Legal Document

404 U.S. 453 92 Supreme Court Reporter 637 30 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 600 FEDERAL POWER COMMISSION, Petitioner,v.FLORIDA & LIGHT COMPANY. Number 70—38. Argued Nov. 15, 1971. Decided Jan. 12, 1972. Rehearing Denied Feb. 22, See 405 948, 929. Syllabus The Federal Power Commission (FPC) properly determined that the transfer of power from Florida Light company (FP L) to another utility's 'bus' (a transmission line into which subsidiary lines connect) and simultaneous a Georgia gave FPC jurisdiction over FP L under § 201(b) Act, grants 'the electric energy in interstate commerce . sale at wholesale commerce, but not (over) any other energy.' FPC's conclusion was commingled with utility, thus transmitted substantially supported by expert opinion is accord known facts electricity, sufficient support its jurisdiction. Pp. 454—469. 430 Reporter, 2nd 1377, reversed remanded. Samuel Huntington, Washington, D.C., for petitioner. Jefferson D. Giller, Houston, Tex., respondent. Mr. Justice WHITE delivered Court. 1 We are asked determine whether exceeded statutory authorization when it asserted Section as amended, 49 Statutes-at-Large 847, 16 Code KF62 824(b), ..' 201(c) defines 'transmitted State consumed point outside thereof.'1 In Connecticut versus FPC, 324 515, 65 749, 89 L.Ed. 1150 (1945), we noted this definition initial jurisdictional determination 'was follow flow energy, an engineering scientific, rather than legalistic or governmental, test.' Id., 529, 755; Southern California Edison Co., 376 205, 209 n. 5, 84 644, 647, 11 638 (1964). 2 case now before us hearing examiner itself, utilizing two scientific tests, generates commerce. They therefore held subject Commission's Respondent argues alternative model better represents electricity; use purports demonstrate has flowed Appeals Fifth Circuit rejected tests 'not prove actual interstate.' 1383 (1970). It did approve L's test ('Both (the tests) suffer same vice,' id., 1385), because must shoulder burden proof, finding set aside. 3 granted certiorari if either provides acceptable basis law fact establishment 401 907, 91 873, 27 805 (1971). 4 * Florida's largest utility. At time relevant litigation served nearly one million customers, ranked ninth nationally among companies revenues, 14th investment gross utility plant, 16th kilowatt-hour sales. Despite significant size, peninsular nature Florida, concentration company's sales southern part State,2 recurrent threat hurricanes might sever combine make operations unusually insular independent like States. All equipment, including lines, confined none directly connect those out-of-state companies. 5 does, however, indirectly As member Pool, interconnected Corporation (Corp),3 Tampa Electric Orlando Utilities Commission, City Jacksonville. These utilities authorities coordinate their activities exchange circumstances require.4 1964 transferred 107 kwh Corp received 61 Corp.5 If flows interconnects just short northern border Co.6 regularly exchanges it.7 Georgia's transmit out Florida. There numerous instances transfers between recorded coinciding L.8 6 Georgia-Corp interconnection serves function. Corp, L, Pool participants members Interconnected Systems Group (ISG), national interlocking automatically emergencies. emergency also would through Corp's links Georgia. To date had no occasion call ISG power. But midwestern sustained 580-megawatt generating loss, scheduled 8-megawatt contribution coincided pool system. 7 relationships establish focal issue case. may exercise only there substantial evidentiary reached via What happens gives (or vice versa)? Is own supply, passed on contends? Or diverted handle needs, displacing amount then on, respondent argues? Or, contends, do changes load generation, others system, stimulate reaction up down signal chain is, essence, electricity moving commerce? Upon answer these questions, rides. 8 were involved Georgia, be serious question about resolution 201 Act owes origin direct Rhode Island Massachusetts Public commission Attleboro Steam 273 83, 47 294, 71 549 (1927). 'Part II (of Act) result Attleboro.' California, 345 295, 311, 73 706, 715, 97 1020 (1953). can doubt achieves end fills 'Attleboro gap' giving exchanges. (1945). 