*1 525 lack present, this he wanted to witnesses
being execute his own due to refusal requisite find no merit forms. We right speedy to a that his his contention trial, many explained as defined Fahy, Judge, Circuit dissented. cases,1 was violated.
Affirmed. Judge,
FAHY, concurs Circuit
result. PIPE LINE
AMERICAN LOUISIANA Petitioners, al., COMPANY et
v. COMMISSION,
FEDERAL POWER Respondent.
No. 18108. Appeals
United Court of States
District of Columbia Circuit. 7,
Argued Feb. 1964. 22,
Decided Jan. 1965. Rehearing
Petition for Denied 15, April 1965. May 7,
As Amended
E.g.,
States,
613,
(1959); King
v.
Smith
United
118 U.S.
S.Ct.
erates an natural interstate running from' southern Louisiana to began operations Michigan. pipeline Currently, gas of its natural to two sells over 95% Michigan corporations, Wis- Pipe Company consin Line and Company. All three Consolidated Gas wholly-owned companies subsidiaries are Company of the American Natural Gas A said about Ameri- few words filings. past In can Louisiana’s tariff 1954, the Federal Power Commission is- public sued a certificate of convenience Louisiana, necessity and to American begin building permitting it to its facili- ties. A condition attached to certi- fication stated that American Louisiana satisfactory must file a tariff to the Com- days begin- mission at least 60 ning operations. 380, 393 13 F.P.C. subsequent A reaffirmed order right condition and reserved “the reject any such tariff and serv- agreements prescribe appro- ice and to agreements priate tariff and service (1956). The 15 F.P.C. employs principal rate Commission two demand” form of forms. “contract gas price a in dollars fixes set for per unit on ex- cents the basis of perience year. in a test the con- This is general ventional rate form in for use gas brief, pipelines. natural In its in most nat- concedes that ural cases contract demand preferred. That form form is Washington, Shannon, Mr. Charles V. pipeline assures the customers a defi- C., petitioners. D. turn, price supply. nite and stable Sol., Wahrenbrock, Mr. Howard E. pipe- rate level set stimulates Commission, Federal Power with whom costs, thereby gen- line’s efforts to cut Counsel, Solomon, Richard A. Gen. Mr. erating capital improvement more Federal Power service, and modernization of eventual- brief, respondent. charges ly resulting in lower to the con- (1957) sumer. See 18 F.P.C. Washington Before Fahy, Dan- (dissenting opinion). The “cost serv- Judges. AHEE, Circuit prescribes rates ad- ice” variable justed monthly pipeline so recovers Judge. WASHINGTON, Circuit plus a fixed return. This actual costs concerning gas case, apparently This is natural rate is used new enter- with charged by prises operating exper- the form the rates to be little or no petitioner, Pipe ience on to base a contract demand American Louisiana which Company. op- Line Petitioner owns and rate. rejection American Louisiana On June which had been a factor original filing,
filed a contract demand rate conventional not treated as schedule; rejected by operative this was Com- fact this decision.1 principal mission. Its reason was that April 6, 1959, On American Louisiana was a enter- filed the contract demand tariff involved prise experience proceeding. in this At that time Ameri- *3 specific base rates: operation can been suggested two-year “As forth in more period set detail herein- more than the after, American Louisiana’s of cost the Commission’s 1957 decision aas sufficiently prerequisite service is not granting definitive of a con- specified support at this time audit, to unit tract demand rate. After a field rates, commodity July 12, 1961, demand such the Commission staff appear joined costs of claimed service ex- in of American Lou- cessive, and the (the contract de- overall isiana’s cost of service an- appro- tariff required mand does not seem nual revenue to enable it re- priate for operating the sales to affiliates cover its costs and the allowed years the initial service. base), return on its rate based on test few of ***** year operations year for the 1960. The approved stipulation, type “We find that a service 20, 1961, order of October with some necessary of tariff is here modifications not here relevant. years the initial service to for protect few Presiding change approved Examiner (and its requested by in rate form parent) if costs increase in- Louisiana. The level rates lower creased rates can be made effective originally requested by than the level against protect public and to ex- Louisiana, however; it was during period cessive rates stipulated based on the quired properly determine costs year the test of service and to effect rate reduc- (Italics added.) tions.” 