The case of Federal Energy Regulatory Commission v. Shell Oil Co., et al. in 1978 revolved around the interpretation and application of a regulation by the Federal Power Commission (FPC), now known as the Federal Energy Regulatory Commission (FERC). The FPC had issued refunds to customers who were overcharged for natural gas due to price controls set during an energy crisis, but later sought repayment from producers like Shell Oil when it was determined that these controls did not apply retroactively. The Supreme Court ruled in favor of FERC, stating that while administrative agencies must provide clear notice before changing regulations or policies, they are not required to do so when interpreting existing rules. Therefore, even though FERC's initial interpretation led to erroneous refunds being issued, this did not prevent them from correcting their mistake and seeking repayments once they realized their error.

In the dissenting opinion for Federal Energy Regulatory Commission v. Shell Oil Co., Justice Rehnquist disagreed with the majority's interpretation of the Natural Gas Policy Act (NGPA). He argued that while Congress intended to give FERC authority to regulate prices, it did not intend for this power to be retroactive. The NGPA was enacted in 1978 and he believed its provisions should only apply from that point forward, not on past transactions. Therefore, he contended that FERC overstepped its bounds by attempting to recoup alleged overcharges made prior to 1978 under a different regulatory regime. In his view, such an action would constitute an unfair retrospective application of new rules and could potentially disrupt market expectations and stability.