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

Decision Date08 May 1940
Docket NumberNo. 8803.,8803.
Citation111 F.2d 1014
CourtU.S. Court of Appeals — Ninth Circuit

John A. Laing and Henry S. Gray, both of Portland, Or., A. J. G. Priest, R. A. Henderson, and Sidman I. Barber, all of New York City (Laing & Gray and Frederic A. Fisher, all of Portland, Or., and Reid & Priest and Harry A. Poth, Jr., all of New York City, of counsel), for petitioners.

David W. Robinson, Gen. Counsel, Federal Power Commission, Louis W. McKernan, Principal Atty., and Howell Purdue and Robert L. Russell, Attys., Federal Power Commission, all of Washington, D. C., for respondent.

Before DENMAN, MATHEWS, and HEALY, Circuit Judges.

HEALY, Circuit Judge.

The proceeding is brought under § 313(b) of the Federal Power Act, 16 U.S. C.A. § 825l(b), to review an order of the Federal Power Commission denying the application of the petitioners, Pacific Power & Light Company and Inland Power & Light Company, for approval of the transfer to Pacific of Inland's properties and assets. Earlier in the proceeding this court held the order reviewable, 98 F.2d 835, and on certiorari its decision was affirmed, Federal Power Comm. v. Pac. Power & L. Co., 307 U.S. 156, 59 S.Ct. 766, 83 L.Ed. 1180. The matter is now before us on the merits.

Inland, an Oregon corporation, owns three hydro-electric plants in Oregon and Washington, two of which are operated under license of the Commission, the third under permit of the Secretary of the Interior. It is not engaged in retail distribution of electric energy. Pacific is a Maine corporation which generates and distributes electric power in Washington and Oregon, and has facilities for interstate transmission of power. It owns all of Inland's stock.1 One of the three Inland projects is operated under lease by Pacific, and the latter company purchases the entire output of a second project. The power of Inland's remaining and much its largest project is sold at wholesale to the Northwestern Electric Company, an affiliate of Pacific, and to Washington Gas & Electric Company. The physical properties of Pacific and Inland are interconnected.

In May, 1937 the two companies agreed upon a transfer to Pacific of all the property, assets and licenses of Inland, subject to the approval of the Federal Power Commission as required by §§ 8 and 203(a) of the Federal Power Act, 16 U.S.C.A. §§ 801, 824b(a). Authorization for the transfer was obtained from the Public Utilities Commission of the state of Oregon and the Department of Public Service of the state of Washington, both of which bodies found that the proposed consolidation is reasonable and in the public interest. The Federal Power Commission, on an ultimate finding that applicants had failed to establish that the proposed merger is consistent with the public interest, declined to give its approval.

Petitioners contend (1) that the finding of the Commission in this respect is not supported by substantial evidence; and (2) that the Commission erred in holding that § 203(a) requires an affirmative showing that benefit to the public will result from the proposed merger.2 A third proposition argued is that a denial of approval under the circumstances shown operates to deprive petitioners of their property and rights without due process of law. For reasons presently to appear we consider it appropriate to notice the second only of these contentions.

In the course of its opinion the Commission said that "in appraising the facts with respect to the proposed merger, we cannot find that any substantial advantage or benefit to the public will result therefrom." Further, that "it is not sufficient for an applicant under Section 203(a) of the Act merely to show that no serious harm may be apprehended as a result of the proposed merger or that such merger is a matter of indifference insofar as the public interest may be affected. The burden is upon the applicant to show that the proposal is consistent with the public interest. This concept requires something more than a showing of convenience to the applicant, and can reasonably be interpreted as indicating that the Congress intended that there be a showing that benefit to the public will result from the proposed merger of facilities before it should receive Commission approval. The Commission is charged with the responsibility and active duty of making an affirmative finding that a proposed merger is consistent with the public interest. This responsibility carries with it the duty to deny an application for approval of the merger of facilities of two operating companies when it can not be shown that good and sufficient reason for the granting of the application exists and that the consuming public will be benefited thereby." In a separate opinion Commissioner Manly disagreed with this view, although concurring in the denial of the application.