16 F.P.C. Presiding rejected The Commission 780-81 per- Examiner’s decision insofar as it prescribed change The Commission a cost of mitted the in rate form. It relied years service tariff “for the initial few exclusively on the fact that American service.” virtually Louisiana sells all Opinion affiliates. In its No. Order On March American Louisi- May 16, 1963, 387 issued ana filed a tariff based on a con- ruled: tract demand rate schedule. The Com- rejected filing by mission a vote of that, contrary “We conclude Viewing 3-2. fil- contract demand examiner, ing “premature,” majority found: change from a cost-of-service to a period opera- “The brief of actual conventional rate should be denied. yield exper- tion does not sufficient years regulatory experience As at- justify ience to test, present pos- sales affiliates prescribed cost of service form of sibilities of abuse and should be rate schedule * * to a contract demand * A scrutinized with eare. rate schedule.” 18 F.P.C. at 798. cost-of-service affords an ef- us rejection expressly stated to be sup- fective and feasible means of prejudice without plying supervision. to a future after the desired Un- operating experience charges rate, sufficient had been der such a seller’s accumulated. inter-affiliate char- computed to its affiliates are on the sales, acter of American Louisiana’s basis of its actual costs for succes- dissenting acceptanee The two Commissioners would tariff of the contract demand Presiding have affirmed the Examiner’s filed. billing periods, plus relevant, sive the return here rates shall “all Thereby per- clearly seller allowed. stated in or dollars and cents * * * per unit,” entitled
mitted all costs to
it is
cents
and that “No
more,
achieving
changes
price adjustments
periodic
but no
thus
or
tion.
Wisconsin
desideratum of
n
[**]
**« “These
arguments
[American
utility
Louisiana]
Michigan
regula-
-X-
do
way purports
any
shall
18 C.F.R.
other
included in the rate schedule or
part
any
154.38.
to effect the modification
rate or
tariff which
any
change,
requested
us,
Com
the case before
sup-
nor was
evidence adduced to
justify
departure
mission seeks to
port it. American Louisiana is un-
practice
from its
established
deniably
affiliate
ground
present
sales
inter-affiliate
Wisconsin and
Consoli-
*4
regu
special difficulties for effective rate
dated,
purchase in
which
excess of
public
lation in the
But
interest.
gas.
percent
95
of its
These circum-
with
view that
the seller’s affiliation
its
justify applying
stances
to it re-
customers was to be the decisive factor
against
quirements
com-
not invoked
determining
new,
in
and
rate form was
* * *
panies otherwise situated.
it
American Louisiana had no notice of
present
facts,
And on the
we con-
before the
decision was
Commission’s
clude
we can
ob-
best attain the
handed down.2 Fairness
to American
regulation
jective
al-
—the
given
require
Louisiana would
that it be
lowance of all
costs and re-
opportunity
an
to address itself to
requiring
turn but no
more —
significance to be attached to the inter-
continued use of a cost-of-service
regulated
character of the
sales.
affiliate
omitted.)
(Footnotes
form of rate.”
noted,
As has been
1957
petitioned
American Louisiana has
this
refusal of American Louisiana’s contract
19(b)
filing
court under Section
of the Natural
demand tariff
was based on Ameri
1938,
Gas Act of
operating experi
52 Stat.
as amend-
can
Louisiana’s lack of
ed,
717r(b)
(1958),
Nothing
15 U.S.C.
to review ence.
af
was stated about its
§
imposing
this decision
a cost of service
filiation with its customers.
rate form.
It has
litigation
been the Commission’s
The tariff
involved in this
regular practice
require
established
August
April
was
filed
1959. On
gas pipelines
natural
to sell on a contract
31,1961, American Louisiana’s rate
practice
demand basis. This
is reflected
hearing
was consolidated for
with rate
regulations,
provide
in its
filings
Michigan
customer,
of its
Wis-
cost of service rate form
bewill
allowed
Hearings
consin.
held from
were
Janu-
only
good
“Upon application
for
and
ary
February 20,
30 to
No
evi-
cause shown.” 18 C.F.R.
