Source: https://supreme.justia.com/cases/federal/us/319/61/case.html
Timestamp: 2017-10-18 14:33:40
Document Index: 535926203

Matched Legal Cases: ['§ 1', '§ 201', '§ 201', '§ 201', '§ 201', '§ 201', '§ 203']

Jersey Central Power & Light Co. v. FPC (full text) :: 319 U.S. 61 (1943) :: Justia US Supreme Court Center
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Jersey Central Power & Light Co. v. FPC
I. After the enactment of the above amendments to the Federal Power Act, and without seeking Commission authorization, the New Jersey Power & Light Company purchased from others than the issuer certain securities of the Jersey Central Power & Light Company. The Federal
It is admitted that the purchaser, Jersey Power, is a public utility under the act. The Commission, after investigation and hearing, held that Jersey Central also was a public utility under the act. 30 P.U.R.((N.S.)) 33. This holding was based on findings that Jersey Central owns and operates transmission facilities (an electric line) extending from its substation adjacent to its generating plant in South Amboy, New Jersey, to the south bank of the Raritan River in the same state where the line joins the transmission facilities of another company, not here involved, the Public Service Electric & Gas Company. This latter company transmits the energy from the point of junction on the Raritan to a common bus
The evidence upon which these findings were based showed that the energy was delivered from Jersey Central
Since the bus bar into which the Jersey Central energy is fed also receives large amounts of energy from other sources, the facts heretofore detailed do not prove conclusively that energy generated by Jersey Central passes to and is consumed in New York. This further evidence
appears from testimony presented by investigators of the Commission. Their examination of Public Service records discloses that there were moments of time between January 26, 1937, and September 6, 1938, when all the energy flowing into the bus bar at Mechanic Street came from Jersey Central, and, at the same moments, energy flowed from Mechanic Street in New Jersey to the Atlantic substation in New York. As no pools of energy exist from which the flow to New York could have been drawn, it necessarily follows that Jersey Central production was instantaneously transmitted to New York. Cf. Utah Power & Light Co. v. Pfost, 286 U. S. 165. The amount of energy transmitted was small. The evidence was developed from 184 log readings selected from 25,000. Of the 184 log readings, 12 showed this flow of energy from Jersey Central to New York between August 26, 1935, the effective date of the federal Power Act, and March 14, 1938, the date of the present purchase of stock. [Footnote 4] Twelve showed such flow shortly after the purchase.
The primary purpose of Title II, Part II of the 1935 amendments to the Federal Power Act, supra, note 1 was to give a federal agency power to regulate the sale of electric energy across state lines. Regulation of such sales had been denied to the States by Public Utilities
II. Petitioners concede that some energy generated by Jersey Central and sold and delivered by it to Public Service passes thereafter to New York. Their contention is that the arrangements by which this energy passes to New York does not make Jersey Central a public utility,
But we need not decide whether the intervention of Public Service between Jersey Central and Staten Island
Edison and the consequent loss of actual control of the energy by Jersey Central is significant to distinguish the two cases just cited. Petitioners, as we understand their briefs, concede, and rightly so, that power rests in Congress to regulate such a flow of energy from Jersey Central as here occurs. Such a flow affects commerce. Cf. Wickard v. Filburn, 317 U. S. 111, and cases cited. [Footnote 8] But petitioners say that Congress did not intend to exercise its full power over interstate transmission, and directed only that transmission "in interstate commerce" should be regulated. As contrasted with "affecting commerce" in the Public Utility Holding Company Act of 1935, 49 Stat. 803, § 1(c), or the "current of commerce" in the Commodity Exchange Act, 42 Stat. 998, or the broad language of The Bituminous Coal Act, 50 Stat. 83, or the Agricultural Adjustment Act, 50 Stat. 246, the words "in interstate commerce" are said by petitioners to be the "strictest test of jurisdiction available to Congress." But the argument, we think, gives no effect to the definition of "transmitted in interstate commerce" as used in this act. In the note below, there is set out the pertinent provisions of section 201 which indicate the meaning given the phrase, which provisions are italicized for quick reference. [Footnote 9] Subsections (a) and (b) show the intent to regulate such transactions as are beyond state power under the Attleboro
case, supra. Subsection (c) defines the electric energy in commerce as that "transmitted from a State and consumed at any point outside thereof." There was no change in this definition in the various drafts of the bill. The definition was used to "lend precision to the scope of the bill." [Footnote 10] It is impossible for us to conclude that this definition means less than it says, and applies only to the energy at the instant it crosses the state line, and so only to the facilities which cross the line and only to the company which owns the facilities which cross the line. The purpose of this act was primarily to regulate the rates and charges of the interstate energy. If intervening companies might purchase from producers in the state of production, free of federal control, cost would be fixed
Further, we think the definition in subsection (e) of "public utility" covers Jersey Central, since that company owns and operates the transmission line to the Raritan, and that line, as a result of the interpretation of interstate commerce in the preceding paragraph, is a facility under Commission jurisdiction by the terms of subsection (b). Subsection (b) declares that the provisions of this part apply "to the transmission of electric energy at wholesale in interstate commerce." This subsection gives jurisdiction over facilities used for such transmission. The business of transmitting and selling electric energy is said
III. Although only the facilities of a public utility used in the transmission or sale at wholesale of electric energy in interstate commerce or the rates and charges for such energy are subjected by Parts II and III of the act to regulation by the Federal Power Commission, that Commission has general power over the issue of all securities or assumption of all obligations by such a public utility. [Footnote 12] This generality of control is, in turn, limited by an exception in the case of utilities organized and operating in a state where its security issues are regulated by a state commission. [Footnote 13]
