Amicus Brief — Federal Energy Regulatory Commission v. Mississippi

wee

preme Court, U.S.

ILE

No. 80-1749

IN THE

Supreme Court of the

OCTOBER TERM, 1980

FEDERAL ENERGY REGULATORY COMMISSION and

James B. EDwarps, SECRETARY OF ENERGY,

Appellants,

Vv.

Tue STATE OF Mississippi, ef al.,

Appellees.

On Appeal From

The United States District Court

For The Southern District Of Mississippi

AMICUS CURIAE BRIEF OF

POTOMAC ELECTRIC POWER COMPANY

IN SUPPORT OF APPELLEES

*EDWARD A. CAINE

ALLEN C. BARRINGER

WILLIAM DANA SHAPIRO

Betty K. CAULEY

1900 Pennsylvania Avenue, N.W.

Washington, D.C. 20068

(202) 872-2890

Attorneys for

Potomac Electric Power Company

Washington, D.C.

October 28, 1981 *Counsel of Record

re nD

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C.

i

QUESTIONS PRESENTED FOR REVIEW

This case concerns the constitutionality of Titles I and

III and Section 210 of the Public Utility Regulatory Poli-

cies Act of 1978 (PURPA). The appellant federal agen-

cies have failed to address the one question, and the one

central precedent respecting it, which is dispositive of the

issue of the unconstitutionality of PURPA Section 210.

This question is whether the grant of authority to the

States by PURPA Section 210 over sales by certain pro-

ducers of electricity in interstate commerce to an electric

utility for resale is void because it violates the plenary

and exclusive authority of Congress over such sales pur-

suant to the Commerce Clause, first confirmed by the

Supreme Court in Public Utilities Commission v. Attleboro

Steam & Electric Company, 273 U.S. 83 (1927).

The questions therefore are:

PURPA Section 210 of Title II —

Can Congress constitutionally delegate to the States its

plenary and exclusive power to regulate interstate com-

merce under the Commerce Clause of the United States

Constitution?

PURPA Titles I and III —

Under the Commerce Clause of the United States

Constitution, can Congress regulate the States’ exercise

of their sovereign legislative powers over the governance

of intrastate commerce, which powers are reserved to the

States by the Tenth Amendment to the United States

Constitution, in order to foster a federal regulatory pro-

gram?

~ TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW .......... 00000 cease i

RIPEN BUN Gb ead ddcccccccdsccccdoosddee ii

MOP TAMITURUUUIES Bb dS Cie cc cdidedeceddgaceccnns iii

INTEREST OF AMICUS CURIAE .....6666 0c ccc ccc cece eeuees l

SUMMARY OF ARGUMENT ......... 0.000 ccceeeeeeeuees 3

PT WCU AMEE Eb ORD ccdtcdcccieeeeeedeness 6

A. Purpa Section 210 Of Title Il Violates The Plenary

And Exclusive Federal Authority Respecting Inter-

state Commerce By Purporting To Grant The States

Direct Regulatory Control Over Sales Of Electricity

In Interstate Commerce To Utilities By Certain

Other Producers Of Electricity ...........6.00055 6

B. PURPA Titles | And II] And Section 210 Of Title Il

Violate The Tenth Amendment To The Constitu-

DO ARR GUAPEAUAEHUMACAL obec sdeveasedede vende 12

1. PURPA “‘regulates the States as States’’ ..... 13

2. PURPA addresses matters which are ‘‘in-

disputably attributes of State sovereignty”’ ... 20

3. State compliance with PURPA directly impairs

the ability of the States ‘‘to structure integral

operations in areas of traditional functions” .. 21

C. In The Presence Or Absence Of Tenth Amendment

_ Considerations, PURPA Titles I And III And Sec-

tion 210 Of Title Il Violate The Commerce Clause

For There Is No Rational Basis Upon Which To

Conclude That Retail Ratemaking Requires Uni-

form National Regulation ...............6000005 23

REY ch akc ddeduddsdwadcsscdbeenddcacewanye 26

iii

TABLE OF AUTHORITIES

CASES: Page

Brown v. EPA, 521 F.2d 827 (9th Cir. 1975), vacated and

remanded sub nom. EPA v. Brown, 431 U.S. 99

ay ual du Uli ets o's 6 vhs 60 8a nee Kae passim

aad (tr Me Lo-Vaca Gathering Company, 379 U.S. 366

Churchill v. City of Utica, 70 U.S. (3 Wall.) 573 (1866) .

