*1
Michigan
See
Consolidated Gas
tlement.
FPC,
gan
Our appreciation of the difficult
us faced
task coping with curtailments ne- gas natural shortage.
cessitated planning to deal with the trust We apply winter will whatever
upcoming adopted light criteria
general problems particular of each pipe- its customers and will take into
line experience during the 1974- account season. winter
GULF STATES UTILITIES
COMPANY, Petitioner, COMMISSION,
FEDERAL POWER
Respondent, Louisiana
Southwest Electric Member-
ship Corporation, Intervenor.
No. 74-1160. Appeals,
United States Court of District of Columbia Circuit.
Argued Feb.
Decided Aug.
Opinion for the Court filed Circuit Judge LEVENTHAL.
LEVENTHAL, Judge: Circuit July of 1950 Gulf States Utilities States) and (Gulf the South Membership Louisiana Electric Co west (SLEMCO) entered into a con operative supply energy of electrical tract for That SLEMCO. by which set a maximum de agreement, 8,000 kilowatts,1 ceiling of some mand Federal Power held Commis to be a sion, June fixed-rate rate in that barred supplier for deliveries of creases electricity.2 19, 1973, In its order of October deny ing rehearing for June 14th of the August interpreted agree an modifying ment 1950 contract as re ceiling, moving making the demand thus energy supplied by subject to the contract and to fixed contract rates.3 We are asked for review of an order Petition interpretation to review this of the 1970 Federal Power Commission. We affirm the agreement. conclusion of the Commission. Beaumont, Tex., Hughes, for Benny H. BACKGROUND I. LEGAL petitioners. Act, The Federal Power 16 U.S.C. Walsh, C., M. Atty., Thomas F. P. seq. (1970), requires, 824 et §§ Counsel, Forquer, Leo E. Gen. whom 205(c),4 every public utility file § Jr., Sol., George McHenry, W. and John charges of its rates and schedules Burnes, Jr., C., Atty., H. F. P. were on subject juris to the Commission’s sales respondent. the brief 205(d)5 prohibits any Section diction. La., Schwab, Rouge, Baton John change previously filed rates intervenor. except by taking filing effect with the Commission, thirty days’ after LEVENTHAL, up notice TAMM' and Before 205(e)6 held FPC’s determination and MILLER,* § Judges, Judge, Circuit * Investigation pursuant by designation Sitting to 28 U.S.C. Under Section in Docket No. E-8121, 14, 1973, Supp. 293(a). J.A. 2-9. § dispute figure 1. There is some over the Denying E-8121, Rehearing, 3. Order in Docket figure 19, 1973, SLEMCO reads the Supp. J.A. October 27-28. State believes while Gulf as 8,000. 824d(c) 8,000 figure 4. 16 U.S.C. for conve We use intending nience, without to resolve the 824d(d) U.S.C. § 5. 16 significance dispute. The difference is of no 824d(e) (1970). 6. 16 U.S.C. appeal. for this Increase, Proposed Suspending Rate 2. Order Hearing, Instituting Setting Matter for suspend with contractual obligations sistent authorizes are valid; up filings to five months new rates inconsistent with obligations on whether hearing
pending
invalid.
and reasonable. Section
change
just
Light v.
Power &
Richmond
Commission, upon its
206(a)7 allows
complaint, to hold a
*3
upon
motion or
own
Indiana & Michi
sub nom.
denied
cert.
“unjust,
a rate
whether
is
hearing on
1068,
414 U.S.
Co.
Electric
gan
unreasonable, unduly discriminatory or
578,
38 L.Ed.2d
94 S.Ct.
a new rate if
to fix
and
preferential”
accept
a
Thus,
deciding whether
unlawful.
found to be
rate is
filed
made unilateral
increase
filing of a rate
must
seller the Commission
by the
ly
Supreme
The
Court has held
intended to
parties
whether
decide
provisions do not authorize
these
changes or whether
unilateral
such
allow
approve
the Commission
established
fixed rate
contract
increases that are inconsistent with
rate
through mutual ne
changed only
can be
obligations.
seller’s
See
gotiation.
