1977 by a vote of 207-206.20 The House then approved the energy package on 14 October 1978 by a vote of 231-168.21 The bills were signed into law by the President on 9 November 1978.22 C. FERC's Incremental Pricing Rules As required, the Commission promulgated Phase I regulations applying incremental pricing to large industries using natural gas as boiler fuel. The regulations were issued on 28 September 1979, and became effective 1 January 1980.23 On 15 November 1979 the Commission issued a notice of proposed rulemaking providing for a broad Phase II rule that applied incremental pricing to all industrial users not specifically exempted by statute.24 On 6 May 1980, three days before the statutory deadline, the Commission adopted Phase II regulations based on its original November 1979 notice. During public hearings FERC had received many comments urging that incremental pricing not be expanded at all because market conditions had changed and because the incremental pricing concept itself was flawed. FERC rejected these suggestions: [437] The Commission believes that it was neither requested nor authorized to second-guess the social and economic judgments that the Congress made in enacting Title II. The role of the Commission under Section 202 is more limited . . . . It is up to the Congress to decide whether this Phase II submittal meets adequately the social and economic goals of the incremental pricing program or, indeed, whether those goals are still appropriate. By virtue of the very review procedures built into section 202, it seems clear that the Congress sought to have this Commission develop a meaningful Phase II rule. The Congress would not have a meaningful choice if the Commission were to offer no rule, or a very narrow rule, for its review The Commission believes that this Phase II rule presents a meaningful choice to the Congress. 25 D. The House Veto The House Committee on Interstate and Foreign Commerce conducted hearings on the Phase II rule on 3 April and 6 May 1980. On 6 May, the same day FERC issued the final rule, the Subcommittee on Energy and Power reported favorably on a resolution of disapproval, and the next day the full committee did the same.26 The committee defined its task as determining "whether the risk of economic dislocation in requiring certain industrial customers at this time to shoulder increased gas costs is outweighed by the benefits in sheltering higher priority users from some cost increases and whether an expansion of incremental pricing at this time is 20 Id. at 36975. 21 Id. at 38503. 22 Remarks on Signing H.R. 4018, H.R. 5263, H.R. 5037, H.R. 5146, and H.R. 5289 into Law, 14 Weekly Comp. Pres. Doc. 1978 (9 Nov. 1978). 23 FERC Order No. 49, 44 Fed. Reg. 57726 (5 Oct. 1979) (codified in 18 C.F.R. §§ 154, 201, 204, 282 (1980)). 24 Notice of Proposed Rulemaking and Public Hearings, FERC Docket No. RM 80-10, 44 Fed. Reg. 67170 (23 Nov. 1979). 25 Phase II Rule, supra note 10, 5, reprinted in Veto Report, supra note 9, at 19. 26 Veto Report, supra note 9, at 5. consistent with current national priorities."27 In recommending disapproval of the rule, the committee emphasized that energy market conditions had changed drastically and in unanticipated ways since passage of the NGPA.28 Furthermore, uncertainty about the value of incremental pricing remained because there had not yet been sufficient time to evaluate the effects of Phase I.29 'Accordingly, the committee finds that current uncertainties with respect to phase II of incremental pricing must be substantially reduced before it would consider implementation of a phase II rule."30 During the floor debate several reasons were given in support of the veto resolution. Most supporters declared that FERC had acted within its statutory mandate, but that changed circumstances and uncertainty about incremental pricing dictated that Congress drop the Phase II approach.31 Most congressmen appeared to agree with Representative Sharp's view that the congressional veto provision in section 202(c) was being used "not as a way to discipline [FERC], but as a way for us, as I think [was] intended by the conferees on the 1978 act, to have a second look at the policy that we could not be certain of[,] that we were [438] not willing to mandate at that time."32 In addition, representatives who had opposed incremental pricing in 1978 argued for repeal of Phase I and declared their support for the veto because incremental pricing was unwise as a matter of policy. 33 Other supporters of the resolution argued that FERC had violated the intent of Congress, by promulgating either too narrow a rule 34 or too broad a rule.35 On 20 May 1980 the veto resolution passed the House by a vote of 369-34.36 E. Rehearing Proceedings before the Commission On 5 June 1980 CECA petitioned for rehearing of the 6 May order, seeking elimination of the provision conditioning the rule's effectiveness on the failure of either house to pass a veto resolution 27 Id. at 7. 