Connecticut Light and Power Company v. Federal p ait

Commission, 324 U.S. 515 (1945)... .. cee ccc ees 21

District of Columbia v. Train, 521 F.2d 971 (D.C. Cir.

), vacated and remanded sub nom. EPA v. Brown,

MBE CH PO MLOTED cncchagotecccccecoseves 16, 17, 20

Duncan v. McCall, 139 U.S. 449 (1891) oo. e ccc 5, 20

East aoe ~ Company v. Tax Commission, 283 U.S. 465

Ex Parte Virginia, 100 U.S. 339 (1880) ....... 6.66 e cee 18

Federal Power Commission v. Florida Power and Light

Company, 404 U.S. 453 (1972) oo. ccc cee ees

Federal Power Commission v. Hope Natural Gas Company,

ee NE LL ics 5 chic ces ciesevirneeess 9,2

Fry v. United States, 421 U.S. 542 (1975)... eeeeee passim

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) ........ 6, 12

Graves v. New York, 306 U.S. 466 (1939) ..... 6.660055 18

Hodel v. Virginia Surface Mining and Reclamation Associa-

tion, inc., 101 $.Ct. 23S2 (i981)... ccccvcceees passim

Kentucky v. Dennison, 65 U.S. (24 How.) 66 (1861) .... 18

Kidd v. Pearson, 128 U.S. 1 (1888) ..... 6. cece eee eee 24

Maryland v. EPA, 530 F.2d 215 (4th Cir. 1975), vacated

and remanded sub nom. EPA v. Brown, 431 U.S. 99

ASR ORLI ea hiaiadis's ane de Ve 644 cohen da passim

Missouri ex rel. Barrett v. Kansas Natural Gas Company,

pI Ee 7, 9, 20-21, 22

Monell v. New York City Department of Social Services, 436

EN ae islets so t.c'viev deuce dedae eer 18-19

Munn vy. Iilinois, 94 U.S. 113 (1877)... 6. eee 5, 20, 22

National League of Cities v. Usery, 426 U.S. 833

(1976)

iv

Table of Authorities Continued

Page

Peel vy. Florida Department of Transportation, 600 F.2d

Es ov doa cane udabus > cdanar

Public Utilities Commission vy. Attleboro Steam and Electric

Company, 273 U.S. 83 (1927) ©... 6 ccc cues passim

Texas v. EPA, 499 F.2d 289 (Sth Cir. 1974) .......... 16-17

The Minnesota Rate Cases (Simpson v. Shepard), 230 U.S.

EID CLAN UUER Clio cctavoenctahe sh ocehe 4, 6-7

wna eae v. Public Utilities Commission, 345 U.S. 295

Wilkerson v. Rahrer, 140 U.S. 545 (1891) ............. 11

Unitep States Constitution:

U.S. Const, art. 1,88, cl. 3 (Commerce Clause) ...... passim

Se I hw oevacescegesceseeeetoes passim

STATUTES:

Clean Air Act, 42 U.S.C, $1857 (1976) «0... . eee, 16

Economic Stabilization Act of 1970, 12 U.S.C. $1904

(1976)

eee eee eee eee eee eee eee eee

Federal Power Act, 16 U.S.C. §§ 824-825 (1976 & 1980

a teh ss oc ay staves besauese 2,9, 2

Md. Code Ann. art. 78, $81, 68(a) and 69(a) .......... 19

Natural Gas Act, 15 U.S.C. $$ 717 et seg. (1976) . . 9, 21

Puls He! te oe none Act of 1978, 16 U. s. C.

