Niagara Mohawk Power Corp. v. Federal Power Commission

• Decision Date: 19 July 1976
• Docket Number: D,No. 922,922
• Citation: 538 F.2d 966
• Parties: NIAGARA MOHAWK POWER CORPORATION, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Town of Massena, New York, Intervenor. ocket 75-4263.
• Court: U.S. Court of Appeals — Second Circuit

Page 966

538 F.2d 966

NIAGARA MOHAWK POWER CORPORATION, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Town of Massena, New York, Intervenor.

No. 922, Docket 75-4263.

United States Court of Appeals, Second Circuit.

Argued April 30, 1976.

Decided July 19, 1976.

Lauman Martin, Syracuse, N. Y., and Shea, Gould, Climenko, Kramer & Casey, New York, N. Y. (Milton S. Gould, New York City, of counsel), for petitioner.

Allan M. Garten, Atty., Washington, D. C., Drexel D. Journey, Gen. Counsel, Robert W. Perdue, Deputy Gen. Counsel, Allan Abbot Tuttle, Sol., Washington, D. C., for respondent.

Fredrick D. Palmer, Wallace L. Duncan, James D. Pembroke, Duncan, Brown, Weinberg & Palmer, Washington, D. C., for intervenor.

Before LUMBARD, WATERMAN and MESKILL, Circuit Judges.

WATERMAN, Circuit Judge:

Petitioner Niagara Mohawk Power Corporation ("Niagara") seeks review under authority of section 313(b) of the Federal Power Act (the "Act"), 16 U.S.C. § 825l (b), of two orders issued by the Federal Power Commission. In the first order, entered September 25, 1975, the Commission denied Niagara's request to dismiss a then pending investigation of Niagara's alleged anticompetitive and discriminatory practices. In the second order, entered November 13, 1975, the Commission denied Niagara's application for a rehearing of the September 25, 1975, order.

On April 14, 1975, Niagara submitted for filing as a rate schedule a transmission agreement dated March 7, 1975, between Niagara and Consolidated Edison Company of New York, Inc. ("Con Ed"). Under the agreement Niagara was to wheel, that is, to transmit, power over its system from its connection with the Rochester Gas and Electric Corporation to its connection with Con Ed's Pleasant Valley 345 kv. substation. The proposed filing of the agreement was noticed on April 18, 1975, and was assigned FPC Docket No. E-9379.

On May 5, 1975, the Town of Massena, New York, filed with the Commission a protest and petition to intervene, together with a motion to reject the rate schedule filing, or, in the alternative, if the schedule be filed, to suspend its operation for five months and to order a hearing. Massena currently purchases electric power directly from Niagara. On May 30, 1974, a referendum had been held in that municipality and a majority of the Massena voters had approved the establishment of a municipal electric system. Establishment of the municipally-owned system required that Massena acquire the electric distribution facilities of Niagara in the municipality and that it enter into an agreement with Niagara for the transmission of power from the Power Authority of the State of New York ("PASNY") to Massena over existing Niagara transmission lines. To that end, Massena commenced a condemnation proceeding in the New York State courts on March 14, 1975. ¹ Additionally, Massena had been unsuccessfully attempting to contract with Niagara for the wheeling of power from PASNY to Massena. It was after Niagara repeatedly failed to accept Massena's offer that an agreement between them be entered into that the municipality sought to intervene in the Niagara-Con Ed rate filing proceeding before the FPC. Massena contended, inter alia, that Niagara had refused to enter into meaningful contractual negotiations for the transmission of power, and that the proposed agreement between Niagara and Con Ed was "an integral part of an interstate program and combination to unlawfully monopolize the electric utility industry." The municipality claimed that the revenues generated by the filing, if accepted, would be unlawfully used by Niagara to strengthen its monopolistic position in the Massena area and unlawfully used to frustrate the establishment by municipalities such as Massena of consumer-owned electric systems.

On June 2, 1975, following the filing by both Con Ed and Niagara of answers to the protest petition and motion of Massena, the Commission accepted for filing Niagara's rate schedule and permitted it to become effective as of October 27, 1974, for the entire schedule period, terminating on October 31, 1975. While it denied Massena's motion for rejection or suspension, the Commission did grant Massena's petition to intervene for a limited purpose, that of asserting rights and interests specifically set forth in the petition to intervene.