154.52. The
attacking
§
dence was introduced
Ameri-
regulations
state,
exceptions
also
with
can Louisiana’s contract demand tariff.3
brief,
2. The
question,
its
cites two
discussion of
affiliation
imposed
cases
which it has
a cost of
permitted
Trunkline was
shift
service rate. Both decisions
involved
the cost of service rate to contract de-
enterprises
years
with no test
(1962).
mand. 27 P.P.C. 930
If there
which to base
any
a contract
demand rate.
was
relevant
in Trunkline’s
one,
merged
In
operation,
seller has
been
since
other than the accumulation of
Pipe-
customer.
operating experience
time,
its
Permian Basin
during
over
Co.,
line
12
period
P.P.C.
24
decisions,
P.P.C.
between these two
(1960).
significant
More
for our
brought
the Commission has not
it to our
purposes
Supply
is Trunkline Gas
(Indeed,
Co.
attention in its brief.
the brief
proceeding,
In its first
any
omits
mention of
Com-
the second
imposed
rate, noting
a cost
decision.)
of service
mission
essentially
operat-
that Trunkline was
an
ing subsidiary
principal
customer.
Electric,
3. Counsel for
Gas and
9 F.P.C. 721
In
proceedings
without
an intervenor
and a
hearing
application
was denied.
The focus of the
commodity
split between
Wisconsin’s
as
Commission seemed to
suggestion
demand rates.
There
gume
that American Louisiana had
that
garded
matter of affiliation would be
proving
burden of
reaSonableness
dispositive. Hence, we are
itg proposed
opinion,
rate form.
In its
told, American Louisiana did not intro-
example,
the Commission stated
question.
duce evidence on the
arguments
“do not
requires
We think that fairness
change,
support
requested
nor was
should have had an
evidence
it.”
adduced
opportunity to address itself to this mat-
4(e)
the view we take of Section
ter.
sion,
Hill v. Federal Power
Cf.
Commis-
Act,
the Natural
U.S.C.
717c
1964).
(5th
His still was it would have § U.S.C. objection showing contract evidence. This was renewed the burden of unreasonable, exceptions “unjust, in Gas’ to the Pre- demand rate was siding unduly discriminatory, preferential.” Examiner’s decision. 12, 1961, gave July On can Louisiana was a rate increase throughout stipu- proof entered and the Commission into a it the burden experience proceeding. stipulation, lation based on the of a test After year, terms, period By its for the 1960. American Louisiana scaled down its re- during quests projected filed in which the tariff was ef- be- so that revenues fect, ginning January 1, equal up to December would refund to its Louisiana was to customers service normalized cost of $2,044,961, changes; thereafter, only a total of the difference be- known tween its cost of service and the revenue The rate form involved.7 actually stipulated under tariff. collected filed rates to become ef- were deciding January 1, also set a new forth fective on 1961. demand schedule interim contract whether rate is an increase over originally replaced compares rate, naturally rates which the rates the old one generated pe- filed rates preceding American Louisiana. These revenue designed generate (calendar 1960) were revenues that riod under the old equal anticipated would the cost of service of the test with the revenue under the changes year, 1960, during normalized for known new rate 1961. In mak- calendar —$56,261,267.5 Hence, ing comparison on the face revenue the actual tariffs, figure, in rate in- no increase collected in 1960 is not the relevant hearing. at the volved time since revenues were collected these tariff, is the time is relevant under Section American Louisiana’s filed 4(e).6 went into effect November not think that the fact We do figure relevant is the originally filed Ameri- that the tariff plus (expenses allowable originally The rates filed just be on the and reasonable” should higher category Louisiana were each Act, proponent Natural Gas of the rate. (except one which the rate was the original 4(e). The fact an same) July 12, stipulated than those requested increase does not leave 1961: proponent if the burden *6 request hearing the it revises its longer re- that an increase is no so quested. hearing In that event the is sought “involving charge one a rate or Hence, increased.” burden is to be the policy proponent. be- not on The the interpre- hind statute this the bolsters proof to be tation. The burden of is gas company seeking an in- borne a design in The of the was modified rates consumer re- creased rate so that the Supplemental Stipulation a entered into protection. maximum But a ceives company follows: de- on November as increase, sought which once an charge, commodity $2.325/Mcf; mand requested increase, then abandoned its charge, $.301/Mcf; Small General Serv- presents no consumer. such threat to the Rate, Presumably