16] Speaker 02:
Go back and file with more factual support and allegations, or do something, renegotiate contracts?

[01:03:21] Speaker 06:
I would hope the latter, Your Honor, and I would refer Your Honor to

[01:03:28] Speaker 06:
I'm trying to find in my notes the the the affidavit put on the record by Texas Eastern that that excuse the affidavit by Huffman put in by Texas Eastern and this is in particular paragraph six where affine Huffman

[01:03:49] Speaker 06:
points out that Texas Eastern has agreed to make agreements for delivery pressure and they have done that in the past.

[01:04:00] Speaker 06:
That I would submit is a pretty good step forward here.

[01:04:06] Speaker 06:
That's something the parties could negotiate and could make the appropriate arrangements.

[01:04:11] Speaker 06:
The problem gets to be when we read further in Huffman's affidavit when he talks about that

[01:04:19] Speaker 06:
Such an agreement may require facilities.

[01:04:23] Speaker 06:
And facilities aren't free.

[01:04:25] Speaker 06:
Someone's going to have to pay for them.

[01:04:27] Speaker 06:
And that's something that's going to have to be worked out by the parties.

[01:04:29] Speaker 06:
But here, the decision was made to avoid those costs.

[01:04:35] Speaker 06:
And it hasn't worked out fully.

[01:04:38] Speaker 06:
But the point is what the commission is saying is that parties can work this out.

[01:04:44] Speaker 06:
And shippers, in particular, as paragraph 17 of the rehearing order,

[01:04:49] Speaker 02:
I had just a couple of questions in more detail on the similarly situated issue.

[01:04:53] Speaker 02:
How is this situation at this meter station different from the Liberty meter and the Kentucky meter?

[01:05:04] Speaker 02:
Why shouldn't we assume that where there's a common Texas Eastern pipeline that some decision is being made to use pressure at different points and not where range wants it?

[01:05:18] Speaker 06:
They're completely different situations.

[01:05:22] Speaker 06:
The meter stations are with, I think alternatively, a municipality and a local distribution company.

[01:05:31] Speaker 06:
Here you have a very different situation where you have an interconnect and you have this pressure

[01:05:36] Speaker 06:
dynamic between one interstate pipeline and another.

[01:05:40] Speaker 06:
And in this regard, the affidavit signs put on the record by Texas Eastern is good in that he addresses exhibits 10 and 11 that were provided by the complainants.

[01:05:55] Speaker 06:
And if you compare the two exhibits, he does this in paragraph six of his affidavit.

[01:06:01] Speaker 06:
This is at JA 828.

[01:06:03] Speaker 06:
And if you compare those exhibits,

[01:06:06] Speaker 06:
They line up, they link up, and you can tell that the volumes reduced to zero where Columbia Golf had, through the confirmation process, indicated that it couldn't accept the gas.

[01:06:21] Speaker 06:
That's the problem here.

[01:06:23] Speaker 06:
We have no indication in this record that a similar dynamic is happening.

[01:06:27] Speaker 06:
at the meter station that is serving a municipality or a local distribution company.

[01:06:33] Speaker 02:
On the force majeure issue, I had a hard time understanding why it would make a difference, whether arranged withheld payment or not, because if I haven't paid my credit card bill, I could still dispute a charge or whether I have paid.

[01:06:46] Speaker 02:
I just didn't follow that logic.

[01:06:48] Speaker 06:
Fair enough, Your Honor.

[01:06:49] Speaker 06:
I don't believe that's the central point that the Commission was trying to make there.

[01:06:52] Speaker 06:
I think the central point was that the force majeure does not matter here.

[01:06:57] Speaker 02:
And I'd point... It doesn't matter because there's no minimum pressure obligation in the first place?

[01:07:05] Speaker 06:
That's true.

[01:07:06] Speaker 06:
And Texas Eastern never asserted that

[01:07:10] Speaker 02:
that the force majeure is the cause of columbia gulf not confirming the nominate the scheduled nominations in 21 and i would say that's true for most but not for these 10 days in 2021 because they said they gave credits but the point is are are they required to give credits even for the 10-day safe harbor period that's how i understood the

[01:07:34] Speaker 06:
But they didn't make that argument in their complaints.

