Court Opinion

ID: 8876956
Source: CourtListenerOpinion
Date Created: 2022-11-26 19:24:23.560619+00
Date Added: 2024-06-11T17:06:25.029881
License: Public Domain

EDWARDS, Circuit Judge
(dissenting).
The majority opinion would in my view construe statutory restrictions in the 1959 Tennessee Valley Authority Act, 73 Stat. 280 (1959), 16 U.S.C. § 831n-4 (1964), much more narrowly than it appears to me Congress intended. The Tennessee Valley Authority sought authority from Congress to issue revenue bonds to expand its facilities for furnishing electric power within the general area served by TVA. The bill proposed by TVA was opposed vigorously by privately owned power companies whose service areas impinged upon TVA’s. As a result of this opposition, when the 1959 TVA Act was passed, it contained language generally restricting the areas which TVA could supply to those which it was serving as the primary source of power on July 1, 1957, and to an area no more than five miles outside the perimeter of such area.
*418The limiting provision follows:
“Unless otherwise specifically authorized by Act of Congress the Corporation shall make no contracts for the sale or delivery of power which would have the effect of making the Corporation or its distributors, directly or indirectly, a source of power supply outside the area for which the Corporation or its distributors were the primary source of power supply on July 1, 1957, and such additional area extending not more than five miles around the periphery of such area as may be necessary to care for the growth of the Corporation and its distributors within said area: Provided, however, That such additional area shall not in any event increase by more than 2% per centum (or two thousand square miles, whichever is the lesser) the area for which the Corporation and its distributors were the primary source of power supply on July 1,1957: And provided further, That no part of such additional area may be in a State not now served by the Corporation or its distributors or in a municipality receiving electric service from another source on or after July 1, 1957, and no more than five hundred square miles of such additional area may be in any one State now served by the Corporation or its distributors.
“Nothing in this subsection shall prevent the Corporation or its distributors from supplying electric power to any customer within any area in which the Corporation or its distributors had generally established electric service on July 1, 1957, and to which electric service was not being supplied from any other source on the effective date of this Act. * * * ” (Emphasis supplied.) 73 Stat. 280 (1959), 16 U.S.C. § 831n-4(a) (1964).
This action is a suit for an injunction by Kentucky Utilities Company against TVA seeking to restrain it from providing electric power to two municipal electric distribution systems in the towns of Tazewell and New Tazewell, Tennessee. The two major parties agree only on the fact that legal construction is needed for the words “area” and “primary source of power” in the first clause of the portion of 16 U.S.C. § 831n-4, the 1959 TVA Act which we have quoted.
Briefly put, it is the contention of KU that its area of service reaches down from Kentucky into Claiborne County, Tennessee, in a narrow peninsula of service along its transmission line, and that it represented the primary source of power supply on July 1, 1957, for the towns of Tazewell and New Tazewell, Tennessee.
Briefly put also, TVA’s position is that TVA’s power lines, through its subsidiary, Powell Valley Electric Cooperative, criss-crossed all of Claiborne County on the crucial date of July 1, 1957, and served a portion of the Tazewells and plainly, in TVA’s contention, represented the primary source of power for Claiborne County.
TVA also points out factually that its transmission line of Powell Valley cut across KU’s transmission line rendering KU’s Tazewell facilities an island.
TVA’s view of the “area” concerned in this matter is portrayed by its Exhibit 91. (Attached hereto following page 27.)
KU’s view of the same problem is dramatically different, as shown in Exhibit 36. (Attached hereto following page 27.) '
Although it seems unlikely, both exhibits refer to this same dispute and to the same general geographical locality.
It is clear, as the District Judge who heard this case found, that TVA was the dominant supplier of electric power in Claiborne' County while KU was the dominant supplier of electric power within the city limits of Tazewell and New Tazewell.1
*419It is also clear that neither of these utilities had any exclusive franchise to serve any territory here in dispute. It is also clear that KU had many customers in Claiborne County, while TVA had customers in both Tazewell and New Taze-well on the critical date.
After an interesting review of the Congressional history of the 1959 TVA Act, Judge Taylor concluded:
“The TVA Board of Directors on August 26, 1964 made an official and formal finding to the effect that all of Claiborne County, including the towns of Tazewell and New Tazewell was within the periphery of the area for which TVA or its distributors were the primary source of power supply on July 1, 1957. At the time of the determination, the Directors had before them the four maps that were submitted to the Committees of Congress by the witnesses for TVA.
“The area within Claiborne County determined by the TVA Board to be within the area for which TVA or its distributors were the primary source of power supply in July 1, 1957 is indentical to the areas shown as served by the TVA distributors on the maps furnished by TVA to the Congressional Subcommittee.
“The finding of the Board was made in good faith and supported by substantial evidence.
“The history of the 1959 Act supports the finding of the TVA Board that Tazewell and New Tazewell were within the primary area served by TVA and its suppliers as of July 1, 1957. We do not believe that Congress in the 1959 Act intended to exclude the two Tazewells from the primary service area served by TVA and its suppliers as of July 1, 1957. U. S. v. Burleson [D.C.], 127 F.Supp. 400.
“None of the defendants has induced or conspired to induce any electric customer of KU to breach his or its contract with KU and none has been guilty of bad faith, fraud or deceit in the securing of electric power customers within the two municipalities.
“It results that the proof fails to show that plaintiff is entitled to any of the relief sought in the complaint.”
The maps to which Judge Taylor refers are before this court. They were before Congress when it passed the disputed legislation. Tazewell and New Tazwell are clearly within both the Tennessee watershed and the perimeter of the TVA service area as it was outlined to Congress. In these cities on July 1, 1957, no private utility had any exclusive franchise, and in fact, TVA was then furnishing power to customers. In addition, the cities are located in a county where TVA clearly was the primary source of power on July 1, 1957. Under this set of facts, I do not see how we can properly interpret the 1959 TVA Act as making illegal a finding of fact by the Board of TVA that it was “the primary source of power” for “the area” concerned on July 1, 1957. The 1959 TVA Act and its relevant amendments seem to me to support TVA authority to make this finding. (73 Stat. 280 (1959), 16 U.S.C. § 831 *420(1964). See in particular 16 U.S.C. § 831i and 16 U.S.C. § 831n-4). Judge Taylor so interpreted the Act and found “substantial evidence” to support the crucial finding.
I believe that Judge Taylor’s interpretation and application of the statutory language represents both logical construction of the statutory language and compliance with Congressional intent.
I concur with my brothers’ view that the 1959 TVA Act should be construed as giving KU standing to bring this suit, but I would affirm the District Judge’s order dismissing same for the reasons given above and in his complete opinion.

