Opinion ID: 386006
Heading Depth: 3
Heading Rank: 2

Heading: The Niagara Redevelopment Act

Text: 41 NYSEG's contention that the NRA gives PASNY sole authority to determine what terms and conditions for the wheeling of Niagara Project power are reasonable has no greater force. The NRA, enacted in 1957, expressly authorized and directed (the Commission) to issue a license to the Power Authority of the State of New York for the construction and operation of a power project with capacity to utilize all of the United States share of the water of the Niagara River permitted to be used by international agreement. 11 16 U.S.C. § 836(a) (1976). In addition to those (conditions) deemed necessary and required under the terms of the Federal Power Act, the Commission was instructed to include in PASNY's license several provisions, including the following: 42 The licensee shall, if available on reasonable terms and conditions, acquire by purchase or other agreement, the ownership or use of, or if unable to do so, construct such transmission lines as may be necessary to make the power and energy generated at the project available in wholesale quantities for sale on fair and reasonable terms and conditions to privately owned companies, to the preference customers enumerated in paragraph (1) of this subsection, and to the neighboring States in accordance with paragraph (2) of this subsection. 43 16 U.S.C. § 836(b)(4) (1976) (emphasis added). NYSEG asks us to construe this provision as giving PASNY exclusive authority to determine whether or not its contracts are fair and reasonable, and contends that support for this view may be found in a negative inference to be drawn from NRA § 836(b)(2). Subsection (b)(2) requires that the Commission condition PASNY's license on PASNY's making a reasonable portion of Niagara Project power available to neighboring states, and provides that (i)n the event of disagreement between (PASNY) and the power-marketing agencies of any such States, the (Commission) may, after public hearings, determine and fix the applicable portion of power to be made available and the terms applicable thereto. 12 NYSEG argues that since subsection (b)(2) provides for resolution of disputes thereunder by the Commission, the absence of similar provision under subsection (b)(4) means the Commission has no jurisdiction with regard to a dispute under subsection (b) (4). 44 We find nothing in these or any other sections of the NRA to suggest that PASNY has exclusive authority over its contracts involving transmission of Niagara Project power. Section 836(b)(4) does not strip the Commission of the authority or responsibility for assessing the reasonableness of such contracts; its effect is to require PASNY, as a condition of its license, to insure transmission lines for delivery of its power by agreement for use or purchase of such lines or, if such agreements are not available on reasonable terms, to construct the necessary lines. The implication of the mandate to the Commission to impose conditions is that it will be able to enforce those conditions. We do not view the absence from subsection (b)(4) of provision for public hearings such as are required under (b)(2) for power apportionments between states, as implying that the Commission has no jurisdiction to assure that its licensee complies with other conditions of its license. 45 NYSEG's reliance on Airco Alloys v. Niagara Mohawk, supra, is similarly misplaced. As discussed supra, the New York court there merely upheld its own jurisdiction to decide whether PASNY's contractual rights were violated. That decision thus has no bearing on the Commission's jurisdiction to determine the reasonableness, within the meaning of that word under the NRA, of a term included in a PASNY contract. 46 In any event, even assuming that PASNY had exclusive authority to decide whether given energy transmission terms available to it are reasonable, 13 the Commission order at issue here would in no way conflict with such authority, since, as discussed in Part 1 above, the Commission's order does not require PASNY to take, or refrain from taking, any action whatsoever. The only impact of the order upon PASNY is to give PASNY the option of transmitting additional power to Penn Yan over the lines of NYSEG.