131 F.2d 953 | 2d Cir. | 1942
Lead Opinion
1. The Commission, on June 16, 1936, made its Order No. 42, adopting a Uniform System of Accounts for Public Utilities and Licensees, subject to the provisions of the Federal Power Act, 16 U.S.C.A. § 791a et seq. By order dated May 11, 1937, the Commission directed all public utilities subject to its jurisdicton under that Act to submit certain data, statements and information concerning their accounts, records and properties. After notice and hearing, as required by the Act, the Commission, by orders dated February 25, 1941, and October 21, 1941, purporting to be entered pursuant to sections 208 and 301(a) of the statute, directed petitioner, Hartford, to
It is clear, and petitioner so concedes, that, if petitioner is a “public utility,” as that term is defined in section 201 (e), then those orders arc valid.
The pivotal question is, then, whether petitioner owns or operates any facilities subject to the Commission’s jurisdiction under Part II.
Petitioner is a Connecticut corporation engaged in the business of generating, transmitting, distributing and selling electric energy in and near Hartford, Connecticut. It owns a steam-generating plant in Hartford. For some ten years before the President approved the Act, petitioner was a member of a voluntary arrangement for a “Pool” of electric energy known as the Connecticut Valley Power Exchange. The Exchange consisted of Massachusetts and Connecticut electric utility companies and was formed and operated for the purpose of exchanging electric energy, “at incremental cost,” between the members. Through the operations of this Exchange, electric energy generated by petitioner was transmitted to, and sold to,' customers -in Massachusetts. Among the facilities used by petitioner in these transmissions of energy through the Exchange were these: (a) Facilities, owned by petitioner, between the connections on its generators in its generating plant and a substation immediately outside its generating plant. (b) That substation, owned by petitioner, (c) A transmission line, owned and operated by the Connecticut Power Company, connecting the substation with the facilities of -a Massachusetts member of the Exchange.
In 1936, petitioner withdrew from the Exchange, Connecticut Power then succeeded it as a member of the Exchange, and petitioner then sold -to Connecticut Power the substation and the facilities from its bushings on the wall of its generating plant to the substation. Since then Connecticut has owned -and operated these facilities. Petitioner retained ownership and operation of the facilities in its gen-crating plant, and between its generators and those wall bushings. The generators are connected to a “Main Bus” inside the generating plant. Numerous circuits connected to that bus are used solely in intrastate distribution and transmission; but -there are three such circuits which lead through the wall bushings of the plant building to the substation; inside the building these circuits to the wall bushings are owned by petitioner, while outside they are now owned by Connecticut Power.
The 1936 sale of assets to Connecticut Power was admittedly made in the hope of escaping the Commission’s jurisdiction. After that sale to Connecticut Power, no physical change was made in the transfers of energy under the Exchange arrangement, and the physical plan of operations of the Exchange continued -as theretofore. Connecticut Power supplies to other Exchange members energy which it receives principally from petitioner, and receives from them energy, a considerable part of which it supplies to petitioner. Financial benefits, by way of savings, which had formerly accrued to petitioner as a member of the Exchange, now are received and retained by Connecticut Power. It is admitted by petitioner that it knows that the amount of energy it sells to Connecticut Power exceeds the latter’s load requirements for its needs in the State of Connecticut; that such excess is utilized by Connecticut Power in connection with the operations of the Exchange; that, in such operation, energy is transmitted across the State boundary to Massachusetts, where it is used (except for losses) for sales to ultimate consumers; and that the supply of energy by petitioner is essential to the operations of the Exchange.
Petitioner owns 9.19% of the common stock of Connecticut Power. Four of the eleven directors of petitioner are among the fourteen directors of Connecticut Power, and two of the principal officers of the two companies are the same.
Through the three circuits, above mentioned, which lead from petitioner’s generating plant to the substation owned by Connecticut Power, 166,144,000 kilowatt hours of electric energy from petitioner’s generating plant were supplied to Connecticut Power in the first nine months of 1939, of which 97,932,000 were transmitted to Massachusetts. From June 1 to September 30, 1939, approximately a third of the net generation at petitioner’s plant was sent to Massachusetts.
