Cities of Campbell v. F.E.R.C., 84-1017
| Decision Date | 25 September 1985 |
| Docket Number | No. 84-1017,84-1017 |
| Parties | CITIES OF CAMPBELL and Thayer, Missouri, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Arkansas Power & Light Company, Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the Federal Energy Regulatory commission.
Charles F. Wheatley, Jr., Washington, D.C., for petitioners. Don Charles Uthus, Washington, D.C., entered an appearance for petitioners.
Joseph S. Davies, Atty., F.E.R.C., Washington, D.C., for respondents. Barbara J. Weller, Deputy Sol., and Joel M. Cockrell, Atty., F.E.R.C., Washington, D.C., were on the brief, for respondent. Jerome Feit, Sol., F.E.R.C., Washington, D.C., entered an appearance for respondent.
Robert T. Hall, III, Washington, D.C., with whom Richard M. Merriman, Floyd L. Norton, IV, and Stephen L. Huntoon, Washington, D.C., were on the brief, for intervenor.
Before WRIGHT and MIKVA, Circuit Judges, and MacKINNON, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge MacKINNON.
The Cities of Campbell and Thayer, Missouri ("Cities") petition under 15 U.S.C. Sec. 3416(a)(4) for review of a Federal Energy Regulatory Commission ("FERC" or "Commission") order affirming and adopting an initial Administrative Law Judge's decision and denying rehearing construing contracts between the Cities and the Arkansas Power & Light Company ("AP & L") as permitting unilateral rate increases under Sec. 205 of the Federal Power Act ("FPA" or "Act"), 16 U.S.C. Sec. 824d (1981). The issue on review is whether the Commission correctly interpreted the contracts between AP & L and the Cities. We conclude that the Commission's interpretation was correct, and affirm.
In 1975, the Cities contracted to purchase electric power from the Arkansas-Missouri Power Company ("Ark-Mo"), the predecessor-in-interest of AP & L. These contracts contained identical clauses, stating:
ARTICLE III--Rate
Each month Customer will pay to the Company for all energy delivered during the preceding month an amount determined in accordance with Company's R-1 rate as now on file with the Federal Power Commission or as same may be amended from time to time....
* * *
* * *
This agreement is entered into subject to the approval of regulatory agencies having jurisdiction over such company matters. In addition, the rate, terms and conditions stated in the contract are subject to change at any time subject to the approval of governmental regulatory bodies having jurisdiction.
(Joint Appendix (J.A.) 1601, 1602) (emphasis added).
In 1978, Ark-Mo raised the rates unilaterally by filing the new rates with the Commission under Sec. 205 of the Federal Power Act. Although these rates represented an increase of approximately 30%, and took effect upon filing under Sec. 205, the Cities did not object. Three years later, in 1981, AP & L, the successor to Ark-Mo, notified the Cities of another rate increase of 95%, to become effective, as did the previous increase, after filing with the Commission under Sec. 205. Upon learning of this rate increase, the Cities filed their Protest and Petition to Intervene before the Commission (J.A. 1515). The Cities did not, however, contest at this time the right of the company to increase the rates unilaterally under Sec. 205, but requested, as they were entitled to under that section, that the Commission suspend the proposed rate filing for the maximum period of five months. The Cities filed a motion to dismiss the filing as to the Missouri Utilities Company or alternatively to intervene and suspend the rate for the maximum, five month period (J.A. 1887-1900). Petitioners did not raise the objection that the underlying contracts did not permit AP & L to make unilateral rate changes under Sec. 205 until two months later. The Commission accepted the filing and suspended the proposed rates for five months, setting the matter for hearing (J.A. 1537-44).
On December 30, 1981, petitioners moved the Commission to modify its August 28, 1981 order to reject AP & L's proposed rate increase rather than to suspend it for five months. The rate increase, petitioners said, violated their contracts which they alleged permitted rate changes to take effect only after the Commission approved them (J.A. 1788-99). The Commission denied petitioners' motion on March 3, 1982, finding that the plain language of the contract provided for a unilateral rate change procedure that was consistent with Sec. 205 of the Act (J.A. 186). On April 5, 1982, the Cities filed a Petition for Rehearing, which the Commission denied as untimely on May 5, 1982. The Cities subsequently on June 4, 1982 filed a Petition for Rehearing and Reconsideration of the May order. The Commission on July 6, 1982 denied the Petition for Rehearing and ordered a reconsideration of its Order of March 3, 1982. The Commission set for hearing the issue of whether extrinsic evidence indicated that the parties' intent as to the contract differed from that ascribed to them by the Commission in its interpretation of the contract. The ALJ, after hearing the evidence and excluding some testimony as untimely, upheld the Commission's interpretation. The Cities appeal now from the Commission's subsequent order upholding the rate increase as consistent with the provisions of the contract.