9 Nor difficulty resolving stood could shown sometimes more funnel. Jersey Central 319 61, 63 953, 87 1258 (1943), first major cases considered Court, supplied Service Gas (also New company), turn arrangements Staten York company). PSE G effected 'bus'—a three conductors number connect. showed extensive sampling logs companies, least dozen occasions drew bus supplying bus. Thus, intermediate presence be, some circumstances, null factor, established 10 record does disclose situations operated insufficient factor. demonstrated clarity certainty obtaining prerequisite occurred. This not, equivalent saying occur evidence concluding they did. hardly less emphatic 'proof' unconvincing. court purported have actually resolved, therefore, presented, though so certain convincing offered Central, nonetheless adequate 12 conflicting contentions parties. 13 followed alternate routes moved course, based what called electromagnetic unity response electrical systems, best represented words examiner: 14 '(N)one connected systems control each free characteristics networks. 15 'An system such (Power Light) essentially electro-mechanical all operating generators network interlocked electromagnetically. means generators, ordinary conditions run exactly speed speeds will frequency 60 cycles. No generator change itself long operates network. whenever frequency, always same. 17 'If housewife Atlanta turns light, every almost instantly caused produce quantity additional maintain balance generation load. sensitive enough instruments available placed throughout increase precisely measured.' concluded: 18 'The cause effect relationship occurring constitutes by, to, interconnecting Florida.'9 19 By analysis pattern depletes adds force lines; transmitting 20 staff experts concentrates within 'Turner bus'—the connection systems. variety sources said merge molecules water different (rains, streams, etc.) reservoir. On need show (1) entering (2) leaving destinations moment, order goes state.10 demonstration series tracing studies.11 21 objects. approach technologically sound, legally affects Congress, argued, chosen grant affecting clearly so.12 22 second meet standard law, according unsound. A point, tangible, physical three-strand line, 225 feet length. argued general Power, argument, enters drawn off discrete identifiable points. given source further along loads wattage cumulatively equal source. distribution entry Turner exhausted where intervenes. When opposite direction (i.e., north south) again displacement: output displaced L. III 23 find necessary disapprove response. Its assertion commingles our opinion, sustain 24 evaluating approach, courts upon assess judgment technical facts. commingling overturned, legal consequences clear. 25 rested testimony witnesses. points expounded witnesses probed, undercut, examiner's cross-examination, rebuttal found persuasive his conclusions independently it. majority reasoning similarly, endorsed conclusions. 26 reluctant reverse results weight carefully articulated opinion. Particularly consider purely factual area competence administrative agency created depends 'engineering scientific' considerations, recognize agency's expertise experience, defer unless without fact. An appreciation institutional capacities reflected congressional directive defining terms judicial review action: facts, evidence, shall conclusive.' 313(b), 825l(b). Gainesville Dept. Corp., 402 526—529, 1592, 1598, 29 74 appears reasons. First, apparently regarded mere speculation evidence. view, reality, however logically compelling, fact.13 Second, even views thought important acknowledged rest representations reality imperfectly understood. From concluded dealing 'simplified characterization' that, despite frequent characterization appeals,14 too uncertain application particular situation used establishing 28 reinstate think well taken. Appeals' reservation, hold well-reasoned uncontradicted empirical 'substantial evidence' first-hand (in how moves bus) unavailable.15 proposition been accepted,16 indeed often applied specifically challenges matters, fairly dispute. See, e.g., (1964); Travelers' Indemnity Parkersburg Iron Steel 70 63, 64 (1934); ex rel. Chapman 191 796, 808 (1951) aff'd, 153, 609, 918 Judge Parker latter case: (substantial-evidence) rule questions involve matters knowledge consists largely experts. reason, ignore put absurd position substituting theirs controverted hydraulic engineering. findings experience assistance staff, should accorded greatest most hesitant substitute Commission.' F.2d, 808. affirming, noted, 31 '(W)e cannot say, limited scope open us, warranted. Judgment economic issues exists determine, said, cannot, exercised devoid reason.' U.S., 171, S.Ct., 619 32 elusive electrons renders experimental draw fine distinctions required practically unobtainable. That mean insubstantial beyond federal regulation. 33 second, related, concern expressed exaggerates proof civil this. lower require studies showing flow-through Central. 