324 U.S. 515 (1945), 189, Connecticut Light & Power Co. v. Federal Power Commission

Docket Nº:No. 189
Citation:324 U.S. 515, 65 S.Ct. 749, 89 L.Ed. 1150
Party Name:Connecticut Light & Power Co. v. Federal Power Commission
Case Date:March 26, 1945
Court:United States Supreme Court
 
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Page 515

324 U.S. 515 (1945)

65 S.Ct. 749, 89 L.Ed. 1150

Connecticut Light & Power Co.

v.

Federal Power Commission

No. 189

United States Supreme Court

March 26, 1945

Argued January 3, 1945

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT O COLUMBIA

Syllabus

1. The declaration of policy in § 201(a) of the Federal Power Act, that federal regulation is "to extend only to those matters which are not subject to regulation by the States" is relevant in resolving ambiguity in specific provisions of the Act which purport to effectuate that policy. P. 527.

2. In the provision of § 201(b) of the Federal Power Act that the Commission shall have jurisdiction over all facilities for the transmission or wholesale of electric energy in interstate commerce, "but shall not have jurisdiction, except as specifically provided in this Part and the Part next following, over facilities used . . . in local

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distribution," the phrase "facilities used in local distribution" delimits the jurisdiction of the Commission and establishes a legal standard which must be observed in determining whether a company is a "public utility" under the Act. P. 530.

3. The exemption from the Commission's jurisdiction of "facilities used in local distribution" is not limited to facilities which distribute no out-of-state energy. Facilities may carry out-of-state energy exclusively and still be exempt under the Act. The test is whether they are local distribution facilities. P. 531.

4. The jurisdiction of the Commission under the Federal Power Act to regulate accounting practices extends only to companies which are "public utilities" under the Act -- i.e., companies which own or operate facilities that are subject to the jurisdiction of the Commission. P. 531.

5. The court below having considered irrelevant the appropriate test of the Commission's jurisdiction under the Act, its inquiry on review did not proceed under a correct rule of law, and its judgment must be reversed. P. 532.

6. Where a federal agency is authorized to invoke an overriding federal power except in certain prescribed situations, and then to leave the problem to traditional state control, the existence of federal authority to act should appear affirmatively, and not rest on inference alone. P. 532.

7. The business of local distribution of electric energy does not, as a matter of law, exclude the process of reducing out-of-state electric energy from high to low voltage in subdividing it to serve ultimate consumers. P. 534.

8. Upon the record in this case, it is doubtful whether the Commission applied the correct law, and the case should be remanded to the Commission for appropriate jurisdictional findings. This Court does not undertake to decide as an original matter whether the facilities in question are facilities which subject the company to the Act, nor whether there was basis for jurisdiction of the Commission during some past period by reason of the company's operation of facilities since abandoned. P. 534.

9. The jurisdiction of the Commission under the Federal Power Act, over facilities for the transmission of electric energy in interstate commerce which are not used in local distribution, does not depend upon whether any particular volume or proportion of interstate energy is involved, and such a jurisdictional limitation is not to be supplied by construction. P. 536.

141 F.2d 14 reversed.

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Certiorari, 323 U.S. 687, to review a judgment sustaining an order of the Federal Power Commission requiring the petitioner to comply with the uniform system of accounts prescribed by the Commission under the Federal Power Act.

JACKSON, J., lead opinion

MR. JUSTICE JACKSON delivered the opinion of the Court.

The Federal Power Commission has asserted jurisdiction to regulate the accounting practices of the Connecticut Light and Power Company. The Federal Power Act as amended in 1935, 49 Stat. 838, 16 U.S.C. § 792 et seq., declares a congressional policy concerning the business of transmitting and selling electric energy for ultimate distribution to the public, and state that regulation of

that part of such business which consists of the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce is necessary in the public interest, such Federal regulation, however, to extend only to those matters which are

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not subject to regulation by the States.

§ 201(a), 49 Stat. 847, 16 U.S.C. § 824(a).