[01:07:36] Speaker 06:
The commission, this is an important part of what the commission said at Rehearing Order Paragraph 16, JA 974.

[01:07:49] Speaker 06:
Range never showed in its complaints and in the rehearing request that it would be entitled to additional credits.

[01:07:57] Speaker 06:
And I think that's true.

[01:08:00] Speaker 06:
They don't flesh that out in the complaints.

[01:08:04] Speaker 06:
And so here again, and by not making the case as well, in the rehearing request, there's a forfeiture argument under NGA section 19, 15 USC 717R, which requires the party raise an issue with specificity.

[01:08:22] Speaker 06:
But they never spelled out this argument that the force majeure fundamentally was wrong and was invalid in some way.

[01:08:33] Speaker 06:
And in fact, if I can add one more thing, they actually say the opposite.

[01:08:37] Speaker 06:
Joint complaint, paragraph 86, JA 48, they say they reserve the rights to raise force majeure and a future.

[01:08:47] Speaker 03:
Can I just, you may have addressed this and I apologize if I missed it.

[01:08:52] Speaker 03:
So on the issue of whether there was a forfeiture of their

[01:08:58] Speaker 03:
the part of the 6.2, section 6.2 argument with regard to the 750 pounds of pressure.

[01:09:10] Speaker 03:
Are you saying that if they filed a new complaint explicitly raising that, that claim would not be barred by

[01:09:28] Speaker 03:
the commission's orders construing six point two or or not.

[01:09:39] Speaker 03:
I guess I'm just trying to understand.

[01:09:42] Speaker 06:
I think they could file a new petition and they could explicitly and as I as I alluded to I don't think it would be that difficult to articulate this clearly.

[01:09:51] Speaker 06:
I don't know how the commission would resolve that.

[01:10:00] Speaker 03:
Yeah, I guess maybe maybe this is an unfair question.

[01:10:11] Speaker 03:
Do you read the commission's order as having resolved that claim implicitly?

[01:10:22] Speaker 06:
I do want to, the claim was not made that Texas Eastern failed to operate the upstream compressor station at 750, point number one.

[01:10:32] Speaker 06:
Point number two, the claim wasn't made that there's a causal link between such a theory and what their theory is, is that there's a pressure differential on the interconnection.

[01:10:45] Speaker 03:
I don't know if that's I guess maybe the better way to answer the question is, do you read the commission's orders is saying that that even if it were so pled, it wouldn't make any difference.

[01:11:01] Speaker 03:
They would still

[01:11:03] Speaker 03:
they would still the commission prevail.

[01:11:06] Speaker 06:
Sorry.

[01:11:07] Speaker 06:
The commission certainly said that they didn't make that connection.

[01:11:10] Speaker 06:
And that's specifically in footnote 39.

[01:11:13] Speaker 06:
Um, I believe that's a J a nine 70 explicitly said that, um, range didn't make the connection between the upstream compressor station and the interconnection.

[01:11:25] Speaker 06:
Okay.

[01:11:26] Speaker 02:
So there is no result of the first order that

[01:11:29] Speaker 02:
The Danville station has no obligation to operate at 750, which was one way I thought that the petitioners were reading it.

[01:11:35] Speaker 02:
There's no such impact of the Brooks order.

[01:11:37] Speaker 02:
It just didn't touch that issue.

[01:11:40] Speaker 06:
Because it wasn't what station I think that's correct because it wasn't raised in this in this case.

[01:11:52] Speaker 02:
Thank you.

[01:11:53] Speaker 06:
Thank you, your honor.

[01:11:56] Speaker 02:
Okay, and then we'll briefly hear from Mr. Etremendy.

[01:12:00] Speaker 07:
Yes, Your Honor.

[01:12:02] Speaker 02:
I'm probably butchering that.

[01:12:04] Speaker 07:
You actually weren't.

[01:12:05] Speaker 07:
You got it right on the first attempt.

