Opinion ID: 359629
Heading Depth: 1
Heading Rank: 3

Heading: the application of the commission's policy to penn power

Text: 30 The question remains, however, whether a different result is required here because Penn Power did file rates in 1938. Ellwood contends that any amount charged in excess of the Rate Schedule No. 6 must be refunded under the filed rate doctrine. The filed rate doctrine is really not so much a judicially created doctrine as an application of explicit statutory language. 31 The doctrine has been applied under several regulatory schemes. 7 It has meant somewhat different things to different circuits. The doctrine has been described as intending to prevent discriminatory rate payments, 8 as reflecting a statutory bias in favor of retroactive rate reductions but not retroactive rate increases . . . 9 and as being primarily concerned with the preservation of the agency's primary jurisdiction over reasonableness of rates and the need to insure that regulated companies charge only those rates of which the agency has been made cognizant. 10 32 The core of the filed rate doctrine, as it applies to electric utilities, is contained in the following sub-sections of § 205(c, d) of the Federal Power Act, 16 U.S.C. §§ 824d(c) and 824d(d): 33 (c) Under such rules and regulations as the commission may prescribe, every public utility shall file with the Commission, within such time and in such form as the Commission may designate, and shall keep open in convenient form and place for public inspection schedules showing all rates and charges for any transmission or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services. 34 (d) Unless the Commission otherwise orders, no change shall be made by any public utility in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after thirty days' notice to the Commission and to the public. Such notice shall be given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. The Commission, for good cause shown, may allow changes to take effect without requiring the thirty days' notice herein provided for by an order specifying the changes so to be made and the time when they shall take effect and the manner in which they shall be filed and published. 35 The basic principle is simple: Since all rates subject to the Commission's jurisdiction must be filed and filed rates cannot be changed except as provided, utilities must sell their energy at the filed rate. This principle that rates cannot be changed except upon proper filing has been applied even where the initial rates had been agreed to between the parties, But had not been filed. 11 36 Ellwood's theory is that the rate filed by Penn Power in 1938 based on the 1935-1940 contract was the only rate that Penn Power could charge until its 1964 filing and, therefore, that it is entitled to a refund of all amounts paid in excess of that rate. We hold that it is within the Commission's discretion to deny any refund on the facts here. 12 37 As the Supreme Court stated in applying the Natural Gas Act, we must examine the details of Ellwood's argument (ag)ainst the backdrop of the practical consequences of the petitioner's claim and the purpose of the Act . . . . Sunray Mid-Continent Oil Co. v. F. P. C., 364 U.S. 137, 147, 80 S.Ct. 1392, 1399, 4 L.Ed.2d 1623 (1960). The practical consequence of applying the filed rate doctrine in the manner suggested by Ellwood is that Penn Power would have the rate it charged Ellwood frozen for a period of twenty-four years after the 1935 contract, which set the rate, had terminated. Ellwood claims that it should receive reimbursement in the amount of $312,465. 38 The purposes of the Act would not be furthered by such a result. The underlying concern of the Act is to assure that the rates subject to its coverage are reasonable and that these rates are set and reviewed in a fair and orderly manner. Penn Power did not escape regulation by not filing with the Commission between 1940 and 1964. Its sales to Ellwood were subject to regulation by the Pennsylvania Public Utilities Commission and all rate increases were filed with that agency. 39 Thus when Ellwood's argument is viewed against the backdrop of the practical consequences of its claim and the purposes of the Act, the force of the argument is considerably diminished. 40 With this in mind we now address directly the merits of Ellwood's filed rate contention. Ellwood argues that even if the policy embodied in Order No. 282 of forgiving past failures to file is valid, the sales here are outside the ambit of the policy because Penn Power filed a rate covering such sales in 1938. Presumably, according to this argument, if Penn Power had made a filing which cancelled this rate, the sales here would be within the scope of the policy enunciated in Order No. 282. In 1938, the Commission requested that Penn Power file the agreement on the basis of which the sales to Ellwood were made. Penn Power filed this agreement after being told that the filing of the rate itself was not proper. § 205(d) of the Federal Power Act, 16 U.S.C. § 824d(d) prohibits changes in any rate, charge, classification, or service, or in any rule, regulation or Contract relating thereto without proper filing. The contract which was filed here, by its terms, terminated after five years. The current regulation, 18 C.F.R. § 35.15 (1977), requires filing with the Commission before a rate schedule or part thereof required to be on file with the Commission is proposed to be cancelled or Is to terminate by its own terms. As late as 1961, this regulation then numbered 18 C.F.R. § 35.05 referred only to filing cancellations and did not specifically require filing where a contract, as the one here, terminated by its own terms. Since the statute requires filing of Changes, and there was no change, and since the regulation applicable at the time the contract terminated did not require filing where a contract was terminated by its own terms, Penn Power properly considered the rate it filed in 1938 to be of no effect after 1940. We therefore hold that there was no effective filed rate applicable to the sales in question and, as a result, the filed rate doctrine is not applicable. 41 An alternative basis for this conclusion is that the filed rate doctrine provides no basis for distinguishing between companies who filed rates in the past and those who did not file at all. As already discussed, courts have held that where the Commission has jurisdiction over given sales and the parties have agreed to a certain rate, that rate may not be increased without prior filing even though the initial rate was never filed. 13 Ellwood therefore has no greater claim to a refund than does any other purchaser whose supplier's past failure to file is excused pursuant to Order No. 282. Thus if the Commission has the discretion under these circumstances to excuse past failures to file and we have just held that it does, the filed rate doctrine imposes no special obstacle to the exercise of that discretion with respect to Penn Power here. 42 The order of the Commission will, therefore, be affirmed.