727 F.2d 1131 | D.C. Cir. | 1984
Opinion for the Court filed by Circuit Judge WILKEY.
Petitioners seek review of two orders of the Federal Energy Regulatory Commission (“FERC” or “the Commission”) pertaining to a wholesale rate filing made by Central Illinois Public Service Company (“CIPS”) in 1979.
We affirm FERC in all respects except for its interpretation of the contracts between CIPS and four of its municipal customers. We reverse FERC’s determination that the rates under the contracts must be applied prospectively only, from the date of FERC’s order in this case.
I.Background
On 2 November 1979 CIPS made a wholesale rate filing with FERC. The rate filing sought rate increases for CIPS’s three classifications of wholesale customers: the Coops in group W-l; the full requirements city customers in W-2; and the partial requirements city customers in W-3. Prior to this contested rate filing, CIPS historically had charged the same rate to its W-l customers (Coops) as it did to its W-2 customers (full requirements cities), despite their separate customer classifications. CIPS’s 1979 wholesale rate filing, however, sought a greater increase in the rates to be charged to the W-2 city customers than it did for the rates to be charged to the W-l cooperative customers.
In accordance with contracts between CIPS and the Coops, CIPS had given the Coops six months’ advance notice of its proposed wholesale rate filing. Pursuant to this advance notice, CIPS and the Coops entered into settlement negotiations, which resulted in the Coops’ agreeing not to challenge the proposed rate filing at FERC. Contracts between CIPS and the Cities did not contain a similar notice provision and CIPS merely gave the Cities the more limited, 60 days’ notice required by the Federal Power Act.
Because the Coops had agreed to the proposed rate increase in advance, the Commission permitted the W-l rate to take effect without suspension. FERC, however, imposed a suspension on the effective date of the W-2 and W-3 rate increases, and then proceeded to investigate the propriety of those proposed rates under the Federal Power Act. A hearing on CIPS’s proposed increases in rates charged to the Cities was held before an Administrative Law Judge, at which hearing CIPS, the Cities, and FERC’s staff all participated.
In the proceedings the Cities challenged the justness and reasonableness of the W-2 and W-3 rates, and also charged that CIPS’s proposed rates were unlawfully discriminatory because of the disparity between the rates to be charged to the Coops and the Cities. The Cities further claimed that CIPS’s proposed change to a new method of allocating fixed costs among customers was not reasonable. In addition, the
Exceptions to the Initial Decision were filed with the Commission by CIPS and the Cities. In addition, the Coops were permitted to intervene in the proceedings before FERC in support of CIPS’s position, which urged the Commission to reverse the ALJ’s rejection of CIPS’s proposed method of allocating costs. In addition, four of the Cities made the argument, not previously made to the ALJ, that the proposed rate increase could not be applied to them, because their private contracts with CIPS prohibit unilateral rate filings.
On 12 July 1982 the Commission affirmed in part and reversed in part the ALJ’s Initial Decision, and FERC’s order established the just and reasonable rates that CIPS was permitted to charge.
On 30 September 1982 FERC issued a subsequent order, in which it denied applications for rehearing and it further explained its determinations on the discrimination and contract issues.
II. Analysis
A. The Cost Allocation Method
A principal element in CIPS’s rate schedule is the demand charge, which allocates fixed costs among customers. CIPS’s 1979 rate filing proposed to allocate fixed costs among customers based on each customer’s demand for electricity during CIPS’s peak sales months of June, July and August. This method of cost allocation is known as a 3-CP method, because of its use of a coincident peak of three months. Prior to its 1979 filing, CIPS had used a 12-CP method, which apportioned fixed costs among customers based on each customer’s demand for electricity in each of twelve months. Because the Cities’ purchases of electricity are the greatest during the summer months and the Coops’ demand peaks in the winter, CIPS’s proposed use of the 3-CP method would have resulted in a higher proportion of fixed costs being allocated to the Cities than was allocated to them under the previously employed 12-CP method.