It will be observed that section 201(a) is a declaration of the end sought by the enactment of this Part -- that is, federal regulation of the generation, transmission. and sale of electric energy in commerce. The sounder conclusion, it seems to us, is that this limitation is directed at generation, transmission, and sale, rather than the corporate financial arrangements of the utilities engaged in such production
and distribution. This conclusion finds strong support in the fact that not only section 203(a), here under discussion, but sections 204(a), [Footnote 17] 208, [Footnote 18] and 301(a) [Footnote 19] regulate matters obviously subject to state regulation. If the scope of the limitation was as broad as petitioners contend, none of these sections just referred to would be effective. Section 203(a) would be a nullity, as, of course, the disposition and acquisition of facilities, merger, consolidation, or purchase of securities by their utilities may be regulated by the States. But this does not follow where a specific limitation is placed on the issue of securities by section 204. Section 204 is not rendered useless by subsection (f), since it is applicable to states without state commissions authorized to regulate security issues. See notes 12 and 13 supra. In view of the contemporaneous legislation as to
The same bill had sections 208(a) and 301(a), just referred to, which did regulate matters which could be regulated by the states. After its passage through the Senate in this form, the bill went to the House, and 201(a) was there amended by the Committee on Interstate and Foreign Commerce (H.Rep. No. 1318, 74th Cong., 1st Sess., June 24, 1935) to conclude, as it now does, "such Federal regulation, however, to extend only to those matters which are not subject to regulation by the States." The report, although it commented on the section, did not mention this change as one of substance from the conclusion of the Senate Bill. H.Rep. No. 1318, 74th Cong.,
1st Sess., p. 26. Sections 208 and 301, with their regulation of matters subject to state regulation, remained unchanged. More significant even than these indicia of the scope of the concluding words of section 201(a) is the fact that the Committee which adopted the new concluding words adopted also section 204, subsection (f), withdrawing federal regulation from security issues where such issues are "regulated by a State commission." While, of course, this may have been done to make certain that state power would not be infringed, such meticulous care was entirely unnecessary if the wording of section 201(a), simultaneously added, had the effect now urged. [Footnote 23] One might deduce from the language of the report in the House that the precise question at issue here was in the mind of the House Committee, and was resolved in accord with our conclusion. [Footnote 24] From this record of the pains taken by the Congress to make clear the respective responsibilities
Jersey Central exchanges electric energy with another utility, Public Service. The physical hook-up by which this exchange is effected is such that Jersey Central at times transmits electricity to Public Service and at times receives electricity from Public Service. Jersey Central owns and operates a transmission line seven-eighths of a mile long extending from its power plant to another point in the State where the line connects to a cable owned by Public Service running to a station owned by the latter at Perth Amboy, New Jersey. Over these connecting facilities, exchanges of two sorts are made. One is of emergency service whereby, in case of a breakdown in either company's system, energy is drawn from that of the other.
Jersey Central has no contractual relations with Staten Island, and does not sell it any energy. Jersey Central's relations with Public Service are independent of any contractual relations between the latter and Staten Island. At times when energy is flowing from Jersey Central to Public Service, it is also flowing from Public Service to
It is clear that the mischief to be
It is conceded that Jersey Central, as respects generation and sale of the energy in question, and as respects also its security issues, was, at the date of adoption of the federal Act, and still is, subject to regulation under the law of New Jersey, and that law does regulate these matters. [Footnote 2/3]
The electric current which sometimes reaches Staten Island is, no doubt, "propelled" in some measure by Jersey Central's dynamos, but whether the current shall go to Staten Island or be used within the State is a matter wholly beyond Jersey Central's control in point either of law or of fact. Public Service may or may not choose to transmit and sell the energy interstate as a part of the interstate business which is subject to regulation by the Commission. The current flows beyond the State line only because Public Service maintains wires for that purpose and turns the current into them. What § 201 authorizes the Commission to regulate is "that part of such
The construction now given to the Act makes the Commission's power to regulate Jersey Central depend not on the nature of its own business, as § 201(a) and (b) plainly require, but on the interstate character of the business of Public Service, over which Jersey Central has no control and which is subject to regulation by the Commission. § 201(b) and (e). I can find no support in the language, history, or avowed purposes of the Act for such a construction. Moreover, it is in flat contradiction to the words of § 201(a), (b), and (e), which, when read together, explicitly exclude from the jurisdiction of the Commission a "person" who "owns or operates facilities" otherwise subject to the jurisdiction of the Commission by providing, in § 201(a), that the federal regulation is "to extend only to those matters which are not subject to regulation by the States." Jersey Central is engaged in generating electricity which it sells and delivers to Public Service, all within the State. When the present Act was adopted, it was not doubted, and, in the light of our decisions, it could not be, that the seller's business was intrastate, and subject to state regulation. The manufacture and sale of a product wholly within a state is not interstate commerce, even though the product is destined by the buyer to be shipped out of the state in interstate commerce. [Footnote 2/4] That this is equally the case where
I conclude that the provisions of § 203 [Footnote 2/6] relating to regulation of security issues should not be considered, since
With alterations of expression not
Notwithstanding the statement in the Senate Committee's report on the Senate bill that "[t]he revision has also removed every encroachment upon the authority of the States," the House, not satisfied that State power had been adequately protected, struck out the entire Senate bill by amendment and substituted a new draft. In presenting
Both the language of the Act and the legislative history show that Congress did not intend to regulate matters