[01:12:08] Speaker 07:
May it please the court, Matthew Etremendy for Intervenor Texas Eastern.

[01:12:13] Speaker 07:
So there's a lot going on in this case, and I'm happy to answer questions on anything.

[01:12:16] Speaker 07:
I did want to start on one point that hopefully I can clear up pretty quickly and simply

[01:12:23] Speaker 07:
And that's the shipper issue in northern natural because I do think that that's actually really straightforward point to resolve.

[01:12:32] Speaker 07:
So Texas Eastern is unambiguously not the shipper here.

[01:12:36] Speaker 07:
The shipper is range and to judge Wilkins question about is there a definition of shipper in Columbia Gulf tariff.

[01:12:42] Speaker 07:
The answer is.

[01:12:43] Speaker 07:
Yes, it's cited in our brief, page 31, note 8.

[01:12:48] Speaker 07:
It is also quoted in the joint complaint, JA751.

[01:12:52] Speaker 07:
That's in a footnote to one of Texas Eastern's pleadings.

[01:12:57] Speaker 07:
But the tariff defines shipper as any person or entity requesting or receiving service under Columbia Gulf's rate schedules.

[01:13:04] Speaker 07:
So shipper is defined as a person buying service from Columbia Gulf, not an interconnecting pipeline.

[01:13:11] Speaker 07:
So there's no service contract here between Texas Eastern and Columbia Gulf.

[01:13:15] Speaker 07:
So there's really no real dispute that as a matter of definition under Columbia Gulf's tariff,

[01:13:21] Speaker 07:
And also just as a matter of ordinary industry usage that Texas Eastern is not the shipper here.

[01:13:26] Speaker 07:
So it's it's really not credible to argue that the provision applying duties to shippers under Columbia Gulf's tariff applies to Texas Eastern.

[01:13:35] Speaker 07:
I mean that that's just unambiguously not right.

[01:13:38] Speaker 07:
Now there is still the question about what do we do with Northern natural and the language in Northern natural.

[01:13:43] Speaker 07:
So I would be happy to

[01:13:45] Speaker 07:
address that as well.

[01:13:46] Speaker 07:
So it is not true that the commission said that Northern Natural was a shipper on ANR.

[01:13:54] Speaker 07:
And it also didn't say that Northern Natural was bound by that language.

[01:13:57] Speaker 07:
What it said was that the analogous language in ANR's tariff applied.

[01:14:03] Speaker 07:
Not that it imposed a duty on Northern Natural, just that it applied.

[01:14:08] Speaker 07:
And what did it mean by applied?

[01:14:09] Speaker 07:
Well, it resolved that there was no duty on ANR

[01:14:13] Speaker 07:
to adjust its pressures downward.

[01:14:16] Speaker 07:
The duty wasn't on it to ensure that the gas arrived at sufficient pressures.

[01:14:21] Speaker 07:
So that's what it meant by the tariff language applied, which is what it said.

[01:14:25] Speaker 07:
It didn't say impose an obligation on Northern Natural.

[01:14:27] Speaker 07:
It didn't say Northern Natural is a shipper.

[01:14:29] Speaker 02:
So it's sort of ANR as in contrary to distinction to Northern Natural and or its shipper and whoever determines the pressure of what's delivered.

[01:14:41] Speaker 02:
to A&R.

[01:14:42] Speaker 02:
So it's not significant to the holding who's responsible for the obligations on the counterparty side of things as between the actual shipper and Northern Natural.

[01:14:54] Speaker 07:
So the holding was that A&R did not have an obligation to adjust its pressures.

[01:15:01] Speaker 07:
That was just the holding.

[01:15:03] Speaker 07:
So it didn't say who, if anyone, had a legal duty otherwise to.

[01:15:07] Speaker 03:
What about the last sentence of paragraph 23

[01:15:12] Speaker 03:
which reads, therefore, the responsibility to deliver gas at a pressure sufficient to allow the gas to enter A&R's system rests with Northern Natural.

[01:15:25] Speaker 03:
That's pretty clear.