The Commission affirmed the ALJ’s conclusion that CIPS’s proposed use of a 3-CP method of allocating costs among classes of customers was not reasonable. On review, the Coops argue that FERC and the ALJ used an incorrect legal standard to assess the propriety of CIPS’s proposed use of a
The Coops’ contention that the ALJ erred by requiring CIPS to prove that the proposed 3-CP method was more reasonable than the 12-CP method is not correct; neither the ALJ nor FERC employed that standard. The Federal Power Act requires that all rates charged by public utilities be “just and reasonable.”
[T]he standard for the decision is ... not whether a 12 CP method is more appropriate than a 3 CP method, but rather whether the 3 CP method is reasonable and adequate.11
The ALJ did not put a burden on CIPS to prove that its proposed cost allocation method was superior to alternative allocation methods.
Furthermore, the application of the proper legal standard to a proposed cost allocation method involves important policy choices about how costs of services should be allocated among customers.
The Coops further allege that the ALJ made an error of law by failing to heed the views of the Illinois Commerce Commission when he evaluated the reasonableness of CIPS’s proposed cost allocation method. Nothing in the Public Utility Regulatory Policies Act, however, requires FERC to adopt the views of state rate-setting commissions when the Commission evaluates the reasonableness of rates that a utility may charge to wholesale customers.
Furthermore, FERC’s determination that CIPS’s proposed 3-CP method was unreasonable is supported by substantial evidence in the record considered as a whole. The ALJ’s Initial Decision found as matters of fact that CIPS did not have a summer peak demand that was significantly greater
than its winter demand and that CIPS’s system had a high level of use throughout the year.
B. The CIPS’s Allegedly Undue Discrimination Between Wholesale Customers
The Federal Power Act prohibits a public utility from discriminating unduly among customers with respect to rates and service. Section 205(b) of the Federal Power Act provides:
No public utility shall, with respect to any transmission or sale subject to the jurisdiction of the Commission, (1) make or grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, services, or in any other respect, either as between localities or as between classes of service.
In upholding CIPS’s W-l (Coop) and W-2 (Cities) customer classifications, FERC stated that the Federal Power Act permits utilities to use reasonable classifications “based on differences in characteristics having cost of service implications.”
The Cities contend that FERC’s approval of separate customer classifications for the Coops and the Cities is arbitrary and unreasonable. They claim that CIPS’s classification method should be based on the specific characteristics of individual customers. For example, the Cities argue that some of the Coops are summer-peaking customers with cost-of-service characteristics more similar to the Cities than to other Coops. CIPS’s classifications, which are based on general characteristics, are unreasonable and unduly discriminatory under section 205(b) of the Federal Power Act, according to the Cities.
While classification of customers based on individual characteristics might produce more finely adjusted rates and more scientific results, FERC may properly grant the utilities reasonable latitude in setting rate classifications based on general characteristics of customer groups. As this court noted in Alabama Electric Cooperative v. FERC,
2. The Rate Disparity
The Cities make the additional charge that the disparity between their rates and the rates charged to the Coops pursuant to the Coops’ negotiated settlement with CIPS renders CIPS’s rates unduly discriminatory under section 205(b). The ALJ found that there were no cost factors that warranted a departure from CIPS’s historical practice of charging identical rates to the W-l and W-2 customer classifications.
Despite the absence of a cost justification for the rate disparity, however, FERC held that the rate differences were not unduly discriminatory. The Commission noted that the rate difference was only temporary, because the settlement agreement which resulted in lower rates for the Coops only pertained to the 1979 rate filing by CIPS. Most of the rate difference would be eliminated by CIPS’s use of a 12-CP method for the Coops’ rates instead of the 8-CP method agreed upon by the Coops prior to the contested rate filing. FERC reasoned that when a temporary difference in rates between customer categories is the result of a settlement agreement that does not involve bad faith or improper conduct, the difference is lawful, provided that there is no evidence of actual competitive harm or un
The Cities challenge FERC’s opinion for three reasons. First, they allege that CIPS’s advance settlement with the Coops was the product of bad faith and improper conduct. Second, the Cities contend that even if the settlement was properly negotiated, the prior settlement agreement does not legitimize the size of the particular rate differential between the Coops and the Cities. Third, the Cities claim that FERC erred by requiring the Cities to bear the burden of showing anti-competitive effects. We find each of these contentions to be without merit.
