Atlantic Refining Co. v. Public Service Commission
In Atlantic Refining Co. v. Public Service Commission, 360 U.S. 378, 79 S.Ct. 1246, 3 L.Ed.2d 1312 (1959), the Supreme Court recognized the right and duty of the Commission to give consideration to the reasonableness of a proposed price under Sec. 7 the Natural Gas Act proceedings upon an application for a permanent certificate.
The reasoning authorizing such consideration is equally applicable to the issuance of temporary certificates. The Court Said:
"Where the proposed price is not in keeping with the public interest because it is out of line or because its approval might result in a triggering of general price rises or an increase in the applicant's existing rates by reason of `favored nation' clauses or otherwise, the Commission in the exercise of its discretion might attach such conditions as it believes necessary.
"This is not an encroachment upon the initial rate-making privileges allowed natural gas companies under the Act, United Gas Pipe Line Co. v. Mobile Gas Service Corp., supra 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373, but merely the exercise of that duty imposed on the Commission to protect the public interest in determining whether the issuance of the certificate is required by the public convenience and necessity, which is the Act's standard in 7 applications. In granting such conditional certificates, the Commission does not determine initial prices nor does it overturn those agreed upon by the parties. Rather, it so conditions the certificate that the consuming public may be protected while the justness and reasonableness of the price fixed by the parties is being determined under other sections of the Act. Section 7 procedures in such situations thus act to hold the line awaiting adjudication of a just and reasonable rate. " (360 U.S. 378, 79 S.Ct. 1255.)
In Atlantic Refining Co. v. Public Service Comm'n of New York, 360 U.S. 378, 388, 79 S.Ct. 1246, 1253, 3 L.Ed.2d 1312 (1959), the Supreme Court held that the "(Natural Gas) Act was so framed as to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges."
The Court there confirmed the Commission's duty to protect consumers by attaching conditions to certificates, limiting the initial rate, permitting the Commission to suspend any increases, and providing for refunds of any amounts later found to be excessive. Id. at 388-392, 79 S.Ct. at 1253-55.