[01:15:27] Speaker 03:
That doesn't we don't have to interpret whether northern natural is a shipper or not.

[01:15:32] Speaker 03:
They don't use the term shipper.

[01:15:34] Speaker 03:
They just say straight up the obligation rests with northern.

[01:15:38] Speaker 07:
So it doesn't say obligation.

[01:15:39] Speaker 07:
It says responsibility.

[01:15:41] Speaker 07:
And I think it's pretty clear in context that what it meant by that was that northern natural would bear the financial

[01:15:46] Speaker 07:
burden of making any necessary adjustments if it wanted to ensure that the deliveries occurred.

[01:15:53] Speaker 07:
And remember, Northern Natural is the complainant.

[01:15:54] Speaker 02:
I thought you were going to say that it's the physical responsibility and who ends up paying for it as a matter of contract upstream.

[01:16:01] Speaker 07:
Physical responsibility.

[01:16:02] Speaker 07:
Well, I think what it was saying was that, I think what it was saying was that Northern Natural couldn't try to push an obligation onto A&R to make this change.

[01:16:14] Speaker 07:
What it was saying was,

[01:16:16] Speaker 07:
Look, you're the complainant.

[01:16:18] Speaker 07:
If you want the pressures to be adjusted and for this pressure and balance to be fixed, the responsibility is on you.

[01:16:24] Speaker 07:
And what it meant by that wasn't that there was some rule across the board on upstream pipelines that they have an enforceable legal duty to deliver at a certain pressure.

[01:16:35] Speaker 07:
It's analogous to saying that a buyer of goods without a warranty is responsible for repairs.

[01:16:40] Speaker 07:
It doesn't mean they're required to repair the goods they buy.

[01:16:43] Speaker 07:
It just means that they'd have to bear the cost if they did.

[01:16:48] Speaker 07:
And so I think that's pretty clear.

[01:16:51] Speaker 07:
And I think it's also just taking a step back here.

[01:16:55] Speaker 07:
It would be very strange in this one passing sentence that comes at the end of an analysis of A&R's tariffs and contracts.

[01:17:03] Speaker 07:
if the commission had suddenly, without explanation, set some kind of default rule that altered contractual obligations on essentially every pipeline in America.

[01:17:13] Speaker 02:
I have a couple other questions about force majeure.

[01:17:18] Speaker 02:
If FERC had taken up the propriety of the force majeure declaration and held that it was invalid,

[01:17:26] Speaker 02:
Would you owe Range reservation credits for the 10 days on which Texas Eastern reduced the deliveries at Adair due to the... So Range still hasn't made a case on that or explained, you know, what if any additional credits it thinks it would be entitled to.

[01:17:44] Speaker 07:
Now, what it does say is that it says it thinks that it may be entitled to more credits under this 10 day safe harbor provision.

[01:17:52] Speaker 07:
It says that on appeal.

[01:17:53] Speaker 07:
It did not say that on the hearing.

[01:17:54] Speaker 07:
It did not even hint at that on re-hearing.

[01:17:57] Speaker 07:
In fact, this is nowhere in the record at all.

[01:18:00] Speaker 07:
That's why when they do, on their reply brief, eventually get around to quoting it, they have to use a web link rather than a citation to the record.

[01:18:09] Speaker 02:
On things that weren't argued, though, did Texas Eastern argue that it didn't have any minimum pressure obligation at Adair in any event, so didn't need to declare force majeure

[01:18:21] Speaker 02:
as a result of the pipeline safety administration's pressure restriction?

[01:18:27] Speaker 07:
So let me clear up some things because the record's a little complicated on this and hopefully I can provide some clarity.

[01:18:34] Speaker 07:
So range in Columbia go for afraid that Texas Eastern would try to evade responsibility, so to speak, in general for the pressure and balance issues at Adair by relying somehow on force majeure or sort of blaming it on PHMSA orders.

[01:18:50] Speaker 07:
That didn't occur here and that made a lot of the allegations and the complaints about force majeure and finza sort of drop out of the case.