Pipe Line Co. v. Mobile
United Gas
Gas
332,
Corp.,
373,
350 U.S.
76 S.Ct.
Service
(1956); FPC v.
7. 16 U.S.C. §
rou-
deliveries in excess of
max-
filing
commitment.
commitment established
electricity
SLEMCO imum
tinely delivered
contract,
investigation
maximum.
excess
far
delivered;
to determine whether the
were
instituted
35,579 kilowatts
In
kilowatts;
and in
that contract were in the
rates fixed
1963, 45,090
ap-
interest. Gulf States made no
public
kilowatts.
Order,
rehearing of
plication
filed new
April
reconsideration, urg-
asked
that would
schedules
among
grounds,
other
that the Com-
ing,
rates effective
its wholesale
increase
ignored
decision
mission’s
were to
schedules
1973. These
practice
delivering
long-standing
elec-
SLEM-
Gulf States’
affect
in excess of its maximum con-
power
tric
contracts with other
as its
CO, as well
commitment and that
it failed
tractual
filing Gulf States said
In its
customers.
*4
the
recognize
agree-
to
expressly con-
its contracts
most of
ceiling.
ment eliminated
rate increases and
unilateral
templated
responded that
it
The Commission
provide
contract did not
that,
past delivery practices
not bound
increases,
the new rates
parties,
and deferred consideration
of
to deliveries
apply
to
were
agreement
the letter
of the effect of
commitment.
filing.
action on that
pending
docket, May
on
separate
In a
judicial
review of this or-
petitioned
of
agreement
the letter
filed
Gulf States
der,
subsequently
but
dismissed its ap-
extended
that modified and
August
peal.
SLEMCO, as
That
through July of 1963.
amended
THE FIXED RATE CHARACTER
III.
inter
alia that
specified
agreement
1950 CONTRACT
OF THE
language of the
interpret
“Company will
no less
than
to be
favorable
[contract]
court,
argument
oral
before this
.
In
if Exhibit A
be the case
would
.,
contended
.
.” Exhibit Gulf States
.
incorporated
were
including the 1970
agreement,
extension
The first
paragraphs.
four
contained
A
modification,
impose
does not
“will
that Gulf States
obligation under
Mobile-
as
fixed-rate
capacity ...
[SLEM-
provides,
it
doctrine because
warrants
Load Growth
Sierra
Normal
CO’s]
XI,
“is
article
sub-
provided for the
second
..” The
governmental
all valid laws and
ject
over and
capacity,
“additional
of
supply
..” Gulf
regulations
States did
Growth”
certain
Load
above Normal
ruling
the FPC’s June 1973
appeal
ar- not
The third established
circumstances.
would,
contrary, and the matter
un-
disputes that
procedures
bitration
circumstances,
ordinary
judi-
be res
specified portions
der
of
might arise
cata.
And
paragraphs.
two
first
abandonment
allowed the
fourth
argues that
Gulf States
delivery or the reduction
only
effect should extend
judicata
res
“capacity so abandoned or
if the
capacity
specified in the 1950 con-
the maximum
be delivered from another
is to
reduced
To find the June order to be res
tract.
Delivery” supplied by Gulf
Point
for all deliveries would be un-
judicata
States.
claims,
fair,
for it did not
when the Commission’s decision
the FPC know
an Order of
that the decision would not
rendered
proposed
Gulf States’
rate was
accepted
relatively
small amount
schedule,
only affect
found the SLEMCO con-
(less
in the 1950 contract
than
fixed rates within
contemplate
total deliver-
cent of Gulf States’
per
doctrine.
terms of
Mobile-Sierra
ten
SLEMCO),
extended
but would be
accepted as an initial
ies
The schedule
filed its
in excess of
import.
to cover volumes
rehearing,
may
which
have been the
kilowatts.
signal
that the
to Gulf States
first
Keystone Insurance
In Stebbins
might interpret
the letter
326, 481
F.2d 501
commitment,
its contractual
expanding
held that
conventional
(1973), we
13th,
expiration
the eve of the
estoppel applies to
that collateral
rule
period
thirty-day time
in which Gulf
independent grounds upon
two
both of
petition
could file a
for reconsid
judgment
expressly
rested
which a
1.34(a) (1974).
