Legal Document

402 U.S. 515 91 Supreme Court Reporter 1592 29 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 74 GAINESVILLE UTILITIES DEPARTMENT et al., Petitioners,v.FLORIDA POWER CORPORATION. FEDERAL COMMISSION, Petitioner, versus FLORIDA Nos. 464, 469. Argued Feb. 24, 1971. Decided May Syllabus Pursuant to § 202(b) of the Federal Power Act, Commission (FPC) is empowered direct one electric utility interconnect its system with another and it 'may prescribe terms conditions arrangement be made * including apportionment cost between them compensation or reimbursement reasonably due any them.' After hearings staff studies FPC found that an interconnection Gainesville, a small municipally-owned utility, respondent, major investor-owned would in public interest, not unduly burden benefit both parties. The ordered interconnection, requiring Gainesville pay entire $3 million thereof maintain certain generating capacity. In light these circumstances imposed no standby charge on Gainesville. Appeals denied enforcement order, agreeing respondent's claim omission annual $150,000 payment by petitioner for backup service provided resulted failure satisfy statutory mandate 'reimbursement due' respondent because obtain from interconnection. Section 313(b) Act provides 'findings as facts, if supported substantial evidence, shall conclusive.' Held: Since there was evidence support FPC's findings benefits will accrue erred deferring expert judgment. Pp. 521—529. 425 Reporter, 2nd 1196, reversed remanded. George Spiegel, Washington, D.C., petitioner. Gordon Gooch Richard W. Emory, Baltimore, Md., respondent. Mr. Justice BRENNAN delivered opinion Court. 1 Under order directs 'to establish physical connection transmission facilities of' 202(b), 49 Statutes-at-Large 848, 16 Code KF62 824a(b).1 which directed Florida Corporation Utilities Department did contain term condition sought approximately emergency 40 F.P.C. 1227 (1968); 41 4 (1969). Fifth Circuit held that, such condition, 'the do adequately requirements they provide it. Thus we deny this insofar provision reasonable made.' 1203 (1970) (footnote omitted). We granted petition certiorari Number 469, 400 877, 118, 27 114 (1970). reverse judgment Commission's remand entry new enforcing entirety. 2 demand upon power fluctuates significantly hour hour, day day, season season. For reason, cannot maintained basis constant demand. Rather, utility's capability must geared peak load demand, also take into account fact equipment occasionally out overhaul, breakdowns. consequence, builds 'reserves' capacity excess system.2 practice relies completely own resources (an 'isolated' industry jargon) capable producing plus produces 'reserve' equal largest unit. 3 importance reduces need build capacity.3 An simply line connecting two utilities. Electric may move freely through up line's Ordinarily, however, energy generated each sufficient supply system's customers amount flows It only at times when connected utilities unable some reason produce meet customers' needs deficiency supplied automatically other utility. To extent rely deficiency, freed necessity constructing maintaining purpose. municipally owned operated serving 17,000 22-square-mile area covering city adjacent portions Alachua County, Florida. 1965, Gainesville's had total 108.4 megawatts (mw) while 51.1 mw. 1965 consisted five steam units ranging 50 mw gave reserve 57.3 over mw—a adequate cover shutdown unit projected doubled 102 1970. Its 1970 capacity, increase 138.4 addition 1968 15-mw gas-turbine generators. necessary avoid having make still greater investment equipment. 5 operates generation, transmission, distribution 370,000 retail 20,600-square-mile 32 counties central northwest Florida, County. supplies wholesale 12 municipal systems 9 REA cooperatives. 1966, aggregate 1595 experienced 1232 At time hearing before Commission, building 525-mw begin December 1969, anticipated 2114 1826 load, 288 mw, less than size unit, 525 However, interconnections has four See n. 3, supra. All constitute Operating Committee, which, though informal nature, serves medium technical operations members are coordinated. As result sharing reserves possible Committee's members, able reduce required were electrically isolated. Specifically, Committee maintains 115% load. 6 several years prior negotiate 'interconnection' member & Light. When those efforts failed, filed application seeking under directing Gainesville.4 II 7 authorizes another, 'prescribe *,' 'finds action appropriate interest,' 'if finds undue placed thereby.' proviso section makes explicit authority ordering compel enlargement (or) sell exchange so impair ability render customers.' 824a(b). 8 Following extensive hearings, examiner proposed interest place Power. affirmed further neither enlarge nor serve customers. but (1) (2) least load—the requirement all members. fixed rates paid actual transfers across Respondent, Power, does challenge except annually 'compensation effected Respondent contended charge, computed generator, justified could gain since available too realistic value massive system. rejected contention. noted included comparable contracts voluntarily negotiated Committee. emphasized cost' factor been satisfied bear full making Primarily, rested rejection grounds. First, stated view applying provision, analysis should focus respective gains realized parties responsibilities interconnected operations: 10 '(T)hat based upon, follow proportionate burdens places networks, expects receive. Benefits received given situation approximate not. course negotiation voluntary pooling arrangements, may, occasion, offset determining particular services rendered supplied. But where, here, providing charges therefor have equitably determined after careful party, consideration relative *.' F.P.C., 1237. 