Metropolitan Transp. Authority v. F.E.R.C.

• Decision Date: 17 June 1986
• Docket Number: Nos. 1150,s. 1150
• Parties: METROPOLITAN TRANSPORTATION AUTHORITY, Power Authority of the State of New York, Connecticut Municipal Electric Energy Cooperative, Allegheny Electric Cooperative, Inc., New Jersey Board of Public Utilities, Boston Edison Company, Eastern Edison Company, Fitchburg Gas and Electric Light Company, and Massachusetts Electric Company, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Municipal Electric Utilities Association of New York State, Vermont Department of Public Service, Allegheny Electric Cooperative Inc., Public Service Electric and Gas Company, Connecticut Municipal Electric Energy Cooperative, Massachusetts Municipal Wholesale Electric Company, City of Cleveland, Ohio, New Jersey Board of Public Utilities, Bethlehem Steel Corporation, Borough of Landsdale, Arlene Violet, Attorney General of Rhode Island and Rhode Island Public Utilities Commission, Boston Edison Company, Eastern Edison Company, Fitchburg Gas and Electric Light Company, Massachusetts Electric Company, Rockland Electric Co., and Sussex Rural Electric Cooperative, and New Jersey Preference Boroughs, Intervenors. to 1155, Dockets 85-4115, 85-4149, 85-4151, 85-4153, 85-4159, 85-4165.
• Court: U.S. Court of Appeals — Second Circuit

Page 584

796 F.2d 584

METROPOLITAN TRANSPORTATION AUTHORITY, Power Authority of the State of New York, Connecticut Municipal Electric Energy Cooperative, Allegheny Electric Cooperative, Inc., New Jersey Board of Public Utilities, Boston Edison Company Eastern Edison Company, Fitchburg Gas and Electric Light Company, and Massachusetts Electric Company, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent Municipal Electric Utilities Association of New York State Vermont Department of Public Service, Allegheny Electric Cooperative Inc., Public Service Electric and Gas Company Connecticut Municipal Electric Energy Cooperative, Massachusetts Municipal Wholesale Electric Company, City of Cleveland, Ohio, New Jersey Board of Public Utilities, Bethlehem Steel Corporation, Borough of Landsdale, Arlene Violet, Attorney General of Rhode Island and Rhode Island Public Utilities Commission, Boston Edison Company, Eastern Edison Company, Fitchburg Gas and Electric Light Company, Massachusetts Electric Company, Rockland Electric Co., and Sussex Rural Electric Cooperative, and New Jersey Preference Boroughs, Intervenors.

Nos. 1150 to 1155, Dockets 85-4115, 85-4149, 85-4151,

85-4153, 85-4159, 85-4165.

United States Court of Appeals, Second Circuit.

Argued April 23, 1986.

Decided June 17, 1986.

Gerald Tarrant, Vermont Dept. of Public Service, Montpelier, Vt. (Patterson, Belknap, Webb & Tyler, New York City, McCarthy, Sweeney & Harkaway, P.C., Washington, D.C., of counsel), for intervenor Vermont Dept. of Public Service.

William E. Mowatt, Gen. Counsel Allegheny Electric Cooperative, Inc., Harrisburg, Pa. (Robert Weinberg, Duncan, Weinberg & Miller, P.C., Washington, D.C., William C. Wise, Chevy Chase, Md., of counsel), for intervenor Allegheny Elec. Cooperative, Inc.

James R. Lacey, Gen. Sol., Public Service Electric and Gas Company, Newark, N.J., for intervenor Public Service Elec. and Gas Co.

Marilyn G. Zack, Director of Law, Cleveland, Ohio (June W. Wiener, Chief Asst. Director of Law, William M. Ondrey Gruber, Asst. Director of Law, Cleveland, Ohio, Reuben Goldberg, Goldberg, Fieldman and Letham, P.C., Washington, D.C., of counsel), for intervenor City of Cleveland, Ohio.

W. Cary Edwards, Atty. Gen., State of N.J., Newark, N.J. (Elise Goldblat, Deputy Atty. Gen., Newark, N.J., of counsel), for intervenor and petitioner New Jersey Bd. of Public Utilities.

Joshua Z. Rokach, Atty., F.E.R.C., Washington, D.C. (William H. Satterfield, Gen. Counsel, Jerome M. Feit, Sol., F.E.R.C., Washington, D.C., of counsel), for respondent Federal Energy Regulatory Com'n.

Duncan, Weinberg & Miller, P.C., Washington, D.C. (Wallace L. Duncan, J. Cathy Lichtenberg, Jeffrey C. Genzer, Washington, D.C., of counsel), for intervenor Municipal Electric Utilities Ass'n of New York State.

Ely, Ritts, Brickfield & Betts, Washington, D.C. (Philip L. Chabot, Jr., Kirk Howard Betts, Washington, D.C., of counsel), for intervenor Sussex Rural Elec. Cooperative.

Spiegel & McDiarmid, Washington, D.C. (David R. Straus, Scott H. Struass, Washington, D.C., of counsel), for intervenors Massachusetts Mun. Wholesale Elec. Co. and Connecticut Mun. Elec. Energy Cooperative.

Renee Schwartz, New York City (Ezio Scaldaferri, Botein Hays & Sklar, New York City, of counsel), for petitioner Metropolitan Transp. Authority.

David R. Straus, Washington, D.C. (Scott H. Strauss, Spiegel & McDiarmid, Washington, D.C., of counsel), for petitioner Connecticut Mun. Elec. Energy Cooperative.

Robert Weinberg, Washington, D.C. (Duncan, Weinberg & Miller, P.C., Washington, D.C., William C. Wise, Chevy Chase, Md., William E. Mowatt, Gen. Counsel, Allegheny Electric Cooperative, Inc., Harrisburg, Pa., of counsel), for petitioner Allegheny Elec. Cooperative, Inc.

