California Electric Power Co. v. FEDERAL POWER COM'N

• Decision Date: 12 November 1952
• Docket Number: No. 12987.,12987.
• Citation: 199 F.2d 206
• Parties: CALIFORNIA ELECTRIC POWER CO. v. FEDERAL POWER COMMISSION et al.
• Court: U.S. Court of Appeals — Ninth Circuit

199 F.2d 206 (1952)

CALIFORNIA ELECTRIC POWER CO. v. FEDERAL POWER COMMISSION et al.

No. 12987.

United States Court of Appeals Ninth Circuit.

October 14, 1952.

Rehearing Denied November 12, 1952.

Henry W. Coil, Donald J. Carman, Riverside, Cal. (Harold M. Hammack and Kenneth M. Lemon, Riverside, Cal., of counsel), for petitioner.

Bradford Ross, Gen. Counsel, Howard E. Wahrenbrock, Asst. Gen. Counsel, Federal Power Commission and (Leonard Eesley, Washington, D. C., Francis L. Hall, Arlington, Va., Louis C. Kaplan, Attys., Federal Power Commission, Rogers Heights, Md., of counsel), for respondent.

L. E. Blaisdell, Dist. Atty. of Mineral County, Hawthorne, Nev., for intervenor Mineral County.

Holmes Baldridge, Asst. Atty. Gen., Paul A. Sweeney, Melvin Richter, T. S. L. Perlman, Attys., Department of Justice, Washington, D. C. (Charles Goodwin, Counsel, George Spiegel, Asst. Counsel, Bureau of Yards & Docks, Department of Navy, Washington, D. C., of counsel) for the United States as intervenor.

Everett C. McKeage, Boris H. Lakusta, Wilson E. Cline, Attys., Public Utilities Commission of State of California, San Francisco, Cal., for California Public Utilities Commission, as amicus curiae.

Before MATHEWS, HEALY, and ORR, Circuit Judges.

HEALY, Circuit Judge.

California Electric Power Company petitions for review of an order of the Federal Power Commission directing it to cease and desist from charging two Nevada customers (the Department of the Navy and Mineral County, Nevada) any rate other than "filed rates" for electric energy it sells those customers.

The Commission's order does not assume to perpetuate the "filed rates," but provides only that they shall control until and unless superseded by new rates filed by the Company or by rates fixed by the Commission. Aside from some minor, and, we think, inconsequential, objections of a procedural nature, the issue posed by the petition is whether the rates are subject to the Commission's filing requirements, or whether, as the petitioner contends, the Public Utilities Commission of California, either alone or in conjunction with the Public Service Commission of Nevada, has jurisdiction over the rates charged these customers.

Petitioner owns and operates an inter-connected system for the generation and distribution of electric power in California and Nevada. The power sold to the Navy and to Mineral County is generated in and transmitted from petitioner's Northern Division plants in California.¹ Most of it comes from three plants in petitioner's Mono Basin system, these being hydroelectric projects licensed by the Commission under § 4(e) of Part I of the Federal Power Act, 16 U.S.C.A. § 797(e), to operate on the public lands. The energy sold the Navy is delivered to Navy-owned transmission lines at petitioner's Mill Creek plant in Mono County, California. From there it flows through the Navy's line across the California-Nevada state boundary to the Naval Depot at Hawthorne, Nevada. Similarly the electric energy sold Mineral County is delivered at the Mill Creek plant to Mineral County, which transmits the energy across the state border over its own line for resale to consumers in Mineral County. These lines in each instance are 55,000 volt transmission lines. At Hawthorne, Nevada, the energy in both instances is transformed to lower voltages for distribution.²

As regards the Navy, the power it purchases or generates is used to operate the Navy's various facilities at the Depot, and, in addition, to supply the needs of the occupants of a housing project which was built for and is occupied by civilian employees of the Depot, as well as the energy needs of the operators of the Depot's various concessions. Each housing or business unit has a separate meter, and the occupant thereof is billed and required to pay for the energy which he consumes. From 1943 to 1948,³ between 15.4% and 28.6% of the Navy's yearly total power supply was resold to these residents and business concessions, the amount resold averaging 18.7% of the yearly total. By contract entered into in 1943 petitioner and the Navy agreed upon the rates to be charged for the energy furnished. This contract was not filed with the Power Commission as a rate schedule, but petitioner charged the contract rates until 1948, when it obtained from the California Public Utilities Commission a rate increase in respect of certain designated customers, including Navy, whom petitioner was serving under special contracts.

The properties and facilities of the Mineral County power system belong to and are operated by the County under the direction of its Board of Commissioners who ex-officio constitute the board of managers of the county-owned facility. Petitioner has sold to the County the power required for the system under a series of three-year contracts providing that at rates set forth in the contract petitioner would furnish and the County would purchase all of the energy required by the latter for resale and distribution to the ultimate consumers in the state of Nevada.

Petitioner argues that since it is a licensee under Part I of the Federal Power Act its rates to Navy and to Mineral County are to be regulated by the Commissions of Nevada and California under § 20 of the Act, and that they are not subject to regulation under Part II, §§ 201, 205 and 206.⁴ The contention is not different from that made and rejected in Pennsylvania Water & Power Co. v. Federal Power Commission, 343 U.S. 414, 418, 72 S.Ct. 843, where the Court said that Part II proceeds on the assumption that regulation of public utilities transmitting and selling power at wholesale in interstate commerce is a matter which necessarily must be accomplished by the Federal government. It was thought that the program formulated by the Act would be hindered, not helped, if Part I licensees were held impliedly exempt from the more expansive regulation provided by Part II.

The transactions in question manifestly constitute sales by a public utility of electric energy in interstate commerce. It is of no moment that petitioner's facilities for the transmission and sale of the energy are all located in California and that those used to transmit it across the line into Nevada are owned by the purchasers of the energy. Public Utilities Commission v. Attleboro Steam & Electric Co., 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549; Federal Power Commission v. Arizona Edison Co., 9 Cir., 194 F.2d 679.⁵ Nor is it of consequence, as the petitioner contends, that in one instance the energy is transmitted across the state line by the United States. Federal Power Commission v. Arizona Edison Co., supra, 194 F.2d at page 681. The question is not whether the United States is in interstate commerce, but whether petitioner is. But it is urged that sales to the United States or to Mineral County are not at wholesale within the Act's intendment since § 201(d) defines sales at wholesale as sales to any person for resale, and neither the United States nor Mineral County is by definition a person. Sections 3(4) and 3(3) of Part I and 201 (f) of Part II of the Act are appealed to in support of the argument. Section 3(4) defines the word "person" as meaning "an individual or a corporation", and § 3(3), defining "corporation," excludes municipalities from the definition. Section 201(f) will be noticed in a moment.

The argument here predicated on § 201 (d) was made to the Seventh Circuit in the recent case of Wisconsin-Michigan Power Co. v. Federal Power Commission, 197 F. 2d 472, where a number of municipalities were involved as purchasers for resale. Upon consideration of the legislative history and gradual development of the several provisions of the Act, together with the policy of the legislation as a whole, the...