Client Alert
| October 26, 2011
Fifth Circuit Vacates Order Nos. 720 and 720-A
Acting under its claim of authority under section 23 of the Natural Gas Act (one of the new sections added by the Energy Policy Act of 2005), FERC issued Order No. 720 in 2008 followed by Order No. 720-A on rehearing and clarification in 2010. Section 23 (Natural Gas Market Transparency Rules) allows FERC to obtain and disseminate information about “the availability and prices of natural gas sold at wholesale and in interstate commerce” from “any market participant.” In Order No. 720, FERC promulgated Posting Rules that required major non-interstate pipelines to post detailed scheduled flow information for each receipt and delivery point with a design capacity greater than 15,000 MMBtu per day. “Major” non-interstate pipelines are generally defined by the rule to include intrastate and Hinshaw pipelines that deliver more than 50 million MMBtu per year. In an order and opinion issued on October 24, 2011, the Fifth Circuit vacated Order No. 720 and the related Order on Rehearing, 720-A. Companies most immediately affected by the Fifth Circuit ruling are, of course, intrastate pipelines and actual and potential shippers, but the implications for the Fifth Circuit’s analysis extend further, as is always the case with a jurisdictional determination when the agency has extended its jurisdictional reach to non-traditional areas.
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