28 Id. at 8. 29 Id. 30 Id. at 13-14. The committee also addressed the issue "whether section 204(e) of the NGPA requires that the Commission set a facility's maximum incremental pricing liability on the basis of its actual alternative fuel cost or whether, instead, section 204(e) merely gives the Commission a range of prices for establishing that facility's maximum incremental pricing liability." Id. at 10. The committee concluded: "The Commission's narrow interpretation of its authority under section 204(e) to set incremental pricing alternative fuel ceilings solely on the basis of installed alternative fuel capability and its perceived inability to tie delivered natural gas prices to natural gas wellhead market conditions appears to be a misreading of the statute." Id. at 11. 31 See, e.g., 126 Cong. Rec. H3839 (daily ed. 20 May 1980) (remarks of Rep. Sharp); id. at H3840 (remarks of Rep. Dingell); id. at H3843 (remarks of Rep. Preyer); id. at H3844 (remarks of Rep. Lundine); id. at 3850 (remarks of Rep. Kemp); id. at H3853 (remarks of Rep. Benjamin); id. at H3854 (remarks of Rep. Ashley). CECA and Congressional amici agree that the veto was based primarily on the determination that incremental pricing should not be expanded. See Brief for Congressional Amici at 47 n.44; Reply Brief for Petitioners at 29. 32 126 Cong. Rec. H3841 (daily ed. 20 May 1980) remarks of Rep. Sharp); see id. at H3849-50 (remarks of Rep. Levitas); id. at H3850 (remarks of Rep. Eckhardt). 33 "Every argument that has been made in committee, every argument that has been made on the floor against phase II is equally applicable to phase I." Id. at H3848 (remarks of Rep. Gramm); see id. at H3843 (remarks of Rep. Preyer); id. at H3845 (remarks of Rep. Brown); id. at H3851 (remarks of Rep. Kemp); id. at H3853 (remarks of Rep. Quayle). 34 See id. at H3847 (remarks of Rep. Markey). See also Veto Report, supra note 9, at 11 ("The Commission's narrow interpretation of its authority under section 204(e) . appears to be a misreading of the statute."). 35 See 126 Cong. Rec. H3849 (daily ed. 20 May 1980) (remarks of Rep. Stockman); id. at H3854 (remarks of Rep. Ashley). 36 H.R. Res. 655, 96th Cong., 2d Sess., 126 Cong. Rec. H3855 (daily ed. 20 May 1980). within thirty days. The petition expressly challenged the constitutionality of section 202(c). On 1 August 1980 FERC denied the petition. It declined to rule on the constitutionality of the veto, finding "that sound administrative practice requires the presumption of constitutional validity of the statutes entrusted to this Commission for implementation." 37 The Commission then revoked the vetoed Phase II rule. It reasoned that if section 202(c) were declared unconstitutional the rule might take effect. This result was undesirable because "the Commission has not yet independently evaluated whether the Phase II rule meets the social and economic goals of the Title II incremental pricing program" and because "we might well have very serious reservations as to the wisdom of making the Phase II rule effective." 38 Therefore, to ensure that it would have an opportunity to evaluate Phase I and Phase II if section 202(c) were held invalid, the Commission decided to "exercise its authority under sections 201 and 202 to amend the rule under section 201 to revoke the amendments made by [the Phase II order]." 39 Petitioners then sought rehearing of the revocation order. They challenged the Commission's authority to revoke the rule, and argued that the order was issued in violation of the APA's notice and comment requirements. The Commission denied the petition, finding that sections 201 and 202 of the NGPA permitted revocation by giving it power to amend the rule. It also found that the APA's requirements were met by the original notice of November 1979, and ruled in the alternative that there was "good cause" to ignore the APA in this case. 40 Petitioners sought judicial reveiw of both the revocation order and the denial of the second rehearing petition, and this court consolidated the two petitions. We find that the revocation order was invalid, that section 202(c) is unconstitutional, and that the Phase II rule should become effective absent further Commission action to postpone or amend it. The Commission is free to conduct further proceedings not inconsistent with this opinion. [439] II. JURISDICTION Only Congressional amici contest this court's jurisdiction. There motion to dismiss, opposed by both petitioners and respondent FERC, asserts that this case should have been brought in the district court rather than the court of appeals. We hold that this case is properly in this court, and we deny the motion. Section 506 of the NGPA gives this court jurisdiction to review FERC orders and rules issued under the Act.41 Congressional amici insist, however, that petitioners to not seek review of either an order or a rule: They instead challenge FERC's acknowledgement that by 37 Revocation Order, supra note 5, at 3, reprinted in App. A at 9. 