[01:18:57] Speaker 07:
What Texas Eastern, its argument for why it wasn't responsible for the gas that Columbia Gulf didn't accept was that it had no obligation in its tariff to deliver gas at a certain minimum pressure at the Adair interconnect.

[01:19:12] Speaker 07:
There was a force majeure declaration that Texas Eastern made in late May 2021.

[01:19:20] Speaker 07:
That had nothing to do with the pressure imbalance issues at Columbia Gulf.

[01:19:27] Speaker 07:
It stemmed from a separate anomaly on one of the three lines, a corrosion stress cracking issue that led to a PHMSA order.

[01:19:38] Speaker 07:
So essentially what we're looking at here is

[01:19:41] Speaker 07:
At the same time that this curtailment was occurring in 2021 and where there were pressure imbalance issues at the Adair Interconnect, there was a separate and unrelated force majeure declaration in effect stemming from this PHMSA order.

[01:19:58] Speaker 07:
As a result of that, there were some volumes that Texas East, that range nominated for delivery that Texas Eastern couldn't even schedule on the basis of force majeure.

[01:20:09] Speaker 07:
And for those, Range was given credits in accordance with Section 31.2 of the tariff.

[01:20:16] Speaker 08:
But just want to make sure I understand.

[01:20:18] Speaker 08:
So in their complaint, they definitely do say that that force majeure declaration was improper, and that if it's improper, it's on page 17 and 18 of Range's complaint.

[01:20:32] Speaker 08:
If it was improper, they should be entitled to 10 more days.

[01:20:36] Speaker 08:
And then paragraph 36 is based on the foregoing.

[01:20:39] Speaker 08:
We respectfully request the commission determine Texas Eastern is responsible for providing reservation charge credits to Range for all volumes that Texas Eastern scheduled but failed to deliver.

[01:20:50] Speaker 08:
So what, how does that line up with what I'm guessing?

[01:20:54] Speaker 07:
So Range did not raise in its complaint an argument that the force majeure declaration was invalid.

[01:21:02] Speaker 07:
I'm sorry if you could point me to the page again where you're seeing this.

[01:21:06] Speaker 08:
It's JA 297 to 298.

[01:21:15] Speaker 08:
And I know it's difficult to do this on the fly, but it seems to me that's at least where this general topic is discussed.

[01:21:22] Speaker 07:
Well, right.

[01:21:23] Speaker 07:
So what Range is saying there is that notwithstanding the fact that there was a force majeure declaration in effect there, Columbia Gulf, or rather Texas Eastern, couldn't claim that, you know, sort of wash its hands of giving any reservation charge credits.

[01:21:40] Speaker 07:
What it doesn't ever say here is that Texas Eastern's declaration of a force majeure event was invalid or improper.

[01:21:50] Speaker 07:
And that was the issue that was raised for the first time on re-hearing.

[01:21:52] Speaker 07:
Thank you.

[01:21:58] Speaker 02:
Just a couple factual questions.

[01:22:00] Speaker 02:
There's a meter at the Adair interconnect.

[01:22:07] Speaker 02:
before the interconnect, after?

[01:22:09] Speaker 02:
Is it along the Texas Eastern pipeline?

[01:22:15] Speaker 07:
So the meter at the actual interconnect?

[01:22:18] Speaker 07:
Or do you mean the meter stations?

[01:22:19] Speaker 02:
No, I mean the meter at the interconnect.

[01:22:20] Speaker 02:
How do we know what the pressure is at the interconnect?

[01:22:26] Speaker 07:
There is a meter at the interconnect, yes.

[01:22:29] Speaker 02:
And that's in the interconnect or in Texas Eastern's

[01:22:38] Speaker 07:
So unfortunately, candidly, I don't know the physical reality of that.

[01:22:42] Speaker 02:
And so, too, with the Liberty and Kentucky energy meters, they're measuring pressure in Texas Eastern's pipeline?

[01:22:55] Speaker 07:
So they are measuring flows into these local distribution pipelines.

[01:23:00] Speaker 02:
So flows off?

[01:23:01] Speaker 07:
Correct, off Texas Eastern's pipeline.