On June 23, 1975, Massena filed with the FPC an application for rehearing and/or clarification of the Commission's June 2 order and decision, incorporating by reference all of its earlier May 5, 1975, allegations. Contending that the order failed to make clear the Commission's purpose in permitting the intervention, Massena argued that the petition raised a dispute of material fact and that it also specifically averred the relevance of the proposed rate schedule to Niagara's alleged anticompetitive practices, and, in view thereof, the Commission could not summarily dispose of Massena's claims.

By order issued July 23, 1975, the FPC granted Massena's application for rehearing, and, as suggested by Massena in its rehearing-clarification application, ordered the institution of an investigation to commence December 16, 1975, under section 206(a) of the Act, 16 U.S.C. § 824e(a), ² in Docket No. E-9379, to examine the merits of Massena's allegations of discriminatory treatment by Niagara. Three weeks later, Niagara filed a motion to dismiss the investigation, maintaining, inter alia, the irrelevance of its alleged anticompetitive practices to rate schedule filings, and also claiming that the Commission lacked jurisdiction under section 206 to either order an investigation or to compel Niagara to wheel power to Massena.

By order issued September 25, 1975, the FPC denied Niagara's motion to dismiss, stating that a full elucidation of the facts underlying the Niagara-Massena dispute would be necessary before a decision could be formulated. On October 9, 1975, Niagara moved for a rehearing of the September order, arguing once again for dismissal of the investigation and reiterating its claims of lack of jurisdiction and of the absence of any allegation by Massena that would render § 206 applicable. In its response of October 21, Massena countered that, as § 206 speaks both of unjust and discriminatory rates, and of any such practices which affect rates, the section did in fact provide jurisdiction for an FPC investigation. Niagara's discriminatory refusal to wheel power, Massena argued, is a practice which lowers Niagara's revenues and thus results in higher rates to Niagara's jurisdictional customers, and which also increases rates charged customers by, in general, lessening the competition in the electric utility industry. On November 13, 1975, the Commission denied Niagara's petition for a rehearing, and Niagara filed its petition in this court for review of the September 25 and November 13 orders on December 2, 1975.

However, the filing of the petition for review marked no cessation in the flow of litigation. On November 21 and December 29, 1975, Massena requested that the service of testimony and exhibits in the pending FPC investigation in Docket No. E-9379 be deferred until, respectively, January 9, 1976, and February 28, 1976. Massena also served on Niagara at least one request for discovery. On February 4, 1976, Massena filed with the Commission an application under § 202(b) of the Act, 16 U.S.C. § 824a(b), requesting that FPC direct Niagara to establish physical interconnection of its facilities with the facilities in Massena which the municipality expected to obtain through the state condemnation proceeding. This § 202(b) application was assigned Docket No. E-9550 and is now pending before the Commission.

On February 10, 1976, the Commission moved this court to dismiss Niagara's petition for review on the ground, inter alia, that the orders under review were merely procedural and interlocutory and thus not appealable under § 313(b) of the Act. That motion was denied on February 24, 1976, without prejudice to renewal upon the argument of the merits, and it is now before us for adjudication. On April 12, 1976, the Commission filed here a second motion to dismiss on the ground that it had, by order of April 8, 1976, dismissed the investigation in Docket No. E-9379, and, in doing so, had rendered this appeal moot. The Commission's dismissal of the investigation was prompted by Massena's filing on February 27 of a request for its deferral and for an extension of procedural dates, Massena stating that if the Commission ordered physical interconnection pursuant to Massena's application in Docket No. E-9550, Massena would move for dismissal of the Docket No. E-9379 investigation. After receipt of this request Commission Staff Counsel then moved the FPC on March 11 to dismiss the investigation proceedings, and the motion was granted without prejudice to Massena's refiling its allegations of Niagara's anticompetitive practices in a separate docket before the Commission.

We agree with the FPC that its orders of September 25, 1975, denying Niagara's motion to dismiss the investigation, and November 13, 1975, denying Niagara's motion for a rehearing of the September order, are unreviewable, interlocutory orders, and that Niagara's petition to this court to review them must be dismissed. Section 313 of the Act provides that a party aggrieved by an order issued by the Commission may apply for a rehearing within thirty days after the order's issuance; and that, upon denial of such an application, the party may seek review of that order in the Court of Appeals. Concededly, the statute by its own terms, § 313(b), contains no requirement of finality: "Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the United States Court of Appeals . . . ." Therefore all Commission orders would seem to fall within its purview. However, in the interest of discouraging...