34 sets high standards. Special occasional operation factor) permitted present clear compelling transactions. assessed determination, standards certainty, substantial-evidence test.17 exceptionally leading raise future cases. 35 Finding reason imposing willing construct one. true, respondent, needed reserve state top test' controls case, imposes 'legalistic governmental' test. reach 'facilities local distribution' energy. 824(b). demarcated preserved. 36 requirement sort demanded Appeals—if feasible all18—would take years conduct.19 Even supposedly easily met criteria jurisdiction, matter took four pass proceedings;20 years. congressionally mandated function meaningfully, judiciary overwhelm unworkably proof. England Divisions Case, 261 184, 197, 43 270, 275, 67 605 (1923); Railroad Wisconsin Chicago, Burlington Quincy R. 257 563, 579, 42 232, 234, 66 371 (1922). 37 note, moreover, type become interconnections grow complicated. Arkansas 368 376, 382 (CA8 1966), quoting F.P.C. 747, 751. encourage artificial wasteful complication purpose avoiding More important, proliferate pools larger, hurdles erected ever difficult greater regulation, likely (under rule) regulation achieved. 38 pointed Seventh similar one, criminal prosecution highest required, guilt circumstantial evidence.21 went moment; marshaled suggest reasonably occurred instant transmission; presented closely reasoned empirically Recognizing men responsible fully understand electricity,22 know it, ever-expanding basis, demand certain. done 39 decision remanded reinstatement Commission. 40 Reversed 41 STEWART, POWELL, REHNQUIST consideration DOUGLAS, whom THE CHIEF JUSTICE concurs, dissenting. Congress constitutional regulate Commerce Clause 'commingling' 525 530, 756. so. 44 Examiner explains 'electromagnetic unity' theory tells why unasserted exists: 45 (respondent's) electromechanical conditions, 46 (respondent) alike electrical, characteristics. Because alike, possible presently existing very large scale, extending Rocky Mountains Atlantic Ocean Canadian Mexican border. 48 load.' 544, 567—568. Evidently undesirous explicitly overruling '(m)ere determines nothing,' 72, 959, avoids validating Instead, relying expertise, narrower ground measured passing employment 'commingled' method. Closer wizardry, previously 132 (1942), reveals, simply hypothesized using which, dissenting commissioners observed, '(assumed) issue, (begged) jurisdiction.' conventional method entirely result—that FPL supra; 749. 50 abandonment favor privately owned facility (except isolated Texas) Both methods assume momentary needs (Corp) located line. assumes excesses absorbed few never cross hand, excess reaches continue rely utilities' extent absorb excess. leftover travel next load, again, supply consumers' remainder until fractional original crosses Extending assumption's application, grid send surge entire assumption approved, perceive remains '(m) ere nothing.' 51 are, much vogue days. authority enter grid. Unless voluntarily, true here, virtue 202(b) act only1 'upon person engaged 824a(b). 52 rates. claim here selling involved; minuscule taken place incidental doubtless reasons undertaken phrase unlike Pennsylvania Water 343 414, 419—420, 72 843, 845, 96 1042. effort Uniform System Accounts.2 825(a). 53 Rather battle methods, central ought de minimis warrant fastening bureaucracy company. legislation stated Senate Report: 54 E. (273 ) transactions Other features business equally immune practically.' S.Rep. 621, 74th Cong., 1st Sess., 17.3 55 While pervasive, once fastened onto company, unambiguous policy preserve effective regulation: 56 revised bill impose effectively controlled limitation regard inserted section prevent expansion matters.' (emphasis supplied). 57 And objective statute's language: 58 'It hereby declared public interest, extend States.' Utility Holding Company 1935, 201(a), 847. 59 assert inadequate. Each year conducts field audits ensure compliance accounting practices depreciation rates.4 enhancing slogan 'federal leadership' cites fulfill regime. Court's runs counter expresed desire voluntary interconnection. 202(a), 848. Interconnection both avoid costs associated switching induced interconnections. recognized: '(I)nterconnections reliability, reliability strongly interest. near universality interconnections, seem lead connections being broken new strengthened.' F.P.C., 559 (1967). 62 light purposes N Dec. Immigration Nationality Decisions superimpose transmissions made prearrangement supra, 66—67, 955, let fastened, 'small.' Yet neither accidental nor minimis. 