« ForrigeFortsett »
the Federal Power Commission issued an order fixing petitioner's rates, which had the effect of requiring a continuation of the integration and pooling of the power producing and transmitting facilities of the three companies. Held: The order is valid. Pp. 421-424.
(a) Petitioner's duty to continue its coordinated operations with the Maryland company springs from the Commission's statutory authority, not from the law of private contracts. Pp. 421-422.
(b) The Act gives the Commission ample authority to order these companies to continue their long-existing operational "practice” of integrating their power output; and in so doing the Commission was furthering the expressly declared policy of the
Act. Pp. 422-424. 4. Petitioner has presented nothing to show that the end result of
the rate reduction ordered by the Commission is unjust or unrea
sonable. P. 424. 89 U. S. App. D. C. 235, 193 F. 2d 230, affirmed.
The Federal Power Commission found the rates charged by petitioner for the sale of electric power at wholesale in interstate commerce unreasonable and ordered a reduction. The Court
The Court of Appeals affirmed. 89 U. S. App. D. C. 235, 193 F. 2d 230. This Court granted certiorari. 342 U. S. 931. Affirmed, p. 424.
Wilkie Bushby argued the cause for the Pennsylvania Water & Power Co. et al., petitioners in No. 428. With him on the brief were Randall J. LeBoeuf, Jr., James Piper and Raymond Sparks.
William J. Grove argued the cause for the Pennsylvania Public Utility Commission, petitioner in No. 429. With him on the brief was Thomas M. Kerrigan.
Solicitor General Perlman argued the cause for the Federal Power Commission. With him on the brief were Assistant Attorney General Baldridge, Robert L. Stern, Paul A. Sweeney, Melvin Richter, Bradford Ross, Howard E. Wahrenbrock, Reuben Goldberg and Theodore French.
Opinion of the Court.
Alfred P. Ramsey argued the cause for the Consolidated Gas Electric Light & Power Co., respondent in No. 428. With him on the brief was G. Kenneth Reiblich.
Charles D. Harris argued the cause and filed a brief for the Public Service Commission of Maryland, respondent in No. 428.
MR. JUSTICE BLACK delivered the opinion of the Court.
In 1944 the Maryland Public Service Commission, the Mayor and Council of the City of Baltimore, the Baltimore County Commissioners, and several private purchasers of electric power decided to ask the Federal Power Commission for help. They requested the Commission to investigate allegedly "excessive rates” the Pennsylvania Water & Power Company (Penn Water)' was charging Consolidated Gas Electric Light and Power Company of Baltimore (Consolidated). The Maryland interests wanted the Federal Power Commission to reduce these charges so that the state commission could lower Consolidated's rates to its Maryland customers. The federal Commission held many months of extensive hearings and found that Penn Water had charged its customers almost three times what it should have in 1946. In that year it had a net operating income of $3,477,408, as contrasted with $1,300,672 which the Commission found would have been a fair return (514%) on a fair rate base ($24,774,712), allowing Penn Water “about 8.64% for common stock and surplus, which is adequate."? The Commis
* Penn Water, as used in this opinion, refers to both Pennsylvania Water & Power Company and its wholly owned affiliate, Susquehanna Transmission Company of Maryland.
2 There was evidence before the Commission that from 1936 through 1945 Penn Water's dividends on its common stock had never been less than 25% of the cash paid in on the stock.
Opinion of the Court.
sion ordered Penn Water to file a new schedule of rates and charges to bring about the reductions required.
In subsequent orders the Commission denied Penn Water's applications for rehearing, rejected as insufficient new rate schedules filed by Penn Water, and itself prescribed the rate schedules which Penn Water here seeks to avoid. On review the Court of Appeals gave full consideration to Penn Water's multitudinous challenges and approved the Commission's action, one Judge dissenting. 89 U. S. App. D. C. 235, 193 F. 2d 230.
Most of the numerous questions presented and decided by the Commission and the Court of Appeals are not presented here by the petitions for certiorari which we granted. We are not called on to review the adequacy of the evidence to support the Commission's findings as to a fair rate base, a fair rate of return, or any other findings except insofar as our decision of several rather general questions presented might indirectly undermine some of them. The questions we must decide are in general these:
(1) Does the fact that Penn Water is a licensee under Part I of the Federal Power Act,' and therefore subject to regulation under that Part, preclude its regulation under Part II of the Act as a public utility engaged in interstate commerce?
(2) Assuming that Penn Water can be subjected to regulation under both Parts of the Act, were the Commission and the Court of Appeals correct in holding that all of Penn Water's sales at wholesale were "in interstate commerce" within the meaning of Part II of the Act?
(3) Does the Commission's rate reduction action compel the continuance of or is it improperly based Opinion of the Court.
3 342 U. S. 931. 4 41 Stat. 1063, 49 Stat. 838, 16 U. S. C. $ 791a et seq.
upon contractual agreements between Penn Water and Consolidated which Penn Water cannot carry out without violating the federal antitrust laws or the laws of Pennsylvania forbidding surrender by Pennsylvania corporations of their corporate independence?
Although Penn Water is the type of “public utility" subject to regulation under Part II of the Act, it argues that since it is subject to regulation under Part I as a licensee, it cannot be regulated under Part II as a public utility. We cannot agree. With some express exceptions not here relevant, the language of Part II of the Act makes all “public utilities” subject to the regulation it prescribes. No reason has been advanced which could possibly justify a judicial exception to this statutory command. A major purpose of the whole Act is to protect power consumers against excessive prices. Part I leaves regulation to the states under some circumstances. But, under $ 20 of Part I the Federal Government is to protect the consumer if a state regulatory body does not exist or the "States are unable to agree ... on the services to be rendered or on the rates or charges of payment therefor ....” Part II proceeds on the assumption that regulation of public utilities transmitting and selling power at wholesale in interstate commerce is a matter which must be accomplished by the Federal Government. Part II therefore provides for a more expansive federal regulation than that authorized under Part I. It would hinder, not help, the Power Act's program if
5 Section 20 of Part I provides that "the rates charged and the service rendered ... shall be reasonable, nondiscriminatory, and just to the customer ...." Section 205 (a) of Part II provides that "All rates and charges . . . shall be just and reasonable
Opinion of the Court.
we should impliedly exempt Part I licensees from the more expansive Part II regulation. It may be possible that some future cases will develop minor inconsistencies in the administration of the two Parts. Today's case, however, is not such a one. We hold that Penn Water is subject to regulation under Part II of the Act. It is also subject to Part I regulation since the Commission found on substantial evidence, as the court below held, that the States were "unable to agree" within the meaning of $ 20 of Part I of the Act.
It is contended that some of Penn Water's sales at wholesale were not "in interstate commerce" and therefore were not subject to federal regulation under Part II. This contention refers to sales made by Penn Water in Pennsylvania to Pennsylvania customers. These are alleged to include about 83% of Pennsylvania generated power. Because of the following circumstances we agree with the Commission and the Court of Appeals that these sales were "in interstate commerce.
Penn Water and Safe Harbor Water Power Corporation (Safe Harbor) have hydroelectric plants on the Susquehanna River in Pennsylvania. Consolidated operates large steam-generating plants in Baltimore. The flow of the Susquehanna varies greatly even from day to day. During periods of low flow, Penn Water receives steam-generated energy from Baltimore in order to meet its power supply commitments. Conversely, during periods of high flow, Consolidated is able to receive the cheaper hydroelectric power from Penn Water and Safe Harbor. For many years Penn Water, Consolidated, and Safe Harbor have been operating under contracts for the coordinated sale and distribution of electric power in Maryland and Pennsylvania. A complete integration