Minneapolis Gas Company et al., Petitioners, v. Federal Power Commission, Respondent,city of Duluth, Minnesota, Superior Water, Light and Power Company, Minnesota Valley Natural Gas Company, Northern Natural Gas Company, Iowa Public Service Company, Iowa Power and Light Company, Northwestern Public Service Company, State of Minnesota, Willmar Gas Company, Inc., Intervenors, 278 F.2d 870 (D.C. Cir. 1960)

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U.S. Court of Appeals for the District of Columbia Circuit - 278 F.2d 870 (D.C. Cir. 1960) Argued March 29, 1960
Decided May 13, 1960
Petition for Rehearing Denied June 10, 1960
As Amended August 19, 1960

Mr. George C. Mastor, Minneapolis, Minn., with whom Messrs. P. L. Farnand, Minneapolis, Minn., and George C. Pardee, Omaha, Neb., were on the brief, for petitioners.

Mr. Richard C. Steffey, Atty., Federal Power Commission, of the bar of the Supreme Court of Virginia, pro hac vice, by special leave of court, with whom Messrs. Willard W. Gatchell, Gen. Counsel, Federal Power Commission, Howard E. Wahrenbrock, Solicitor, Federal Power Commission, and Robert L. Russell, Asst. Gen. Counsel, Federal Power Commission, were on the brief, for respondent.

Mr. Justin R. Wolf, Washington, D. C., with whom Mr. Charles A. Case, Jr., and Mrs. Louise C. Powell, Washington, D. C., were on the brief for intervenor Northern Natural Gas Co., argued for all intervenors except City of Duluth and Superior Water, Light and Power Co.

Mr. Harold J. Soderberg, Minneapolis, Minn., was on the brief for intervenor State of Minnesota.

Messrs. John W. Scott and Louis L. Da Pra, Washington, D. C., were on the brief for intervenor Minnesota Valley Natural Gas Co.

Mr. Robert S. Hunt, Chicago, Ill., was on the brief for intervenors Iowa Public Service Co., Iowa Power and Light Co., and Northwestern Public Service Co.

Mr. Bryce Rea, Jr., Washington, D. C., was on the brief for intervenor Willmar Gas Co.

Messrs. Glen H. Bell and Charles P. Seibold, Madison, Wis., entered appearances for intervenors City of Duluth, Minn., and Superior Water, Light and Power Co.

Before EDGERTON, DANAHER, and BURGER, Circuit Judges.

EDGERTON, Circuit Judge.

Petitioners seek review of the Federal Power Commission's opinion and order of July 31, 1959, and its order of September 18, 1959, granting certificates of public convenience and necessity under § 7(c) of the Natural Gas Act, 52 Stat. 825, as amended, 15 U.S.C.A. 717f(c). The orders authorize Northern Natural Gas Company to extend its pipelines and bring natural gas service to more than 300 communities in Nebraska, South Dakota, Iowa, Illinois, Wisconsin, and Minnesota. 22 FPC 164, 523.

Petitioners are local gas distributors that buy from Northern. They object to the Commission's orders because, on the basis of the rates now charged Northern's customers, the new service will not yield to Northern in the first three years as high a percentage of profit as the present service, and may therefore tend to keep up the rates which petitioners pay to Northern.

The various parts of a public utility's system need not and cannot be equally profitable. Puget Sound Traction, Light & Power Co. v. Reynolds, 244 U.S. 574, 581, 37 S. Ct. 705, 61 L. Ed. 1325. The record supports the Commission's finding that Northern's project will be economically "feasible particularly after * * * provisions * * * for customers who may not pay their proper share of Northern's cost of service." Service on certain lines is authorized only on condition that the distributors on those lines make certain contributions to initial costs. The record also supports the Commission's conclusion that the new service is required by the public convenience and necessity. The Commission properly weighed the interests that will be served against those that will be injured and did not strike an arbitrary balance. Cf. Democrat Printing Co. v. Federal Communications Commission, 91 U.S.App.D.C. 72, 202 F.2d 298.