ice these $.45/Mcf. any should be the as treated same designed produce rates were to same the gas company other which seeks a rate in revenue level as interim the rates change other than an increase. original stipulation. Supplemental The rejected Stipulation by the Com- appended 7. The table to agreement mission because of the lack of suggests in cost that there is an increase parties of all and remanded to the Trial $64,216 change of service of to a due ordinary in Examiner for determination bookkeeping they in relate conventions (Jan. 12, 1962). course After further depreciation to in deductions the calcula- hearing, incorporated Examiner the Trial tion of the Federal tax. We income Supplemental Stipula- from rates regard change in- do not as an this Sept. 27, tion in his of decision rate, justifying placing in crease statutory provision proof 6. The states: “At burden on American Lou- hearing involving charge sought Clearly, stipu- a rate or isiana. the intent of the increased, proof revenues, to be the burden of to lation was to match the 1960 show the increased rate not to increase them. argue base); figure adversary opportunity rate an to an turn —6% argue hearing. convincingly col- states how much would have been Petitioners lected under American Louisiana’s old their brief in this court that Com- analysis comparison figure, nor- mission’s rate. of this of American Louisi- changes, ana’s for known the new future financial malized with status is oversim- misleading.9 plified placing rate shows that the rate was not con- proof the burden an on ceived as increase rate level.8 American Louisi- unjustified ana the Commission is be- stipulated rates, there Based prior cause absence aof determi- increase, in form no rate unless the shift nation, evidence, proposed on A an in rate level. itself increase change involves an increase in rates.10 change designed generate of rate Furthermore, even if these theories were equal revenues to the actual revenues supported record, if the Commis- year preceding appropriate less going rely sion was on them either of changes fund and normalized for known to establish the existence of a rate in- not, face, on its a rate increase. The crease, American Louisiana have should suggest Commission in its seems brief given been oppor- forewarned and an possible considering two reasons for tunity dispute the theories. Then if change First, in form an increase. urged positions either of the here argues change that a of serv- from cost sustained, been necessarily ice to contract in- demand attempted could have to bear the burden proposi- a volves increase. But this proof they impose. would novel, tion is and it has no remand, argues Second, On record. Commission should first equal determine whether that the in form is in- to an case; in form is crease of also increase in rates the facts of this prepared say, rate. We are not but the facts on as a law, matter of that a relies shift have no basis in the record. rates, example, pegging service to For contract demand the Commission asserts declining the new rate to the American Louisiana is a preceding regarded year, company can never be base so that a cost of serv- leading 4(e). constantly decline, ice rate would increase Section savings placing That Hence, section could to adoption be read as for consumers. proponent rate, burden of a contract demand charges, new rate which would maintain the constant exist- would amount to a rate ing pipeline disputable revenues of a “increase.” whose revenues This is a matter would otherwise have decreased. But the which American Louisiana should have *7 newly-filed inappropriate compare isiana’s tariffs is irrelevant. 8. It would be stipulation pierced anticipated these rates revenue level rate, January beginning made American Louisiana refund the dif- with the period ference between for of the cost of service service revenue of some year prior Suppose and the revenue collected. to 1960. the new revenue higher level were col- than the revenues decision, 9. In its 1956 the Commission in lected 1959. That would not estab- noted a that contract demand rate was change lish that was a rate in- interest, in not crease, if, here, as is the case the new pos- since it does not make for allowance revenue level nor- was the same as the way sible in increases costs a malized revenue level in 1960. Nor would quotation of service rate does. See the fact that the new revenue level was given supra. arguments urged Both here lower than the level that 1959 establish finding change for in this form a rate a rate decrease was mat- involved. As a increase seem at earlier odds this sense, comparison ter of common view. immediately pre- should be made with the Obviously, involving 10. in ceding a case the rea- period. revenue change, placing sonableness of a rate proof signifi- great The fact in burden of the actual rates 1960 is of cance. were collected under American Lou- 532 perience” only' made after in- cannot substitute facts.12 be