The mere fact of a rate disparity between the Cities and the Coops does not establish unlawful rate discrimination under section 205(b) of the Federal Power Act. Rate differences may be justified and rendered lawful by “facts—cost of service or otherwise.”
Settlement agreements between a utility and a customer, however, may not be completely analogous to fixed rate contracts. In the settlement agreement between the Coops and CIPS, the parties did not set electricity rates for specified terms of years. Instead, the Coops and CIPS agreed that the Coops would not challenge CIPS’s unilateral rate filing with FERC and that CIPS would charge the Coops the settled rate until such time as CIPS made another rate filing at FERC. Nonetheless the policies articulated in Mobile and Sierra support treating a settlement agreement as a factual difference that may justify a rate disparity under section 205(b). Like fixed rate contracts, settlements promote market stability and reduce litigation over rate filings under the Federal Power Act. As FERC has noted, settlements would be severely discouraged, if not eliminated, if any resulting price disparities among customers were considered unlawfully discriminatory within the meaning of section 205(b).
Rate disparities resulting from a private rate arrangement are lawful only when the agreement was reached through
We are persuaded that FERC’s finding of proper conduct resulting in a settlement is supported by substantial evidence on the record considered as a whole. CIPS bore the risk that its revenues would be'diminished by a FERC determination that CIPS’s rate filing for the Cities, which matched the rate design settled upon in advance with the Coops, would not be found just and reasonable under the Federal Power Act. As FERC stated:
What CIPSCO did was not so much discriminatory as it was risky. CIPSCO was free to negotiate a settlement with the cooperatives, but in doing so took the risk that separate settlement efforts with the cities would fail and that this Commission, in determining just and reasonable rates for service to the cities, would allocate costs to the cooperative service that were not reflected in the W—1 settlement rates. This in fact is what has happened.36
We affirm FERC’s holding on this issue.
Second, the Cities claim that even if the Coops’ settlement agreement warrants a rate disparity among customer categories, it does not justify the specific rate disparity here. We disagree. Under section 205(b), factual differences between customers should justify the particular rate disparity at issue in order to render a rate difference lawful.
Finally, the Cities claim that FERC erred by its refusal to presume anti-competitive effects from the rate disparity in this case. FERC held that the Cities had the burden to show anti-competitive effects and that they failed to prove any competitive burden under section 205(b). On review, the Cities argue that prior FERC precedent requires that anti-competitive effects be presumed in this case.
FERC’s refusal to presume anti-competitive effects in this case is not a departure from prior precedent.
The general FERC rule, to which the price squeeze cases are the exception, is that anti-competitive danger must be proved in order to invalidate an otherwise reasonable rate disparity. In Boroughs of Chambersburg v. FERC, for example, this court stated that a rate disparity resulting from a contract entered into in good faith was not unduly discriminatory under section 205(b) “if nothing else is demonstrated.”
C. The Casey Group Contracts
The third major challenge to FERC’s orders pertains to FERC’s interpretation of contracts between CIPS and four of its municipal customers. This contract claim arose after the ALJ had issued his Initial Decision, when the cities of Casey, Flora, Greenup, and Newton (the “Casey Group”) filed motions with the Commission to prevent the rate increases under CIPS’s unilateral rate filing from being applicable to them. The Casey Group sought a refund'of all increased revenues collected from them since the effective date of CIPS’s unilateral rate filing.
