Electrical Dist. No. 1 v. F.E.R.C., s. 83-1627
| Citation | 774 F.2d 490,249 U.S.App.D.C. 190 |
| Decision Date | 04 October 1985 |
| Docket Number | 83-1656,Nos. 83-1627,s. 83-1627 |
| Parties | ELECTRICAL DISTRICT NO. 1, et al., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Arizona Public Service Company, Intervenor. PAPAGO TRIBAL UTILITY AUTHORITY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Arizona Public Service Company, Intervenor. |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
Page 490
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Arizona Public Service Company, Intervenor.
PAPAGO TRIBAL UTILITY AUTHORITY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Arizona Public Service Company, Intervenor.
District of Columbia Circuit.
Decided Oct. 4, 1985.
Melvin Richter, Washington, D.C., with whom James T. McManus, Washington, D.C., was on brief, for petitioners in No. 83-1627.
Richard I. Chaifetz, Washington, D.C., with whom Arnold D. Berkeley, Washington, D.C., was on brief, for petitioner in No. 83-1656.
Joshua Rokach, Federal Energy Regulatory Commission, Washington, D.C., for respondent in Nos. 83-1627 and 83-1656. Barbara J. Weller, Deputy Sol. and Arlene Pianko Groner, Washington, D.C., were on brief for respondent in Nos. 83-1627 and 83-1656.
Vicki G. Sandler, Phoenix, Ariz., with whom Thomas E. Parrish, Steven M. Wheeler, Phoenix, Ariz., Richard M. Merriman and Brian J. McManus, Washington, D.C., were on brief, for intervenor in Nos. 83-1627 and 83-1656. Daniel J. Wright,
Page 491
Washington, D.C., also entered an appearance for intervenor.Before MIKVA and SCALIA, Circuit Judges, and BAZELON, Senior Circuit Judge.
SCALIA, Circuit Judge:
This case arises out of a ratemaking proceeding before the Federal Energy Regulatory Commission under Sec. 206 of the Federal Power Act, 16 U.S.C. Sec. 824e (1982). In terms familiar to the energy bar, the question it presents is the lawfulness of FERC's decision to make a rate increase effective as of the date of its order directing a compliance filing, rather than upon the date of acceptance of the compliance filing. In less technical terms, the question is whether new rates can lawfully be made effective as of the date on which the Commission outlines the factors on the basis of which the rates should be calculated, but before the rates themselves are effectively filed.
Arizona Public Service Company ("APS") sells electricity under contract to petitioners, the Papago Tribal Utility Authority and a number of electrical, irrigation and water conservation districts. These contracts do not allow APS unilaterally to increase its rates pursuant to the procedures of Sec. 205 of the Federal Power Act, 16 U.S.C. Sec. 824d, but rather require that all new rates be fixed by FERC in proceedings under Sec. 206. See Papago Tribal Utility Authority v. FERC, 610 F.2d 914, 930 (D.C.Cir.1979). When APS sought to increase the rates here at issue, it therefore filed the proposed rates with FERC for its approval. In its Opinion No. 137, FERC held that although APS was entitled to a return (an allowable "cost of service") in excess of that produced by the existing rates, the proposed rates produced an excessive return, and in some respects misallocated the burden of that return among APS's various customers. The Commission directed APS to make, within forty-five days, what is generally called a "compliance filing," see 18 C.F.R. Sec. 35.18 (1985)--i.e., to file "a revised cost of service, revised rate schedules and revised tariff sheets which reflect the findings in this decision." 18 F.E.R.C. (CCH) p 61,197, at 61,401 (Mar. 2, 1982). Before the compliance filing was due, APS and petitioners sought rehearing of FERC's order; APS also requested and received an extension of time until forty-five days after the order on rehearing to make its compliance filing. On rehearing, FERC issued Opinion No. 137-A, which modified and clarified its order in several respects, and let it stand as to the remainder, including, of course, the direction for a compliance filing. 20 F.E.R.C. (CCH) p 61,407 (Sept. 30, 1982). 1 APS made the compliance filing November 12, 1982 and subsequently revised it on November 17, 1982. Pursuant to delegated authority, 18 C.F.R. Sec. 375.308(w)(1) (1984), the designee of the Director of the Office of Electric Power Regulation accepted the filing and made the rates effective as of the date of acceptance, February 7, 1983.
APS appealed the issue of the effective date to FERC, requesting that the new rates be made effective as of March 2, 1982, the date of Opinion No. 137. The Commission acceded to APS's request. Order Setting Effective Date of Rates, 23 F.E.R.C. (CCH) p 61,077 (Apr. 6, 1983). The present petitioners sought rehearing of this order from the Commission, and after denial of their request filed an action for review in this court under 16 U.S.C. Sec. 825l (b) (1982). We granted FERC's request for remand to permit FERC to consider the significance of Opinion No. 137-A's modifications to the ratemaking principles set forth in Opinion No. 137. On January 26, 1984, FERC issued its order on remand, 26 F.E.R.C. (CCH) p 61,087 (1984), reaffirming that the rates were effective as of the date of Opinion No. 137 rather than Opinion No.
Page 492
137-A. Petitioners now seek review of FERC's order on remand and its Order Setting Effective Date of Rates under 16 U.S.C. Sec. 825l (b).FERC argues that because Sec. 205(a) of the Federal Power Act provides that "[a]ll rates and charges ... shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful," 16 U.S.C. Sec. 824d(a), it follows that a new rate must go into effect as of the date that FERC finds an existing rate to be unjust or unreasonable, because it would be unlawful to allow the unjust or unreasonable rate to continue in effect. It seems to us, however, no more inevitable that the Commission has the obligation to end an unlawful rate from the moment it finds unlawfulness than that an unlawful rate must be regarded as null and void from the moment it becomes unlawful. (A customer cannot, of course, refuse to pay a rate currently in effect on the ground that it has become unlawfully high and therefore void; nor, after payment of such a rate, can the Commission order a...
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