11 Second, even evaluated benefits, 'this record shows intertie afford opportunities advantage important benefits: electrical operating corporate financial savings.' Id., 1238. original denying rehearing, specified set margin.5 On findings, concluded either party Thus, final pays actually other, obligated deliver 'as available' basis. 1236 4, 1245. Appeals' denial 'for Power' court's conclusion 'proportionate burden' 'largely illusory:' 13 'The policy responsibility really works way. receives high and, size, real obligations. large system, incur responsibilities. Such imaginary equity compensation.' F.2d, 1203. 14 validity conclusion, depends whether court correctly read showing 'receives benefit' incurs 'no obligations.'6 squarely contrary. 15 Although argue derived irrelevant proper decision case, nonetheless, strenuous protest, went bring expertise identifying specific 5, Merely argued legal question involved, unnecessary benefits. A reviewing hardly complain agency more feels absolutely necessary.7 825l(b), '(t)he finding Universal Camera NLRB, 340 474, 71 456, 95 L.Ed. 456 (1951). Among increased reliability Power's area, availability 60 100 during periods year, savings coordinated planning achieve use most efficient systems. aided studies, staff, record. Insofar implies clearly wrong. And assumed combination insufficient due,' overstepped role judiciary. Congress ordained determination first instance, 17 emphasis occurs discussing energy. relevance emergencies, require What chooses emphasize flowing relatively valuable same certainly true commodity others, price willing airplane seat profit passenger flying California close million-dollar business deal west vacation; former might his latter. willingness purchaser concern monopolist, governmental charged assuring fair return reliable service, price. 18 Our guidepost here Act's commitment what due, highly field, Commission. Cf. Permian Basin Area Rate Cases, 390 747, 767, 88 1344, 1360, 20 312 (1968). exercise judgment, receive come without capital part. addition, accordance procedures established circumstances, proportionate-burden received. record, say failed discharge assure 'reasonable compensation' service. 19 conclude supports occasion decide companies, properly network. Decision await case presents Reversed 21 BLACKMUN took part cases. 824a(b), provides: '(b) Whenever State commission person engaged sale energy, notice affected opportunity hearing, (if thereby) persons persons: Provided, That purposes, distinguishes various types requirements. start operating, state can immediately. calls instantaneous 'spinning' reserves, variations breakdowns occur. always generator currently power, protect against breakdown called level. These 'quick-start' 'ready' short notice—usually minutes less. Both spinning quick-start collectively referred 'operating' contrast 'installed' reserves. Installed refers remaining generators ready operated, operation. Accordingly, expense associated includes expense—building capacity—and running readiness general, differentiate different lower well illustrated hypothetical discussed brief, 15—16. 'Assume operate isolation 500 served 200 minimum, 700 installed (500 unit). If assume near throughout output constantly required. pursuant formula, exceed 2300 (total load—if peaks occur period—plus 300 i.e., 1/2 This met 115 percent Each thus 575 capacity—125 isolation. whole maintenance reserves; pro rata share 75 reducing requirements.' (Footnote omitted.) time, complaint charging unlawful discrimination §§ 205 206 824d, 824e, agree dismissed moot ordered. 'For Company, add additional source network geographic where Company (customer demands), plants own. Because expected very (Gainesville) governors faster rate response setting Power's. Also great improved intertie. shown submitted engineering analyses loss probabilities. They effect improving system.' '(T)hroughout (for rehearing), emphasizes contention significant Upon argument find greatly understimated Corporation. isolation, relationship 112.1 purpose proceeding enable lessen self-reliance, continue staff's witness testified ten year period 1970—1979, average minimum 43 percent. According computations, deliver, facilities, anywhere January, April, September prediction furnish magnitude plainly refutes assertion prove one-way street City. permit reciprocal mutual 'Staff's future refute allegation scintilla evidence' become interchange consummated. Similarly, rebut Corporation's assertions regarding insignificance contributions.' 5—6 (opinion rehearing). 'Florida asserts (Power) plant. states now three sources fourth. Form Suwanee Plant closest center. plant miles away next Inglis Station 80 away. 69 kv lines. lines loads vulnerable outages. position upgrade area.' 7. concedes Brief 21. We, therefore, reject alternative, 'not fact-findings protected umbrella test.' 20. procedure followed, see SEC Chenery Corp., 318 80, 63 454, 87 626 (1943), evaluate considerations relevant determination, Schaffer Transportation company States, 355 83, 78 173, 117 (1957).

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