18 C.F.R.
Un
eration.
when one of the
not be followed
should
der these circumstances Gulf States has
to exhaust
grounds is failure
administra-
strong argument, under the principle
holding we
In so
con-
tive remedies.
Stebbins, its understanding of
the bound
probability
sidered
impact of the June 14th
order was
acquiesced
judg-
in the earlier
party had
while it
reasonable
is foreclos
ground
“one
ment because
attacking the June
ed from
14th order
adjudicate
finally
the case on
does not
8,000 kilowatts),
(as
may
not fairly
operates
per-
merits but
challenging
foreclosed from
Com
litigation
future
mit
continued
mission’s characterization of the contract
U.S.App.D.C. at
. .” 156
extended,
insofar as
as fixed-rate
that is
purpose
noted that the
F.2d at 508. We
apply
the October
to all
estoppel is to avoid waste of
of collateral
deliveries
SLEMCO.8
judicial
resources and
it would
*5
Assuming arguendo that the fixed-rate
on its head to
principle
“that
stand
maintain,
characterization could
reviewed at
effect,
be.
party
in
that a
must
time,
this
we find no merit
in Gulf
every
solely
each and
fully litigate
issue
contention. Gulf
argu
States’
States’
avoiding
of
purpose
collateral es-
derives
the provision
ment
in the
even where he is otherwise will-
toppel,”
1950 contract
“is
accept the' result.
Id.
ing to
subject to all valid laws
regulations
Gulf
may
have
language,
XI,
chosen to ac-
. .” This
in article
quiesce in the Commission’s
straight-forward,
June 14th
import
is
and its clear
assumption
Order on the
that its impact
simply
acknowledge
existing regula
minor,
relatively
having
was
authority,9
no effect on tory
g.,
e.
require
notice
beyond
kilowatts,
future deliveries
provisions
ment and review
spelled out
at
least as Gulf States understood its by
Court in United
Pipe
Line
hearing
8. The
instituted a
206
a
to deter
If
rate increase or decrease be made
by
applicable
rates fixed
the 1950
mine if the
unlawful,
contract are
to the service rendered
open
possibility
Co-op
and thus left
States to the
Sam Dam
hereunder
higher
may eventually
required.
by acceptance
rate
be
final
filing by
that a
order or
through
any regulatory
body
relief
a
206
Gulf States of
having
very
thereof,
hearing
Supreme
jurisdiction
limited. The
Court
such increased or de-
sufficient,
applicable
has held that
is not
in such a
creased rates
shall be
to such
hearing,
yields
to find that a rate
a low rate of
service rendered hereunder
from and after
Rather,
above,
change.
return.
as we noted
the Com
the effective date of such rate
find
mission must
that “the rate is so
The Commission
language
low as
had ruled that
this
adversely
public
privilege
affect
interest
.
reserved to Gulf
. .”
States the
to effect
Co., supra,
changes by
filing.
