196 F.3d 1264 (D.C. Cir. 1999)
Anadarko Petroleum Corporation, et al., Petitionersv.Federal Energy Regulatory Commission, RespondentAmoco Production Company, et al., Intervenors
No. 98-1227,Consolidated with Nos. 98-1228, 98-1229, 98-1230, 98-1231,98-1232, 98-1297, & 98-1298
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 1999Decided October 29, 1999

On Petitions for Review of Orders of the Federal Energy Regulatory Commission.
Carla J. Stovall argued the cause for petitioners State of  Kansas and Kansas Corporation Commission.  On the briefs  were John McNish and Richard G. Morgan.
Mark H. Haskell argued the cause for petitioners Anadarko Petroleum Corporation, et al.  With him on the briefs  were Gordon Gooch, Dena E. Wiggins, Kristin E. Gibbs,  James W. Moeller, J. Kyle McClain, Robert W. Johnson,  Michael L. Pate, Charles F. Hosmer, Kevin M. Sweeney,  Mickey Jo Lawrence, John E. Dickinson, Norma J. Rosner,  Matthew M. Schreck, Eugene A. Lang, and Eugene R. Elrod.
Andrew K. Soto, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With him on  the brief were Jay L. Witkin, Solicitor, and Susan J. Court,  Special Counsel.
Karol Lyn Newman argued the cause for intervenors in  support of respondent. With her on the brief were James D.  Albright, David W. D'Alessandro, Dennis D. Ahlers, James  Howard, Linda M. Billings, Richard Green, Dana C. Con- tratto, Gary W. Boyle, Jay V. Allen, Francis X. Berkemeier,  James F. Moriarty, Frank X. Kelly, Carl W. Ulrich, Drew J.  Fossum, and James R. Talcott.
Before:  Edwards, Chief Judge, Sentelle and Randolph,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge:


1
Petitioners in these consolidated cases are natural gas producers, and the State of Kansas and the Kansas Corporation Commission.  Four issues are presented.  The first concerns our jurisdiction.  The remaining  three deal with the Federal Energy Regulatory Commission's  resolution of proceedings initiated in the wake of Public  Service Co. of Colorado v. FERC, 91 F.3d 1478 (D.C. Cir.  1996).


2
Although we will presuppose knowledge of our opinion in  Public Service and its predecessor, Colorado Interstate Gas  Co. v. FERC, 850 F.2d 769 (D.C. Cir. 1988), a description of   the issues before us requires some restatement of the litiga- tion that brought this matter to its present posture.

I. Prior Proceedings

3
Title I of the Natural Gas Production Act (NGPA), enacted  in 1978, imposed maximum lawful prices on first sales of  certain categories of natural gas, but § 110 of the NGPA  allowed producers to recover from their customers charges in  excess of the maximum limits "to the extent necessary to  recover ... State severance taxes attributable to the produc- tion of such natural gas and borne by the seller."  15 U.S.C.  § 3320(a)(1) (1988) (repealed);  see also id. §§ 3311-3333  (1988) (repealed).  After passage of the NGPA, the Commis- sion continued to adhere to an earlier agency opinion1 treat- ing the Kansas ad valorem tax imposed on producers as such  a severance tax.  See, e.g., Independent Oil & Gas Ass'n of  W.Va., 7 F.E.R.C. p 61,094 (1979);  Trio Petroleum Corp., 18  F.E.R.C. p 61,203 (1982).  In a petition filed on October 4,  1983, several customers of Kansas producers tried unsuccess- fully to persuade the Commission to change its mind.  See  Notice of Petition to Reopen, Reconsider and Rescind Opinion  No. 699-D, 48 Fed. Reg. 45,287 (1983);  Sun Exploration &  Prod. Co., 36 F.E.R.C. p 61,093 (1986), reh'g denied sub nom.  Northern Natural Gas Co., 38 F.E.R.C. p 61,062 (1987).