decision could great part brief A of’ the quiry.11 Commission’s showing in shift devoted to that, argued even if the It be increasing actually way a proving the burden of Commission had above, profits. we are As we have noted unreasonable, Louisiana’s by anything in record not convinced supported adequately We the burden. change in form would neces this convincing. argument this do not find sarily profits and rob the con increase need for cost The asserted savings. And if the sumer of future regulation inter- for effective rates change this, it would in form does not do in this record has no basis affiliate sales say is unrea be that the hard or, appears, in the Commission’s so far as sonable. respect prior proceedings. all With expertise, On remand the Commission we do the Commission’s opinion, should first decide whether think that the Commission’s argument, equivalent hearing in in form is of an without reached level, place in the bur is unreason crease demand rate that a contract deciding accordingly. pipeline principally den After sells a able for preliminary point, adequately affiliates, this bears its burden hearing evidentiary an proving in this case. should hold unreasonableness change to contract inter-affiliate decide whether we concede that While regulatory reasonable, special present demand is unreasonable transactions pre case,13 problems, “possibilities of this or unreasonable of abuse” the facts any involving sup per by do not se in case inter-affiliate inter-affiliate sales sented gas. port must sales If the last alternative conclusion that such sales thought proper, rates. The the Commission should of service made on cost op- regulatory “years provide parties ex other interested parties pipeline’s in- inter-affiliate sales cost of service 11. set Whether showing only depends wide on a be set aside or decreases need creases costs, range labor the case of abuse. We remanded of variable such inquire price gas rates, factual field into the “to tax justification price financing in producer, increases” It would costs. affiliates. the two state with confidence the contract between difficult indeed to case, Where, pipeline’s rate in an will in- cost of service this that a regulated period. sale is decrease future inter-affiliate crease or Commission, problem considered cites Missis The Commission’s critical. be far less case would Corp. sippi Pow Fuel v. Federal River suggestion “abuse.” There is 238, U.S.App.D.C. er 102 certainly from that not follow does denied, 355 U.S. 252 F.2d cert. decision the Commission’s case that L.Ed.2d 260 78 S.Ct. present must be sustained. case “years reg its assertion “regulatory experience” cannot be kind of ulatory justify special experience” conclu used to sustain transactions. of inter-affiliate treatment Light Washington here. See sion distinguishable, clearly how That case is Baker, U.S.App.D.C. 115 at Co. v. sale was There the inter-affiliate ever. 120-121, F.2d at 16-17 unregulated. arose in the The issue possibility regulated exploring the Com- context of a sale *8 might things Company. Pipe as the consider such Gas Line mission the United corpora- buyer challenged affiliated inclu debt structures The United’s manage- independence gas tions, as a cost sion of increased cost its assets, gas ment, commingling purchased its of service. United bookkeeeping procedures. If the their from an affiliate. court stated that original corporations in fact run be affiliated are sale must be scrutinized separate approval rates for entities and the fore of United’s cost service. suggestion them under Commis- that it was sales between sion are But there was no highly might supervision improper be be these for the inter-affiliate sale to price contract. Our revelant factors. made under a fixed suggested price also against possible prejudice portunity tant undue heard. 