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FPC v. Tennessee Gas Transmission Co., 371 U.S. 145 (1962)

Federal Power Commission v. Tennessee Gas Transmission Co.

No. 48

Argued October 17, 1962

Decided December 3, 1962*

371 U.S. 145


Under § 4 of the Natural Gas Act, a natural gas pipeline company filed increased rate schedules for its 6 different rate zones. All such increased rates were predicated, in part, on a cost of service which included a claim to a 7% rate of return on investment. After suspension by the Federal Power Commission for the full 5 months permitted by law, the new rates went into effect, subject to refund of any portion not ultimately justified in proceedings before the Commission. Several months later, after hearings, the Commission treated separately the issue of the rate of return on investment, found that 7% was excessive, and that 6 1/8% would be proper, and ordered an interim rate reduction and an immediate refund of the amounts collected in excess of the resulting lower rates. It deferred determination of other issues in the proceeding, including the allocation of over-all costs of the company's services among its 6 rate zones.

Held: This was an appropriate exercise of the power granted the Commission by the Act. Pp. 371 U. S. 146-155.

293 F.2d 761 affirmed in part and reversed in part.

Page 371 U. S. 146

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