[01:23:03] Speaker 02:
So not the pressure in the pipeline.

[01:23:06] Speaker 07:
So these, are you referring to the exhibits, the complaint exhibits talking about the meter readings?

[01:23:17] Speaker 02:
The chart, yeah.

[01:23:19] Speaker 07:
Yeah, so those are talking about flow numbers, gas going off.

[01:23:25] Speaker 02:
On to the distribution.

[01:23:26] Speaker 07:
Correct.

[01:23:32] Speaker 02:
And can you say which days between June 2021 and July 29, 2021 were affected by the force majeure?

[01:23:44] Speaker 07:
Were affected by the force majeure, yes.

[01:23:48] Speaker 07:
So this is in the Donaldson affidavit at JA 708.

[01:24:00] Speaker 02:
It says a portion.

[01:24:03] Speaker 02:
A portion, yes.

[01:24:04] Speaker 07:
During the period from June 2nd through July 29th.

[01:24:10] Speaker 07:
So that was the period where this separate force major declaration was in effect that led some nominations not to be scheduled.

[01:24:21] Speaker 07:
To be clear, over the same period, there were also many nominations that Range made that Texas Eastern did schedule.

[01:24:29] Speaker 07:
In other words, that it was ready and willing to deliver at the available line pressure.

[01:24:34] Speaker 02:
I don't know which days were affected and which days were unaffected.

[01:24:38] Speaker 07:
By the force majeure event?

[01:24:40] Speaker 07:
Yeah.

[01:24:42] Speaker 07:
Well, on many of these days, there would have been both nominations that were

[01:24:52] Speaker 07:
scheduled by Texas Eastern, but not delivered solely because Columbia Gulf didn't accept her seat because of the pressure imbalance.

[01:25:02] Speaker 07:
And there would also have been some nominations that were not scheduled due to force majeure.

[01:25:14] Speaker 02:
And during the period between July 30th and August 3rd, when Columbia Gulf elected to receive 203,542 decatherms, but the DERA meter was reading only 131 decatherms flowing, why is there a difference there?

[01:25:30] Speaker 02:
Is that attributable to the force majeure?

[01:25:35] Speaker 07:
That would, I think, principally be due to the, that would have been due to the pressure imbalance in Columbia Gulf's refusal to take receipts.

[01:25:47] Speaker 02:
Well, they're saying they elected to receive 203 decotherms, and the meter's only reading lower than that.

[01:25:52] Speaker 02:
So I'm trying to figure out if they think they're ready to receive more.

[01:25:56] Speaker 07:
I apologize.

[01:25:59] Speaker 07:
Did you know which page that was?

[01:26:00] Speaker 07:
Or I could look it up.

[01:26:01] Speaker 07:
But I'm not recalling that allegation.

[01:26:03] Speaker 02:
I just wrote notes.

[01:26:04] Speaker 02:
I think it's from Donaldson.

[01:26:09] Speaker 02:
That's right.

[01:26:09] Speaker 02:
We'll skip it.

[01:26:10] Speaker 02:
It's been a long day.

[01:26:11] Speaker 02:
Are there questions from my colleagues?

[01:26:14] Speaker 08:
I actually do have one last question just on this reservation charge issue.

[01:26:19] Speaker 08:
I understood you to say range never made a claim that they would be entitled to reservation, more reservation credits if the force majeure declaration was was wrong, was was invalid.

[01:26:33] Speaker 08:
And the last thing that's tripping me up is paragraph 16 of the rehearing order, which says range

[01:26:42] Speaker 08:
has not shown it would be entitled to additional credits for this category of reductions, even if the force majeure declaration had been improper.

[01:26:49] Speaker 08:
It seems to be assuming they're arguing the force majeure declaration is improper and saying, even if they're right, they're not entitled to more, to which I understood Range's answer to be, we'd be entitled to 10 more days.

[01:27:03] Speaker 07:
Right.

[01:27:04] Speaker 07:
So just to respond to that quickly.

[01:27:05] Speaker 07:
So in the complaints, as we've said, Range never did argue that the force majeure declaration was invalid.