The Company, incorporated by Connecticut, serving customers only in Connecticut, and owning no utilities property outside of that state, is comprehensively regulated by the Connecticut Public Utilities Commission in accounting practices, as in many other matters, and it challenges the jurisdiction of the Federal Power Commission.

The Connecticut, appearing amicus curiae through its Attorney General, avers that this assumption of jurisdiction by the Federal Commission

represents an unwarranted and illegal invasion of the powers of the State to regulate its local distributing [65 S.Ct. 751] company, which powers were clearly to be preserved to the State under the provisions of the Federal Power Act.

The Connecticut Public Utilities Commission joins with the National Association of Railroad and Utilities Commissioners, also appearing as amicus curiae, and they contend that the Federal Power Commission's order regulating accounting practices exceeds any authority given by the Federal Power Act and intrudes upon the field which that Act expressly reserved to local regulation.

The basic facts are not seriously in dispute. The Company, for sometime prior to August 26, 1935, the effective date of the Federal Power Act, operated as a member of the Connecticut Valley Power Exchange, an interstate power pool which interchanged energy among certain systems in New York, Massachusetts, and Connecticut. Had such operation continued, the Company would be subject to the Act and to the Commission's order. Two days before its effective date, and frankly for the purpose of avoiding federal regulation, the Company rearranged its operations with intent to cut every connection and discontinue every facility whose continued operation would render it subject to the Federal Power Commission's

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control. The Commission conceded in its opinion, and the Government admits here, the Company's right to do so.1 But the Commission said petitioner's effort was "only a gesture," for, while it cut certain connections, "it did not cut other interconnections over which interstate energy flowed." Of those facilities which the Commission held subjected the Company to the Power Act at the time it became effective, the Company has since divested itself of all but one, and on that one the Commission rests its present jurisdiction to control petitioner's accounting. But it also claims that its accounting orders were entitled to obedience up to the time of the abandonment of the other facilities and because of them.

The facilities on which jurisdiction is predicated are for two general types of operation, one being used in receipt of interstate power, the other for transmission of energy sold to a municipality which, in turn, sold some part of it for export from the state.

The only presently existing facilities said to confer jurisdiction are at Bristol. Here, the petitioning company purchases energy from the Connecticut Power Company, which, despite a confusing similarity of name, is an entirely separate and unaffiliated concern. The petitioning company receives power at 66,000 volts from the lines of the Connecticut Power Company over a short tap line, owned by the Connecticut Power Company, which leads to petitioner's substation. There, the energy is stepped down to 4,600 and 13,800 volts, and transmitted thence over many circuits to consumers in and around Bristol. The substation includes all of the usual equipment, lightning arrestors, disconnects, oil circuit breakers, busses, stepdown

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transformers, and appurtenant structures of an outdoor substation, and, in the substation building, a synchronous condenser is owned and operated, as required by the supply contract, to maintain the power factor.

What is called the East Hampton connection, severed July 1, 1939, consisted of facilities by which the petitioner received energy from the Connecticut Power Company at 13,800 volts and transmitted it several miles to its Leesville substation, where it was reduced to 4,600 volts, and to other substations where it was reduced to 2,300 volts and supplied to customers. What is referred to as the Torrington-Winsted District connection, discontinued in June of 1941, was differently operated. Energy was purchased from the Torrington Electric Light Company, which in turn had purchased it from the Connecticut Power Company. Delivery was accepted by petitioner at the bus bar of the Torrington Company at low voltage, 2,300 volts, petitioner maintained a substation which stepped this voltage up to 27,600, at which it was transmitted about ten miles over its lines to a substation at Winsted, where facilities were operated to lower the voltage to 4,600, whence it was put on distribution lines.

[65 S.Ct. 752] The Commission held in all three instances that such facilities of petitioner were "for the transmission of electric energy . . . , as distinguished from local distribution thereof." It found that the energy received from the Connecticut Power Company and Torrington Company "regularly, frequently, and for substantial periods of time included electric energy in substantial amounts transmitted from Massachusetts." Hence, it concluded petitioner owned facilities for...

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