The contracts at issue were executed by the Casey Group cities and CIPS in 1965. The contracts were filed with the Federal Power Commission
The term of this agreement shall be for a period of 20 years from and after the effective date hereunder; provided however, that the rates and charges for service hereinbefore set forth shall apply only during the first ten years of the period, and the rates and charges for the second ten years of the period shall be mutually agreed to by both parties subject to the approval of the regulatory body or bodies as may have jurisdiction thereof.45
The Casey Group cities and CIPS have not mutually agreed upon rates and charges for the second ten years of the contracts’ duration. In 1975, the first of the second ten years, CIPS notified the Casey Group cities that it planned to make a unilateral rate
FERC found that the Casey Group contracts were fixed rate agreements for the first ten years of the contracts’ term and “agreements to agree” for the second ten years.
The Casey Group cities and CIPS each challenge different aspects of FERC’s interpretation of their contracts. The Casey Group cities contend that the rates specified in the contracts for the first ten years must continue in effect during the second ten years, unless the parties mutually agree to new rates.
Under the Supreme Court’s Mobile-Sierra doctrine, contracting parties may determine for themselves when and how existing rates may be altered, subject to FERC’s power to adjust rates in the public interest.
The wording of the provision here clearly distinguishes between the rates for the first ten years of the contracts and those for the second ten years. The provision states that the rates specified in the contracts are to remain in effect “only during the first ten years.”
[T]he Mobile-Sierra doctrine “is refreshingly simple: The contract between the parties governs the legality of the filing. Rate filings consistent with contractual obligations are valid; rate filings inconsistent with contractual obligations are invalid.”54
We turn now to the statutory scheme to determine what rate filings are consistent with the contracts’ rate provision.
The Federal Power Act contains two basic methods for changing electricity rates. Under section 205, a utility may unilaterally file a rate change with FERC, which rate takes effect immediately after a sixty days’ notice requirement has been satisfied. The effective date of a unilateral rate filing, however, is subject to a possible suspension of no longer than five months, if FERC orders an investigation into whether proposed rate changes are just and reasonable as required by the Act.
We thus must decide whether the parties intended to permit CIPS to use the section 205 method of rate-setting, with its immediate effective date, or the section 206 method of rate-setting by FERC, which takes effect only after FERC issues its order setting a just and reasonable rate. The language of the contract provisions at issue here are consistent with permitting section 205 filings when the parties fail mutually to agree on rates. Open rate terms in contracts may properly be interpreted to permit a utility unilaterally to file rates under section 205.
Not only are the terms of the contracts consistent with a section 205 method of rate setting, but the parties’ conduct throughout the pertinent period of the contracts is probative of the parties’ intent and of the fair meaning of the contracts. The parties’ course of performance under a contract may give meaning to otherwise unclear contract terms.
Accordingly, we hold that the contracts’ rate-setting provision contemplates section 205 filings when the parties fail to agree on rates during the second ten years. Under the contracts, therefore, the W-2 rates as adjusted by FERC’s opinion in this case should take effect on the effective date of CIPS’s filing.
D. Miscellaneous Cost-of-Service Issues
The Cities make additional challenges to FERC’s orders. They claim that FERC erred by summarily affirming the ALJ on certain miscellaneous cost-of-service issues without specifically addressing the Cities’ arguments. The Cities contend that this procedure violates the Administrative Procedure Act.
The Administrative Procedure Act requires that agencies supply “findings and conclusions, and the reasons or basis therefor, on all the material issues of fact, law or discretion presented on the record.”
We briefly discuss each of the miscellaneous issues in turn. First, the Cities claim that FERC improperly adopted the ALJ’s determination on working capital. The Cities advocated in the FERC proceedings that CIPS should receive a negative working capital allowance for its W-l and W-2 rates. By contrast, CIPS sought a positive figure and the FERC staff proposed a zero working capital allowance. The ALJ noted that in a previous CIPS case
Second, the Cities claim that FERC erred by summarily adopting the ALJ’s decision with respect to the transmission loss factor. The Cities claim that CIPS’s evidence was inadequate to justify a 5% transmission loss factor. The ALJ, however, rejected the data introduced by the Cities as seriously flawed, and instead adopted CIPS’s figures. The ALJ thoroughly explained his evaluation of the data in the Initial Decision.
