Houston Lighting & Power Co. v. U.S.
| Decision Date | 22 August 1979 |
| Docket Number | 77-2071,Nos. 77-2070,s. 77-2070 |
| Citation | 606 F.2d 1131,196 U.S.App.D.C. 224 |
| Parties | HOUSTON LIGHTING & POWER COMPANY, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Burlington Northern, Inc., Intervenor. ARIZONA ELECTRIC POWER COOPERATIVE, INC., Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Atchison, Topeka and Santa Fe Ry. Co., et al., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
William L. Slover, with whom C. Michael Loftus, Washington, D. C., was on the brief, for petitioner.
Kenneth G. Caplan, Deputy Associate Gen. Counsel, I. C. C., Washington, D. C., with whom Mark L. Evans, Gen. Counsel, I. C. C., Washington, D. C., was on the brief, for respondent.
Howard J. Trienens, Chicago, Ill., a member of the bar of Supreme Court of Ill., pro hac vice by special leave of court with whom R. Eden Martin, Richard J. Flynn and Lee A. Monroe, Washington, D. C., were on the brief, for intervenors.
John L. Hill, Atty. Gen. of Texas, David M. Kendall, Jr., First Asst. Atty. Gen., P. M. Schenkkan, Sp. Asst. Atty. Gen., and J. David Hughes, Asst. Atty. Gen. of Texas, Austin, Tex., were on the brief, for State of Texas, amicus curiae in support of petitioner.
Ellen K. Schall, Atty., I. C. C., Washington, D. C., entered an appearance for respondent I. C. C.
Robert Lewis Thompson, Robert B. Nicholson and Edward E. Lawson, Jr., Attys., Dept. of Justice, Washington, D. C., entered appearances for respondent U. S.
Before BAZELON, LEVENTHAL and ROBB, Circuit Judges.
Opinion for the Court filed by Circuit Judge LEVENTHAL.
These consolidated petitions for review bring before the court for the first time a new provision added to the Interstate Commerce Act by the Railroad Revitalization and Regulatory Reform Act of 1976 (the "Reform Act"). 1 That provision, now revised and codified as 49 U.S.C. § 10729, provides for expedited consideration by the Interstate Commerce Commission (ICC or Commission) of any proposed rate filing by a rail carrier that is for new service requiring a total capital investment of $1,000,000 or more. If the Commission does not find the proposed "capital incentive rate" unlawful within 180 days after the filing of a notice of intent to establish such a rate, the rate may not be suspended or set aside for five years after it becomes effective. 2
Petitioners are electric utilities which have committed themselves to the construction of large coal-fired electric generating units and which have entered into supply arrangements with western coal producers. They challenge the ICC's approval of capital incentive rates proposed by railroads for the movement of coal from mines to the generating units.
Petitioners have two main claims. First, they challenge the Commission's jurisdiction to consider the proposed rates under § 10729. They contend that the railroads' proposed capital investments are not of the kind contemplated by § 10729, and that, in any event, the Commission's determinations that the $1,000,000 threshold requirement was met lacked evidentiary support. Second, even assuming that § 10729 was properly invoked, they challenge the Commission's findings that the proposed rates were just and reasonable. We affirm.
The two proceedings under review are similar both in factual background and legal issues presented.
Houston Lighting and Power Co. (HL&P), the petitioner in No. 77-2070, provides electricity to a large portion of the Texas Gulf Coast, including the city of Houston. To meet rising demand, HL&P began construction of its W. A. Parrish Station at Smithers Lake, Texas. Responding to the current emphasis on use of domestic coal resources to reduce dependence on foreign petroleum and scarce natural gas supplies, HL&P decided to use coal to fire the two 660,000 kilowatt generating units making up the Parrish Station. When in full operation, the two units will consume nearly five million tons of coal a year. HL&P entered into an agreement for the supply of its long-term coal requirements from a mine near Decker, Montana. Because that mine was not yet productive, HL&P contracted to obtain at least 12.7 million tons of coal from the Jacobs Ranch Mine near Reno, Wyoming.
The coal from Wyoming was to move by railroad in unit trains of approximately 100 cars over a 1607 mile route from Cordero, Wyoming, to Smithers Lake. Of the 1607 miles, the major portion, 1308 miles from Cordero to Ft. Worth, Texas, is over the lines of the Burlington Northern (BN) and its affiliates. The remainder, the 299 miles from Ft. Worth to Smithers Lake, is on the lines of the Atchison, Topeka & Santa Fe (Santa Fe). A dispute arose between HL&P and the railroads over the terms under which the coal would be transported. Negotiations for the publication of a tariff applicable to its coal shipments proved unfruitful, and HL&P found it necessary to purchase 1,200 large-capacity coal cars when the carriers indicated their unwillingness to provide such equipment. In May, 1977, HL&P filed a complaint with the ICC requesting that it prescribe just and reasonable rates and regulations for its coal traffic. 3
Pursuant to § 10729 and its implementing regulations, 4 BN and Santa Fe filed shortly thereafter, on June 3, 1977, a notice of intent to establish a "capital incentive rate" applicable to coal traffic from Cordero to Smithers Lake. The notice proposed a rate of $15.60 per net ton, subject to an annual escalation provision, and an alternative rate of $16.54 per net ton subject only to general rate increases approved by the ICC. The rates would apply only to unit-train movements in shipper-supplied cars, and were subject to a minimum annual volume of four million tons. No separate rate for shipment in carrier-supplied cars was proposed.