38 Id. at 4-5, reprinted in App. A at 10-11. 39 Id. at 7, reprinted in App. A at 13. 40 FERC Order Denying Rehearing on Revocation of Amendments in Order No. 80, at 2-3 (2 Oct. 1980) [hereinafter "Second Denial of Rehearing"], reprinted in 45 Fed. Reg. 71780 (30 Oct. 1980), and App. A at 22-23. 41 15 U.S.Č. §3416 (Supp. III 1979). sence, petitioners seek to compel FERC to adopt the incre- Congressional amici also contend that this case belongs in the district court because that court is better equipped to compile a record and accord effective relief. We are unpersuaded by either of these arguments. [1,2] The suggestion that challenges to an agency's refusal to adopt rules or conduct a rulemaking may be brought only in a district court is erroneous. In WWHT, Inc. v. FCC 43 we found that this court had jurisdiction to review an allegation "that the FCC abused its discretion when it denied [a] request for rulemaking.”44 Thus even if we analogized CECA's complaint here to a challenge to an agency refusal to conduct a rulemaking, we still would have no reason for finding a lack of jurisdiction. It is clear, moreover, that petitioners do indeed seek review of both a rule and an order of the Commission. CECA raises constitutional challenges to the Phase II rule and statutory challenges to the Commission's decision to revoke the rule. FERC issued a final rule, the effectiveness of which was conditioned on the failure of either house of Congress to veto it. CECA petitioned for removal of that provision, but FERC refused. The rule remained a final agency rule, which CECA challenged on constitutional grounds. FERC then re-[440]voked the rule, an action which was "final in every sense of the word."45 We also reject the suggestion that the district court is in any way a more appropriate forum in this case. The rulemaking here has been completed. No further compilation of a record is necessary; the issues raised are purely legal and have been fully briefed on all sides. This court is competent to grant whatever relief might be 42 Motion of Congressional Amici to Dismiss for Lack of Jurisdiction at 3. 43 656 F.2d 807 (D.C. Cir. 1981). 44 Id. at 815-16. See also National Organization For Reform of Marijuana Laws v. Ingersoll, 497 F.2d 654, 656 n.3 (D.C. Cir. 1974) (denying petition for mandamus, but ordering that petition be considered as one for review, where petitioners challenge agency decision not to conduct rulemaking); Gage v. United States Atomic Energy Comm'n, 479 F.2d 1214, 1222 n.27 (D.C. Cir. 1973) (Commission denial of petition for institution of a rulemaking proceeding "would constitute a final order reviewable by this court"). The specific holding in WWHT was that this allegation of abuse of discretion was cognizable under the APA, 5 U.S.Č. § 706(2) (1976). Review was appropriate in the court of appeals because Congress so provided by statute. See 47 U.S.C. § 402(a) (1976); 28 U.S.C. § 2342(1) (1976). Whether review belongs in the district court or court of appeals, then, is determined by reference to the jurisdictional provisions in the agency's governing statute. This points up the flaw in Congressional amici's reliance on Environmental Defense Fund v. EPA, 598 F.2d 62 (D.C. Cir. 1978), which held that only the district court had jurisdiction over the contention "that EPA should have engaged in an additional rulemaking proceeding." Id. at 91. This was based on a finding that the jurisdictional provisions of the statute at issue, the Federal Water Pollution Control Act, 33 U.S.C. §§ 1365(a), 1369(b) (1976), did not provide for review in the court of appeals of this type of agency action. The case does not stand for a general proposition that all denials of rulemaking petitions must be challenged in the district court. (Congressional amici also cite National Res. Defense Council, Inc. v. SEC, 606 F.2d 1031 (D.C. Cir. 1979), in which it was noted that the court earlier had dismissed a petition for review of an agency's refusal to propose rules "on the ground that the Commission's action was not final agency action subject to judicial review." Id. at 1037 n.2. The court's reasoning is not clear since the decision was issued without opinion, and in any event such unpublished orders may not be cited as precedent. D.C. Cir. R. 8(f)). 