FPC v. Sierra Pacific Power
rate
Although
355,
language
ambiguous
U.S. at
energy OF DELIVERY EFFECT THE IV. in Rate Schedule set forth PRACTICES . .” REA, hereto . attached con In its June the 1950 conclusion that Our long is forti failed to find that Gulf rate contract a fixed standing V practice making of Article deliveries in the structure fied para Following first excess contractual maximum re (“Rates”). above, SLEMCO, shall contract ceiling. moved the quoted graph, court, energy furnished before this asked the Intervenor all electric “for pay set to consider point rates in its hereunder rehearing REA attached of the June or Rate Schedule forth in but, February paragraph provides der dismissed .,” the second customers, appeal new from the FPC’s sells to refusal if SLEMCO rehearing. dismissal, Prior grant availa- those than “other REA,” par- appeal consolidated with Schedule bility clause rate; they and if cases decided in negotiate Rayburn Sam Dam shall ties rate, Cooperative v. Electric agree on U.S. fail to us App.D.C. (Nos. This indicates cancelled. 73- shall be customers, 1996, 73-2167, 1975).11 no new there are applies. Gulf States schedule REA rate *6 plausible explana- any offered has not Cooperative, Mid-South Electric anoth- require should why parties the
tion of
customer which has
con-
Gulf States
er
new customers
rate for
negotiation
to
and had
identical
SLEMCO’s
general
already had
Gulf States
if
similarly received deliveries of electric
without
rate schedules
new
right
post
to
contract
power far
max-
agreement.
SLEMCO’s
imum,
the
pressed
matter before our
remanded, holding that
the
court. We
question of
proceed to the
We now
required
was
to evaluate
to leave
parties
the
intended
whether
parties
argues
because
“both
to
the
eral
rate increases
Gulf States
since
10.
admittedly [although erroneously]
doing
parties
two
busi-
the contract
between
was formed
regulatory
Louisiana,
contemplates
that
the
commis-
article XI
assumed
[state
ness in
Commission,
law,
sion],
permits
had
not the Federal Power
application of
which
Louisiana
jurisdiction
over
contract.”
ultimate
for contracts under
increases
jurisdiction
U.S.App.D.C.
regulatory
at 498.
at
commission’s
the state
parties
approval by
upon application
no claim that
to its
to and
that com-
States makes
Plaquemine
SLEMCO entertained
a similar
v.
Serv-
contract with
Louisiana Public
mission.
Comm’n,
(La.1973);
misconception.
Shreve-
So.2d 440
ice
port
Gas & Electric
v. Southwestern
Ray-
involved
the Sam
11. Two contracts
cites
advance.
cash advance shall be
by Company
refunded
at
rate of
THE
Y. THE EFFECT OF
Viothof the amount of such advance
AGREEMENT
LETTER
until
year
each
total refund is com-
We
now to
turn
the FPC’s interpreta-
said
pleted
are,
or until
facilities
tion of
agreement.
letter
Since
Customer,
the election
no longer
this turns on the language of three of
utilized to Customer,
service to
paragraphs
set
A,
out in Exhibit
at-
whichever is sooner. The ownership of
agreement,
tached to
we
quote
*7
will
shall
said facilities
remain with Com-
these in full:
(HB)
pany.
Upon reasonable advance written no-
Upon reasonable advance written no-
pro-
Customer
will
tice from
Company,
tice to
may
Customer
aban-
capacity at the
vide additional
Points
any
of Delivery may
don
Point
or
re-
Delivery specified
of
in Article I as
duce the
capacity previous-
amount of
Normal Load Growth
Customer’s
war-
ly
under
specified
this Agreement for
additions. Normal
rants such
Load
of Delivery, provided
Point
mean
in
growth
shall
kilo-
Growth
capacity so abandoned or reduced is to
maximum 15-minute
watts of
demands
from
be delivered
another Point of De-
highest
of 15%above the
not in excess
livery
is supplied
which
by Company.
at that
such demand established
Point
abandonment
Such
or reduction in ca-
Delivery during
preceding
of
cal-
pacity shall become effective on the
year. Upon reasonable advance
endar
specified by
date
Customer
the no-
Br. at
Intvr.
than 12
not sooner
months
tice,
Although the
did not
have the
notice is received
such
respond directly
the date
to
to the termi-
after
occasion
(HD)
Company.
pressed by
contentions now
Gulf
nology
States,
provide
it did
a reasonable and
argues, and
SLEMCO
interpretation
of the agree-
consistent
promises,
found,
Gulf
interpretation
Under
the FPC’s
ment.