3. Section 201(d) defines the “sale of electric energy at wholesale” to mean “a sale of electric energy to any person for resale.” Petitioner sells electric energy to Connecticut Power. The Exchange arrangements result in resales, whether they be regarded as sales to the Exchange
Petitioner concedes that Congress has the constitutional power to regulate the sales transactions in which it is engaged, but argues that Congress has not exercised that power in this Act, because it has used the expression “in interstate commerce,” a phrase, says petitioner, not sufficiently comprehensive to cover such transactions.
We are not to be taken as saying that a mere sale by A, within a state, to B, who ships the commodity in interstate commerce, would necessarily be a sale in interstate commerce; the character and extent of the seller’s knowledge of the purpose of the purchaser to ship across state lines may be important. Petitioner, in support of its position that it has insufficient knowledge of the transmission to Massachusetts of the energy purchased from it by Connecticut Power, leans heavily on Superior Oil Co. v. Mississippi, 280 U.S. 390, 50 S.Ct. 169, 170, 74 L.Ed. 504, a case which, as the opinion shows, turned on its peculiar facts and which, as the court said, was “near the line.”
The facts here are, then, ample to •show such knowledge as is required; but we are not to be taken as saying that less facts would not be sufficient. We have not "based our ruling on “affiliation” between the •companies, or on the thesis that Connecticut Power is an agent of petitioner. Nor have we considered it of any importance that petitioner, in 1936, sold , assets to Connecticut Power and took other steps to •escape the Commission’s jurisdiction; to make such an attempt is not unlawful, is indeed not immoral — not even if it fails.
It is immaterial that the sales are ■“indirect” in that they are sold within the state to another company for transmission and sale outside the state, or that the quantities of energy sold are variable or small (relative to the seller’s total output) or are part of petitioner’s “surplus” production;
We conclude that the Commission correctly held that petitioner is engaged in “the sale of electric energy at wholesale in interstate commerce.”
4. Petitioner, however, contends that, even if it is engaged in interstate wholesale sales, still it is not a “public utility,” and, therefore, the Commission’s orders are invalid. In brief, its position is (a) that a company, although engaged in making such interstate sales, is not a “public utility,” subject to the Commission’s jurisdiction, unless it has facilities for “transmission in interstate commerce,” and (b) that petitioner has no such facilities.
More in detail, its contention is as follows: (1) All facilities of such a company are rigidly divided into those for “transmission” and those for “generation” of electric energy. (2) Petitioner has no facilities for transmission in interstate commerce; accordingly, all its facilities used in connection with its interstate wholesale sales are “generation” facilities. (3) The Commission has no jurisdiction under any section found in Part II, over “generation” facilities. (4) It follows that the Commission has no jurisdiction, under Part II, over any of petitioner’s facilities. (5) Therefore, petitioner is not a “public utility,” as that term is used in §§ 208 and 301(a) pursuant to which the Commission’s orders were entered, since that term, for the purposes of those sections, is defined, in § 201(e), as a company which owns or operates facilities subject to the Commission’s jurisdiction under Part II. (6) The result, says petitioner, is that the Commission’s orders here under review are invalid.
Even if we assume that generation facilities are not within the Commission’s jurisdiction under § 201 (b) or any other portion of Part II, and also that petitioner has no facilities for interstate transmission, still petitioner’s contention is untenable: Section 201(b) confers jurisdiction over not only facilities (1) for interstate transmission but also — and disjunctively — over facilities (2) for interstate wholesale sales. If the Commission has no jurisdiction under § 201(b) over generation facilities, then that part of that section conferring jurisdiction over facilities for interstate wholesale sales becomes meaningless — unless there is a third category of facilities, i.e., those used neither for transmission nor for generation. We must, therefore, look for that third category. We find it in petitioner’s corporate organization, contracts, accounts, memoranda, papers and other records, in so far as they are utilized in connection with such sales.
It should be noted that the word “facilities” is generally regarded as a widely inclusive term, embracing anything which aids or makes easier the performance of the activities involved in the business of a person or corporation. Cf. Nekoosa-Ed-wards Paper Co. v. M. St. P. & S. F. Ry. Co., 217 Wis. 426, 259 N.W. 618, 620; Fraters v. Keeling, 20 Cal.App.2d 490, 67 P.2d 118, 119; Funk & Wagnalls Dictionary (1913 Ed.) 888.
