Source: http://openjurist.org/print/24235
Timestamp: 2016-05-06 19:27:58
Document Index: 559411526

Matched Legal Cases: ['§ 831', '§ 380', '§ 9795', '§ 3952', '§ 1037', '§ 5502', '§ 8555', '§ 3693', '§ 2562', '§ 2807', '§ 7278', '§ 3031', '§ 494', '§ 6010']

306 US 118 Tennessee Electric Power Co v. Tennessee Valley Authority
Home > 306 US 118 Tennessee Electric Power Co v. Tennessee Valley Authority
Certain provisions of state statutes regulating public utilities are claimed to confer on the appellants the right to be free of competition. Each of the states in which any of them operates, save Mississippi,12 has established a commission to supervise and regulate public utilities. While the statutes13 differ in their provisions, all but that of Virginia require a public utility to obtain a certificate of convenience and necessity as a condition of doing business. The appellants commenced business in the various states prior to the adoption of the requirement of such certificates and, so far as appears, they have none covering their entire operations. They have, however, obtained certificates for extensions made since the passage of the statutes; and they claim that, in any event, these laws afford them protection from the Authority's competition since any utility now seeking to serve in their territory must obtain a certificate, and hence they have standing to maintain this suit against the Authority which has none. The position cannot be maintained. Whether competition between utilities shall be prohibited, regulated or forbidden is a matter of state policy. That policy is subject to alteration at the will of the legislature.14 The declaration of a specific policy creates no vested right to its maintenance in utilities then engaged in the business or thereafter embarking in it.
Moreover, the states in which the Authority is now functioning have declared their policy in respect of its activities. Alabama has enacted that federal agencies, instrumentalities, or corporations shall not be under the jurisdiction of its Public Service Commission;15 that municipalities and improvement authorities may own and operate electric generating and distributing systems and may contract with a federal agency such as the Authority for the purchase of energy, and stipulate as to the use of the energy, including rates of resale;16 that nonprofit membership corporations may be formed for the distribution among their members of electricity with like power to contract with the Authority for the required energy.17 Tennessee has amended Section 5448 of its Code, which defines public utilities, so as to exclude federal corporations such as the Authority from the jurisdiction of the State Utilities Commission;18 has authorized municipalities to own and operate electric generating transmission and distribution systems and to contract for power with the Authority on terms deemed appropriate, including the fixing of resale prices;19 has authorized the formation of nonprofit membership electric corporations with like powers to contract.20 Kentucky has authorized municipalities to establish and maintain light, heat, and power plants;21 and has provided for the organization of nonprofit cooperative electric corporations which may contract with the Authority for purchase of energy and stipulate as to resale prices.22 Mississippi, which has no state law for regulation of utilities, has empowered municipal and county governments to establish and maintain electric distribution systems which may buy power from the Authority and contract as to resale prices;23 has created a rural electrical authority and authorized the formation of power districts and nonprofit competitives, all competent to purchase energy from the Authority and distribute it and to contract with the Authority as to resale rates to consumers.24 The Authority's action in these states is consonant with state law, but, as has been shown, if the fact were otherwise, the appellants would have no standing to restrain its continuance.
As the Authority has not acted in any way in North Carolina, South Carolina, Virginia or West Virginia, the appellants' contention that its proposed entry into some or all of them confers a right to sue for an injunction against injury thereby threatened has even less support.25
A distinct ground upon which standing to maintain the suit is said to rest is that the acts of the Authority cannot be upheld without permitting federal regulation of purely local matters reserved to the states or the people by the Tenth Amendment and sanctioning destruction of the liberty said to be guaranteed by the Ninth Amendment to the people of the states to acquire property and employ it in a lawful business. The proposition can mean only that since the Authority sells electricity at rates lower than those heretofore maintained by the appellants such sale is an indirect regulation of appellants' rates. But the competition of a privately owned company authorized by the state to enter the territory served by one of the appellants would, in the same sense, constitute a regulation of rates. The contention amounts to saying that competition by an individual or a state corporation is not regulation but competition by a federal agency is. In contracting with municipalities and nonprofit corporations the Authority has stipulated respecting the price at which the energy supplied shall be resold by its vendees. That is said to be a regulation of the appellant's business. But it is nothing more than an incident of competition; it is but a method of seeking and assuring a market for the power which the Authority has for sale, and a lawful means to that end.26 The sale of government property in competition with others is not a violation of the Tenth Amendment. As we have seen there is no objection to the Authority's operations by the states, and, if this were not so, the appellants, absent the states or their officers, have no standing in this suit to raise any question under the amendment.27 These considerations also answer the argument that the appellants have a cause of action for alleged infractions of the Ninth Amendment.
Act of May 18, 1933, 48 Stat. 58, as amended by Act of August 31, 1935, 49 Stat. 1075, 16 U.S.C. Sec. 831 et seq., 16 U.S.C.A. § 831 et seq.
50 Stat. 751, 752, 28 U.S.C. Sec. 380a, 28 U.S.C.A. § 380a.
New Orleans, M. & T.R. Co. Ellerman, 105 U.S. 166, 173, 26 L.Ed. 1015; Alabama Power Co. v. Ickes, 302 U.S. 464, 479—483, 58 S.Ct. 300, 303—305, 82 L.Ed. 374, and cases cited; Greenwood County v. Duke Power Co., 4 Cir., 81 F.2d 986, 997; Duke Power Co. v. Greenwood County, 4 Cir., 91 F.2d 665, 676, affirmed 302 U.S. 485, 58 S.Ct. 306, 82 L.Ed. 381.
Alabama Code (1928) § 9795; Carroll's Kentucky Statutes (1936) § 3952-25; North Carolina Code (1935) § 1037(d); Williams' Tennessee Code (1934) § 5502-3; South Carolina Code (1934 Supp.) § 8555-2(23); Virginia Code (1936) §§ 3693—3774k; West Virginia Code (1937) § 2562(1).
Kentucky Acts, Fourth Extraordinary Session, 1936—1937, chap. 6, p. 25.
In fact several of the states in question have statutes which would to some extent, and in some circumstances, permit the purchase and use of power created by the Authority. In all of them municipalities may establish and operate their own distribution systems: North Carolina Code (1935) § 2807; South Carolina Code (1932) §§ 7278—7280, 8262; Virginia Code (1936) § 3031; West Virginia Code (1937) §§ 494, 591(86). North Carolina and Virginia have statutes permitting the formation of cooperatives which may buy power from the Authority under contracts fixing resale rates: Public Laws of North Carolina, 1935, chap. 291, p. 312; Virginia Code (1936) chap. 159A, section 4057(1), et seq. South Carolina has created a State Rural Electrification Authority with power to buy electricity from any federal agency: South Carolina Code (1936 Supplement) § 6010-2.
Source URL: http://openjurist.org/306/us/118/tennessee-electric-power-co-v-tennessee-valley-authority