[01:27:14] Speaker 07:
In fact, it explicitly disclaimed that as the commission noted.

[01:27:17] Speaker 07:
That being said, as you note, that wasn't really the commission's holding when it rejected this argument.

[01:27:24] Speaker 07:
So as it said, I do think it provides valid or useful context.

[01:27:29] Speaker 07:
But what the commission's holding was, was that range had not asserted or showed

[01:27:35] Speaker 07:
that it would be entitled to more credits if the force majeure clause were invalid.

[01:27:41] Speaker 07:
And that's in the rehearing request.

[01:27:43] Speaker 07:
It never did that in the rehearing request.

[01:27:45] Speaker 07:
So that was FERC's holding, that range is making this argument on rehearing.

[01:27:51] Speaker 07:
And it has not asserted or shown that it would be entitled to more credits, even if the force majeure clause were invalid.

[01:27:58] Speaker 07:
Therefore, we don't need to hold a hearing on it.

[01:28:00] Speaker 07:
And that was absolutely a correct holding.

[01:28:02] Speaker 07:
If you look through the rehearing process of those pages, you will see absolutely nothing about this 10-day provision.

[01:28:07] Speaker 07:
And their effort to raise this for the first time on appeal is jurisdictionally forfeited in this court.

[01:28:12] Speaker 07:
Very clear under this court's cases that arguments must be raised with specificity on rehearing.

[01:28:17] Speaker ?:
Thank you.

[01:28:17] Speaker 02:
What is the value to range of a firm contract as you and FERC read the documents here?

[01:28:28] Speaker 07:
So the value to range of a firm contract is that it has service on Texas Eastern, and that service, as opposed to interruptible service, is not subject to a prior claim by another shipper.

[01:28:39] Speaker 07:
So we can't not serve them because we're too busy serving someone else.

[01:28:44] Speaker 07:
Um, that being said, um, you know, I take your, your question to be, well, you know, what is the value of this agreement to range, uh, if, if this, uh, pressure imbalance can, can come up and, uh, rearrange is sort of tough.

[01:28:57] Speaker 07:
I mean, uh, I, I will point out a couple of things on this.

[01:29:00] Speaker 07:
Um, first of all, range is getting value from this contract.

[01:29:03] Speaker 07:
I mean, we're talking about, just for context here, you know, we're talking about a period of about a week in 2019 and then a certain period in,

[01:29:11] Speaker 07:
2021 so we're just talking about those periods and during those even during those periods range was still having gas delivered now there were a few days where it was zero but overall range was still getting gas delivered so you know range is getting value out of out of this contract essentially what range is looking for here in trying to impose a mandate on

[01:29:34] Speaker 07:
Texas Eastern or on all upstream pipelines or delivering pipelines to always deliver at minimum pressure across an interconnect.

[01:29:44] Speaker 07:
It's basically a form of forced insurance, so to speak, or forcing Texas Eastern to bear the costs that would necessarily occur, such as building additional compression facilities.

[01:29:57] Speaker 07:
To ensure that pressure balance imbalances like this never rise and the approach that the Commission.

[01:30:04] Speaker 07:
You know has landed on, and this is not a new thing is that this is it's a contract based approach and.

[01:30:11] Speaker 07:
rational market actors can decide whether or not it's worthwhile to them to pay the extra costs that would be involved in having this kind of, you know, avoiding in advance these types of issues that may or may not crop up in the future.

[01:30:27] Speaker 07:
And there are lots of reasons why they might not want to take on those additional costs of installing, for example, additional compressor facilities.

[01:30:34] Speaker 02:
That's helpful.

[01:30:36] Speaker 02:
Thank you.

[01:30:38] Speaker 07:
Thank you.

[01:30:43] Speaker 02:
And we have some rebuttals.

[01:30:50] Speaker 01:
Mr. Yes, right.

[01:30:51] Speaker 09:
Recognizing that we've all been here a long time today, I will be very brief in my response and rebuttal and hopefully save some of this time for my colleague as well.