5. A majority of the court holds that there is also the following alternative ground for rejecting petitioner’s contention : Even if we assume that petitioner has no facilities for interstate transmission,
and that petitioner’s books, records, etc., are not facilities for wholesale sales in interstate commerce, so that petitioner has nothing except facilities for generation, still petitioner’s contention is unsound. For we consider that generation facilities, where used as aids to such sales, are within the Commission’s jurisdiction under § 201(b).
As previously noted, that subsection specifically provides that “the Commission shall have jurisdiction over all facilities” either for (1) “transmission of electric energy in interstate commerce” or (2) “the sale of electric energy at wholesale in interstate commerce.” If that sentence, so providing, stopped there, it would be obvious that the Commission has jurisdiction over generation facilities when used in connection with interstate wholesale sales. The sentence, however, continues with a clause (which, for convenience, we shall call the “but” clause) reading: “but shall not have jurisdiction, except as specifically provided in this Part and the Part next following [sections 824-825r of this title], over facilities used for the generation of electric energy or over facilities used in local distribution or only for the transmission of electric energy in intrastate commerce, or over facilities for the transmission of electric energy consumed wholly by the transmitter.” This “but” clause, petitioner argues, reduces the authority conferred on the Commission over “all facilities” for “the sale * * * at wholesale in interstate commerce,” in the earlier part of the sentence, by excluding “facilities used for the generation.” To this argument there are several answers :
(a) In the preceding subsection, 201(a), Congress “declared” that “ * * * Federal regulation of matters relating to generation to the extent provided in this Part and the Part next following [sections 824-825r of this title] * * * is necessary in the public interest.” The legislative history of the Act also weighs heavily against petitioner’s assertion. As that history is excellently summarized in Jersey Central Power & L. Co. v. Federal Power Commission, supra, we shall do no more than to quote the following from the statement of
Moreover, among the facilities described in the “but” clause of § 201(b), are those used “only for the transmission * * *' in intrastate commerce”; as such facilities could not possibly be among those used for interstate transmission or interstate wholesale sales, the “but” clause becomes foolish if interpreted as carving out of the authority granted in the earlier part of the same sentence the facilities described in the “but” clause. Such a foolish interpretation is avoided by giving effect to a phrase in the “but” clause, i.e., “except as specifically provided in this Part or the Part next following [sections 824-825r of this title].” The “but” clause then shows up not as one reducing jurisdiction but as a negatively worded confirmation of the Commission’s jurisdiction, in certain circumstances, over the facilities mentioned in the “but” clause. In other words, the “but” clause is to be construed as if it read: “Wherever it is so specifically provided in Parts II and III, the Commission shall have jurisdiction over the facilities used for generation, for local distribution, for intrastate transmission, etc.”
Under that interpretation, the Commission, under § 201(b), has jurisdiction of generation facilities when used in connection with wholesale interstate sales, because jurisdiction of facilities for such sales is “specifically provided” in that section. Congress, we think, intended to exempt generation facilities when not used for interstate purposes because, when not so used, they are intrastate facilities; accordingly, when not so used, they are grouped, in the “but” clause, with other non-interstate facilities, i.e., facilities used in local distribution or for intrastate transmission.
Regarding the “but” clause as an exception, and keeping in mind the obvious purpose of Congress, disclosed in the legislative history, to see to it that there was effective regulation of interstate wholesale sales of electrical energy, we consider as pertinent the “elementary rule requiring that exceptions from a general policy which a law embodies should be strictly construed * * Spokane & Inland R. R. v. United States, 241 U.S. 344, 348, 350, 36 S.Ct. 668, 671, 60 L.Ed. 1037; cf. Piedmont & Northern Ry. v. I. C. C., 286 U.S. 299, 311, 312, 52 S.Ct. 541, 76 L.Ed. 1115; United States v. McElvain, 272 U.S. 633, 639, 47 S.Ct. 219, 71 L.Ed. 451.
We note that the Natural Gas Act, U. S.C.A.Title 15, § 717(b) provides that that Act shall apply to the “transportation” of natural gas “in interstate commerce” or to the “sale in interstate commerce of natural gas for resale”; the same sentence contains a “but” clause reading: “but shall not apply * * * to the local distribution of natural gas or to the * * * production or gathering of natural gas.”
