Public Service Co. of New Mexico v. Federal Energy Regulatory Commission, s. 78-2007
| Decision Date | 11 August 1980 |
| Docket Number | 79-1275 and 79-1276,Nos. 78-2007,s. 78-2007 |
| Citation | 628 F.2d 1267 |
| Parties | PUBLIC SERVICE COMPANY OF NEW MEXICO, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. CITY OF GALLUP, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Public Service Company of New Mexico, Intervenor. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Paul H. Keck of Morgan, Lewis & Bockius, Washington, D. C. (Michael F. Healy of Morgan, Lewis & Bockius, Washington, D. C., William B. Keleher and Richard B. Cole of Keleher & McLeod, Albuquerque, N. M., with him on brief), for petitioner-intervenor Public Service Company of New Mexico.
Charles F. Wheatley, Jr. of Wheatley & Wollesen, Washington, D. C. (Woodrow D. Wollesen and Robert A. O'Neil, Washington, D. C., with him on brief), for petitioner City of Gallup.
George H. Williams, Jr., Atty., Federal Energy Regulatory Commission, Washington, D. C. (Robert R. Nordhaus, Gen. Counsel and Jerome Nelson, Sol., Washington, D. C., with him, on brief), for respondent.
Before SETH, Chief Judge, and McKAY and LOGAN, Circuit Judges.
These three cases were consolidated for hearing as each seeks review of orders of the Federal Energy Regulatory Commission. The particulars of each petition will be described in the following sections.
The Public Service Company of New Mexico seeks to review orders of the Federal Energy Regulatory Commission entered in Docket No. E-9454 insofar as they required Public Service Company of New Mexico to file the contract covering its coal purchases from Western Coal Company. The Commission based this portion of its orders of July 5th and December 15th of 1978 on section 35.14(a)(7) of its regulations. The regulations in part read:
Under related Commission regulations if the contract must be filed, any subsequent changes in it are treated for all practical purposes as rate schedule changes. The contract or a copy was, of course, furnished during the course of the hearing and considered.
Public Service Company of New Mexico urges that the regulation is not applicable so as to require filing under section 35.14 for the reason that there were no facts developed at the hearings as to "control" except that PNM owned 50% of the stock of Western Coal, and in any event the contract was subject to the "regulatory authority" of the New Mexico Public Service Commission.
The record does not show that PNM had actual "control" over Western Coal. This issue was not considered during the course of the hearings as a fact issue, and the Administrative Law Judge made no finding on the point. We have held that control is a fact question. SEC v. International Chem. Dev. Corp., 469 F.2d 20 (10th Cir.). As mentioned, all the record shows is that PNM owns 50% of the coal company stock and Tucson Gas and Electric owns the other 50%. There is no basis in the record for the Commission's determination as to control assuming that the issue was properly before it in view of the procedural deficiencies.
The regulation relating to filing quoted above (§ 35.14(a)(7)) applies only to contracts "which are not subject to regulatory authority." The record demonstrates that the New Mexico Public Service Commission does not "regulate" Western Coal, but it must pass on the contract between Western Coal and PNM to determine whether it is reasonable. This would seem to meet the requirement of the FERC regulations in that it is the "contract" which is referred to, not Western Coal as an entity. When the regulation says "contracts" it clearly means contracts and the matter is not subject to interpretation. United States v. Ray, 488 F.2d 15 (10th Cir.).
The authority of the New Mexico Public Service Commission under chapter 85 of the laws of 1980 of New Mexico has been clarified with the recent enactment of the following provision:
"The sale, furnishing or delivery of coal, uranium or other fuels by any affiliated interest to a utility for the generation of electricity for the public shall be subject to regulation by the commission but only to the extent necessary to enable the commission to determine that the cost to the utility of such coal, uranium or other fuels at the point of sale is reasonable . . . ."
We must hold that the determination by the Commission as to "control" had no basis in the record, and that the decision as to whether the coal contract was subject to "regulatory authority" was in error. Thus the Commission order insofar as it directs filing of the PNM-Western Coal contract with the Commission under 18 C.F.R. § 35.14(a)(7) is set aside.
The City of Gallup, New Mexico petitioned to have reviewed in 79-1275 the order of the Federal Energy Regulatory Commission entered in Docket No. ER 78-338, and in 79-1276, the orders entered in Docket No. E-9454. This court in Public Service Co. of N. M. v. FPC, 557 F.2d 227 (10th Cir.), reviewed other orders in E-9454. The Public Service Company of New Mexico appears as an intervenor in support of the rate schedule adopted by the Commission.
The orders here concerned approved certain rates to be charged Gallup by PNM. The Commission in considering the new rates concluded that the existing PNM-Gallup contract was not a "fixed rate" contract. Having made this determination the Commission applied the standard for section 206 hearings, 16 U.S.C. § 824e(a), sec. 206(a) of the Act, thus whether the rates are "just and reasonable," rather than the Sierra burden for "fixed rate" contracts that is whether the contract rates are so low "as to adversely affect the public interest." See FPC v. Sierra Pacific Power Co., 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed. 388 and related cases.
The City of Gallup urges that the PNM-Gallup contract is a "fixed rate" contract contrary to the position of the Commission. There would seem to be no reason to describe the analysis of the contract used to decide the issue. It is sufficient to point out that the parties agreed in the contract that "This contract, including the tariff made a part hereof, shall at all times be subject to such changes or modifications as shall be ordered from time to time by any legally constituted regulatory body having jurisdiction to require such changes...
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