4
On judicial review, we held in Colorado Interstate that the  Commission's decision in Sun Exploration "fell short of reasoned decision-making."  850 F.2d at 770.  We remanded the  matter to the Commission so that it might, if it could, offer  some "cogent theory of what makes a tax 'similar' to a  production or severance tax under § 110" of the NGPA.  Id.  at 773.  Five years passed before the Commission acted on  remand.  In a ruling handed down after Congress had re- pealed § 110 of the NGPA,2 the Commission determined that   the Kansas ad valorem tax was not the equivalent of a  severance tax attributable to production and therefore pro- ducers already charging the maximum price could not recover  the tax from their customers.  See Colorado Interstate Gas  Co., 65 F.E.R.C. p 61,292 (1993), reh'g denied, 67 F.E.R.C.  p 61,209 (1994).  The Commission ordered the producers to  repay all overcharges made after June 28, 1988, when our  Colorado Interstate opinion issued.  Our opinion, the Com- mission believed, gave the producers sufficient notice to alter  their sales practices.  See 65 F.E.R.C. at 62,372-73;  67  F.E.R.C. at 61,660.


5
When we reviewed the Commission's action in Public Ser- vice, we agreed with the Commission's reconsidered position  on the Kansas tax.  But we disagreed with the Commission  about the extent of the producers' refund obligation.  In our  opinion, "the producers' liability for refunds extends back to  October [4,] 1983, the date when all interested parties were  given notice in the Federal Register that the recoverability of  the Kansas tax under § 110 of the NGPA was at issue."  91  F.3d at 1490.  Although "anything short of full retroactivity  (i.e., to 1978) allow[ed] the producers to keep some unlawful  overcharges without any justification at all," we limited the  producers' liability to October 1983 because that was "the  earliest date advocated by any party before the court."  Id.


6
After our Public Service decision issued, the producers  invoked the Commission's procedures for making equitable  adjustments to refund payments "as may be necessary to  prevent special hardship, inequity, or an unfair distribution of  the burdens."  15 U.S.C. § 3412(c).  Collectively, the produc- ers advanced two claims not explicitly decided in Public  Service:  they requested a waiver of the interest due on the  overcharges they had to repay for the period between Octo- ber 1983 and June 1988;  and they requested a reduction in  their repayment obligation to the extent Kansas had over- valued (and thus overtaxed) the gas they had sold under the  belief that those taxes were recoverable.  In two orders, the  second on rehearing, the Commission rejected these petitions  for a blanket waiver but said it would allow individual produc- ers to obtain relief upon a sufficient showing of hardship.  See   Public Service Co. of Colo., 80 F.E.R.C. p 61,264, at 61,952  (1997) (Public Service Order I), reh'g denied, 82 F.E.R.C.  p 61,058, at 61,213, 61,214 (1998) (Public Service Order II).   The producers also challenged the Commission's interpreta- tion of the Public Service decision's starting date for their  repayment obligation.  As the Commission read our opinion,  the producers were liable to pay refunds of revenues collected  in excess of the applicable maximum price based upon any tax  bill rendered after October 4, 1983.  As against this, the  producers argued that the Commission should have prorated  the annual tax bill they received from Kansas in 1984, an  error which they believed added nine months to the repay- ment obligation imposed by this court.  See Reply Brief of  Petitioners (Producers) at 19.