The railroads accompanied their notice of intent with affidavits asserting that the movement of HL&P's coal traffic would require a total capital investment of more than $1,000,000. BN asserted that investments in new locomotives and related equipment necessary to move four million tons of coal annually would exceed $27,000,000, and that improvements in, and increased maintenance of, track structure (roadway) attributable to the coal traffic would substantially exceed $1,000,000. Santa Fe stated that, in addition to investment in tract structure, its investment in locomotives and related equipment would exceed $9,000,000.
HL&P filed a protest to the proposed rate schedules, and the case was considered on written submissions. 5 In a November 28, 1977, decision, the Commission found that investment in new locomotives and in upgrading roadway and other plant qualified the proposed rate for treatment under § 10729. It further concluded that the rate of $15.60 per net ton was just and reasonable. However, it rejected the escalation formula to which the $15.60 rate was attached, as well as the proposed $16.54 flat rate. 6
Arizona Electric Power Cooperative (AEPC), the petitioner in No. 77-2071, is a non-profit, rural electric cooperative which engages in the production and wholesale distribution of electricity throughout the state of Arizona. It has commenced construction at its Apache Station near Cochise, Arizona, of two coal-fired electric generating units that will consume one million tons of bituminous coal annually. AEPC secured its long-term coal supplies from mines near Gallup, New Mexico. This coal will move by railroad over a 523 mile route 371 miles via the lines of Santa Fe from Gallup to Deming, New Mexico; and 152 on the lines of the Southern Pacific from Deming to Cochise.
As in HL&P's case, negotiations for the publication of a tariff agreeable to both the utility and the carriers proved unavailing. By complaint filed January 19, 1977, AEPC sought prescription by the Commission of the just and reasonable rate for the coal traffic. During the pendency of the complaint proceedings, Santa Fe and Southern Pacific filed a notice of intent to establish a capital incentive rate of $8.64 per net ton for coal traffic from Gallup to Cochise. The proposed rate applied to unit-train shipments in shipper-supplied cars, subject to a minimum of one million tons per year.
By accompanying affidavit, Santa Fe asserted that the new coal traffic would require an investment of at least $3,000,000 for new locomotives and $2.41 million for construction and upgrading of track structure. Southern Pacific alleged a required investment exceeding $2,000,000 for new locomotives and related equipment.
Over protest by AEPC, the Commission held on November 28, 1977, that the railroads' proposed investment in locomotives and roadway satisfied the requirements for treatment under § 10729, and that the $8.64 rate was just and reasonable. 7
The utilities filed petitions for review. The railroads intervened on behalf of the ICC. The United States, a statutory respondent, takes no position in this controversy.
We first consider petitioners' threshold argument that the Commission erred in its determination that the railroads' claimed investment in locomotives and roadway improvements qualified their proposed rate schedules for consideration under § 10729, and for its five-year preclusion of attack.
The issue is whether, as petitioners contend, Congress intended to limit § 10729's special procedures and protections to rates that reflected investment in new or innovative types of rail facilities, equipment or services. In petitioners' view, the section does not extend to rates based on more conventional investments, such as for locomotives and roadway, merely necessitated by new or increased traffic. As originally enacted, the provision could be invoked "whenever the implementation of the proposed schedule would require a total...
To continue reading
Request your trial
-
National Insulation Transp. Committee v. I. C. C.
...94th Cong., 2d Sess. 46-47, reprinted in 1976 U.S.Code Cong. & Admin.News 61. See Houston Lighting & Power Co. v. United States, 606 F.2d 1131, 1148 (D.C.Cir.1979); Atchison, T. & S. F. Ry. Co. v. I. C. C., 580 F.2d 623, 626-27 (D.C.Cir.1978).11 NITCOM argues that public policy would be fur......
-
Cleveland-Cliffs Iron Co. v. I. C. C.
...to set aside a rate that has become effective if that rate is later found to be unlawful. See Houston Lighting & Power Co. v. United States, 606 F.2d 1131, 1142 (D.C.Cir.1979), cert. denied, 444 U.S. 1073, 100 S.Ct. 1019, 62 L.Ed.2d 755 (1980). Moreover, 49 U.S.C. § 11701 authorizes the ICC......
-
Smith v. RI ST. SERV. FOR BLIND & VIS. HANDICAPPED, Civ. A. No. 83-0292 S.
...nor to replace the agency's judgment with its own. Overton Park, 401 U.S. at 416, 91 S.Ct. at 823; Houston Lighting & Power Co. v. United States, 606 F.2d 1131, 1141 (D.C.Cir.1979); cert. denied, 444 U.S. 1073, 100 S.Ct. 1019, 62 L.Ed.2d 755 (1980); C.A. White Trucking Co. v. United States,......
-
Atchison, T. & S. F. Ry. Co. v. U.S.
...at most, state that the new language may be construed as clarifying prior ambiguities. Houston Lighting & Power Co. v. United States, 196 U.S.App.D.C. 224, 606 F.2d 1131 (D.C.Cir.1979), cert. denied, --- U.S. ----, 100 S.Ct. 1019, 62 L.Ed.2d 755 (1980); Purolator Courier Corp. v. ICC, 598 F......