Connecticut Light & Power Co. v. FEDERAL POWER COM'N

• Decision Date: 28 February 1944
• Docket Number: No. 8341.,8341.
• Citation: 141 F.2d 14
• Parties: CONNECTICUT LIGHT & POWER CO. v. FEDERAL POWER COMMISSION.
• Court: U.S. Court of Appeals — District of Columbia Circuit

141 F.2d 14 (1944)

CONNECTICUT LIGHT & POWER CO. v. FEDERAL POWER COMMISSION.

No. 8341.

United States Court of Appeals District of Columbia.

Argued December 8, 1943.

Decided February 28, 1944.

Mr. Claude R. Branch, of Boston, Mass., for petitioner. Mr. John L. Hall, of Boston, Mass., also entered an appearance for petitioner.

Mr. Howard E. Wahrenbrock, Assistant General Counsel, of Washington, D. C., with whom Messrs. Charles V. Shannon, General Counsel, Louis W. McKernan, Principal Attorney, and Howell Purdue, all of the Federal Power Commission, all of Washington, D. C., were on the brief, for respondent.

Before MILLER, DOBIE,^* and ARNOLD, Associate Justices.

ARNOLD, Associate Justice.

The Federal Power Commission after extensive hearings found that the petitioner, The Connecticut Light and Power Company, was a public utility within the meaning of the Federal Power Act, 16 U.S.C.A. § 791a et seq., and ordered it to comply with the uniform system of accounts prescribed by the Commission under Section 301 of the Act. The case is before us for a review of the finding and order of the Commission. Since it is conceded that the petitioner must comply with the order if it is a public utility under the Act, the sole question before us is whether the finding of the Commission to that effect is sustained by substantial evidence and by a correct interpretation of the law.¹

The Connecticut Light and Power Company distributes electricity to a substantial part of the State of Connecticut, including 107 towns, cities and boroughs with a total population of 660,000, and about 130,000 additional consumers served by other Connecticut utilities which purchase electric current from the petitioner. On the Saturday before the Monday on which the Act took effect petitioner was unquestionably engaged in the interstate transmission of electric energy as defined by the Act. It was a member of the Connecticut Valley Power Exchange for the interchange of electric energy between companies in Massachusetts, Connecticut and New York. Its facilities were designed so that this interchange of energy created substantial savings and constituted the most efficient use of the system. In a last minute effort to avoid Federal jurisdiction the petitioner severed its main interstate connection in spite of the fact that this added to the cost of furnishing electricity to consumers in Connecticut. It was, however, unable to sever all its interstate connections and it is on these remaining connections that the government rests its case.

The principal connections which remained after the passage of the Act were (1) with an interstate line from Massachusetts owned by the Connecticut Power Company (a separate organization) which is tapped by the petitioner; and (2) with facilities which transmitted electric energy to Fishers Island in New York until 1941. We will consider the effect of these interstate connections separately.

The Power Line from Massachusetts Tapped by the Petitioner.

The Connecticut Power Company in the operation of the Connecticut Valley Power Exchange supplies energy from various plants in Massachusetts to an interstate power line which is tapped in Connecticut by petitioner to supply East Hampton, Torrington-Winsted and Bristol. While there are sources of supply within the state for these communities, meter readings taken by the government show that a substantial amount of current reaches these communities from this interstate power line. We need not consider seriously the contention of the petitioner that scientifically conclusive proof of interstate transmission of energy is impossible because, as testified by petitioner's experts, "with all the information it is ever going to be possible for us to obtain, nobody is ever going to answer the question in a unique way as to which load the power from a particular station goes to". A distinction between electric current as measured on a meter and electric energy was certainly not within the contemplation of Congress when it passed the Act; indeed, no scientist knows what the nature of electric energy is. Ordinary meter readings which measure electric current are sufficient data on which to make charges for electricity to users. That they are equally sufficient to determine the interstate transmission of energy under the Federal Power Act is shown by the case of Jersey Central Power & Light Co. v. Federal Power Commission, 1943, 319 U.S. 61, 63 S.Ct. 953, 87 L.Ed. 1258.

A more serious question which petitioner raises is whether the ownership of facilities in Connecticut for tapping an interstate line in order to supply power to local communities is sufficient to make it a public utility. Petitioner contends that such facilities are not within the jurisdiction of the Commission because they are used in local distribution. Petitioner's argument runs as follows: It is not required to keep accounts unless it is a "public utility". Section 301 A public utility is any person who owns or operates facilities subject to the jurisdiction of the Commission. Section 201(e) The Commission does not have jurisdiction, except as specifically provided, over facilities used in local distribution. Section 201(b) While the Act specifically provides for the keeping of accounts on facilities in local distribution it does not specifically provide for jurisdiction over such local facilities. Section 301 From this it is argued that even though the energy which petitioner distributes comes from another state it is not a public utility under the jurisdiction of the Commission because the facilities which it owns are for local distribution.

Such a construction is a grammatical possibility. However, it contradicts the broad purpose of the Act to correct abuses of write-ups, inflation of accounts and similar practices which have on occasion been found in the utility industry. It would permit a company which operated facilities that were normally designed for the interstate transmission of electric power to split itself into segments, one of which owned the power line and the other the distribution system. By such artificial corporate manipulation the Federal Power Commission would get jurisdiction over the tail of what was in fact an interstate set-up (to wit: the high voltage line), and lose jurisdiction over the dog (the main distribution system). It would encourage the setting up of unnecessarily complicated accounting systems between the owners of the segments of the artificially divided power system, which the Act is designed to eliminate. The Federal Power Act obviously intends to confer Federal jurisdiction upon electric distribution systems which normally would operate as interstate businesses. It is not an act to put a premium on artificial corporate reorganization. It is not surprising, therefore, that the construction urged by the petitioner has been expressly overruled in the case of Hartford Electric Light Co. v. Federal Power Commission, 2 Cir., 1942, 131 F.2d 953, certiorari denied, 1943, 319 U.S. 741, 63 S.Ct. 1028. The opinion of Judge Frank in that case analyzes the provisions of the Act so well that we need not repeat it here. He reaches what seems to us the proper conclusion that Section 201 (b) means to give the Commission jurisdiction over any facility for the transmission of electric energy in interstate commerce. The "but" clause in the section is intended to make it clear that this jurisdiction extends even to local facilities where the Act provides for their regulation, as it does in the case of accounting practices.

Therefore, whether or not the facilities by which petitioner distributes energy from Massachusetts should be classified as "local" is not relevant to this case. The sole test of jurisdiction of the Commission over accounts is whether these facilities, "local" or otherwise, are used for the transmission of electric energy from a point in one state to a point in another.² Since actual meter readings in this case show such an interstate flow of current to supply petitioner's facilities it is a public utility under the Act.

The only alternative to such a conclusion is to adopt the argument of the petitioner that a point can be selected in the instantaneous transmission of energy from Massachusetts to Connecticut where interstate transmission ends and intrastate transmission begins. Petitioner suggests that point can be found at the station where it taps the admittedly interstate line. This theory assumes that electricity is carried in little buckets. The owner of the interstate line carries the bucket on its interstate journey and hands it to the petitioner in Connecticut. And thus the transmission of electricity is made to look like the sale of a pair of shoes. This conception contradicts all we know about electrical transmission. It is the kind of mythological offspring of a union between the law and the...