Indiana & Michigan Elec. Co. v. Federal Power Commission, 72-2168
| Decision Date | 14 August 1974 |
| Docket Number | No. 72-2168,72-2168 |
| Citation | 502 F.2d 336 |
| Parties | INDIANA & MICHIGAN ELECTRIC COMPANY, Petitioner, v. FEDERAL POWER COMMISSION, Respondent. Richmond Power and Light of the City of Richmond, Indiana, et al.,Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Peter J. Schlesinger, New York City, for petitioner.
John Staffier, Atty., F.P.C., for respondent. Leo E. Forquer, Gen. Counsel, George W. McHenry, Jr., Acting Sol., and Platt W. Davis, III, Atty., F.P.C., were on the brief for respondent.
George E. Morrow, Memphis, Tenn., for intervenor, Indiana and Michigan Municipal Distributor Assn.
George Spiegel and Sandra J. Strebel, Washington, D.C., were on the brief for intervenor, Richmond Power and Light of the City of Richmond, Ind.
Wallace L. Duncan, Washington, D.C., was on the brief for intervenor, Anderson Power and Light of the City of Anderson, Ind. Frederick D. Palmer, Washington, D.C., also entered an appearance for intervenor Anderson Power and Light.
Before BAZELON, Chief Judge, and ROBINSON and WILKEY, Circuit judges.
Indiana & Michigan Electric Company (hereinafter I&M) filed proposed changes in its tariff schedule with the Federal Power Commission on 13 June 1972. By letter of 3 July 1972, the Secretary of the Commission acknowledged I&M's filing and advised the company that 'the earliest effective date for the increase consistent with (Section 35.13(b)(4)(i)) of the Regulations would be August 13, 1972.' 1 This section of the Commission's regulations 2 requires that, whenever a filing calls for a rate increase, certain cost-of-service data and a summary of the proposed rates be filed 60 days prior to the date the rates are to take effect. On 18 July 1972 I&M applied to the Commission for an order making its new rate schedule effective as of 14 July, or 31 days after the date on which I&M had previously filed. On 11 August 1972 the Commission accepted I&M's rates for filing but designated 13 August as their effective date; it then suspended their use for five months thereafter, or until 13 January 1973. 3 By order dated 6 October 1972 the Commission denied I&M's application for rehearing. 4
I&M's petition for review of the Commission's order was originally consolidated with petitions by two of I&M's customers, Richmond Power and Light and Anderson Power and Light. On 25 May 1973 this court held that I&M's rate filing was unlawful with respect to Richmond and Anderson because it violated the terms of their contracts with I&M. 5 However, since the parties here have represented to the court that I&M's contract with at least one of its other 22 customers 6 is different from the Richmond and Anderson contracts, I&M's petition to have the effective date of its new rate schedule retroactively altered to 14 July 1972 remains viable. 7
Because the Commission lacked statutory authority to delay the effective date of I&M's filing until 13 August 1972 and to suspend the new rates until 13 January 1973, we vacate the Commission's order of 11 August 1972 and remand to the Commission with instructions that I&M's 13 June rate filing be given effect as of 14 July 1972. 8
The liminal question here is whether this court can, consistent with section 313(b) of the Federal Power Act, consider I&M's contention that the Commission's 60-day prefiling regulation is invalid. Section 313(b) provides, in relevant part: 'No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing unless there is reasonable ground for failure so to do.' 9
While I&M did not expressly raise the legality of the 60-day regulation in its application for rehearing, it did challenge the Commission's statutory authority to set an effective date 60 days after I&M's filing. 10 The Commission characterized I&M's position in seeking a rehearing as follows: 'I&M asserts that the Commission has no authority to require a notice in excess of the thirty days specified in Section 205(d) of the Federal Power Act.' 11 Apparently perceiving I&M's position as a challenge to the 60-day regulation, the Commission devoted two of the five pages of its order denying rehearing to an attempted justification of the regulation. 12 Commissioner Moody joined issue with the majority and attacked the validity of the regulation in his dissent. 13 Clearly, then, I&M brought sufficient attention to the issue to stimulate the Commission's consideration of it.
The rationale of the requirement that an aggrieved party exhaust its administrative remedies, as provided by section 313 of the Federal Power Act, is "that orderly procedure and good administration require that objections to the proceedings of an administrative agency be made while it has an opportunity for correction . . .." 14 I&M gave the Commission an opportunity to correct its alleged error in setting the effective date of I&M's rates. Furthermore, I&M suggested the possibility that the 60-day regulation is invalid by inviting the Commission to construe the regulation in a manner 'compatible with the Commission's statutory authority.' 15 The Commission declined to correct its alleged error and explicitly defended the validity of its regulation. Thus, I& M should be permitted to assert the regulation's invalidity in this court.