Carmen L. Gentile, Washington, D.C. (Bruder & Gentile, Washington, D.C., of counsel), for petitioners Boston Edison Co., Eastern Edison Co., Fitchburg Gas and Electric Light Co., and Massachusetts Elec. Co.

Charles M. Pratt, Senior Vice President and Gen. Counsel, Power Authority of State of N.Y., New York City (Arthur T. Law Offices of Algird F. White, Jr., Albany, N.Y. (Barbara S. Brenner, Albany, N.Y., of counsel), for intervenor Bethlehem Steel Corp.

Cambouris, Wendy M. Lane, Power Authority of the State of New York, New York City, of counsel), for petitioner Power Authority of State of N.Y.

Wheatley & Wollesen, Washington, D.C. (Charles F. Wheatly, Washington, D.C., of counsel), for intervenor Borough of Lansdale, Pa.

Sheldon Whitehouse, Sp. Asst. Atty. Gen., Providence, R.I., for intervenors Arlene Violet, Attorney General of Rhode Island, and Rhode Island Public Utilities Comn.

Bruder & Gentile, Washington, D.C. (Carmen L. Gentile, Washington, D.C., of counsel), for intervenors Boston Edison Co., Eastern Edison Co., Fitchburg Gas and Electric Light Co. and Massachusetts Electric Co.

LeBoeuf, Lamb, Leiby & MacRae, Washington, D.C. (M. Reamy Ancarrow, Washington, D.C., of counsel), for intervenor Rockland Elec. Co.

Before LUMBARD, MANSFIELD and MESKILL, Circuit Judges.

MANSFIELD, Circuit Judge:

Nine parties to this proceeding have filed petitions for review of two decisions of the Federal Energy Regulatory Commission ("FERC") concerning the allocation of hydropower produced by the Niagara Power Project ("the Project"). ¹ The Niagara Redevelopment Act, 16 U.S.C. Sec. 836, et seq., requires the Power Authority of the State of New York ("PASNY"), the licensee authorized to operate the Project, to allocate "a reasonable portion" of the Project power, which may not be more than 10%, to "public bodies and nonprofit cooperatives ... within reasonable economic transmission distance in neighboring states." The petitions challenge FERC's holding that (i) "public bodies" are "publicly-owned sellers and distributors of electricity at retail", (ii) neighboring states include, at least, those states which border New York, (iii) PASNY is required to sell a "reasonable portion" of the Project's power, up to 10%, to public bodies and non-profit cooperatives outside of New York, and that 10% of the Project's power was such a reasonable portion under current circumstances, and (iv) public bodies and non-profit cooperatives outside of New York are not entitled to an extra allotment of power as retroactive relief for PASNY's past failure to sell them 10% of the Project power. We affirm.

BACKGROUND

FERC has licensed PASNY to administer the Niagara Power Project, which generates hydro-electric power from the Niagara River near Niagara Falls. The Niagara Redevelopment Act (the "NRA"), under which the license was issued, provides in pertinent part:

"(1) In order to assure that at least 50 per centum of the project power shall be available for sale and distribution primarily for the benefit of the people as consumers, particularly domestic and rural consumers, to whom such power shall be made available at the lowest rates reasonably possible and in such manner as to encourage the widest possible use, the licensee in disposing of 50 per centum of the project power shall give preference and priority to public bodies and nonprofit cooperatives within economic transmission distance....

"(2) The licensee shall make a reasonable portion of the project power subject to the preference provisions of paragraph (1) ... available for use within reasonable economic transmission distance in The "50 per centum" of project power set aside for "public bodies and nonprofit cooperatives" is called "preference power" and the entities eligible to receive it are "preference customers."

neighboring States, but this paragraph shall not be construed to require more than 20 per centum of the project power subject to such preference provisions to be made available for use in such States. 16 U.S.C. Sec. 836(b)."

In March 1980 the Connecticut Municipal Electric Energy Cooperative ("CMEEC") and the Massachusetts Municipal Wholesale Electric Company ("MMWEC") filed complaints against PASNY and motions for partial summary judgment with FERC. Both MMWEC and CMEEC are political subdivisions of their respective states. Their states have designated them bargaining agents "for the procurement" of Niagara power for preference customers in the state. 16 U.S.C. Sec. 836(b)(2). The complaints accused PASNY of refusing, in violation of 16 U.S.C. Sec. 836(b)(2), to sell preference power to the "neighboring states" of Connecticut and Massachusetts or to allocate a full 10% of the Project power to preference customers outside of New York.

In its answer PASNY conceded that Connecticut and Massachusetts were "neighboring states" and that it was allocating less than 10% of the Project's power to preference customers outside of New York. It argued, however, that its decision not to sell preference power to CMEEC and MMWEC was justified because it was already selling a "reasonable" portion of such power to preference customers outside of New York, even though the total amount sold was less than 10%. PASNY also noted that it was selling to the New York City Transit Authority ("NYCTA") and to the Metropolitan Transit Authority ("MTA") a portion of the preference power which it would otherwise have sold out-of-state. MTA is the New York State agency responsible for most of the mass transportation services available in the New York City metropolitan area.

On September 10, 1980, FERC consolidated MMWEC and CMEEC's complaints. It also granted several petitions to intervene, including those of Allegheny Electric Cooperative (Allegheny) and the Vermont Department of Public Service ("VDPS"). ² Allegheny is an organization of fourteen New Jersey and Pennsylvania rural electrical cooperatives. VDPS is a Vermont state agency responsible for purchasing power from PASNY and other power authorities. Vermont first requested Niagara power in 1960 and VDPS has been buying it since 1962. Unlike CMEEC and MMWEC, the bargaining agencies for Connecticut and...