(1980 Supp.), 15 U.S.C.

HH 301 et seq. (1980 Supp. ay aeikaa area's 5b eatin bi passim

Surface Mining Control and Reclamation Act of 1977, 30

U.S.C. $1201 et seg. (1980) 20... ees 16

Other Source Materials:

18 C.F.R. $8 292.401 ef seq... . ccc eee eee eees ll

H. Rep. No. 95-1750, 95th Cong., 2d Sess. (1978) ...... 22

S. Rep. No. 95-442, 95th Cong., Ist Sess. (1977) ....... 25

IN THE

Supreme Court of the United States

OcTosBer TERM, 1980

No, 80-1749

FEDERAL ENERGY REGULATORY COMMISSION and

JAMES B. EDwarbs, SECRETARY OF ENERGY,

Appellants,

Vv.

THe STATE OF Mississippi, et. al.,

Appellees.

On Appeal From

The United States District Court

For The Southern District of Mississippi

AMICUS CURIAE BRIEF OF

POTOMAC ELECTRIC POWER COMPANY

IN SUPPORT OF APPELLEES

INTEREST OF AMICUS CURIAE

This amicus curiae brief is filed on behalf of Potomac

Electric Power Company (Pepco; Company) in support

of the Appellees — the State of Mississippi, the

Mississippi Public Service Commission, and Mississippi

Power and Light Company. Written consent from each

party to the filing of this brief has been obtained by Pepco

and has been filed with the Clerk of the Court.

Pepco is a District of Columbia and Virginia corpora-

tion and is also licensed to do business in the State of

Maryland and the Commonwealth of Pennsylvania. Pep-

co sells electric energy at retail in intrastate commerce

within the District of Columbia, Maryland and Virginia

and at wholesale for resale in interstate commerce in

Maryland. Pepco’s retail sales are regulated by the Public

2

Service Commissions of the District of Columbia and

Maryland and the State Corporation Commission of

Virginia. Pepco is a Public Utility whose sales for resale

and transmission of electricity in interstate commerce are

regulated by the Federal Energy Regulatory Commission

(FERC) pursuant to Parts II and III of the Federal Power

Act, 16 U.S.C. $$ 824-825 (1976 & 1980 Supp.).

Pepco notes as a preliminary matter that for many

years it has been in substantial compliance in each of its

retail jurisidictions with the ratemaking standards now

specified in the Public Utility Regulatory Policies Act of

1978 (PURPA). Pepco’s opposition to PURPA Section

210 of Title II and to Titles I and II] of PURPA stems

from the unconstitutionality of these provisions.

Certain provisions of PURPA — specifically Section

210 of Title II and Titles I and II1' — order the States to

undertake significant and detailed regulatory actions with

respect to wholesale utility transactions in interstate com-

merce and retail utility transactions in intrastate com-

merce, These provisions were declared unconstitutional

by the district court below. If the district court’s decision

is affirmed with respect to PURPA Section 210, the un-

constitutional and factually unwarranted direct intrusion

of State control over wholesale prices in interstate com-

merce will be nullified and the Federal Energy Regula-

tory Commission will be returned the ability to regulate

all interstate transactions under the Federal Power Act,

16 U.S.C. $§ 824, et seg. (1976 & 1980 Supp.). If the dis-

trict court’s decision is affirmed with respect to Titles I

and III of PURPA, the unconstitutional and factually

unwarranted direct intrusion of federal control over State

116 U.S.C. $6 824a-3, 2601 ef seg. (1980 Supp.); 15 U.S.C. $$ 3201

et seq. (1980 Supp.).

3

actions respecting retail price regulation in intrastate

commerce will be nullified and the States, including the

three which regulate Pepco’s retail sales of electric

energy, will regain the ability to structure and effect their

regulatory ratemaking functions in the manner they

deem best suited to serve the public interest.

Therefore, Pepco has a substantial interest in the sub-

ject matter of this proceeding.

