627 F.2d 467 | D.C. Cir. | 1980
Lead Opinion
Petitioner Connecticut Light and Power Company (CL&P) challenges an order of the Federal Energy Regulatory Commission (FERC) suspending for five months CL&P’s proposed new rate schedule. FERC and intervenor Connecticut Municipal Group (Municipals) urge us to dismiss the appeal as moot in view of CL&P’s settlement offer to refrain from seeking recovery of the suspended rates. We hold that this case is not moot, and set aside the suspension order because of the Commission’s failure to disclose reasons for the length of the suspension period.
I. FACTS
On 31 July 1978 CL&P filed a proposed rate increase (the “R-4 rate”) of $2,736,000 with the Commission, requesting an effective date of 1 September 1978 for the new rate.
CL&P made an Application for Rehearing and Reconsideration on 29 September 1978.
On 8 February 1980 CL&P filed a joint motion of the parties requesting the court’s permission to withdraw the cost-of-service issue from consideration because of an offer of settlement filed with the Commission on 5 February 1980.
Arguing that the offer of settlement eliminated the only impact on CL&P from the suspension order, the Municipals on 13 February 1980 moved to dismiss the appeal as moot.
II. MOOTNESS
CL&P notes that the settlement allegedly mooting this petition will not become final until the offer of settlement has been reviewed, approved, and made effective by FERC, but for the purpose of this motion it “is willing to stipulate that all financial disputes related to the Commission’s suspension order have been settled.”
Nevertheless, for two reasons we find that the settlement offer does not moot this petition. First, the settlement does not resolve all the issues presented in the petition.
Second, as to economic issues we think this case fits within the “capable of repetition, yet evading review” doctrine of Southern Pacific Terminal Co. v. ICC
Even so, we think the public interest in resolving this recurring controversy precludes dismissal for mootness. Suspension orders have a significant effect on regulated companies and their customers. For instance, in this case CL&P claims it lost over $1 million in revenues during the five-month suspension period.
Because the settlement offer does not resolve all the issues before us and in view of the public interest in resolving this recurring controversy, we find that this case is not moot.
III. MERITS
Section 205(e) of the Federal Power Act, authorizing suspension orders, provides:
[T]he Commission, upon filing with such schedules and delivering to the public utility affected thereby a statement in writing of its reasons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, classification, or service, but not for a longer period than five months beyond the time when it would otherwise go into effect; . . . ,24
The question here is whether the order provided the requisite statement of reasons for “such suspension.” We hold that it does not.
that the proposed rates have not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory, preferential or otherwise unlawful. The Commission shall accept the submittal for filing and suspend the proposed rates for one month from the proposed effective date after which the rates and services will go into effect .
This language is substantially indistinguishable from that of the instant case, yet the suspension period is one month rather than five months. Of course, indistinguishable rationales for differing results constitute no rationale at all. Indicating, as the Commission does, that rates may be “unjust and unreasonable” may provide a reason for suspending the rates, but of itself does not provide a reason for different lengths of suspension periods.
WHY a five-month suspension is justified instead of one month — or one day — is within the agency’s knowledge, because it consciously made a decision to impose a five-month or one day suspension. If the agency had no knowledge, standards, or rationale to guide it in making the choice, then its choice was totally arbitrary and must be set aside. If the FERC has standards or a rationale by which it chooses a period of suspension ranging from one day to five months, then the statute commands that they be articulated, so that their reasonableness and application to the individual case can be known, and so that the regulated entities will have some guidance for the future.
Largely relying on our decision in Municipal Light Boards v. FPC,
There is a distinction between a reviewing court weighing the agency’s discretion and a reviewing court interpreting the statute by which the agency exercises that discretion.
The Commission maintains that its stated reasons are statutorily adequate, citing the Supreme Court’s decision in the Trans Alaska Pipeline Rate Cases.
*472 [T]he Commission is required by § 15(7) to set out its reasons in writing for suspending a tariff. The usual and sufficient reason will be that the Commission has found a proposed tariff to fall on the unjust or unreasonable side of the line it has drawn, and it is a reason of precisely this sort that the Commission has given here.32
A similar result was reached by the Eighth Circuit in Otter Tail Power v. FERC.
