Alabama Power Co. v. Tennessee Valley Authority
| Decision Date | 28 August 1996 |
| Docket Number | No. CV 96-PT-0097-S.,CV 96-PT-0097-S. |
| Citation | 948 F.Supp. 1010 |
| Parties | ALABAMA POWER COMPANY, et al., Plaintiffs, v. TENNESSEE VALLEY AUTHORITY, et al., Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
Rodney O. Mundy, Alan T. Rogers, Michael D. Freeman, Lyle D. Larson, Teresa G. Minor & Karl R. Moor, Balch & Bingham, Birmingham, AL, Robert H. Forry, Troutman Sanders, Atlanta, GA, Ben H. Stone & Scott E. Andress, Eaton & Cottrell P.A., Gulfport, MS, for plaintiffs.
Edward S. Christenbury, Robert B. Glinski, Harriet Cooper, James E. Fox & Thomas C. Doolan, Tennessee Valley Authority, Knoxville, TN, N. Lee Cooper & Cathy S. Wright, Birmingham, AL, Dorothy E. O'Brien & John McCall, Louisville Gas & Electric, Louisville, KY, for defendants.
This cause comes on to be heard on Defendant Tennessee Valley Authority's Motion To Dismiss Or, In The Alternative, For Summary Judgment filed on March 18, 1996; Power Companies' Motion For Summary Judgment filed on April 15, 1996; and the Motion of LG & E Power Marketing, Inc. For Summary Judgment filed on April 30, 1996. At a recorded conference on June 4, 1996, all the parties acknowledged that the cause is appropriate for determination, one way or the other, on motion(s) for summary judgment. The parties acknowledge that the issues are issues of law related to the interpretation of controlling statutory provisions. The issues are either unbelievably simple or extremely complex. In any event, this court is likely serving only as a conduit to the appellate process.
The plaintiffs have filed a statement of purported material facts which they say are not in dispute. The defendant(s) have responded to that list and agree in most respects. In other respects they agree, but with clarifications, argument, and/or extrapolations. In some respects, there are denials that the alleged facts are material. In a very few instances, there are outright denials. In any event, the parties agree that there are no factual disputes sufficient to defeat at least one of the motions for summary judgment.
Of course, the readers will be generally familiar with the Tennessee Valley Authority ("TVA"). It was established under the provisions of the Tennessee Valley Authority Act of 1933. See 16 U.S.C. § 831, et seq. TVA was created in the "interest of the national defense and for agricultural and industrial development, and to improve navigation in the Tennessee River and to control the destructive flood waters in the Tennessee River and Mississippi River Basins." 16 U.S.C. § 831. TVA's Board of Directors ("Board") "is directed in the operation of any dam or reservoir in its possession and control to regulate the stream flow primarily for the purposes of promoting navigation and controlling floods" (emphasis added). 16 U.S.C. § 831h-1. So far as may be consistent with such purposes, the Board is authorized to provide and operate facilities for the generation of electric energy in order to avoid the waste of water power, to transmit and market such power "as in this chapter provided," and thereby, so far as may be practicable, to assist in liquidating the cost or aid in the maintenance of the projects of TVA. Id. Title 16 U.S.C. § 831i authorizes the Board to sell surplus power to all types of entities, but with preference to governmental entities and non-profit cooperative organizations. For a general discussion of the sale of surplus power by TVA, see Tennessee Valley Authority v. Ashwander, 78 F.2d 578 (5th Cir.1935), aff'd, 297 U.S. 288, 56 S.Ct. 466, 80 L.Ed. 688 (1936), reh'g denied, 297 U.S. 728, 56 S.Ct. 588, 80 L.Ed. 1011 (1936).1
16 U.S.C. § 831j provides:
It is declared to be the policy of the Government so far as practical to distribute and sell the surplus power generated at Muscle Shoals equitably among the States, counties, and municipalities within transmission distance. This policy is further declared to be that the projects herein provided for shall be considered primarily as for the benefit of the people of the section as a whole and particularly the domestic and rural consumers to whom the power can economically be made available, and accordingly that sale to and use by industry shall be a secondary purpose, to be utilized principally to secure a sufficiently high load factor and revenue returns which will permit domestic and rural use at the lowest possible rates and in such manner as to encourage increased domestic and rural use of electricity.... (emphasis added).