SUMMARY OF ARGUMENT

The appellant federal agencies and the amici curiae in

support do not address the central issue respecting the

constitutionality of PURPA Section 210:

Can Congress delegate to the States its plenary and

exlusive power to regulate interstate commerce

under the Commerce Clause of the United States

Constitution?

The answer is no. PURPA Section 210 is unconstitu-

tional in its attempt to delegate to the States regulatory

authority over sales of electricity in interstate commerce

to utilities from certain other producers of electricity for

resale by the utilities. Public Utilities Commission v.

Attleboro Steam & Electric Company, 273 U.S. 83 (1927).

Under the Commerce Clause of the Constitution, art.

I, §8, cl. 3, Congress is granted plenary and exclusive au-

thority over activities which are in interstate commerce.

Because of this constitutional grant of plenary and

exclusive authority, the States are powerless to regulate

activities in interstate commerce, even when Congress

itself has declined to undertake such regulation and even

when Congress has attempted to delegate such regulation

to the States. Public Utilities Commission v. Attleboro

Steam & Electric Company, supra, 273 U.S. at 89-90;

Churchill v. City of Utica, 70 U.S. (3 Wall.) 573, 585

(1866).

4

A sale of electricity to any utility by any other producer

of electricity (for further resale or for resale of the

electricity in intrastate commerce to its retail customers)

is a sale of electricity in interstate commerce which no

State can regulate. Public Utilities Commission vy. Attleboro

Steam & Electric Company, supra, 273 U.S. at 89-90. Pur-

suant to PURPA Section 210, 16 U.S.C. §824a-3 (1980

Supp.), regulatory authority over such sales is not only

granted to the States by Congress, but also is mandated

of the States by Congress. This grant and requirement of

authority is void, for it violates the plenary and exclusive

authority over interstate commerce granted to Congress

by the Commerce Clause of the Constitution. /d.

Also under the Commerce Clause, Congress is granted

limited authority over activities which are in intrastate

commerce. See The Minnesota Rate Cases (Simpson v.

Shepard), 230 U.S. 352, 399-400 (1913). This authority

may be exercised by Congress only to the extent that the

intrastate activities have a substantial effect upon inter-

state commerce. See Fry v. United States, 421 U.S. 542,

547 (1975). In addition, this authority may be exercised

by Congress only to the extent that the powers reserved

to the States by the Tenth Amendment are not usurped.

National League of Cities v. Usery, 426 U.S. 833, 851-52

(1976).

PURPA Titles I and III and Section 210 of Title II ex-

ceed the limitations placed by the Tenth Amendment

upon the authority of Congress under the Commerce

Clause. These provisions require the States to hold hear-

ings, to adopt specified procedures, to permit interven-

tions, to make specified findings of facts on the basis of

specified evidence, to comply with reporting require-

ments, and to implement federally promulgated regula-

tions. Thus, PURPA Titles I and III and Section 210 of

>

5

Title II do not regulate commerce but State governance

of intrastate commerce. See, e.g., Brown v. EPA, 521

F.2d 827, 838-39 (9th Cir. 1975). They regulate the

States as States. Jd. They do so in an area which is the es-

sence of State sovereignty — the States’ legislative au-

thority in the exercise of their police powers respecting

intrastate commerce. Duncan v. McCall, 139 U.S. 449,

461 (1891); Munn v. Illinois, 94 U.S. 113, 125 (1877).

PURPA Titles I and III and Section 210 of Title II regu-

late the States as States in the legislative area of public

utility retail ratemaking — an area which is a subject of

traditional State regulation and legislative authority. See

Munn v. Illinois, supra, 94 U.S. at 125; H. Rep. No. 95-

1750, 95th Cong., 2d Sess. 67 (1978). Thus, under the

Court’s decisions in National League of Cities v. Usery,

426 U.S. 833 (1976) and Hodel v. Virginia Surface Mining

and Reclamation Association, Inc., 101 S. Ct. 2352 (1981),

PURPA Titles I and III and Section 210 of Title II impair

the rights reserved to the States by the Tenth Amend-

ment and accordingly transgress the limits of authority

held by Congress under the Commerce Clause.