On appeal, the Cities raise three main issues. First, the Cities argue that the Commission improperly applied the Sierra-Mobile doctrine to the contracts by finding that they permitted unilateral rate increases. Second, the Cities claim the Commission erred in affirming the ALJ's decision that the extrinsic evidence showed that the parties intended that changes could become effective upon unilateral filing of rate changes by the company under Sec. 205. Third, the Cities claim the Commission, in approving the ALJ's exclusion from evidence of the testimony of the Cities' two witnesses, was arbitrary and capricious and denied the City a fair hearing. As a preliminary matter we address AP & L's claim that the Cities' petition for review should be dismissed because their Petition for Rehearing was untimely filed.
AP & L argues that the Cities' appeal should be dismissed because the Cities did not file a Petition for Rehearing within 30 days of a final Commission order as provided by statute. See 16 U.S.C. Sec. 852l (a). In AP & L's view, the order for reconsideration by the Commission, from which petitioners presently appeal, is not properly appealable because it merely allowed the prior order to remain and had itself no independent effect. Thus, AP & L contends that the present appeal is no more than an evasion of the statutory jurisdictional requirement of a timely rehearing petition.
AP & L's argument would have merit except for the particular circumstances of this case. Section 313(a) of the Federal Power Act provides that "[n]o proceeding to review any order of the Commission shall be brought by any person unless such person shall have made application to the Commission for a rehearing thereon." 16 U.S.C. Sec. 825l (a). Applications for rehearing may be made within 30 days after FERC's issuance of the challenged order. Id. The 30-day time requirement of this statute is as much a part of the jurisdictional threshold as the mandate to file for a rehearing. Boston Gas Co. v. FERC, 575 F.2d 975 (1st Cir.1978). See also Dayton Power & Light Co. v. FPC, 251 F.2d 875, 877 (D.C.Cir.1957). The dispute over the timeliness of the petition to rehear the March 3, 1982 order, however, is in fact irrelevant to this case, since the controversy was mooted by FERC's July 6, 1982 order. This court implicitly recognized this in its October 4, 1982 order in No. 83-1738, which provided that
... [w]ith regard to FERC's March 3, 1982 order, the petition for review is dismissed for lack of a final reviewable order. With regard to FERC's May 5, 1982 order, the petition for review is dismissed as moot. This dismissal is without prejudice to refiling after the Commission issues a final order.
Cities of Campbell and Thayer v. FERC, No. 83-1738 (D.C.Cir. Oct. 4, 1982) (Order). When the Cities filed its untimely application for rehearing of the Order of March 3, 1982, on April 5, 1982, it also filed a motion not only that the application be deemed timely filed or that a one-day extension be granted, but also requested in the alternative that the application for rehearing be treated as a motion for reconsideration of the March 3 order and that the March 3 order be stayed. Motions for reconsideration may be made at any time. 16 U.S.C. Sec. 825l (a). On July 6, 1982, FERC announced that it had not previously considered the merits of reconsidering the March 3 order on Mobile-Sierra grounds. While FERC denied rehearing on the issue of timeliness of the original application (i.e., denied rehearing of its May 5 order), it granted the alternative relief sought by Cities: It stayed the March 3 order pending hearing and decision on the Mobile-Sierra question, the basis of the Cities' original motion to reject AP & L's rate filing.
Because the Commission agreed to reconsider its March 3 order and stayed the March 3 order, there was no final appealable order until the Commission finally rejected the Cities' motion to reject AP & L's rate filing on Mobile-Sierra grounds. By staying the effectiveness of its March 3 order and by granting reconsideration of that entire order, the Commission made clear that its administrative decision making process was still ongoing, that no final decision had yet been made, and that no rights or obligations of either party had been fixed for the interim. The March 3, 1982 order therefore was not a final, reviewable order. Port of Boston Marine Terminal Assn. v....
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