415 U.S. 345 (1974), 72-1162, Federal Power Commission v. New England Power Co.

Docket Nº:No. 72-1162
Citation:415 U.S. 345, 94 S.Ct. 1151, 39 L.Ed.2d 383
Party Name:Federal Power Commission v. New England Power Co.
Case Date:March 04, 1974
Court:United States Supreme Court

Page 345

415 U.S. 345 (1974)

94 S.Ct. 1151, 39 L.Ed.2d 383

Federal Power Commission

v.

New England Power Co.

No. 72-1162

United States Supreme Court

March 4, 1974

Argued December 3, 1973

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

The Independent Offices Appropriation Act, 1952 (the Act), authorizes each federal agency to prescribe a fee, charge, or price for services provided by the agency "to or for any person (including groups . . . )," determined to be fair and equitable, consideration being taken of "direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts. . . ." Pursuant to the Act, the Federal Power Commission imposed an annual assessment against all jurisdictional electric utilities in proportion to their wholesale sales and interchange of electricity, and against all natural gas companies with operating revenues of $1,000,000 or more in proportion to their deliveries of natural gas in interstate commerce. On petitions for review, the Court of Appeals set aside these annual charges, holding that whole industries are not in the category of those who may be assessed under the Act, the thrust of which reaches only specific charges for specific services to specific individuals or companies.

Held:

1. While the Act includes services rendered "to or for any person (including groups . . . )," since the Act is to be construed to cover only "fees," and not "taxes," National Cable Television Assn. v. United States, ante, p. 336, the "fee" presupposes an application for the agency's services, whether by a single company or group of companies or the receipt of a specific beneficial service. P. 349

2. The Act is to be construed as authorizing a reasonable charge to "each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit," and as precluding a charge for services rendered

when the identification of the ultimate beneficiary is obscure, and the services can be primarily considered as benefitting broadly the general public.

Pp. 349-351.

151 U.S.App.D.C. 371, 467 F.2d 425, affirmed.

Page 346

DOUGLAS, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, and REHNQUIST, JJ., joined. MARSHALL., J., filed an opinion concurring in the result, in which BRENNAN, J., joined, post, p. 352. BLACKMUN and POWELL, JJ., took no part in the decision of the case.

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

This case, companion to National Cable Television Assn. v. United States, ante, p. 336, raises another important problem of construction of the provisions of the Independent Offices Appropriation Act, 1952, Tit. 5, 65 Stat. 290, 31 U.S.C. § 483a. The Federal Power Commission established filing fees under the Natural Gas Act and under the Federal Power Act. These filing fees have not been challenged. What was challenged were annual assessments under both Acts, levied in an effort of the agency to recoup some of the remaining costs under the two Acts.

With respect to electric utilities, the Commission determines each year the costs of administering the Federal Power Act. The costs associated with the Commission's efforts to promote the co-ordination and

Page 347

reliability of nonjurisdictional electric systems are not included. The Commission also deducts from administration costs the costs associated with services rendered to electric systems not subject to the Commission's jurisdiction and the amount received during the year from filing fees. The remaining balance is assessed against jurisdictional utilities1 in proportion to their wholesale sales and interchange of electricity. In 1971, these companies had gross revenues of some $21 billion and net income of nearly $4 billion. The annual assessment challenged here involved 1973 and for all such electric companies was $5 million or 0.024% of gross revenue and 0.14% of net income.

As respects natural gas companies, the Commission determines each year the costs of administering the natural gas pipeline programs under the Natural Gas Act, 52 Stat. 821, 15 U.S.C. § 717 et seq. These costs, after deducting amounts received from filing fees, are assessed against all natural gas companies with annual operating revenues of $1,000,000 or more in proportion to their deliveries of natural gas in interstate commerce. In addition, all natural gas companies required to file an annual report on their total gas supply (18 CFR § 260.7) are assessed one-tenth of a mill for each thousand cubic feet of new reserves of natural gas certificated each year to support the cost of the producer certificate program.