In the presence or in the absence of Tenth Amend:

ment limitations on Congressional authority under the

Commerce Clause, PURPA Titles I and III and Section

210 of Title II exceed the limits of Congressional com-

merce power. Public utility retail services are matters in-

ternal to the States which under no circumstances could

be regulated by Congress unless such regulation could

rationally be related to necessary exercise of control over

interstate commerce. See Fry v. United States, supra, 421

U.S. at 547. There is no rational basis for federal regula-

tion over retail utility ratemaking.

6 ‘

ARGUMENT

A.

Purpa Section 210 Of Title II Violates The Plenary And Exclusive

Federal Authority Respecting Interstate Commerce By Purporting

To Grant The States Direct Regulatory Control Over Sales Of

Electricity In Interstate Commerce To Utilities By Certain Other

Producers Of Electricity

Pursuant to PURPA § 210, Congress has attempted to

delegate to the States its exclusive authority over inter-

state commerce. Congress is powerless to delegate an

exclusive federal function to the States and the States

cannot impose a direct burden on interstate commerce.

The Commerce Clause of the Constitution, art. I, § 8,

cl. 3, grants to Congress the power ‘‘[t]o regulate Com-

merce with foreign Nations, atd among the several

States, and with the Indian Tribes.’’ The power given

Congress pursuant to the Commerce Clause is plenary

and exclusive. Only the federal government can regulate

interstate commerce. Gibbons v. Ogden, 22 U.S. (9

Wheat.) 1, 196-97 (1824). ‘‘This power, like all others

vested in Congress, is complete in itself, may be exer-

cised to its utmost extent, and acknowledges no limita-

tions, other than those prescribed in the constitution.”

Id. at 196.

The States are not competent to impose a direct burden

on interstate commerce through their regulation of inter-

nal activities. This fact is true even when Congress has

not seen fit to regulate. In The Minnesota Rate Cases

(Simpson v., Shepard), 230 U.S. 352, 396-97 (1913), the

Court stated as follows:

If a state enactment imposes a direct burden upon in-

terstate commerce, it must fall regardless of Federal

legislation. The point of such an objection is not that

Congress has acted, but that the state has directly re-

7

strained that which, in the absence of Federal regu-

lation, should be free.

(Emphasis original.) Those things which ‘‘in the absence

of Federal regulation, should be free,”’ are activities es-

sentially national in character and requiring uniform reg-

ulation. /d. at 399. With respect to these activities, the

power of Congress to regulate under the Commerce

Clause is exclusive.

The grant in the Constitution of its own force, that

is, without action by Congress, established the es-

sential immunity of interstate commercial inter-

course from the direct control of the states with re-

spect to those subjects embraced within the grant

which are of such a nature as to demand that, if regu-

lated at all, their regulation should be prescribed by a

single authority. /t has repeatedly been declared by this

court that as to those subjects which require a general

system or uniformity of regulation, the power of Con-

gress is exclusive.

The Minnesota Raie Cases, 230 U.S. at 399 (emphasis

supplied).

Certain aspects of the electric and natural gas indus-

tries have been declared by the Court to be in interstate

commerce and thus subject to the exclusive authority of

Congress under the Commerce Clause, i.e., the

transmission of natural gas or electricity by a utility

whose transmission system crosses state boundaries, the

sale of natural gas or electricity by such utility for resale,

and the sale to such utility by any other producer of nat-

ural gas or electricity.

In Missouri ex rel. Barrett v. Kansas Natural Gas Com-

pany, 265 U.S. 298 (1924), the Court determined that the

business of the Kansas Natural Gas Company was in in-

terstate commerce and was therefore free from state in-

terference, even in the absence of federal regulation. The

Kansas Natural Gas Company was engaged in the busi-

ness of producing and purchasing natural gas from other

producers for transmission and resale to distributing

companies in various states. The distributing companies

then resold the gas to local consumers. 265 US. at 305.

