FPC V. TEXACO, INC.
377 U.S. 33 (1964)
NATURE OF THE CASE: This was a dispute over escalator clauses.
FACTS: The FPC through notice and comment rule making adopted regulations governing the
terms of contracts between gas producers and pipelines to whom they supplied gas. The
regulations prohibited escalator clauses; adjusting the contract price for gas to future
higher prices for newly delivered gas. There was no oral argument but an opportunity was
afforded all parties to submit their views in writing. Texaco and Pan American did so along
with others. Later each party then submitted an application of necessity under section 7 of
the Natural Gas Act to supply natural gas to a pipeline company. The Act required that such
applications under section 7 be set for hearing. The Commission rejected these applications,
as the prices they disclosed were not permissible under the regulations; no hearings were
held.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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