The point is that it is not as such that the generation facilities are subject to the Commission’s jurisdiction under § 201(b), but as facilities used in the business of knowingly selling electric energy wholesale in interstate commerce. It is the fact of petitioner’s knowledge which should dissipate the apprehension expressed in the brief of amicus curiae that the result of a decision sustaining the Commission in
5a. The Commission argues that there is an additional ground for holding that it has “jurisdiction” under § 201(b). Since we have held that it has “jurisdiction,” for the reasons heretofore given, we shall not consider that argument but merely note that it runs as follows: In Utah Power & L. Co. v. Pfost, 286 U.S. 165, 181, 52 S.Ct. 548, 552, 76 L.Ed. 1038, the court differentiated between generation and transmission, stating that transmission “begins * * * definitely at the generator, at which point measuring appliances can be placed and the quantum of electrical energy ascertained with practical accuracy.” As appears from our summary of the facts in the instant case, petitioner owns and operates facilities connecting its generators with the “bus,” and circuits connected with that “bus” which lead, through bushings in the wall of petitioner’s generating plant, to the substation owned by Connecticut Power Company; all those connections, the bus, and that part of the circuits inside the petitioner’s generating plant, are owned by petitioner. The Commission argues that those facilities, under the Pfost case, are transmission facilities and, as the energy sold in Massachusetts passes (with petitioner’s knowledge) through those facilities, they are “facilities * * * for the transmission of electric energy in intrastate commerce,” and are within the Commission’s jurisdiction under § 201(b). Petitioner argues that such facilities are classified in the Commission’s accounting rules as part of a generating plant; but the Commission replies that such an accounting classification cannot be controlling when the question, as here, is one of jurisdiction. Petitioner also argues that these facilities, even if for transmission, are, relatively, so small in extent that they cannot be the basis of jurisdiction; the Commission answers that in Jersey Central Power & L. Co. v. Federal Power Commission, 3 Cir., 129 F.2d 183, jurisdiction, under § 201(b), was held to be properly based on
6. Petitioner, however, argues that, regardless of all other consideration, Congress cannot have intended, that the Commission should have jurisdiction over any of petitioner’s facilities because of the preamble of the Act, § 201 (a) which reads as follows: “It is hereby declared that the business of transmitting and selling electric energy for ultimate distribution to the public is affected with a public interest, and that Federal regulation of matters relating to generation to the extent provided in this Part and the Part next following [sections 824-825r of this title] and of that part of such business which consists of the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce is necessary in the public interest, such Federal regulation, however, to extend only to those matters which are not subject to regulation by the States.”
On the basis- of -the closing words of that section, two arguments are advanced. The first (as we understand it) runs thus: The Connecticut Commission' asserts that it, absent a federal statute, has complete jurisdiction over all petitioner’s facilities and activities; and perhaps, if the question were to arise today, the Supreme Court would hold that,' absent federal legislation, such a State. Commission can constitutionally exert such jurisdiction; accordingly, the last .phrase in § 201 (a) should be read as depriving the Federal Commission of jurisdiction.
With that suggestion, we cannot agree. For, in ascertaining the legislative purpose, we must read the legislation in the light of the views of Congress at the time of its enactment.
Petitioner also seems to argue that, because of the closing words of § 201 (a), the Federal Commission is denied jurisdiction over any facilities which are, in part, subject to regulation by any State, and that, since the State of Connecticut, through a State Commission, regulates, in part, all petitioner’s facilities, Congress must be understood as intending that they should not be within the regulatory power of the Federal Commission. That suggestion is without merit. And especially so with reference to accounts, records and the like. For Congress obviously contemplated that there would, in many cases, be both federal and state regulation. Thus, in § 301 (a), after conferring on the Federal Commission authority over such matters, Congress said, “Provided, however, That nothing in this Act [chapter] shall relieve any public utility from keeping any accounts, memo-randa, or records which such public utility may be required to keep by or under authority of the laws of any State.” Thus a company like petitioner may be required to keep its accounts, etc., in two distinct forms, one pursuant to the orders of the Federal Commission and the other in accord with State requirements
<, Section 209 (b) unmistakably recognizes the likelihood of duality in regulation, and is designed to mitigate its effects, by providing for “conferences” and “joint hearings” by the Federal and State Commissions “regarding the relationship between rate structures, costs, accounts, charges, practices, classifications, and regulations of public utilities subject to the jurisdiction of such State commission and of the [federal] Commission.”
We cannot agree that Congress intended by the preamble that interstate transactions, which the Attleboro case had held to be beyond the regulatory power of the States, should be exempt from federal regulation where they are carried on by facilities which are also used for intrastate commerce.