Finally, the Cities claim that the ALJ erred in his rate-of-return determination by denying the Cities an opportunity effectively to cross-examine FERC’s and CIPS’s rate-of-return witnesses. This procedural error, the Cities contend, violates the Administrative Procedure Act, the due process clause of the Fifth Amendment, and FERC rules of practice.
III. Conclusion
The orders under review are affirmed in their entirety except for FERC’s decision on the Casey Group contracts’ rate provision. We reverse that portion of the orders which permits the just and reasonable rates under the contracts to apply prospectively only from the date of FERC’s order. Under the contracts, the W-2 rate as adjusted by FERC should take effect on the effective date of CIPS’s filing. The ease is remanded to FERC for further proceedings consistent with this opinion.
. Central Illinois Public Service Co., Opinion No. 142, 20 FERC (CCH) ¶ 61,043 (1982); Central Illinois Public Service Co., Opinion No. 142-A, 20 FERC (CCH) ¶ 61,435 (1982).
. The twelve cities are: Bethany, Bushnell, Cairo, Carmi, Casey, Flora, Greenup, Marshall, Metropolis, Newton, Rantoul, and Roodhouse, Illinois.
. See Joint Appendix (J.A.) at 698, 808-09.
. See 16 U.S.C. § 824d(d) (1982).
.Central Illinois Public Service Co., Initial Decision, Docket No. ER80-71 (2 March 1981), J.A. at 696.
. Opinion No. 142, 20 FERC (CCH) ¶ 61,043 (1982).
. Opinion No. 142-A, 20 FERC (CCH) ¶ 61,435 (1982).
.FERC contends that the Coops lack standing to petition for review of FERC’s decision on the reasonableness of CIPS’s cost allocation method. Brief for Respondent at 38-39. We find that the Coops are sufficiently aggrieved by the Commission’s orders to be proper petitioners before this court. Section 313(b) of the Federal Power Act, 16 U.S.C. § 8251(b) (1982) grants standing to “[a]ny party to a proceeding under this chapter aggrieved by any order issued by the Commission in such proceeding.” The Commission permitted the Coops to intervene in this case when the cost allocation issue was before the Commission. The Coops’ settlement agreement with CIPS does not deprive them of standing to seek review of FERC’s order rejecting CIPS’s proposed use of a 3-CP method of allocating costs. Although the rate design settled upon by CIPS and the Coops in 1979 utilized a 3-CP cost allocation method, FERC’s requirement that CIPS use a 12-CP cost allocation method is likely to affect rates charged to the Coops. Costs allocated to the Coops by the Commission’s mandated 12-CP method are not reflected in the Coops’ settlement rates. Indeed, in November of 1982, immediately after FERC issued its final order in this case, CIPS filed to increase its rates to the Coops. See Central Illinois Public Service Co., Docket No. ER83-78-000.
. 16 U.S.C. § 824d(a) (1982) (“rates or charges shall be just and reasonable”).
. See Public Service Co. of Indiana, 56 FPC 3003 (1976).
. Initial Decision at 5; J.A. at 701.
. Furthermore, even if the ALJ had used a relative reasonableness approach in evaluating the proposed cost allocation method, such a standard may be proper. See, e.g., Idaho Power Co., 3 FERC (CCH) ¶ 61,108 at 61,301-03 (1978) (Holden, Commissioner, concurring) (inquiries into the “relative reasonableness” of other proposed methods are not contrary to the Federal Power Act).
. See Cities of Batavia v. FERC, 672 F.2d 64, 80-83 (D.C.Cir.1982).
. See id; Wisconsin Michigan Power Co., 31 FPC 1445, 1455 (1964).
. See Opinion No. 142 at 13; J.A. at 709.
. See Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 589, 65 S.Ct. 829, 833, 89 L.Ed. 1206 (1945).