II. Jurisdiction

7
With respect to the portions of the orders denying the  producers' request for a generic, or collective, waiver of  interest on amounts to be refunded, the Commission tells us  the producers are not "aggrieved" within the meaning of 15  U.S.C. § 3416(a)(4).  The idea is that they may still seek, and  the Commission may still grant, individual equitable adjust- ments based on a producer's unique circumstances.  We do  not think this possibility eliminates the injury the producers,  as a whole, suffered as a consequence of the Commission's  rulings.  The rulings have "necessary legal significance."   Marathon Oil Co. v. FERC, 68 F.3d 1376, 1379 (D.C. Cir.  1995).  For one thing, no producer would need to request  individual relief if the Commission had granted a generic  waiver of interest.  For another, the Commission set proce- dures in place for the customers to receive refunds back to  October 1983, including interest.  See Public Service Order I,  80 F.E.R.C. at 61,956-57.  If the Commission can deny the  producers' claim for a waiver of interest en masse and order  repayment--as it has done--then the producers may petition  for judicial review from the Commission's judgment.  Other- wise, one might as well say that a class representative has no  standing to challenge a district court's order refusing to  certify a class because the potential members of the class may   still bring individual claims for relief.  That, of course, is not  the law.  See, e.g., Deposit Guaranty Nat'l Bank v. Roper,  445 U.S. 326 (1980).


8
Marathon Oil Co. is not to the contrary.  The details of the  case defy brief description.  Suffice it to say that the court  held only this:  injury-in-fact could not be established on the  basis of speculation about whether the Commission's refusal  to act would affect later determinations by the Internal  Revenue Service to grant or deny tax credits.  See 68 F.3d at  1379.  Nothing comparable is present here.  There is no  guesswork involved in assessing the impact of the Commis- sion's decision.3  If the decision stands, a producer could be  relieved from having to pay interest only by establishing  conditions specific to itself.  See Public Service Order I, 80  F.E.R.C. at 61,952;  Public Service Order II, 82 F.E.R.C. at  61,213, 61,214.

III. Interest

9
The Commission's general policy, in effect for many years,  requires interest to be paid on various kinds of overcharges.   See Natural Gas Policy and Procedures, FERC Statutes and  Regulations, Regulations Preambles 1977-1981, p 30,083  (1979), reprinted in 44 Fed. Reg. 53,493 (1979), aff'd United  States Gas Pipeline Co. v. FERC, 657 F.2d 790, 794-96 (5th  Cir. 1981).  This policy serves three purposes:  to "(1) provide  just compensation for the losses, or costs, imposed upon those  who have paid excessive rates;  (2) reflect the benefits which were available to companies which collected excessive rates;   and (3) not provide incentives for any party to prolong  litigation."  See id. at 30,546;  44 Fed. Reg. at 53,494.  To  these ends, the regulation governing price increases for the  recovery of severance taxes gave notice that any such increas- es were "subject to a general obligation to refund any portion  of the price, together with interest."  18 C.F.R.  § 270.101(2)(e) (1993);  see also 18 C.F.R. § 154.102(c).


10
"Compensation deferred is compensation reduced by the  time value of money."  In re Milwaukee Cheese Wisconsin,  Inc., 112 F.3d 845, 849 (7th Cir. 1997).  In this case, compen- sation has been deferred for a very long time--so long that  the interest on the producers' overcharges now amounts to 160 percent of the principal.  See Reply Brief of Petitioners  (Producers) at 5, 10.  The Commission is empowered, by  § 502(c) of the NGPA, to make adjustments giving relief from  its orders "as may be necessary to prevent special hardship,  inequity or an unfair distribution of burdens."  15 U.S.C.  § 3412(c). The producers have a list of "equitable" reasons  why the Commission should have relieved all of them of  having to pay interest:  the litigation has gone on forever;  the  Commission is responsible for much of the delay;  the produc- ers relied on the Commission's settled view that the Kansas  ad valorem tax was a severance tax.  We think the Commis- sion rightly brushed these objections aside.