The parties agree that, in addition to the pertinent provisions of 16 U.S.C. § 831n-4, hereinafter discussed, the provisions of 16 U.S.C. § 831k may have special pertinence in this case. That section provides, inter alia, that:
And provided further, That as to any surplus power not so sold as above provided to States, counties, municipalities, or other said organizations, before the board shall sell the same to any person or corporation engaged in the distribution and resale of electricity for profit, it shall require said person or corporation to agree that any resale of such electric power by said person or corporation shall be made to the ultimate consumer of such electric power at prices that shall not exceed a schedule fixed by the board from time to time as reasonable, just, and fair, and in case of any such sale, if an amount is charged the ultimate consumer which is in excess of the price so deemed to be just, reasonable, and fair by the board, the contract for such sale between the board and such distributor of electricity shall be voidable at the election of the board: And provided further, That the board is authorized to enter into contracts with other power systems for the mutual exchange of unused excess power upon suitable terms, for the conservation of stored water, and as an emergency or break-down relief. (emphasis added).2
In 1959, as part of an enactment authorizing TVA to issue and sell bonds, Congress, as an apparent quid pro quo, included in 16 U.S.C. § 831n-4 the following provisions:
Unless otherwise specifically authorized by Act of Congress the Corporation shall make no contracts for the sale or delivery of power which would have the effect of making the Corporation or its distributors, directly or indirectly, a source of power supply outside the area for which the Corporation or its distributors were the primary source of power supply on July 1, 1957, and such additional area extending not more than five miles around the periphery of such area as may be necessary to care for the growth of the Corporation and its distributors within said area: Provided, however, That such additional area shall not in any event increase by more than 2½ per centum (or two thousand square miles, whichever is the lesser) the area for which the Corporation and its distributors were the primary source of power supply on July 1, 1957: And provided further, That no part of such additional area may be in a State not now served by the Corporation or its distributors or in a municipality receiving electric service from another source on or after July 1, 1957, and no more than five hundred square miles of such additional area may be in any one State now served by the Corporation or its distributors.
Nothing in this subsection shall prevent the Corporation or its distributors from supplying electric power to any customer within any area in which the Corporation or its distributors had generally established electric service on July 1, 1957, and to which electric service was not being supplied from any other source on the effective date of this Act.
Nothing in this subsection shall prevent the Corporation, when economically feasible, from making exchange power arrangements with other power-generating organizations with which the Corporation had such arrangements on July 1, 1957.... (emphasis added).3
There follow provisions authorizing TVA to supply power to various named towns or cities in Tennessee, Kentucky, and Georgia, a named air station in Mississippi and other federal agencies. The enactment concludes with a statement of Congressional declaration of intent:
It is declared to be the intent of this section to aid the Corporation in discharging its responsibility for the advancement of the national defense and the physical, social and economic development of the area in which it conducts its operations by providing it with adequate authority and administrative flexibility to obtain the necessary funds with which to assure an ample supply of electric power for such purposes by issuance of bonds and as otherwise provided herein, and this section shall be construed to effectuate such intent. (emphasis added).
Defendants note that 16 U.S.C. § 831dd provides that,
This chapter shall be liberally construed to carry out the purposes of Congress to provide for the disposition of and make needful rules and regulations respecting Government properties entrusted to the Authority, provide for the national defense, improve navigation, control destructive floods, and promote interstate commerce and the general welfare....
The court notes that there is no specific reference in this section to the sale or exchange of power outside of the defined area. The question arises as to what purposes of Congress are to be served by liberal construction? TVA suggests that the purposes to be served are the purposes for which TVA was created by Congress.4 In Hardin v. Kentucky Utilities Co., 390 U.S. 1, 7, 88 S.Ct. 651, 655, 19 L.Ed.2d 787 (1968), the Court stated, "[I]t is clear and undisputed that the protection of private utilities from TVA competition was almost universally regarded as the primary objective of the [1959] limitation [in § 831n-4]."5
The court will not specifically repeat all the facts as alleged by plaintiffs and as responded to by defendants. The court will state some of the...
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