nable FERC to reconsider the competing interpretations of section 104 and instructed the Commission, in resolving that provision's ambiguity, to exercise its own judgment and to offer a reasonable explanation for its interpretation, rather than relying on a misreading of Mid-Louisiana.    Id. at 1171-72.


6
On remand, FERC fully complied with our guidelines by supplying a well-reasoned explanation to support its conclusions.  Emphasizing that section 104(b)(1) mandated application of the "just and reasonable rate ... established by the Commission" on April 20, 1977, FERC noted that as of that date the Federal Power Commission ("FPC") had only "established" wellhead rates for independent producers' gas at a national or area level.  Instead of establishing a pipeline producer's unit rate per million Btu's of wellhead production, the FPC had simply approved a pipeline's proposed rate after evaluating the "prudence" of its overall production costs--including the cost-of-service "price" as measured by total pipeline sales.  40 F.E.R.C. at 61,544.


7
Thus, FERC concluded that the Commission had never "established" any "just and reasonable" rate that would be "applicable" to pipeline production of old gas on April 20, 1977.  FERC construed section 104's parenthetical phrase, "or would have been [ ] applicable," as "intended to apply the rates established for independent producers to all pipeline-produced gas."    Id. at 61,545.  The Commission justified its interpretation as consistent with Congress' intent in the NGPA to put pipeline production "on the same footing as all other production."    Id. at 61,545-46, citing Mid-Louisiana, 463 U.S. at 333-37, 103 S.Ct. at 3032-35.


8
We conclude that FERC's independent construction of section 104 is "permissible" under Chevron and that the Commission's rationale adequately supports its decision.  FERC's only error, which we find non-essential to its analysis, is the assertion that Congress intended the parenthetical phrase to permit the Commission to apply national rates t