11
The Commission's legal errors and the snail-like pace of its  administrative proceedings are cause for complaint, but are  not in themselves grounds for altering the producers' interest  obligation.  See Southeastern Michigan Gas Co. v. FERC,  133 F.3d 34, 42-44 (D.C. Cir. 1998).  It is the balance of  equities between the producers and their customers, not  between the producers and the Commission, that matters.   As the Commission has recognized, interest is simply a way of  ensuring full compensation.  See Public Service Order II, 82  F.E.R.C. at 61,215.  This is why the delay between the time  of the customers' injury and the granting of relief is a reason  for awarding interest, not for denying it, at least when the  delay cannot be laid at the feet of the customers.  See  Milwaukee v. Cement Div. of Nat'l Gypsum Co., 515 U.S. 189,   196 (1995);  General Motors Corp. v. Devex Corp., 461 U.S.  648, 657 (1983).  It is why the producers' contention that they  are being penalized for their good faith reliance on the  Commission's long-standing treatment of the Kansas tax mis- apprehends the purpose of awarding interest.  Interest is not  awarded against someone for conducting litigation in bad  faith;  it is, as the Commission knew, awarded to make the  prevailing party whole.  See National Gypsum Co., 515 U.S.  at 196-97.


12
The Commission gave careful consideration to each of the  "equitable" reasons the producers offered for a generic waiv- er of interest and said this:  "granting a generic waiver of  interest of the ad valorem Kansas refunds ordered by Public  Service would be inconsistent with the Court's mandate."   Public Service Order II, 82 F.E.R.C. at 61,214.  That the  Commission correctly read our Public Service opinion cannot  be doubted.  We there rejected the producers' equitable  arguments against full refunds back to 1983, arguments the  producers now repeat in support of their request for a  generic waiver of interest regarding the same period.  In  holding that the producers "must refund the full amount that  they unlawfully collected," 91 F.3d at 1490, we determined  that the producers had not established "detrimental reliance,"  id.;4  that even if they had relied on the Commission's treat- ment of the Kansas tax, passage of the NGPA and the 1983  petition challenging this treatment rendered their reliance  unreasonable, id.;  and that "we are hard pressed to see how  the producers would be harmed in any cognizable way even if  they were required to disgorge every dollar they received in  recovery of the tax," id.  In view of these and other portions  of our Public Service opinion, the Commission properly con- cluded that it should not grant a generic waiver of interest    because, to do so, it would have to assess the equities in a  manner contrary to Public Service.5


13
Estate of French v. FERC, 603 F.2d 1158 (5th Cir. 1979),  which the producers invoke, does not favor a different out- come.  The court of appeals held that "equitable consider- ations" did not allow the Commission to award interest  against a petitioner seeking an economic hardship waiver for  the seven years it took to decide his claim because a delay of  that length was unreasonable per se.  See id. at 1167-68.   Here, by contrast, the Commission acted quite promptly on  the producers' petition for a waiver of interest.  There may  have been untoward delay here, but it occurred between our  remand in Colorado Interstate and the Commission's reversal  of its treatment of the tax.  There is an ocean of difference  between being required to pay interest on a lawful obligation  (as the producers are being required to do here) and being  required to pay interest while waiting for the Commission to  decide whether one deserves a hardship waiver (which is what  the court refused to allow in French).

IV. Tax-on-Tax

14
One of the curious features of the complex system by which  Kansas taxed the production of natural gas was the way in  which assessors "grossed up" the value of the gas by approxi- mately 10 percent to reflect the producers' ability to recover  the Kansas tax at the time of sale.  See Ensign Oil & Gas,  Inc., 71 F.E.R.C. p 61,204, at 61,750 (1995).  The producers  now argue that the Commission should reduce the amount of    their refund liability to their customers by the amount of this  "tax-on-tax" because it rested on the false assumption that  they could recover the tax and because they now have no way  of recouping the inflated taxes they paid to Kansas.  We hold  that the Commission properly determined that the producers  are responsible for refunding the Kansas tax-on-tax.