However, it is apparent that Trans Alaska and Otter Tail deal only with the question of what constitutes a “reason” for suspending a rate increase; they do not give us guidance as to the statutory adequacy of reasons for the length of a suspension. Because the suspension period is meant to give the Commission a chance to inquire into the validity of the rate, it is unrealistic to expect a detailed statement dealing with the merits at the time of the suspension. But the reasons why a rate is or is not valid ultimately and the data behind such determinations are quite different from the factors involved in the Commission’s choice to suspend for one day or five months. Disclosing reasons for the length of a suspension does not necessarily require the Commission to prejudge the merits of a rate’s reasonability vel non at the time it suspends them in order to investigate that issue.
At oral argument the court in dialogue with counsel brought out factors which might be considered relevant by FERC in determining the length of a suspension period; among those factors could be the size of the increase, the percentage of a company’s business involved, certain other terms and conditions of the increase, the complexity of issues, or the Commission’s calendar. Whether any of these were considered by the Commission is anyone’s guess, since FERC (or its predecessor) has never indicated by rulemaking or in individual cases what standards guide its discretion as to suspension periods. Presumably, FERC has some sort of reasons for varying suspension periods; we think that requiring the Commission, in accordance with section 205(e), to state briefly such reasons in the relevant order would not be an undue burden.
We recognize that Congress intended that the Commission have utmost freedom in exercising its discretion as to the length of rate suspensions. But that the exercise of the suspension power is to be unfettered by judicial review does not mean FERC can use the power in a capricious manner. Surely Congress did not intend that the Commission treat regulatees placed in exactly the same situation in drastically different ways. When utilities are treated disparately, a reason must be given for the disparate treatment. Unfettered power is never to be power exercised without reason — especially when Congress clearly called for the statement of reasons.
And these reasons must relate to the time period of the suspension, not just to the necessity of some suspension, which is nearly always that the proposed rate must be examined as to its justness and reasonableness. If there are no reasons for choosing different periods, then the choice is completely arbitrary, and the Commission should settle on giving uniform suspensions.
Section 205(d) indicates that the FERC does not have an arbitrary power to treat utilities differently without giving a reason.
Determinations both whether a rate should be suspended and for how long have a substantial impact on consumers and companies, both are unreviewable by us, and we think both should be accompanied by reasons elaborated by the Commission. Section 205(e) requires reasons not merely for the suspension, but “for such suspension.” Length is a significant part of the suspension decision; reasons must be given for the period selected.
That reciting only nonexplanatory boiler plate is an apparently long standing Commission practice does not validate the failure to disclose reasons for suspension periods. It would “make a mockery of the judicial function” to rule “that administrative agencies are entitled to violate the law if they do it often enough.”
The same boiler plate recited in each order cannot possibly be a rationale for a one-day suspension and at the same time a rationale for a five-month suspension. The statutory requirement of a statement of reasons means reasons for the length of a suspension that fit the fact situation of the relevant case.
Because the present order does not contain a statement of reasons for the length of the suspension period, it is set aside, and the case is
Remanded.
. CL&P’s transmittal letter and FERC’s Notice of Filing of Tariff Change are reprinted in the Joint Appendix (J.A.) at 1 and 15-22 respectively.
. Members of the group participating in this proceeding include: City of Groton Department of Utilities; Borough of Jewett City Electric Light Plant; Second Taxing District, City of Norwalk; Third Taxing District, City of Nor-walk; City of Norwich, Gas & Electric Department; and Town of Wallingford, Department of Public Utilities, Electric Division.
. Protest and Petition to Intervene of the Connecticut Municipal Group, reprinted in J.A. at 36-51.
. Answer of the Connecticut Light & Power Company to Protest and Petition to Intervene of the Connecticut Municipal Group, reprinted in J.A. at 52-60.
. Order Accepting for Filing, Suspending Proposed Rate Increase, Granting Intervention, Denying Request for Phased Hearing, Providing for Hearing and Establishing Procedures, Docket No. ER78-517 (31 Aug. 1978), reprinted in J.A. at 2-7.
. Id. at 2, reprinted in J.A. at 3.
. Application by the Connecticut Light & Power Company for Rehearing and Reconsideration of the Commission’s Order of August 31, 1978, reprinted in J.A. at 61-73.
. Id. at 10, reprinted in J.A. at 70.
. Order Granting Rehearing for Further Consideration, Docket No. ER78-517 (30 Oct. 1978), reprinted in J.A. at 9-10.
. Order on Rehearing, Docket No. ER78-517, slip op. at 1 (22 Nov. 1978), reprinted in J.A. at 11.