The Commission delayed the effective date of I&M's rate filing pursuant to section 35.13(b)(4)(i) of its regulations. 16 This section requires that if a proposed rate schedule calls for increased rates, the utility must file with the Commission 'a statement showing its cost of the service to be supplied under the new rate schedule,' 'a summary statement of (the) proposed increased rate,' and certain material on sales and revenue under the old rates and the proposed rates, all '60 days prior to the date that such changed rate is proposed to become effective.' 17 Much of the data required presupposes the existence of a completed rate schedule. Obviously, a 'summary statement of (the) proposed increased rate' cannot be filed unless the thing to be summarized, the rate schedule itself, has been prepared. Included in the cost-of-service items required are 'the percentage rate of return claimed,' 18 'the maximum demands of the service under the proposed rate schedules,' 19 and 'revenues under the proposed rates.' 20 Accurate calculation of these items would be difficult, if not impossible, in the absence of a detailed schedule of the proposed rates. Similarly, a detailed schedule is a prerequisite to calculation of '(a) statement comparing sales and services and revenues therefrom . . . under both the rate schedule proposed to be superseded or supplemented and the proposed changed rate schedule.' 21 Finally, section 35.13(b)(5) further requires that 'the filing utility shall submit with its rate increase filing 60 days prior to the proposed effective date of such increased rates, testimony and exhibits of such composition, scope and format that they would serve as the company's case-inchief in the event the matter is set for hearing.' 22 Again, preparation of such information depends upon the existence of the completed rate schedule.
It seems clear, then, that in order to comply with the requirements of section 35.13(b), a utility must be prepared to make a complete filing of its new rate schedule. Thus, the practical effect of the section is to impose a de facto 60-day notice requirement on utilities seeking to increase their rates. Such a requirement contravenes the terms of section 205(d) of the Federal Power Act, which provides:
Unless the Commission otherwise orders, no change shall be made by any public utility in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after thirty days' notice to the Commission and to the public. Such notice shall be given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. The Commission, for good cause shown, may allow changes to take effect without requiring the thirty days' notice herein provided for by an order specifying the changes so to be made and the time when they shall take effect and the manner in which they shall be filed and published. 23
The Supreme Court has interpreted this language to create not only a minimum notice period for the utility's customers and the Commission, but also a maximum waiting period for the filing utility. In United Gas Pipe Line Co. v. Memphis Light, Gas & Water Division, 24 the Court construed section 4(d) of the Natural Gas Act, 25 whose language is virtually identical to that in section 205(d) of the Federal Power Act, as providing for 'the earliest effectuation of contractually authorized or otherwise permissible rate changes consistent with appropriate Commission review.' 26 Thirty days is the maximum a utility can be compelled to wait from the time it files its rate changes until the date the changes take effect unless the Commission properly exercises its suspension power. Under the Commission's regulations, a utility must make a de facto rate filing 60 days in advance of the effective date. Therefore, the regulations unlawfully extend the statutory waiting period for utilities by 30 days.
The Commission asserts that the 60-day prefiling requirement of section 35.13(b)(4)(i) is necessary to 'the proper exercise of its ratemaking authority under the Federal Power Act.' 27 To exercise its authority properly, the Commission must evaluate in each case the advisability of...
To continue reading
Request your trial
-
Thompson v. U.S. Dept. of Housing and Urban Dev., No. CIV.A. MJG-95-309.
...N.A.A.C.P., 817 F.2d at 160. The Court may tailor its remedy to the unlawful agency behavior. Id. (citing Indiana & Michigan Electric Co. v. FPC, 502 F.2d 336, 346 (D.C.Cir.1974)) ("[W]hile the court must act within the bounds of the statute and without intruding upon the administrative pro......
-
Papago Tribal Utility Authority v. Federal Energy Regulatory Commission
...(2d Cir. 1976). In such a case immediate review might not invade the province of the agency. For example, in Indiana & Michigan Electric Co. v. FPC, 502 F.2d 336 (D.C.Cir. 1974), cert. denied, 420 U.S. 946, 95 S.Ct. 1326, 43 L.Ed.2d 424 (1975), this court reviewed an order of the Commission......
-
Western Oil and Gas Ass'n v. U.S. E.P.A.
...v. EPA, 597 F.2d 377 (3d Cir. 1979); Rodway v. U. S. Dept. of Agriculture, 514 F.2d 809 (D.C.Cir. 1975); Indiana and Michigan Electric Co. v. FPC, 502 F.2d 336 (D.C.Cir. 1974), cert. denied, 420 U.S. 946, 95 S.Ct. 1326, 43 L.Ed.2d 424 (1975); Duquesne Light Co. v. EPA, 481 F.2d 1 (3d Cir. 1......
-
Vermont Yankee Nuclear Power Corporation v. Natural Resources Defense Council, Inc Consumers Power Company v. Aeschliman
...of a suggested alternative is unwarranted." Id., at 331, 547 F.2d, at 628, quoting from Indiana & Michigan Electric Co. v. FPC, 163 U.S.App.D.C. 334, 337, 502 F.2d 336, 339 (1974), cert. denied, 420 U.S. 946, 95 S.Ct. 1326, 43 L.Ed.2d 424 While the court's rationale is not entirely unappeal......