The Supreme Court has agreed to study the government's power to lift price controls on some natural gas, a case that has tens of millions of dollars at stake for consumers.
The justices said they will review federal regulations that, among other things, allow gas producers to raise some prices charged to pipeline companies.The regulations were struck down by a federal appeals court but will remain in effect until a Supreme Court decision is announced, likely in 1991.
The 5th U.S. Circuit Court of Appeals last year invalidated regulations adopted in 1986 by the Federal Energy Regulatory Commission.
The appeals court said FERC exceeded its authority when it permitted producers of so-called old gas to raise their prices and to stop selling to pipeline companies unwilling to pay the higher prices.
Old gas is defined by a 1978 federal law as natural gas committed to interstate commerce by Nov. 8 of that year, the date the law took effect.
Energy industry experts said the appeals court ruling could lead to refunds of more than $100 million. But the 5th Circuit court did not order refunds.
In the appeal acted on today, the federal commission and the gas producers said lifting price controls will mean more new gas production in the long run, and that such action could save consumers $25 billion.
The 1986 commission regulation raised the ceiling price of old gas from 52 cents per thousand cubic feet to $2.75. Little gas has been sold at the higher figure.
Such increases generally are passed through the gas distribution system from producers to pipeline companies to retailers to consumers.
The cases are Mobil Oil vs. United Distribution Companies, 89-1452, and FERC vs. United Distribution Companies, 89-1453.