45 Response of FERC in Opposition to Motion to Dismiss at 5 n.1. necessary. The simple fact that petitioners desire a different outcome does not turn their claim into one for mandamus. [3] In sum, there is no reason in law or policy for this case to be brought in the district court.46 To accept Congressional amici's interpretation would be to create a standard whereby review of rules would be heard in one court and review of revocation of rules in another, even though the statute, record, and issues would be virtually identical. We decline to reach such a result because it would violate the congressional intent expressed in section 506 that review of final Commission decisions be conducted in the courts of appeals.47 III. SEVERABILITY FERC, joined by Congressional amici and intervenors, argues that this court should not reach the constitutional issues because even if we found the legislative veto provision unconstitutional, petitioners would not [441] be entitled to effective relief. The argument is that section 202(c) is inseverable from section 202(a) because Congress would not have authorized Phase II incremental pricing had the legislative veto provision not been included. Thus, if subsection (c) is unconstitutional all of section 202 must be struck down. FERC would be left without authority to promulgate any Phase II rule, and petitioners would not be entitled to reinstatement of the rule issued by FERC in May 1980. 46 Congressional amici cite two statutes which expressly provide that agency refusals to implement a rule because of a congressional veto must be challenged in the district court. See 15 U.S.C.A. §57a-1(f) (West Supp. 1981) (FTC rulemaking); Federal Insecticide, Fungicide, and Rodenticide Act Amendments of 1980, Pub. L. No. 96-539, §4, 94 Stat. 3195 (to be codified at 7 U.S.C. §136w(a)(4)) (EPA pesticide rulemaking). These statutes are irrelevant here, however, since Congress did not authorize the district court to hear such issues in FERC cases. Indeed, by directing the district court to certify to the court of appeals all questions of the constitutionality of the legislative veto, these provisions suggest that Congress intends, even where it directs suits to be brought in the district court, to have a court of appeals, rather than a single district court judge, ruling on the constitutionality of the legislative veto. 47 In Chadha v. Immigration & Naturalization Serv., 634 F.2d 408 (9th Cir. 1980), consideration of juris. postponed until hearing on merits, U.S. 102 S.Ct. 87, 70 L.Ed.2d 80 (1981), the Ninth Circuit held that it had jurisdiction to review the House of Representatives' disapproval of the suspension of an alien's deportation. This was based on 8 U.S.C. §1105a (a) (1976), which provides that review in the court of appeals "shall be the sole and exclusive procedure for the judicial review of all final orders of deportation." Congressional amici direct our attention to a recent Third Circuit decision interpreting the same jurisdictional provision, though not involving the legislative veto. The court found that it lacked jurisdiction to hear claims brought by non-immigrant Iranian students found deportable by the Immigration and Naturalization Service ("INS"), challenging the constitutionality of the regulation which led to the discovery of their illegal status. Discussing the holding in Chadha, the Third Circuit declared: A faithful application of Cheng Fan Kwock [v. INS, 392 U.S. 206, 88 S.Ct. 1970, 20 L.E.2d 1037 (1968),] compels the conclusion that, because the constitutionality of either the one-house disapproval or the Iranian-related regulation could not have been tested during administrative deportation proceedings, neither matter should be reviewable directly by a court of appeals under section 106(a). Dastmalchi v. Immigration & Naturalization Serv., 660 F.2d 880, 883 (3d Cir. 1981). We find neither of these cases relevant to the jurisdictional question before us. There is a considerable body of law interpreting the specific judicial review provisions of the Immigration and Nationality Act, centering on the meaning of "all final orders of deportation." In contrast, this case presents us with the more general issue of appellate review of a final agency rule. In particular, we note that the specific ground of disagreement stated by the Third Circuit was that the constitutionality of the legislative veto and the INS regulation could not have been determined during the administrative deportation proceedings. In this case, FERC refused to address the constitutional issue because it did not want to take a partisan position, not because it lacked the power to do so. See note 5 supra.. Congressional amici do not claim otherwise. Thus, we are presented with a case in which the agency refused on policy grounds to address the issue, and then, in recognition of the importance of the issue, went on to revoke the rule. For us to refuse to review the constitutional issue would be tantamount to holding that a court of appeals may never decide constitutional challenges to any agency rule. |