15
In terms of equity, the tax-on-tax problem disturbed the  balance of equities between the producers and Kansas, not  between the producers and their customers.  There is no  reason why, in the Commission's words, "overcharged con- sumers should forego refunds they are entitled to, to the  extent producers paid more ad valorem taxes to Kansas  localities than they should have."  Public Service Order II, 82  F.E.R.C. at 61,219.6

V. Refund Date

16
In Public Service, we said that we would "not require  refunds of taxes recovered with respect to production before  October 1983 because there is before us no controversy over  those monies."  Public Service, 91 F.3d at 1490-91.  Our use  of the phrase "with respect to production," which appears  three times in the opinion, see id. at 1490, 1492, has generated  some confusion, particularly in view of our decision on the  merits that the Kansas tax was not a severance tax attribut- able to production within § 110's meaning.  91 F.3d at 1482- 86.  On remand, the Commission interpreted taxes "with  respect to production" to mean "revenues collected based  upon any tax bill rendered after October 4, 1983," Public  Service Order II, 82 F.E.R.C. at 61,220;  accord Public Ser- vice Order I, 80 F.E.R.C. at 61,953 n.25.  Because Kansas  levied its ad valorem tax annually and collected it through a  bill sent toward the end of each year, the producers objected  to the Commission's interpretation because it appeared to  them to impose an additional nine months of liability.  See    Reply Brief of Petitioners (Producers) at 19.  We find our- selves in agreement with neither the Commission nor the  producers.  Both focus on the tax transaction between pro- ducers and Kansas rather than the sales transactions between  the producers and their customers.  Our decision in Public  Service required the producers to refund all taxes passed  through to customers after October 4, 1983.  In other words,  the phrase "with respect to production" means "when sold."


17
Public Service used the prepositional phrase "with respect  to production" three times to modify three different objects.   The opinion first stated that "we do not require refunds of  taxes recovered with respect to production before October  1983."  91 F.3d at 1491-92 (emphasis added).  Here, "taxes  recovered" means taxes passed through at sale because that  is how taxes are "recovered."  The second instance is this:   "Producers are liable to refund all Kansas ad valorem taxes  collected with respect to production since October 1983."  Id.  at 1492 (emphasis added).  Here, the natural first reading of  "taxes collected" might be taxes levied by Kansas because we  normally think of states, not private entities, as tax collectors.   In context, however, the better reading of "taxes collected" is  taxes collected from customers through higher prices.  The  final instance is:  "The customers are limited, however, to  recovery of taxes paid with respect to production since Octo- ber 1983...."  Id. (emphasis added).  This last sentence  focuses most clearly on the sales transaction rather than the  tax transaction because it is the customers who are doing the  paying.  In order to show that this is the correct interpreta- tion, we need to look at the way the taxation and recovery  process worked.


18
During the period in question, Kansas would send a tax bill  to the producers near the end of the year assessing a well's  raw value during the previous year.  See Public Service, 91  F.3d at 1484.  That value was determined by a number of  factors including the volume of the reserve, the physical  capital at the well site, and the rate of production.  See id. at  1484-85.  It is also significant that the rate of production  factor was averaged over the lengthier of two time periods-- three or five years--whenever production had lasted that   long.  See id. at 1484.  After receiving the state tax bill for a  given year, the producers would take advantage of the federal  recovery policy by raising their prices in individual transac- tions to reflect their individual tax liability.


19
Between October 1983 and January 1984, the producers  overcharged customers to recover state taxes assessed  against the value of their wells in 1982.  The producers seem  to argue that one should look only to the tax bill they received  from Kansas in 1984 for the 1983 tax year and then reduce it  by roughly 75% (assuming even production over the year).7   That argument focuses on the tax transaction, which is the  wrong transaction.  The transaction that caused the harm is  the sales transaction, and it is the overcharges made in those  individual transactions (plus interest) that the producers must  now repay.8