5 U.S.C. § be express (a). its five non-affiliated distributor cus- need for us to There is no question previously present- of this tomers have been on the merits views upon by ed to and ruled the Commis- at this time. sion several cases reasons, the Commis- For the above and the sion’s decision must reversed eventually by position The taken further hear- remanded to it for matter was thus considered opinion. ings not inconsistent with favorably Examiner decided Michigan American & Louisiana. So ordered. thereupon exceptions Electric filed to the Judge decision, FAHY, (dissenting). pointing Circuit Examiner’s out: prac “American Louisiana sells in this I affirm the Commission would tically affiliates, all of its to its case. Michigan Wisconsin and now, Up Consolidated. until I required Commission has use that it position The court takes a cost of service form of rate in Commission’s that the seller’s affilia- view charges to its affiliates are tions with its customers was decisive upon based its actual costs classified determining factor in a new form is in accordance with the Commission’s principle of which American Louisiana procedure.14 established had no notice before the Commission’s “This is sound because it avoids require decision, and that fairness would possibility of an inter-affiliate given opportunity to address being transaction used as the means significance to the to be attached itself siphoning off, concealing, to the inter-affiliate character of the profits of affiliated customers. regulated unfairness, I sales. find no lack truly American Louisiana is a de- opportunity, or indeed lack address partment the affiliates. The hearings upon subject. System American Natural Gas can- both Commission and Ex- the Trial not be hurt of service tariff aminer that a show vital consideration because American Louisiana as- respect to the rate form issue was Obviously, sured its cost of service. oper- American Louisiana’s inter-affiliate seeking it is a device to some- obtain ations. thing more. The Staff has taken no Presiding Examiner, prior position question. Commission, decision refers to the erroneously “The Examiner relied opposition filed Gas & Elec- solely stipulated on the fact that a Company tric to American Louisiana’s approved had been changeover to the contract-de- justify his conclusion that the de- mand form of rate. He stated that such mand-commodity should be opposition “rested small number adopted. However, Commission, of Am Lou’s customers and the close order in which the same principal affiliation of its two customers stipulated ap- cost of service was (Mich Con), Wis and Mich factors not assigned proved, for decision the affecting obviously Mich Gas and ‘bor- question Therefore, of rate form. early rowed’ from the Commission’s deci- treating the Examiner erred in sion in the matter.” The Examiner an- approval as decisive. opposition, alia, swered this “14 inter as fol- Louisiana, 16 FPC lows: 779; Louisiana, 18 FCP 795.” “Michigan Gas is not a customer argument
of Am Lou inferences as to In American Louisiana’s possible preference Am Lou’s undue the case to the counsel who *9 presents its two affiliates and its concomi- now the case to this court ex- impression, erly opposition of on the plicitly to referred prior it or- He basis of the Commission’s Electric. stated &Gas ders, all that it satisfied disposed in his brief requisite acceptance properly re- conditions to the and had been contract demand jected by dem- of a conventional Examiner. This ” * knowl- form rate. American Louisiana’s onstrates edge opposition, inter- on the of the based argu- lengthy application awas The relationships, to the contract- affiliate against decision, ment to It was a matter form of rate. demand upon the deci- on the based record Furthermore, and decided. be considered sought amplification of no sion rested. Commission, re- decision of the after the application The denial of this the record. position, jecting American Louisiana’s rejection Louisiana’s was a American rehearing sought American Louisiana opportunity position, to not a denial of argument oral in an elaborate written and present posi- to American Louisiana application filed with the Commission. argument. tion, except by further oral slight- application there is not the In this dispute opinion does not The court’s est indication a desire to introduce notice on that American Louisiana was evidence, slightest or the further dissatis- throughout proceedings that the faction the record as made. open And American form was issue. argu- wholly application was devoted to pro- justify its knew it had to Louisiana ments on the record.1 The effort based light objections posed to persuade the was to Commission to operations. its inter-affiliate applica- different conclusion. To use the requst been made un I add that has language, tion’s statutory applicable provision2 der the provided opportunity “an should be by this to obtain a remand court adequate presen- a full make and taking of additional Commission for directly tation Commission of finally, evidence, Louisi why the reasons court does not com ana’s brief should adhere to a con- conventional plain opportunity that it was denied the (CD-I) tract demand form rate enlarge record; complains it being required instead revert to reached conclusion (CS-1) why