Moreover, petitioner’s suggested interpretation gives undue weight to a preamble clause worded as generally as § 201 (a). Cf. Carter v. Carter Coal Co., 298 U.S. 238, 280, 56 S.Ct. 855, 80 L.Ed. 1160; N. L. R. B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 129, 130, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352.
For that reason, we also reject the following suggestion: Although, as already noted, § 201 (b), disjunctively, confers jurisdiction over interstate transmission or interstate wholesale sales, yet, it is said, this disjunction must be disregarded because the preamble refers, conjunc-tively, to “the business of transmitting and selling electric energy”; this reference, it is urged, restricts the application of § 201 (b) to a “person” which is in the joint business of transmitting and selling in interstate commerce. It will be noted that the result would be to exempt a corporation engaged in transmitting, but not selling at wholesale, in interstate commerce, >a result which the legislative history shows to be in flat contradiction of the legislative .purpose, for it would relieve such a company from both State and Federal regulation. The preamble of the Natural Gas Act, U.S.C.A. Title 15, § 717 (a), speaks in similar conjunctive manner of the “business of transporting and selling natural gas,” while § 717 (b) — like 201 (b) of the Federal Power Act — makes the Gas Act applicable, disjunctively, to “such transportation or sale.” In the People’s Natural Gas case, supra, the court gave effect to the disjunctive treatment in § 717 (b), paying no attention to the conjunctive description in the preamble.
7. We are not unmindful of the doctrine of such cases as Federal Trade Commission v. Buntc Brothers. Tnc., 312 U.S. 349, 61 S.Ct. 580, 582, 85 L.Ed. 881; Palmer v. Massachusetts, 308 U.S. 79, 83, 84, 60 S.Ct. 34, 84 L.Ed. 93, and A. A. Kirschbaum v. Walling, Administrator, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. -, i.e., that, having “due regard for a proper adjustment of the local and national interests in our federal scheme,” [312 U.S. 349, 351], 61 S. Ct. 580, 582, 85 L.Ed. 881, the courts should discountenance “in roads by implication on state authority,” [308 U.S. 79, 84, 60 S.Ct. 37, 84- L.Ed. 93], and that a Congressional intent to extend federal regulation should not be assumed to exist unless Congress is “reasonably explicit” in stating such a purpose. We think the Congressional purpose to vest the Commission with the powers it here asserts does not rest upon mere implication and that the Act and its legislative history make that purpose, to say the least, “reasonably explicit.” There is no
8. The facts and the meaning of the statute are sufficiently clear so that, in arriving at our decision, we have not deemed it necessary to consider whether the doctrine of Gray v. Powell, 314 U.S. 402, 413, 62 S.Ct. 326, 86 L.Ed. 301,
9. We have discovered no evidence in the record which shows that the findings of fact made by the Commission, necessary to support its orders, are not based on substantial evidence. We cannot, therefore, agree with petitioner that the Commission was under a duty to make further findings of uncontested facts, as requested by .petitioner, which, to quote petitioner’s brief, related to “legal criteria rejected” — and we hold 'correctly rejected — “by tlie Commission.” Such a duty no more rests upon the Commission than it does upon a federal trial judge, sitting without a jury, who is also required to make findings.
10. Petitioner assigns as error the failure of the Commission to include in the record before us any trial examiner’s report. No such report was ever served on petitioner and petitioner based no arguments on the contents of such a report either here or before the Commission. So far as appears from its findings and legal conclusions, the Commission did not rely upon any such report, nor is it required to do so by the Act. We see no reason why, in the circumstances, that report, if there be one, should be considered by us. Cf. N. L. R. B. v. Air Associates, 2 Cir., 121 F.2d 586; Kidder Oil Co. v. Federal Trade Commission, 7 Cir., 117 F.2d 892, 902, is not in point;
The petition is denied and the orders of the Commission are affirmed.
No question is raised as to the constitutionality of the Act.
Jersey Central Power & L. Co. v. Federal Power Commission, 3 Cir., 129 F.2d 183, similarly approaches the question of the Commission’s jurisdiction through a determination of whether a company is a “public utility” under Section 201 (e).
