Southern California Edison Co. v. F. E. R. C., 81-1599

• Decision Date: 31 August 1982
• Docket Number: No. 81-1599,81-1599
• Citation: 686 F.2d 43
• Parties: SOUTHERN CALIFORNIA EDISON COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, City of Vernon, California, Cities of Anaheim, Riverside, Banning, Colton and Azusa, California, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 43

686 F.2d 43

222 U.S.App.D.C. 321

SOUTHERN CALIFORNIA EDISON COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent City of Vernon, California, Cities of Anaheim, Riverside Banning, Colton and Azusa, California, Intervenors.

No. 81-1599.

United States Court of Appeals District of Columbia Circuit.

Argued April 7, 1982.

Decided Aug. 31, 1982.

Brian J. McManus, with whom Richard M. Merriman, Stephen G. Kozey and Eugene Wagner, Washington, D. C., were on the brief, for petitioner. William E. Marx and Lisa H. Powell, Washington, D. C., also entered appearances for petitioner.

A. Karen Hill, Atty., F. E. R. C., with whom Charles A. Moore, Gen. Counsel, and Jerome M. Feit, Sol., F. E. R. C., Washington, D. C., were on the brief, for respondent.

Sandra J. Strebel, Bonnie S. Blair and Stephen C. Nichols, Washington, D. C., were on the brief, for intervenors Cities of Anaheim, et al.

Arnold Fieldman and Channing D. Strother, Jr., Washington, D. C., entered appearances for intervenor City of Vernon, California.

Before ROBINSON, Chief Judge, MacKINNON, Circuit Judge, and LARSON, ^* Senior District Judge for the District of Minnesota.

Opinion for the Court filed by Circuit Judge MacKINNON.

Concurring opinion filed by Chief Judge ROBINSON.

MacKINNON, Circuit Judge:

Petitioner Southern California Edison Co. (Edison) challenges an order of the Federal Energy Regulatory Commission (FERC or Commission) suspending for five months Edison's proposed new rate schedule and rejecting outright without a hearing Edison's proposed "attrition allowance" as a component of this new schedule. Because we find FERC's suspension order unreviewable and the allowance rejection supportable in full, we reject Edison's challenge and affirm FERC's order on both counts.

I. Facts

On December 16, 1980, Edison filed a proposed two-step rate increase for service to its nine wholesale customers. ¹ The first phase rates were proposed to become effective on February 14, 1981, and were to result in approximately $18.6 million in additional revenues for the twelve month period ending December 31, 1981. Edison proposed to make the second phase rates effective simultaneously with the first, and expected as a result to produce additional revenues of approximately $23.7 million.

Notice of the filing was issued on December 22, 1980, with comments due on or before January 9, 1981. On January 8, 1981, Anza Electric Cooperative, Inc. filed a petition to intervene and protest, requesting that Edison's proposed rates be suspended and set for hearing. The next day, the City of Vernon, California also filed a petition to intervene and protest, requesting, inter alia, a five month suspension of both the first and second phase rates. Finally, also on January 9, 1981, the Cities of Anaheim, Riverside, Banning, Colton, and Azusa, California filed a protest, petition to intervene, motion to reject, request for a five month suspension on both rates, and a request for summary disposition of certain issues, including Edison's proposed first phase "attrition allowance."

On January 26, 1981, Edison filed an answer which challenged the specific objections raised by the various intervenors.

On February 13, 1981, FERC issued an order accepting a modified form of the proposed rate schedules for filing, but suspending operation of those rates for a term of five months. ² After making reference to a number of past decisions setting out considerations underlying FERC's policy regarding rate suspensions such as the one at issue, the Commission noted:

For the reasons given (in those decisions), we have concluded that rate filings should generally be suspended for the maximum period permitted by statute where preliminary study leads the Commission to believe that the filing may be unjust and unreasonable or that it may run afoul of other statutory standards. We have acknowledged, however, that shorter suspensions may be warranted in circumstances where suspension for the maximum period may lead to harsh and inequitable results. Such circumstances have not been present here. We shall therefore accept (both) the proposed ... rates for filing, as modified by this order, and suspend them for five months from 60 days after filing ...

Order Accepting for Filing and Suspending Proposed Rates, Granting Summary Disposition in Part, Denying Motions to Reject, Granting Interventions, and Establishing Procedures at 6 (JA 90).

