Court Opinion

ID: 7838346
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:43:10.703903+00
Date Added: 2024-06-11T15:56:12.122545
License: Public Domain

LUMBARD, Circuit Judge
(concurring): *
I concur in affirming the orders and add this brief summary of the reasons therefor.
There is no dispute, as indeed there could not be, that the doctrine first enunciated in Sierra Pacific and Mobile precludes a public utility, such as appellants herein, from unilaterally increasing its rates in abrogation of the terms of a fixed rate contract. Rather, it is in recognition of this principle that Appalachian argues that we should disregard the explicit language in its wholesale agreements establishing a fixed rate for the purchase of electric power and instead accept its contention that the true but unexpressed intention of it and its customers was to adopt a “going rate” agreement, see United Gas Pipe Line Company v. Memphis Light, Gas & Water Division, 358 U.S. 103, 79 S.Ct. 194, 3 L.Ed.2d 153 (1958), in conformity with Virginia’s alleged proscription of “fixed and unalterable rate contracts.”1 The court correctly declines this invitation to step outside the four corners of an unambiguous contract. The parol evidence rule, as consistently applied in both the Virginia state courts2 and this Circuit,3 forbids such an excursion.
Kentucky Utilities’ (KU) petition for review presents a more troublesome question. In assessing the impact of the Natural Gas Act upon pre-existing contract rights, the Supreme Court in Mobile concluded that “the rate-making powers of natural gas companies [are] to be no different from those they would possess in the absence of the Act,”4 350 U.S. at 343, 76 S.Ct. at 380. KU would read this passage as endorsing its proposed unilateral rate increase since, it maintains, under Kentucky law, to which it was subject prior to the assertion of federal regulatory jurisdiction, it was allowed to and did institute unilateral rate changes. Although reasonable at first blush, KU’s argument does not withstand closer inspection.5
The above quoted passage from the Mobile opinion must be read in the context of the Supreme Court’s assumption that “[a]bsent the Act, a unilateral announcement of a change to a contract would of course be a nullity,” 350 U.S. at 339, 76 S.Ct. at 378. Assuming, arguendo, that such is not the case under Kentucky law, I do not believe that there is any warrant in either Sierra Pacific-Mobile or elsewhere, for requiring the F.P.C. to defer to state law when such a deferral would impair the Congressional purpose of insuring “the stability of supply arrangements which all agree is essential to the health of the natural gas *111[and power] industries,” Mobile, 350 U.S. at 344, 76 S.Ct. at 380. Cf. Jerome v. United States, 318 U.S. 101, 104, 63 S.Ct. 483, 87 L.Ed. 640 (1945).

 Sitting by designation.

. Appalachian Power Co., 48 F.P.C. 1366, 1367 (1972) (original order).

. E. g., Globe Iron Const. Co. v. First National Bank, 205 Va. 841, 140 S.E.2d 629, 633 (1965).

. E. g., E. P. Hinkel & Co. v. Manhattan Co., 165 U.S.App.D.C. 140, 143, 506 F.2d 201, 204 (1974).

. As the Supreme Court recognized in Sierra Pacific: “The provisions of the Federal Power Act relevant to this question are in all material respects substantially identical to the equivalent provisions of the Natural Gas Act,” 350 U.S. at 353, 76 S.Ct. at 371.

. KU also argues that despite the clear language in its wholesale agreements establishing a fixed rate, the intent of the parties was to permit unilateral changes as sanctioned by Kentucky law. For the reasons given above in connection with Appalachian’s similar claim, this contention is unsound.