Section 208 roads : “(a) The Commission may investigate and ascertain the actual legitimate cost of the property of every public utility, the depreciation therein, and, when found necessary for rate-making purposes, other facts which bear on the determination of such cost or depreciation, and the fair value of such property, (b) Every public utility upon request shall file with the Commission an inventory of all or any part of its property and a statement of the original cost thereof, and shall keep the Commission informed regarding the cost of all additions, betterments, extensions, and new construction.”
Section 301(a) roads: “Every licensee and public utility shall make, keep, and preserve for such periods, such accounts, records of cost-accounting procedures, correspondence, memoranda, papers, books, and other records as the Commission may by rules and regulations prescribe as necessary or appropriate for purposes of the administration of this Act [chapter], including accounts, ree-ords, and memoranda of the generation, transmission, distribution, delivery, or sale of electric energy, the furnishing of services or facilities in connection therewith, and receipts and expenditures with respect to any of the foregoing: Provided, however, That nothing in this Act [chapter] shall relieve any public utility from keeping any accounts, memoranda, or records which such publie utility may be required to keep by or under authority of the laws of any State. The Commission may prescribe a system of accounts to be kept by licensees and public utilities and may classify such licensees and public utilities and prescribe a system of accounts for each class. The Commission, after notice and opportunity for hearing, may determine by order the accounts in which particular outlays and receipts shall be entered, charged, or credited. The burden of proof to justify every accounting entry questioned by the Commission shall be on the person making, authorizing, or requiring such entry, and the Commission may suspend a charge or credit ponding submission of satisfactory proof in support thereof.”
Section 3(4) defines “person” as used in the Act to mean “an individual or a corporation.”
Part II includes §§ 201 to 209 inclusive, 16 U.S.C.A. §§ 824-824h; Part III includes §§ 301 to 319, 16 U.S.C.A. §§ 825-825r.
Petitioner’s president testified as follows : “It is a fact known to the Company that the amount of energy sold by the Company to The Connecticut Power Company exceeds the territorial requirements of the latter, and that such excess is used by it, that is, by The Connecticut Power Company, in connection with the operation of the Connecticut Valley Power Exchange; and that in such operation energy is transmitted across the Massachusetts line; * * * The Company is the source of all the steam generated energy that The Connecticut Power Company delivers to the Connecticut Valley Power Exchange for transfer to Massachusetts and New York. Practically all of the energy received by The Connecticut Power Company from the Connecticut Valley Power Exchange originates in Massachusetts. * * * ”
“Q. Why do you permit The Connecticut Power Company, when convenient, to purchase the surplus electrical energy from the Hartford Company which you know it transmits across the State lines, as you have testified? A. Because when The Hartford Electric Light Company elected to divest itself of all inter-state transactions and of any benefit therefrom, we would, if we had specified that power purchased from the Hartford Company should not be used for such purpose, have deprived the residents of the
The following colloquies occurred in the oral argument before the Commission:
“Mr. Prettyman (one of counsel for petitioner) : I say that the physical movement, when we were a member of The Exchange, was the same as the physical movement since we have not been a member of The Exchange.
“Commissioner Scott: Let me put it in this way. Are not the various electrical facilities used in the process purely transferring devices, and is it not a fact that the entire combined process — electric, magnetic and mechanical — is integral, continuous and essentially simultaneous, and in the movement or transportation of this energy the same today as prior to 1936?
“Mr. Prettyman: Yes.
“The Chairman: And is not the timing of deliveries of such energy as does move over into Massachusetts the same as it would have been if the Hartford Company remained a member of The Exchange?
“Mr. Prettyman: That may he so. If the Hartford Company were a member of The E'xchange today probably the timing would be the same as to the energy that wmuld go to The Exchange.
- “The Chairman: And it would go there for the same purpose?
“Mr. Prettyman: The ultimate purpose, yes.
“The Chairman: And the Hartford generating station would play the same part in the integration of power supply accomplished by The Exchange that it would have played if the Hartford Company had remained a member of The Exchange ?
“Mr. Prettyman: The generating station of the Hartford generates energy that goes into The Exchange today, and-tho same thing would be true if it were a member of The Exchange ?
“The Chairman : That is right.
“Mr. Prettyman: That is true. * * *
“Mr. Prettyman: The purpose of the whole system from generator to point of utilization is to get energy from the generator to the point of utilization, yes. There is no question about that.
