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In the case Federal Power Commission v. United Gas Pipe Line Co., 1968, the U.S Supreme Court ruled that under Section 4 of the Natural Gas Act, natural gas companies must file rate schedules with the Federal Power Commission (FPC) and cannot unilaterally change their rates without FPC approval. The court held that a clause in United's contracts allowing it to make unilateral changes was invalid because it violated this provision of the act. This decision reinforced regulatory oversight over energy industries by affirming that federal law superseded private contract agreements when they conflicted with statutory requirements for public interest protection.
In the dissenting opinion for Federal Power Commission v. United Gas Pipe Line Co., Justice Harlan disagreed with the majority's interpretation of Section 4(e) of the Natural Gas Act, arguing that it did not give the Federal Power Commission (FPC) authority to determine whether a rate increase was just and reasonable before it went into effect. He contended that this power only extended to determining if an existing rate was unjust or unreasonable, and therefore should be changed. The justice argued that allowing FPC such preemptive powers would undermine contractual agreements between parties in favor of regulatory intervention, which he believed contradicted Congress' intent when drafting the act. Furthermore, he expressed concern over potential administrative burdens on FPC due to increased hearings and investigations resulting from this expanded role.