addi-
B,
“provide
to
A and
paragraphs
committed,
is
States
crite-
specified
when
capacity”
tional
circumstances,
specified
supply SLEM-
States
committed
met
ria were
with additional
CO both
facilities and
power.
electric
of
amounts
actual
deliver
needed,
delivery points, where
and with
contends
Gulf States
corresponding deliveries of the
load
supplement
it
commits
merely
which the
growth for
facilities are to be
which electric-
through
facilities
physical
Significantly,
used.
commitment de-
effect
has no
it
and
delivered
ity is
is linked to
scribed
HA
in ar-
demand
on the
Growth,”
Load
defined in
“Normal
terms
original
of
III
ticle
of “kilowatts of maximum 15-minute de-
Paragraph B
mands.”
commits Gulf
not free of ambi-
are
paragraphs
The
“additional
capacity”
interpretation
can
each
and
guities,
Normal
Load Growth
above
when
phras-
to isolated
by reference
supported
gives “assurance
of revenue”
example, Gulf
For
es.
“makes a cash advance equal
or
to the
installation
of
to “the
A’s reference
If
total cost” or a combination of the two.
(emphasis
capacity”
Both criteria assume increased deliveries
reference
added), and
HD’s
The “revenue”
power.
of
which SLEM-
capacity. Gulf States
“abandonment”
is to assure will presumably
CO
flow
clearly refer
phrasings
these
argues
energy,
additional sales of
and it is
structures,
thus indicate
physical
project
reasonable
facilities, rather
than a
transmission
would undertake
the risk of cash ad-
contemplated.
are
electricity,
flow
only where it
is assured an in-
vances
“reduction,”
as
talks of
DH
supply
electricity.
creased
“abandonment,”
capacity,
well
lessening
to refer
to a
said
can thus be
B
“the
And
discusses
flow.
power
H
Although the application of the
necessary
such additional
facilities
Mobile-Sierra-Memphis
principles
to a
that “facilities” and
implying
capacity,”
given
primarily
is
a matter of
concepts.
separate
“capacity”
law, where the decision involves the in
parties’
terpretation
intent as re
argues
language
contract,
vealed in the
of a
a distinction
draws
between
proper
to defer
to the Commission’s
physical
which refers
to the
“capacity,”
expertise
decision is “amply sup
capability
individual
size
ported
factually
both
“commitment,”
legally.”
delivery
points,
Pipe
Line Co. v. Memphis
United
to Gulf States’ maximum
which refers
Division,
Light,
Gas & Water
delivery points.
obligation for
As we
Affirmed.
TAMM, (concurring Judge Circuit result). parts majority I concur in I—III of the TRANSCONTINENTAL GAS PIPE opinion significant in the result. The CORPORATION, Petitioner, LINE in this ease is whether the Federal issue arbitrary Power Commissionwas and ca pricious failing explain why the COMMISSION, FEDERAL POWER between Gulf Respondent. 8,000 Slemco eliminated the ceiling original kilowatt on the No. 73-1626. Transportation, Bowman Inc. v. Ar See United Court of Appeals, Freight System, Inc., kansas-Best District of Columbia Circuit. 281, 285-86, S.Ct. 42 L.Ed.2d The effect of the Commis Argued Nov. 1974. sion’s action was to extend the fixed-rate Sept. Decided characterization of the delivery approximately to the electricity. part
kilowatts of III See majority opinion. the majority As observes,
correctly ex Commission’s fact,
planation “cursory.”
order itself does not us with
guideposts might from which we discern agency’s reasoning.
Nevertheless, I am convinced
reading of the letter we to this case to the
were remand exposition enlargement
for a further reasoning,
of its the ultimate result
would be identical with that reached Thus, present opinion. the need for
finality and for the elimination of mar-
ginal questions agency from crowded outweighs any
dockets benefits to be remand,
gained by especially since appears
Commission’sconclusion to be fa- FCC, Corp. v. Id. Television Boston
18. Greater F.2d denied, 403 U.S. 91 S.Ct. cert. L.Ed.2d
