Grace v. El Paso Natural Gas Company was the hearing for the legal proceedings before the Federal Energy Regulatory Commission (FERC) which consisted of a hearing and a later rehearing, between 1989 and 1990.
The issue was based on FERC Order 490,[1] which the commission had created for the issue of abandonment of certain natural gas sales and purchases under the authority of Natural Gas Act of 1938 (NGA).
490 was never intended to be an unconstrained grant of regulatory authority to interstate pipelines to terminate and abandon small producer contracts, subject only to later judicial review of the contract expiration dispute.
At a minimum, the Commission should investigate the types of serious allegations presented here by the complainant and render a decision based on the substantive merits.
As a practical matter, in the absence of such investigation, many small producers effectively will have no remedy of any kind in the event of such alleged pipeline conduct, because a contract lawsuit will be financially burdensome, if not impossible.