In addition, the Commission summarily rejected without a hearing Edison's proposed first phase "attrition allowance" ³ because it "elevate(d) the 1981 test year projected costs to the 1982 expense levels without the filing of timely cost supporting statements as required by section 35.13 (18 C.F.R. § 35.13) of the (Commission's) regulations." Id. at 3-4 (JA 87-88). The Commission then ordered Edison to file revised first phase rates and cost of service statements "within 30 days of the issuance of this order to reflect the exclusion of the attrition allowance." Id. at 4 (JA 88).

II.

Petitioner here challenges both the suspension order and the attrition allowance rejection. We dismiss the first challenge as dealing with unreviewable subject matter, and the second challenge as being without merit.

A. The Suspension Order

Petitioner primarily attacks the five month suspension order on the grounds that the Commission did not justify in any fashion whatsoever its decision to impose the maximum statutory suspension on the operation of Edison's proposed rates. That omission, petitioner alleges, violates this court's holding in Connecticut Light and Power Company v. FERC, 627 F.2d 467 (D.C.Cir.1980). In that case, FERC suspended the proposed rates in question for a period of five months, saying only "that the rates 'have not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory, preferential, or otherwise unlawful.' " 627 F.2d at 471. No elaboration on the policy behind the decision to suspend for five months, as opposed to suspending for a lesser period, was provided. We held that some rationale for the time element must be provided.

If the FERC has standards or a rationale by which it chooses a period of suspension ranging from one day to five months, then the statute commands that they be articulated, so that their reasonableness and application to the individual case can be known, and so that the regulated entities will have some guidance for the future.

Id. Accordingly, we remanded to FERC for an accounting of its reasons for choosing a five month suspension period. Id. at 473.

Petitioner's reliance on Connecticut Light and Power is misplaced. Unlike the situation in that case, the Commission in the case at bar provided petitioner with reasons supporting its actions. Specifically, the Commission incorporated by reference the policy analysis on the suspension question set out in detail in three previous Commission suspension orders (all of which issued after Connecticut Light and Power and all of which scrupulously adhered to the holding in that decision.) ⁴ Applying that policy analysis, the Commission determined that the five month suspension was in order, noting in the process, "(w)e have acknowledged ... that shorter suspensions may be warranted in circumstances where suspensions for the maximum period may lead to harsh and inequitable results. Such circumstances have not been presented here." ⁵ (JA 90).

In supplying petitioner with the analytical framework behind its decision to suspend, the Commission has clearly met the mandate of Connecticut Light and Power. Having done so, it may not be held accountable on appeal to this court for any other aspect of the suspension action. As we held recently in Delmarva Power & Light Co. v. FERC, 671 F.2d 587 (D.C.Cir.1982), once the reasons behind imposing a rate suspension of a given length have been articulated to the satisfaction of Connecticut Light and Power, the suspension decision itself is "utterly inappropriate for judicial review and manifestly within the agency's province.... It is one thing to require that a rationale be given, it is something else to examine the merits of the rationale so expressed." ⁶ 671 F.2d at 595.

Accordingly, we decline review of petitioner's challenge to the Commission's five month suspension order because that challenge is patently beyond our jurisdiction.

B. The Attrition Allowance

The Commission rejected Edison's "attrition allowance" without a hearing because it elevated the 1981 projected costs to the 1982 expense levels without the filing of timely cost supporting statements as required by 18 C.F.R. § 35.13. We uphold that rejection. The Commission's regulation is explicit in allowing a company to present estimated cost data for a twelve-month period only, beginning no later than the proposed effective date of the new rates.

In addition (to twelve months of actual costs), the public utility shall file statements A through P (relating principally to various costs of providing the service) together with related work papers based on estimates for any twelve consecutive months beginning after the end of Period I but no later than the date the rates are proposed to become effective (Period II).

Full explanation of the basis of each of the estimated figures shall be included. Period II shall be the "test period." (18 C.F.R. § 35.13(b)(4)(iii) (emphasis added).)

Edison does not contest the fact that some of its projected cost data extends past the twelve month limit imposed by section 35.13. Rather, it tries to vindicate its actions by pointing out that other projected cost data it submitted did satisfy Commission regulations. This argument is obviously frivolous. Because some of the projected cost data did not meet the regulatory requirements set out in section 35.13, the Commission had no choice but to reject that data in full and to inform Edison that if it wanted to be compensated at all for the costs...