. See 16 U.S.C. § 2612(b) (1982). Title I, section 102, of PURPA provides, in part:
The requirements of this chapter do not apply to the operations of an electric utility ... to the extent that such operations ... relate to sales of electric energy for purposes of resale.
Id.
. See Alabama Power Co., 8 FERC (CCH) ¶ 61,083 at 61,327 (1979).
. See Initial Decision at 5-13; J.A. at 701-09.
. See Initial Decision at 3-14; J.A. at 699-710.
. 16 U.S.C. § 824d(b) (1982).
. Opinion No. 142 at 5; J.A. at 810.
. The Cities’ customer profile is concentrated on general service customers with heavy air conditioning loads. The Coops, by contrast, service mainly rural and farm customers. Opinion No. 142 at 5-6; J.A. at 810-11.
. 684 F.2d 20, 27 (D.C.Cir.1982).
. See, e.g., St. Michaels Utilities Commission v. FPC, 377 F.2d 912, 916 (4th Cir.1967).
. Initial Decision at 45; J.A. at 741.
. Opinion No. 142 at 11; J.A. at 816.
. See, e.g., Boroughs of Chambersburg v. FERC, 580 F.2d 573 (D.C.Cir.1978) (per curiam).
. St. Michaels Utilities Commission v. FPC, 377 F.2d 912, 915 (4th Cir.1967). See Towns of Alexandria v. FPC, 555 F.2d 1020, 1027-28 & n. 41 (D.C.Cir.1977).
. See United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332, 344, 76 S.Ct. 373, 380, 100 L.Ed. 373 (1956); FPC v. Sierra Pacific Power Co., 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed. 388 (1956).
. 587 F.2d 1306, 1310 (D.C.Cir.1978).
. See Boroughs of Chambersburg v. FERC, 580 F.2d 573, 577 (D.C.Cir.1978) (per curiam).
. See Delmarva Power & Light Co., 6 FERC (CCH) ¶ 61,084 at 61,162 (1979) (If rate settlements cannot survive the anti-discrimination mandate of the Act, “[n]o utility company could afford to risk anything less than a full and complete settlement with all its customers. ... [Individual customers would have no incentive to settle .... ”). See also Boroughs of Chambersburg v. FERC, 580 F.2d 573 (D.C. Cir.1978) (per curiam).
. Town of Norwood v. FERC, 587 F.2d 1306, 1313-14 (D.C.Cir.1978).
. See Brief of Petitioner Cities of Bethany at 24-31.
. Opinion No. 142 at 11; J.A. at 816.
. See Public Service Co. of Indiana v. FERC, 575 F.2d 1204, 1212 (7th Cir.1978).
. Central Illinois Public Service Co., Docket No. ER83-78-000 (1983).
. See, e.g., City of Frankfort, Indiana v. FERC, 678 F.2d 699, 707 & n. 16 (7th Cir.1982).
. See United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir.1945); Cities of Batavia v. FERC, 672 F.2d 64, 86 (D.C.Cir.1982).
. See 18 C.F.R. § 2.17 (1983). See also Illinois Cities of Bethany v. FERC, 670 F.2d 187, 194-200 (D.C.Cir.1981).
. 580 F.2d at 578 (emphasis in original).
. 678 F.2d 699, 707 & n. 16 (7th Cir.1982). See also Southwestern Electric Power Co., 4 FERC (CCH) ¶ 61,330 at 61,768 (1978).
. Functions of the Federal Power Commission were transferred to the Federal Energy Regulatory Commission in 1977. See 42 U.S.C. § 7172(a) (Supp. V 1981).
. Opinion No. 142 at 13; J.A. at 818.
. Opinion No. 142 at 15-16; J.A. at 820-21.
. U.C.C. § 2-305 (1972).
. See Opinion No. 142 at 18; J.A. at 823.
. If, however, the rates for the first ten years as applied to the second ten years were so low as to affect the public interest adversely, FERC could adjust the rates under section 206, according to the Casey Group cities’ interpretation of the contracts.