[01:30:58] Speaker 09:
Just really briefly on your last point, your honor, about what is the value to range in this contract if there's no guarantee of service.

[01:31:06] Speaker 09:
Firm service is supposed to mean firm.

[01:31:08] Speaker 09:
There was some some discussion with Mr. Mr. Eidegger about how why can't you just renegotiate the contract?

[01:31:13] Speaker 09:
We have a mobile Sierra issue there, your honors.

[01:31:16] Speaker 09:
If we cannot get for to undo the contract unless there's a public interest problem, we've already seen what for thinks about the contract.

[01:31:21] Speaker 09:
So we have that problem there.

[01:31:23] Speaker 09:
I would note also the standard industry practice for interconnection agreements or for for agreements where delivery pressures are applicable.

[01:31:30] Speaker 09:
is where the counterparty to the contract has some knowledge about what the delivery pressures are.

[01:31:36] Speaker 09:
That would be something like a power generation facility that has turbines that need to have gas coming in at a certain pressure.

[01:31:41] Speaker 09:
That would be a local distribution company that has some knowledge about the pressure that it needs for its system.

[01:31:46] Speaker 09:
A shipper has no way of knowing other than examining the publicly available MAOP information for the upstream and downstream pipelines to figure out what the pressure could be

[01:31:56] Speaker 09:
But the point I'm trying to make is, even if we could renegotiate the agreement with Texas Eastern, what would we put in that agreement?

[01:32:04] Speaker 09:
So thank you very much, Your Honours.

[01:32:09] Speaker 02:
And we'll also hear briefly from Mr. Higgins for Columbia Golf.

[01:32:14] Speaker 04:
Thank you, Your Honour.

[01:32:15] Speaker 04:
Just very quickly, I just wanted to make three very brief points in response to what I heard this morning.

[01:32:22] Speaker 04:
is with respect to Columbia Golf's tariff and how it defines shipper.

[01:32:25] Speaker 04:
I'd note that ANR's tariff at section 5.1.1 defines shipper in the same exact way with reference to rate schedules.

[01:32:33] Speaker 04:
Who takes advantage of rate schedules is a shipper.

[01:32:36] Speaker 04:
Under ANR's tariff, it's the same definition under Columbia Golf's tariff.

[01:32:39] Speaker 04:
There is no way, at least I haven't heard anyway from FERC during all these proceedings, to distinguish Columbia Golf's tariff in this case and ANR's tariff in Northern Natural.

[01:32:50] Speaker 04:
Second thing I heard was a statement that in Northern Natural, the delivering pipeline was not bound by the receiving pipeline's tariff.

[01:32:57] Speaker 04:
But again, paragraphs 14 and 23, right in conjunction, simply do not permit that interpretation.

[01:33:04] Speaker 04:
Again, paragraph 14, tariff provision requires Northern Natural, the shipper, to deliver gas to A&R at pressure sufficient to enter into the pipeline.

[01:33:13] Speaker 04:
That was A&R's argument.

[01:33:15] Speaker 04:
And then paragraph 23, we also concur with A&R's interpretation of its tariff requirements.

[01:33:19] Speaker 04:
It's very plain.

[01:33:21] Speaker 04:
And the very last point I wanted to make was just in response to one of Judge Wilkins' questions that FERC never acknowledges

[01:33:28] Speaker 04:
that it made this statement, and it would be very easy for FERC on remand to simply say, yes, we did make that statement.

[01:33:36] Speaker 04:
Here's what we meant by it.

[01:33:38] Speaker 04:
Here's why it was wrong.

[01:33:39] Speaker 04:
Here's why it applies.

[01:33:40] Speaker 04:
Here's why it doesn't apply.

[01:33:42] Speaker 04:
FERC, throughout these proceedings, has never acknowledged that in Northern Natural, it applied substantially identical language to the delivering pipeline.

[01:33:50] Speaker 04:
And we ask now a relief for FERC to have to do that on remand.

[01:33:56] Speaker 04:
If there are no further questions, we ask that you grant the petition.

[01:33:58] Speaker 05:
Thank you.