4, 955. (ISG) covers southeastern portions approved Examiner's 'all 140 operate parallel electromagnetically; receive contribute 100 mw. supports normally interconnected; since virtually instantaneously 186,000 miles per help demands; finally, FPL, FPL.' 549. apart infinitesimal sporadic 'FPL contributed mw assist 580-mw loss.' Ibid. single episode seconds only. Such fleeting episodes my view displace regime promised left hollow promise. allow pre-emption come full cycle, insofar municipal plants concerned. camel tendency occupy permanently tent. wise course; so, decision. sections 824, full, follows: '(a) ultimate affected relating provided subchapter chapter '(b) provisions apply deprive lawful exportation hydroelectric across facilities except chapter, intrastate wholly transmitter. '(c) For subchapter, thereof; takes '(d) term 'sale wholesale' resale.' Seventy-five percent FP's concentrated tip 400 south Transcript Proceedings 241. Reprinted App. et seq. (hereinafter referred (T)). (1971), described detail. interchanges care temporary needs. economy (sales cost higher producer) fuel Pool).' Opinion Hearing Examiner, 562. Exhibit Page 1028 (T). concentrate, connection. considered, established. 7, infra. 564. exhibits revealed instances, descovered meter readings selected hours four-month period, Exhibits Nos. 18, Pages 1048—1054(T), 19, 1055—1059(T). Five bus, period. 32, 1116(T). 'For example, Staff's page 6, graphically demonstrates September 28, 1964, 7:00 o'clock p.m., 51,000 kw instantaneous stantaneous 50,000 550. makes power, small quantity, attach settled 'conditioned volume proportion involved, construction.' Ligh 536, 759. 1042 (1952). 1048—1059(T). argument developed dissent 78 seq., 962 Note particularly 88, 966: interesting compare, connection, statutes enacted (as Part Act). Three adopted July August 1935 covered 'affecting' commerce; three, question, cover commerce.' Thus inferred 'discriminating language.' 'Neither treated depicting accurately way conceptualize occurrences. witness Jacobsen verified experimentally fact.' 1384—1385. principally Indiana Michigan 365 180 (CA7), cert. denied, 385 972, 509, 435 (1966); 1966); 375 387 931, 2054, 992 (1967); Cincinnati 506 (CA6), 389 842, 88 77, 106 'Sometimes tolerating gap limitations human intellects magnitude investigations conducted circumstances. Not propositions useful process susceptible developing inordinately expensive.' K. Davis, Administrative Law Treatise 16.11, 473 (1958). recognized Lord Mansfield 190 ago: disputed. 1758 bank erected, soon afterwards harhour decay. decay owing? defendant says, bank. Why? prevents backwater. opinion:—the whole agreed upon. Nobody swear .. (T)he parties go trial Smeaton called. confusion arises misapplication terms. objected going speak, deduced disputed—the banks, course tides winds, shifting sands. His mathematically speaking, mischief, sensibly. understands construction harhours, causes destruction, remedied. science who matters; me, brethren Trinity House. believe defect natural cause, opinions received. harbour is. Of this, alone judge. Therefore judgment, formed proper evidence.' Folkes Chadd, Doug. 157, 158—160, 99 Eng.Rep. 589 590 (1782). Modern follows perception. Wigmore, Evidence §§ 1917—1929, 1976 (3d ed. 1940 Supp. 1970). 'This think, furnishes utilized lines.' 67, 956. 'Logic dictate combination continuous access integrated difficult, burdensome, perhaps impossible.' 382. 104 7. final handed May 2, 1967. began investigation ignoring extended period work, observe shows formally notified October 3, 1963, Order Initiating Investigation 2412(T). 'We reject I&M's fundamental prevail, I&M claims impossible, unnamed 'scientific proof' customers. recall cases, reasonable 180, 184. 'Nobody say really transmitted.' 568. Apart exigencies 'war.' 824a(c). hiatus fills. words, no-man's here. Fla.Stats. 366.05 (1969), authorizes 'prescribe uniform classification accounts utilities, things adequate, fair rates charges.' related includes person, corporation, partnership, association, entity lessees, trustees, receivers operating, managing, controlling plant electricity. 366.02. exercises 1966 Annual Report 11: Accounting Auditing Department responsibility maintaining surveillance books records various industries 'In meeting responsibility, maintains comprehensive file statistical, financial, data form annual, quarterly, monthly reports submitted examination continuing premises verify accuracy basic Accounts prescribed Rules Regulations.' (Emphasis supplied.) 294 (1927), absent precluded rate producer distributor. fill Inasmuch (save interwoven intersects boundary, eliminate intent outcome excessive reliance doctrine deference expertise.

Classification Label: 7