a cost-formula rate and present record. considerations adverted to accordingly I would not remand but validity order do Commis- would decide the justify imposition of a cost- present sion’s order record. formula rate on and its customers. II appear necessary proceedings “It did not were conducted from appropriate question beginning to discuss this their as a rate increase case. argument at the oral before the Com- increase when A rate level was effected February 26, mission tariffs contract-demand prop- very American Louisiana was filed.4 It in some were be true that Thus, opin- primary the statement the court’s 3. American Louisiana’s conten- p. ion, 529, that we are told American are that the burden is tions prove introduce evidence of Louisiana did not Commission to the form of subject of affiliation because there un- rate filed American Louisiana was suggestion disposi- just was no would be unreasonable and that the Com- unjustified. Moreover, I think is find- tive mission’s decision does not contain required ings this issue was not to be labeled essential order. “dispositive.” requested changeover pre- 4. The Act, 19(b), existing month 2. Natural 52 Stat. to month cost-of-service § pro- amended, rate form to 15 U.S.C. 717r (b) posed tariff with contract-demand fixed
53f> itself, form, year filing prior to the of the new tariffs. in rate cases a stipulated But in this ease The rate could not relevant a rate increase. is not change-over no increase from cost-of-service unless it would have been the insep- disputed the rate effect before the rate form was over the contract-demand re- level increase tariffs were filed. from rate erable the 4(e) quested. In a situation Section such American Louisiana seems to admit explicitly casts Natural Act produces that the contract-demand form proof upon American the burden pro- over increased unit revenues those that increased Louisiana “to show the previous duced their cost-of-service just and reasonable.” rate or is brief, petitioners rate. their state: 717c(e) 15 U.S.C. Stat. assumption second inherent “The not sustained. burden approach in the Commission’s is that company pipeline should be denied suggests stipulation the court that any opportunity to earn more than changed July 12, 1961, the somehow return, might some fixed rate of as ease insofar as the bur- character of the possible specific under rates if the proof assum- den of Even concerned.5 company by operating were able ing does, as the see its footnote court efficiently more to reduce its unit question that of increase or no in- * * * [Orig- service. is to be determined as of the time crease emphasis.]” inal hearing than rather at the time of original change- filing,6 making nevertheless the answer It is clear that longer over, contemplated “an increase no cannot be hearing quested” specific if at the time that dollars and cents sought, the rates then contained the contract-demand rate allow would greater stipulation, remain an increase over the revenues. Indeed is unrealistic it preceded position rates which to take the that the dissatisfac- disputed question Nor tariffs. is the an- tion of American Louisiana with a by saying permits swered that the was which it to obtain “its generate “designed to revenues and return” is due other cost-of-service equal would the cost of than the fact the contract-demand year, 1960, test normalized for known permit rate it seeks would it to obtain changes”; year for 1960 is not the in more. immediately prior which the rates to fil- ing of a III were in effect. tariff court, me, Apart question mistake seems whether comparison proposed changeover manifested of the con- rate form in- ditionally stipulated 1960 volved a rate to which rate with the increase revenues under the rate American cost-of-service Louisiana must sustain rather than with such burden revenues of Section commodity charges opinion, bearing demand and was an- court’s has question change-over swered as follows: whether “Based on actual sales the calendar cost-of-service form to contract- year 1958, tariff would ef- demand was a rate increase. is not $916,497 conditionally stipulated fect an increase of in revenues.” relevant might have been less than the filed 5. The court fails to take into account tariffs. contingent stipulated nature of cost- figure arguendo. accept assumption only of-service based on 1960 as a test I year. binding only rates, It was to be if the if For the new tariff increased the approved. contract-demand rate form were it seems to me American Louisiana must importantly, demonstrating More the con- fact sustain the burden of ditionally stipulated during interim tariffs would concession in the rates orig- hearing wiped originally have been