VI. Kansas

20
The State of Kansas and the Kansas Corporate Commission joined in this litigation to mitigate the "real and se- vere.... impact on the gas industry in Kansas as a whole and  the economy of the state of Kansas as a whole."  Final Initial  Brief of Petitioners (Kansas) at 13.  While it may be true that  interest refunds could cause some marginal producers to fold,  it is hard to see how the people of Kansas have actually been  injured.  Kansas was able to collect taxes during this entire  period (including their "tax-on-tax");  it has enjoyed the time  value of this money;  and no one is asking the State to pay  back anything.  If it is important to Kansas to limit the     economic damage on marginal producers, it retains numerous  avenues for aiding them.  It appears, however, the only  action taken by Kansas with respect to the producers' refund  liability was adverse.  See Kan. Stat. Ann. § 55-1624 (enacted  Apr. 20, 1998).  Indeed, some of the producers in this case  have already petitioned the Commission for equitable relief  from losses resulting from the state law.  See Notice of  Motion for Waiver, 63 Fed. Reg. 30,736 (1998).


21
*	*	*	*


22
For the reasons stated, the Commission's decision regard- ing the starting date for refunds is set aside and the cases are  remanded for the entry of an order prescribing a starting  date consistent with this opinion.  In all other respects, the  petitions for judicial review are denied.



Notes:


1
 See Opinion No. 699-D, Just and Reasonable Rates for Sales of Natural Gas, 52 F.P.C. 915 (1974).


2
 On January 1, 1993, the Natural Gas Wellhead Decontrol Act of 1989, Pub. L. No. 101-60, 103 Stat. 157, came into effect, eliminating  the price limitations Title I of the NGPA had imposed.


3
 In addition to Marathon, the Commission cites Southwest Gas  Corp. v. FERC, 40 F.3d 464, 468 (D.C. Cir. 1994), and Tenneco, Inc.  v. FERC, 688 F.2d 1018, 1022 (5th Cir. 1982), neither of which make  its point.  Southwest Gas is a run-of-the-mill decision holding that  the petitioner failed to establish any nonspeculative injury resulting  from agency action.  Tenneco merely holds that the petitioner was  not aggrieved by the agency's dismissal of an adjudicatory proceed- ing in order to allow the agency's newly formed investigative  division to gather more evidence before going forward.  See 688  F.2d at 1021.  The dismissal adjudicated nothing;  it did not fix  petitioner's rights;  and it did not command petitioner to do or to  refrain from doing anything.  See id.


4
 This part of our Public Service decision distinguishes Panhan- dle Eastern Pipe Line Co. v. FERC, 93 F.3d 62 (D.C. Cir. 1996), in  which we sustained the Commission's order mandating a refund  without interest because the Commission's error not only prolonged  the litigation, but also caused the losing party to forego a viable  alternative means of recovering from the prevailing party.  See id.  at 67-68.


5
 Whether the Commission's determination that Public Service  "foreclosed the granting of relief on a generic basis to all producers,  regardless of their individual circumstances," Public Service Order  II, 82 F.E.R.C. at 61,214, is inconsistent with its statement that it  retains equitable discretion to adjust individual producer liability in  cases of hardship, see id.;  see also id. at 61,217, is a question not  before us and one on which we reach no judgment.  Our decision  today does not affect the Commission's established standards for  granting hardship waivers and does not prohibit individual parties  from seeking hardship waivers in a proceeding under NGPA  § 502(c), 15 U.S.C. § 3412(c).


6
   Given this ground of decision in Public Service Order II, there is no need for us to address the producers' arguments that the Commission misconstrued Ensign Oil & Gas, Inc., 71 F.E.R.C. p 61,204 (1995), in Public Service Order I.


7
 An accurate calculation would be far more complex because of  variations in production levels, especially when a well is new.  See  Public Service, 91 F.3d at 1483-85;  Colorado Interstate, 850 F.2d at  773.


8
 We are aware that although our decision reverses the Commis- sion, it might put the producers in a worse position than they would  have been if they had not challenged the Commission's starting date  for refunds.  At oral argument, we suggested this possible outcome  to producers' counsel, but despite receiving notice, the producers  continued to press their objection to the Commission's date.