. Joint Motion of the Parties Relative to Disposition of One of Two Issues on Appeal. The cost-of-service issue dealt with FERC’s summary rejection of inclusion by CL&P in its costs of service of any costs incurred to support research programs of the Electric Power Research Institute. Because of the offer of settlement mooting the issue, we do not further discuss the question in this opinion.
. Offer of Settlement at 2.
. Motion of Connecticut Municipal Group to Dismiss Appeal as Moot. On 25 Feb. 1980 FERC filed a Commission Response to Motion to Dismiss in support of intervenor’s motion.
. Connecticut Light & Power Co. v. FERC, No. 78-2312 (D.C.Cir. 3 Mar. 1980).
. Response in Opposition to Motion of Connecticut Municipal Group to Dismiss Appeal as Moot at 3 (emphasis in original).
. See Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 333, 100 S.Ct. 1166, 1171, 63 L.Ed.2d 427 (1980) (“a confession of judgment by defendant on less than all the issues [does not] moot an entire case; other issues in the case may be appealable”).
. Data Processing Serv. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).
. 16 U.S.C. § 824d(e) (1976) (when FERC suspends rates it must deliver “to the public utility affected thereby a statement in writing of its reasons for such suspension”).
. United States Parole Comm’n v. Geraghty, 445 U.S. 388, 100 S.Ct. 1202, 1208, 63 L.Ed.2d 479 (1980) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969).
. 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 (1911).
. Alton & S. Ry. v. International Ass’n of Machinists, 463 F.2d 872, 878 (D.C.Cir.1972).
. See, e. g., Indiana & Mich. Elec. Co. v. FPC, 502 F.2d 336, 343-48 (D.C.Cir.1974) (although vacating FPC rate suspension order, court under its equity powers prohibited retroactive collection of increased rates for the five-month period subsequent to otherwise effective date of new rates), cert. denied, 420 U.S. 946, 95 S.Ct. 1326, 43 L.Ed.2d 424 (1975); Mississippi River Fuel Co. v. FPC, 202 F.2d 899, 904 (3d Cir.) (court disallowed retroactive collection of rates to otherwise effective date of rates), cert. dismissed, 345 U.S. 988, 73 S.Ct. 1138, 97 L.Ed. 1397 (1953).
. Brief for Petitioner at 35.
. 16 U.S.C. § 824d(e) (1976).
. See cases cited in Appendix to Brief for Petitioner.
. Docket No. ER78-522 (30 Aug. 1978).
. We are unable to locate reasons for the suspension period elsewhere in the order. The Commission does recite briefly the history of the filing and the objections raised against it, but does not indicate if the history or nature of the objections had any bearing on the length of the suspension.
. 450 F.2d 1341 (D.C.Cir.1971), cert. denied, 405 U.S. 989, 92 S.Ct. 1251, 31 L.Ed.2d 445 (1972).
. Id. at 1352.
. Id.
. 436 U.S. 631, 98 S.Ct. 2053, 56 L.Ed.2d 591 (1979).
. Id. at 653, 98 S.Ct. at 2066.
. 583 F.2d 399 (8th Cir.1978), cert. denied, 440 U.S. 950, 99 S.Ct. 1431, 59 L.Ed.2d 639 (1979).
. Id. at 408 n.38 (citations omitted).
. Wilderness Soc’y v. Morton, 479 F.2d 842, 865 (D.C.Cir.1973) (en banc).
. Baltimore & O. Ry. v. Jackson, 353 U.S. 325, 330-31, 77 S.Ct. 842, 1 L.Ed.2d 862 (1957); Wilderness Soc’y v. Morton, 479 F.2d 842, 865 (D.C. Cir.) (“An administrative practice which is plainly contrary to the legislative will may be overturned no matter how well settled and how long standing.”), cert. denied, 411 U.S. 917, 93 S.Ct. 1550, 36 L.Ed.2d 309 (1973).
. That the Commission was particularly remiss here is indicated by its failure to even mention, much less discuss, the arguments raised in CL&P’s answer to the petition for suspension. While we do not hold that FERC must with precision answer each contention advanced by parties respecting suspension periods, we think FERC’s failure even to acknowledge the objections strengthens our conclusion that the order is mute with respect to reasons for the suspension length.
. NLRB v. Bell Aerospace Co., 416 U.S. 267, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974).
Dissenting Opinion
dissenting:
I believe the case is moot and hence would not reach the acknowledgedly important issues ably discussed by Judge Wilkey in this case.