Opinion ID: 1568028
Heading Depth: 1
Heading Rank: 5

Heading: Accounting Disposition of Amounts Disallowed

Text: The jurisdiction of the Commission to enter the order directing that the licensee remove from project accounts and transfer to the earned surplus account the items which the Commission disallowed is attacked by the licensee. It contends that the Federal Water Power Act, under which the license was granted, did not entrust the Commission with control of the licensee's capital accounts but merely of the project accounts and that even as to project accounts final determination of project cost or net investment was entrusted by the original act to the district court rather than to the Commission. It asserts that the 1935 amendment to section 14 of the act, which did give the Commission the right to determine net investment, could not affect its right under the original act to have this determination made by agreement or court decree. Finally it contends that the order of the Commission directing the disallowed items to be removed from the project accounts was, in effect, a final determination of the issue of net investment in violation of its right. We see no merit in these contentions. Four federal courts of appeals have sustained the authority of the Commission to require items of project costs which it has disallowed to be written off to surplus under circumstances similar to those here disclosed. Northern States Power Co. v. Federal Power Commission, 7 Cir., 1941, 118 F.2d 141; Alabama Power Co. v. Federal Power Commission, 1942, 75 U.S.App. D.C. 315, 128 F.2d 280, certiorari denied 317 U.S. 652, 63 S.Ct. 48; Louisville Gas & Electric Co. v. Federal Power Commission, 6 Cir., 1942, 129 F.2d 126, certiorari denied 318 U.S. 761, 63 S.Ct. 559; Alabama Power Co. v. Federal Power Commission, 5 Cir., 1943, 134 F.2d 602. Those cases are clear authority for the Commission's order here complained of. We deem it unnecessary to add to their discussion of these questions other than to point out that the licensee had no vested right to have its investment determined by one procedure rather than by another at least so long as it was accorded a right to be heard and an ultimate judicial review. Accordingly the change of procedure which the 1935 amendment brought about did not, as applied to the present proceeding, violate the Fifth Amendment. Crane v. Hahlo, 1922, 258 U. S. 142, 42 S.Ct. 214, 66 L.Ed. 514. Compare Gibbes v. Zimmerman, 1933, 290 U.S. 326, 332, 54 S.Ct. 140, 78 L.Ed. 342; National Labor Relations Board v. Mackay Co., 304 U.S. 333, 351, 58 S.Ct. 904, 82 L.Ed. 1381. Likewise we find no merit in the licensee's further contention that it was not afforded a sufficient notice that the question of the removal of the disallowed items from its accounts would be considered by the Commission or a sufficient opportunity to be heard thereon. As to this we need only quote what was said by Justice Miller in one of the Alabama Power Company cases (128 F.2d 280, 288): Not only is it clearly apparent, therefore, that the Commission had full power to require accounting disposition of all items here in dispute, but it seems inescapable that accounting disposition of all was at issue from the very beginning of the proceedings here under review. Unless accounting disposition had been contemplated for the purposes of the statute, the inquiry would have been without meaning. The Company received its license with full knowledge that the law required it to cooperate with the Commission to the ends therein stated. It is impossible to read the statute without realizing the necessity of ascertaining and making accounting disposition of all items which the licensee put in issue. `The grant of a license, being a privilege from the sovereign, can be justified only on the theory of resulting benefit to the public. The act, therefore, should receive a practical construction,  one enabling the Commission to perform facilely the duties required of it by Congress.' Every step in the proceedings and in the negotiations taken by the Commission has been for the purpose of establishing an accounting basis upon which it could perform its duties with respect to the licensee and to the public. This is precisely that regulation which is contemplated by the Act. The order of the Federal Power Commission is affirmed.