. See City of Oglesby v. FERC, 610 F.2d 897, 902-03 (D.C.Cir.1979).
. City of Piqua, Ohio v. FERC, 610 F.2d 950, 953-54 n. 11 (D.C.Cir.1979).
. See Papago Tribal Utility Authority v. FERC, 723 F.2d 950 (D.C.Cir.1983).
. Opinion at 13; J.A. at 818 (emphasis added).
. Papago Tribal Utility Authority v. FERC, 610 F.2d 914, 929 (D.C.Cir.1980) (quoting Richmond Power & Light v. FPC, 481 F.2d 490, 493, cert. denied, 414 U.S. 1068, 94 S.Ct. 578, 38 L.Ed.2d 473 (1973)).
. Section 205, 16 U.S.C. § 824d(a), (d) & (e) (1982), provides!
(a) All rates and charges made ... by any public utility for or in connection with the transmission or sale of electric energy ... shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful.
(d) [N]o change shall be made by any public utility in any such rate . .. except after sixty days’ notice to the Commission and to the public. Such notice shall be given by filing with the Commission ... new schedules stating plainly the change or changes to be made
(e) Whenever any such new schedule is filed the Commission shall have authority ... to enter upon a hearing concerning the lawfulness of such rate ... and, pending such hearing and the decision thereon, the Commission ... may suspend the operation of such schedule and defer the use of such rate . . . but not for a longer period than five months beyond the time when it would otherwise go into effect ....
. Section 206(a), 16 U.S.C. § 824e(a) (1982) provides:
(a) Whenever the Commission, after a hearing had upon its own motion or upon complaint, shall find that any rate ... is unjust, unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable rate ... to be thereafter observed and in force, and shall fix the same by order.
. See id.; FPC v. Sierra Pacific Power Co., 350 U.S. 348, 353, 76 S.Ct. 368, 371, 100 L.Ed. 388 (1956); Papago Tribal Utility Authority v. FERC, 610 F.2d 914, 923-26 (D.C.Cir.1979).
. See, e.g., Borough of Lansdale, Pa. v. FPC, 494 F.2d 1104, 1106 n. 2 (D.C.Cir.1974).
. See City of Piqua, Ohio v. FERC, 610 F.2d 950 (D.C.Cir.1979).
. See, e.g., Public Service Co. of New Mexico v. FERC, 628 F.2d 1267, 1270 (10th Cir.1980), cert. denied, 451 U.S. 907, 101 S.Ct. 1974, 68 L.Ed.2d 295 (1981).
. See, e.g., Pennzoil Co. v. FERC, 645 F.2d 360, 389 n. 59 (5th Cir.1981), cert. denied, 454 U.S. 1142, 102 S.Ct. 1000, 71 L.Ed.2d 293 (1982); Richmond Power & Light v. FPC, 481 F.2d 490, 501 & n. 22, cert. denied, 414 U.S. 1068, 94 S.Ct. 578, 38 L.Ed.2d 473 (1973); Williston on Contracts § 623 (3rd ed. 1961).
. 5 U.S.C. § 557(c)(3)(A) (1982).
. See Humbolt Express, Inc. v. ICC, 567 F.2d 1134, 1137 (D.C.Cir.1977).
. Opinion No. 142 at 3; J.A. at 808.
. Initial Decision at 14-18; J.A. at 710-14.
. Cf. Public Service Commission v. FERC, 642 F.2d 1335, 1345 (D.C.Cir.1980) (interpretation of the Natural Gas Act), cert. denied, 454 U.S. 880, 102 S.Ct. 362, 70 L.Ed.2d 189 (1981).
. Initial Decision at 18; J.A. at 714.
. Initial Decision at 39-41; J.A. at 735-37.
. 5 U.S.C. § 556(d) (1982); 18 C.F.R. § 385.-505 (1983).
. See McCormick on the Law of Evidence § 21 (Cleary ed. 1972).
. See Second Taxing District of Norwalk v. FERC, 683 F.2d 477, 485 (D.C.Cir.1982).