We think the Commission ascribes a meaning to the statute not borne out by its language. The section provides that "after notice and opportunity for hearing, if the Commission finds that the proposed disposition, consolidation, acquisition, or control will be consistent with the public interest, it shall approve the same." The phrase "consistent with the public interest" does not connote a public benefit to be derived or suggest the idea of a promotion of the public interest. The thought conveyed is merely one of compatability. Congress resorted to this language rather than to the use of the stock term "public convenience or necessity", or to such phrases as "in furtherance of" or "will promote the public interest" used in its interstate commerce legislation (later considered); and the language employed ought to be construed to mean no more than it says. It is enough if the applicants show that the proposed merger is compatible with the public interest. The Commission, as a condition of its approval, may not impose a more burdensome requirement in the way of proof than that prescribed by law.

The statute, it is true, prohibits the consolidation of the facilities of public utility companies without prior approval; but it does not disclose a policy hostile to all such mergers or indicate that Congress looked upon them as presumptively harmful. We see no more in the prohibition than the purpose of insuring against public disadvantage through the requirement of a showing that mergers of this sort will not result in detriment to consumers or investors or to other legitimate national interests. The Federal Power Act, 16 U.S.C.A. § 791a et seq., forms an integral part of the Public Utility Act of 1935, 15 U.S.C.A. § 79 et seq.; and Title I of that act was designed to bring about a simplification of corporate structures in the utility field through compulsory consolidations and mergers under named conditions. Consult particularly sections 10(b) and 11 (b) of the Public Utility Holding Company Act of 1935, 49 Stat. 819-821,...

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6 cases
  • Northeast Utilities Service Co. v. F.E.R.C.
    • United States
    • U.S. Court of Appeals — First Circuit
    • December 8, 1992
    ...61,994 (quoting Utah Power & Light Co., 47 F.E.R.C. at 61,750 (1989) (footnotes omitted); see also Pacific Power & Light Co. v. Federal Power Commission, 111 F.2d 1014, 1016 (9th Cir.1940). We review the record, therefore, to determine whether the Commission's finding that the probable bene......
  • Bowie v. Louisiana Public Service Com'n
    • United States
    • Louisiana Supreme Court
    • November 29, 1993
    ...Blue Grass State Telephone Co., v. Public Service Comm'n of Kentucky, 382 S.W.2d 81 (Ct.App.Ky.1964); Pacific Power and Light v. Federal Power Comm'n, 111 F.2d 1014, 1016 (9th Cir.1940). Because our Public Service Commission is vested with plenary regulatory power by a self-executing consti......
  • Anderson Motor Service v. United States
    • United States
    • U.S. District Court — Eastern District of Missouri
    • May 27, 1957
    ...with the public interest." That phrase was construéd by the U. S Court of Appeals for the Ninth Circuit in Pacific Power & Light Co. v. Federal Power Commission, 111 F.2d 1014. The court, loc.cit. 1016, "We think the Commission ascribes a meaning to the statute not borne out by its language......
  • Amell v. United States
    • United States
    • U.S. Claims Court
    • February 16, 1968
    ...discretion to make sure that the increased rates would be consistent with the public interest; they cite Pacific Power & Light Co. v. Federal Power Comm'n, 111 F.2d 1014 (9th Cir. 1940). It is not clear from the Secretary's decision whether he felt required by law to reject plaintiffs' clai......
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1 books & journal articles
  • Regulated Industries
    • United States
    • ABA Antitrust Premium Library Antitrust Law Developments (Ninth) - Volume II
    • February 2, 2022
    ...Gas & Elec. Co., 1993 WL 373384, at *9 n.30. 741. Utah Power & Light, 1987 WL 118932, at *15 (citing Pacific Power & Light Co. v. FPC, 111 F.2d 1014, 1017 (9th Cir. 1940)). FERC has found that the standards set forth in the Public Utility Holding Company Act are relevant but not binding on ......

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