“Commissioner Scott: In other words, all of these facilities are a part of a process which makes the ultimate utilization possible? But for the generation and its transfer over these other lines and its ultimate use at tho other end there would bo nothing for the consumer to use?
“Mr. Prettyman: There is no question at all about that. If there -were nothing between tho generator and the point of utilization the consumer would not get anything. There is no question about that. * * *
“The Chairman: Is it not true that all of the facilities involved in this transfer of energy generated in the Hartford station, and including the generating process in the Hartford station of energy that moves into Massachusetts, are used in precisely the same way, with precisely the same timing as they were used or would have been used if Hartford had remained a member of The Exchange?
“Mr. Prettyman: Yes; I think the answer to that is ‘yes’ — the physical operation, that is, the generation and transmission over the line, obliterating the difference in identification of the companies involved. But the physical aspects of the generation, et cetera, are probably the samo, becauso the demands must be the same, that is, they are the same now as when Hartford was a member of The Exchange, * * *
“Commissioner Manly: Is there a salo of electric energy at wholesale in this case?
“Mr. Barney (one of counsel for petitioner) : Yes.
“Commissioner Manly: There is a sale by the Hartford Company to the Connecticut Power Company?
“Mr. Barney: That is the sale at wholesale.
“Commissioner Manly: For resale?
“Mr. Barney : Oh, yes.”
The Exchange agreement refers to “power purchased by the Pool” from “the company furnishing the power.”
We shall discuss below petitioner’s additional contention as to the effect of the preamble, Section 201(a).
The Natural Gas Act, 15 U.S.O.A. § 717 et seq. relates not only to the “transportation of natural gas in interstate commerce,” but also to “the sale in interstate commerce of natural gas for resale * * * ” and to “natural-gas companies engaged in such transportation or sale.”
In that case an oil company in Mississippi sold gasoline to shrimp packers. The gasoline was delivered at the wharves of the packers’ packing plants in Mississippi and was thence carried by the packers’ boats to a “neighborhood” in Louisiana and there delivered by the packers to shrimp fishex-men for use in fishing. The Oil Company, in each case of delivery, received from the packers a so-called bill of lading, signed by the master of the packers’ boat on which the gas was loaded, purporting to show a consignment to the packers, to the Louisiana neighborhood as destination, on that boat; the bill of lading provided that the gasoline should remain the property of the Oil Company until delivered to the
Emphasis added.
See Peoples Natural Gas Co. v. Fed. Power Comm., supra; Jersey Central P. & L. Co. v. Fed. Power Comm., supra.
Flanagan v. Federal Coal Co., 267 U.S. 222, 225, 45 S.Ot 233, 69 L.Ed. 583; Pennsylvania R. R. v. Clark Coal Co., 238 U.S. 456, 465, 35 S.Ct. 896, 59 L.Ed. 1406; Peoples Natural Gas v. Fed. Power Comm., supra.
Western Union Tel. Co. v. Foster, 247 U.S. 105, 113, 38 S.Ct. 438, 62 L. Ed. 1006, 1 A.L.R. 1278.
Cf. Swift & Co. v. United States, 196 U.S. 375, 398, 25 S.Ct. 276, 49 L.Ed. 518; Texas & N. C. R. R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 S.Ct. 229, 57 L.Ed. 442; Western Union Tel. Co. v. Foster, 247 U.S. 105, 113, 38 S.Ct. 43S, 62 L.Ed. 1006, 1 A.L.R. 1278; Mississippi River Fuel Corp. v. Federal Power Commission, 8 Cir., 121 F.2d 159, 164.
We note, in passing, that such records, etc., are described in § 301(a).
It is suggested that, if such records, etc., are facilities, they are used in the generating business so that, if the generation facilities are excluded, so must they be. But some of the records, etc., are used in connection with the sales and not the generation; that they are partly used in the generation business is not material.
74th Cong., 1st Sess.. House Report No. 1903, page 74.
Emphasis added.
Because of the wording of the statute, it would seem to make little practical difference (1) whether we decide that the Commission has “jurisdiction” over petitioner’s corporate organization, records, etc., so far as they are used in connection with interstate wholesale sales— leaving undecided the question whether it also has “jurisdiction” over petitioner’s generation facilities because they are used in connection with such sales — or (2) whether we go further and decide (either independently or in the alternative) that it has “jurisdiction” over such generation facilities because they are so used. This is true because, once it is decided that the Commission has “jurisdiction” over any of petitioner’s facilities, then the petitioner is a “public utility,” and the Commission is then vested with specific powers under the several sections of the Act which refer to a “public utilityand some of those sections give the Commission specific powers — some direct and some indirect — with respect to the generating facilities of a “public utility.”
