## Facts

- FERC issued Order No. 720 and Order No. 720-A under § 23 of the Natural Gas Act (NGA), added by the Energy Policy Act of 2005, to increase price transparency in interstate natural gas markets.
- The orders adopted a “Posting Rule” requiring “major non-interstate pipelines” to post scheduled flow information and receipt/delivery point data for points with design capacity over 15,000 MMBtu/day.
- “Major non-interstate pipelines” were defined as non-interstate (primarily intrastate) pipelines delivering more than 50 million MMBtu per year.
- Petitioners included the Texas Pipeline Association (representing intrastate pipelines) and the Railroad Commission of Texas (the state regulator).
- Petitioners sought rehearing at FERC, arguing the Posting Rule exceeded FERC’s statutory authority given the NGA’s jurisdictional limits; FERC denied rehearing while clarifying aspects of the rule.
- Petitioners sought judicial review in the Fifth Circuit under 15 U.S.C. § 717r(b).
- The NGA generally regulates interstate transportation and wholesale sales for resale, while § 1(b) excludes other transportation/sales, local distribution, and related facilities from FERC regulation.

## Issues

1. Whether NGA § 23 authorizes FERC to impose flow and capacity posting requirements directly on non-interstate (intrastate) pipelines, notwithstanding NGA § 1(b)’s jurisdictional limitations.
2. Whether FERC’s interpretation of § 23 as reaching intrastate pipelines as “market participants” is permissible under Chevron and the Administrative Procedure Act.

## Decision

- The Fifth Circuit granted the petitions for review and vacated Order No. 720 and Order No. 720-A.
- The court held the Posting Rule exceeded FERC’s statutory authority and was invalid as agency action “in excess of statutory jurisdiction, authority, or limitations.”
- The court concluded § 1(b) draws a jurisdictional boundary that § 23 did not repeal or expand by implication.
- The court treated the Posting Rule as direct regulation of intrastate pipelines’ operations (mandating how and what information must be posted), not merely incidental information collection within existing jurisdiction.
- Applying Chevron, the court found the NGA’s text and structure foreclosed FERC’s asserted authority; even if ambiguity existed, FERC’s reading was unreasonable because it effectively disregarded § 1(b).

## Legal Principles

- An agency may not extend its regulatory authority beyond explicit jurisdictional limits set by its organic statute; later-enacted provisions are read in harmony with those limits absent clear congressional expansion.
- Repeal or expansion of statutory jurisdiction “by implication” is disfavored; broad phrases (e.g., “any market participant”) do not alone authorize regulation of entities otherwise outside the statute’s scope.
- Transparency objectives in a statutory provision do not permit an agency to impose direct regulatory obligations on non-jurisdictional entities where Congress preserved a jurisdictional “bright line.”
- Under Chevron and the APA, agency interpretations that negate express statutory jurisdictional restraints are unlawful as exceeding statutory authority.

## Conclusion

The Fifth Circuit held that NGA § 23’s transparency mandate did not enlarge FERC’s jurisdiction beyond NGA § 1(b)’s interstate boundary, and it vacated FERC’s orders because imposing posting requirements on intrastate pipelines was an unlawful exercise of regulatory power outside FERC’s statutory jurisdiction.


Tex. Pipeline Ass’n v. Fed. Energy Regul. Comm’n, 661 F.3d 258 (5th Cir. 2011)