Page 348

The Commission in its report, 45 F.P.C. 440 and 964, said as respects both electric utilities and natural gas companies that regulations have provided "the foundation for the sound financial condition which public utilities and natural gas companies have achieved." Id. at 445. It mentioned the "industry-wide recognition of the benefits accruing from only one facet of the Commission's activities -- the adoption of a uniform accounting system." Id. at 445 n. 5. The Commission, while. noting that its regulatory activities were beneficial to consumers, added that its actions

have redounded to the benefit of both industries by creating the economic climate for greater usage of the services of the regulated companies which, in turn, have further strengthened their financial stability and their ability to sell debt and equity securities required for capital additions to meet ever-increasing demands.

Id. at 445.

[94 S.Ct. 1154] As respects electric utilities, it noted that its regime was "systemwide and beneficial" to the companies. Id. at 966. As respects natural gas pipelines, it listed its activities that were beneficial to them:

the issuance of temporary certificates to expedite deliveries, the elimination of indefinite price escalation provisions, and the control over the quality of natural gas to be delivered and the length of the period in which supplies may be delivered where advance payments are made by the pipelines.

Id. at 967.

On petitions for review, the Court of Appeals set aside that portion of the Commission's order establishing annual charges, 151 U.S.App.D.C. 371, 467 F.2d 425. The case is here on a petition for certiorari, 411 U.S. 981.

Page 349

The Act in question, 31 U.S.C. § 483a, authorizes the head of each federal agency to prescribe a "fee, charge, or price" for any

benefit, privilege, . . . license, permit, certificate, registration or similar thing of value . . . provided . . . by [the] Federal agency . . . for any person (including groups, . . . corporations . . . )

which he determines

to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts. . . .

The Court of Appeals held that whole industries are not in the category of those who may be assessed, the thrust of the Act reaching only specific charges for specific services to specific individuals or companies. We agree with the Court of Appeals.

The report on the Act, H.R.Rep. No. 384, 82d Cong., 1st Sess., 2, states that

[t]he Committee is concerned that the Government is not receiving full return from many of the services which it renders to special beneficiaries.

(Emphasis added.) It is true that the Act includes services rendered "to or for any person (including groups . . .)." But if we are to construe the Act to cover only "fees," and not "taxes" -- as we held should be done in the National Cable Television case, ante. p. 336 -- the "fee" presupposes an application, whether by a single company or by a group of companies. The Office of Management and Budget (then known as the Bureau of the Budget) issued a circular in 19592 construing the Act. That circular stated that a reasonable charge

should be made to each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit.3

Page 350

(Emphasis added.) The circular also states that no charge should be made for services rendered,

when the identification of the ultimate beneficiary is obscure and the service can be primarily considered as benefitting broadly the general public.4

Page 351

[94 S.Ct. 1155] We believe that is the proper construction of the Act. Though it greatly narrows the Act from the dimensions urged by the Commission, it keeps it within the boundaries of the "fee" system and away from the domain of "taxes" toward which the Commission's "economic climate" argument would lead. Some of the assessments made by the Commission under its formula would be on companies which had no proceedings before the Commission during the year in question. The "identifiable recipient" of a unit of service from which "he derives a special benefit," to quote the Office of Management and Budget, does not describe members of an industry which have neither asked for nor received the Commission's services during the year in question. A blanket ruling by the Commission, say on accounting practices, may not be the result of an application. But each member of the industry which is required to adopt the new accounting system is an "identifiable recipient" of the service, and could be charged a fee, if the new system was indeed beneficial to the members of the industry. There may well be other variations of a like nature which would warrant the fixing of a "fee" for services rendered. But what was done here is not within the scope of the Act. Hence, the judgment of the Court of Appeals is

Affirmed.

MR. JUSTICE BLACKMUN and MR. JUSTICE POWELL took no part in the decision of this case.

Page 352

MARSHALL, J., concurring and...

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