less amount than the out the increase inally tariffs, approval sought. filed of which sought, had been see footnote 5 of the *11 536 regulation.” justified utility, inwas event rate Commission tum Examiner, supplied.) concluding, contrary (Emphasis the to to form It is uncontested that Un- be denied. conventional should per- prescribed does Commission Act, 5(a) of the Natural Gas der Section recover Louisiana to all mit American (1938), 717d 823 15 U.S.C. § 52 Stat. entitled, plus a re- which it costs to is power has the Commission said on cannot be turn which this record “any rate, to unlawful declare unjust or unreasonable. to be observed, demanded, or classification note that We an earlier charged and, under collected” re- Louisiana’s order denied American section, just rea- to determine the and quest a cost-of-service to by order. rate and fix same sonable ground op- insufficient rate “on the FPC, Mississippi Corp. v. River Fuel See erating experience claimed to evaluate U.S.App.D.C. 252 F.2d 102 costs, its prejudice to without but interdependence (1957). As to 624 change.” Amer- this basis On 4 and 5 of the Natural Gas Sections it had ican Louisiana contended Act, Pipe Co. v. see United Gas Line experience operating acquired sufficient 341-345, Co., Mobil Gas 350 U.S. as reasonable and that its costs were 100 L.Ed. 373 S.Ct. 12,1961. July shown free
The Commission found nevertheless Commission was conclude, did, rate form Louisiana’s contract-demand neither this con- as it supported under as was “unlawful tention nor the evidence disallowed”; changeover. and it and should Act As stated: the Commission “just provided that American Louisiana’s undeniably “American are reasonable the future and rates for an affiliate of Wisconsin prescribed” in order. Michigan Consolidated, which and gave adequate reasons purchase per cent of excess of conclusions, adequate support these jus- gas.12 These circumstances special pointed in the record. It out tify applying requirements not to it posed by Lou circumstances against companies otherwise invoked isiana, practically of its sells all which * * * pres- situated And on urged companies. As to affiliated was facts, we can ent conclude that we cost-of-service objective of rate best attain the form rate “minimizes inter-affiliate regulation all allowance —the possibility transactions which afford the costs but no and return manipulation earn and excessive by requiring the continued more — use of a ings.” ****And stated: the Commission form of 'rate. cost-of-service charges “the seller’s its affiliates (Emphasis supplied.) computed are basis “12 purchased The remainder is billing actual costs successive distributing five non-affiliated com plus periods, allowed. return panies.” Thereby permitted all the seller is costs to which it but no is entitled The dollars and cents contract-demand more, achieving larger permitted thus the desidera- form rate have 7. System is obvious that usual incentive can Natural And as a whole. gas municipal public to reduce costs under the dollars since the cost of rate form com- cents contract-demand utilities would be non- at a fixed rate the plicated transactions when inter-affiliate affiliated utilities ultimate con- and the are involved. The seller’s sav- affiliated do not sumer of these receive benefits ings (hence savings passed revenues which es- increased would be to them adequate cape regulation) af- cost-of-service rate form it buyer’s adjusted savings monthly. filiated Ameri- inure savings through profits seller
costs, but approve long pre-
quired to so as the it
existing cost-of-service
just was since reasonable. *12 and return “all costs allowed no more.”
but Clarke, Washington,
Mr. William H. C., D. with whom Mr. David F. Grim- aldi, Washington, (both appointed C.D. court) brief, ap- this was on pellant. Reginald CARRELL, Ellenhorn, Appellant, Mr. N. David U. Asst. S. Atty., whom with Messrs. David C. Ache- v. son, Atty., Q. U. Frank S. Nebeker America, UNITED STATES of Joseph Lowther, Attys., A. Asst. U. S. Appellee. brief, appellee. were on the No. 18782. Burger Fahy, McGowan, Before Appeals States Court of United Judges. Circuit District of Columbia Circuit. Argued Feb. PER CURIAM. Decided March Appellant, others, was convicted rape. appeal He did not within the specified 37(a)
time
Rule
Fed.R.
ap-
Crim.P. Others tried with him did
peal,
obtaining
one
a
Franklin
reversal.
States,
U.S.App.D.C.
et al. v. United
“with directions to cause the petitioner open tion of court at hearing, at which the court will re- quire petitioner’s the attendance of him, trial and shall counsel hear petitioner, well as other competent of- evidence that purpose fered relevant Upon remand. the conclusion of