Thus § 207 relates to “any public utility.” It provides that, on complaint of a State Commission, if the federal Commission finds “any interstate service” of “any public utility” inadequate, it may “compel the enlargement” of the “generating facilities,” unless to do so will impair the public utility’s ability to render adequate service to its customers; and see section 202.
Also, since petitioner is a “public utility,” the Commission, even if it had “jurisdiction” solely over petitioner’s corporate organization, records, etc., would have authority to regulate petitioner’s rates for interstate sales (§ 205); to investigate the cost of any of its properties, especially so far as that is necessary for rate-making (§ 208); to order petitioner to keep its records, etc., as the Commission prescribes (§ 301); to fix rates of depreciation of petitioner’s “several classes of property” (§ 302); and require petitioner to file reports, including data as to earnings, etc., and costs of “generation” (§ 304).
It is true that were we to leave it undecided whether the Commission has any “jurisdiction” over petitioner’s generating facilities, we would thereby leave it undecided whether, as to such facilities, the Commission has authority, with respect to petitioner’s generating facilities, under § 203, requiring the Commission’s approval of the sale, etc., of a whole or part of a public utility’s facilities “subject to the jurisdiction of the Commission.” And the same might be true with respect to § 200(b); ef. however, the Commission’s powers over petitioner under §§ 205 and 213.
Cf. Great Northern Ry. Co. v. United States, 315 U.S. 262, 273, 62 S.Ct. 529, 86 L.Ed. 836; United States v. Union Pacific R. Co., 91 U.S. 72, 79, 23 L.Ed. 224; Ingo v. Koch, 2 Cir., 127 F. 2d 667, 678, and note 21.
Cf. Peoples Natural Gas Co. v. Federal Power Commission, App.D.C., 127 F.2d 153, 159.
Of. Northern. States Power v. Federal Power Commission, 7 Cir., 118 F.2d 141, 144; Alabama Power Co. v. Federal Power Commission, App.D.C., 128 F.2d 280, 285; Louisville Gas & Electric Co. v. Federal Power Commission, 6 Cir., 129 F.2d 126, 132.
We have already noted that the preamble explicitly contemplates “Federal
Other provisions which may result in duality of regulation are noted in the opinion in the Jersey Central case, 3 Cir., 129 E.2d 183, 189, note 2.
§ 201(a) is to be contrasted with the very different preamble to the Public Utility Holding Company Act of 1935, § 1(c), 15 U.S.C.A. § 79a(c), which was enacted on the same day and as another Title of the same legislation as the amended Federal Power Act.
See also the very different use of a “declaration of policy” in the Agricultural Adjustment Act of 1938, where many sections of the statute, following the preamble and conferring authority upon the Secretary, contain the words “in order to effectuate the declared policy” ; see, e. g., U.S.O.A. Title 7, §§ 608b, 608c (16) (A).
Of. Alton R. Co. v. United States, 315 U.S. 15, 62 'S.Ct. 432, 86 L.Ed. 586; Morgan Stanley, Inc., v. S. E. C., 2 Cir., 126 F.2d 325; Perkins v. Endicott Johnson Corp., 2 Cir., 128 F.2d 208.
There a report of the trial examiner had been served on the company which had filed exceptions thereto and submitted a brief and oral argument to the Commission in support of such exceptions; the court held that it had discretion to require, in such circumstances, that the report be made part of the record.
Concurrence Opinion
(concurring).
I agree that .there may be “facilities” for selling electric energy which are neither the apparatus which generates it, nor the wires which carry it to where it is used. What such selling “facilities” include’it would be hard to say; but they, must at least go so far as to comprise the selling organization with its paraphernalia of records and the like, and that is enough to dispose of this appeal. This reading is consonant with the purpose expressed in § 201 (a) ; and the use of the disjunctive in § 201 (b) — “for such transmission or sale” — to my mind turns the scale. As it is not necessary to go any further, I .prefer to rest my concurrence upon this ground alone, leaving undecided whether the Commission has any jurisdiction over the “facilities for * * * generation” as such because they too are “facilities for sale.”