*421

*422

*423

. “As of July 1, 1957, Powell Valley and the City of LaFollette Electric System (the other TVA supplier for Claiborne County) supplied power to a total of 3,564 consumers in Claiborne County and KU supplied power to 1,839 con*419sumers. In June, 1957 Powell Valley and LaFollette liad combined ldlowatt-liour sales of 1,025,793 as against 626,-043 kilowatt-liours for KU. In the same month, the combined Kilowatt demand for Powell Valley and UaFollette was 3,125 kilowatts as against 2,338 for KU. The depreciated plant investment in distribution facilities of Powell Valley and LaFol-lette (as of January 10, 1957 for Powell Valley and as of June 30, 1957 for La-Follette) was $902,999.17 as against KU investment on June 30, 1957 of $457,-947.93.
“On July 1, 1957, in Tazewell, KU supplied tlie electric energy requirements of 344 customers and Powell Valley supplied the requirements of 20 customers, and in New Tazewell KU supplied 217 customers and Powell Valley supplied 8 customers. Considering the two' municipalities together, KU had a total of 561 customers and Powell Valley 28 customers. KU on such date served in these two municipalities 95.3% of the customers receiving electric service.” (Quoted from Trial Judge’s Memorandum Opinion, Appellant’s Appendix at pp. 49a-50a.)