The Fifth Circuit Court of Appeals has ruled that the Federal Energy Regulatory Commission (FERC ) lacks authority to regulate “wholly-intrastate pipelines” under the Natural Gas Act (NG A). Texas Pipeline Ass’n v. FERC, No. 10-60066 (5th Cir. 10/24/11).

Petitioners challenged FERC ’s “posting rule” that required “major non-interstate pipelines . . . to post scheduled flow information and to post information for each receipt and delivery point with a design capacity greater than 15,000 MMB tu per day.” FERC subsequently clarified the rule and reduced the number of non-interstate pipelines covered but denied petitioner’s request for a rehearing. Petitioners alleged that the rule exceeds the authority granted to FERC by the NG A, in violation of section 10(e) of the Administrative Procedure Act. FERC argued that it was authorized to issue the rule under section 23 of the NG A, which allows FERC to obtain information from “any market participant” concerning the availability and prices of natural gas.  

Reviewing the language and history of section 23, the court concluded that while FERC has the authority to obtain information about the availability and prices of natural gas, that authority does not extend to intrastate pipelines. According to the court, the NG A “unambiguously denies FERC the power to regulate entities specifically excluded,” which entities include “wholly-intrastate pipelines.”