The Court stated that the ‘‘[t]ransportation of gas from

one state to another is interstate commerce; and the sale

and delivery of it to the local distributing companies is a

part of such commerce.”’ /d. at 307. Therefore, the Court

found that, if the transportation and sale for resale of nat-

ural gas was to be regulated, such regulation must come

exclusively from Congress. The States were denied all

authority to act. /d.

The same result was reached by the Court three years

later with respect to the electric utility industry in Public

Utilities Commission v. Attleboro Steam & Electric Com-

pany, 273 U.S. 83 (1927). In Attleboro, the Court deter-

mined whether the state regulatory commission of

Rhode Island could establish a rate for the wholesale sale

of electricity, which electricity was resold by the pur-

chaser in another state. Again, the Court found that the

state commission could not act, notwithstanding the

absence of federal regulation, creating what was then

known as the Attleboro gap in utility regulation. The

Court stated in Attleboro as follows:

It is clear: that the present case is controlled by the

Kansas Natural Gas Co. Case. The order of the

Rhode Island Commission is not . . . a regulation of

the rates charged to local consumers, having merely

an incidental effect upon interstate commerce, but is

a regulation of the rates charged by the Narrangan-

sett Company for the interstate service to the

Attleboro Company, which places a direct burden

_—_ interstate commerce. Being the imposition of a

rect burden upon interstate commerce, from

which the State is restrained by the force of the

9

Commerce Clause, it must necessarily fall, regard-

less of its purpose . . . . [T]he paramount interest in

the interstate business carried on between the two

companies is not local to either [affected] State, but

is essentially national in character. The rate is there-

fore not subject to regulation by either of the two

States in the guise of protection to their respective

local interests; but, if such regulation is required it

can only be attained by the exercise of the power

vested in Congress.

Id. at 89-90. The Court further stated that the transmis-

sion of electricity, like the transportation of natural gas, is

an activity in interstate commerce. /d. at 86.

Based upon the decisions of the Court in Kansas Nat-

ural Gas Company and Attleboro, it is clear that the trans-

portation and sale for resale of natural gas and the

transmission and sale for resale of electricity in interstate

commerce are subject to the exclusive regulatory au-

thority of Congress under the Commerce Clause. In-

deed, the Natural Gas Act, 15 U.S.C. §§717 ef seq.

(1976), and Parts II and III of the Federal Power Act, 16

U.S.C. §§ 824-825 (1976), were enacted in order to fill the

gap in regulation over the natural gas and electric utility

industries which followed the Court’s decisions in Kan-

sas Natural Gas Company and Attleboro. See, e.g., Federal

Power Commission v. Hope Natural Gas Company, 320

U.S. 591, 609-10 (1944); United States v. Public Utilities

Commission, 345 U.S. 295, 311 (1953).

The exclusive authority of Congress over sales of

electricity for resale by a producer or a transmitter of nat-

ural gas or electricity is not altered by the fact that the

sale seemingly takes place entirely within one state. The

sale is nevertheless in interstate commerce if the

transmission system of the utility purchaser crosses state

boundaries, because any purchase of electricity or natural

10

gas by a utility is automatically commingled with the

electricity or natural gas being transmitted on the utility’s

system at the time. California vy. Lo-Vaca Gathering Co.,

379 U.S. 366, 369-70 (1965). The purchased electricity or

natural gas cannot be isolated or traced through the sys-

tem so as to locate the point of resale. /d. at 369-70. If it

could be traced, it would be found to be resold through-

out the entire interstate system.’ As a result, all sales of

electric energy for resale, at least in the forty-eight conti-

nental states, are activities in interstate commerce sub-

ject under the Aftleboro doctrine to the exclusive au-

thority of Congress pursuant to the Commerce Clause. ’

Under PURPA Section 210, Congress attempts to do

what the Supreme Court in Attleboro stated could not

constitutionally be done. It attempts to give to the States

authority to regulate sales of electricity by certain other

producers of electricity to a utility in interstate commerce

for resale to the utility’s customers, including that

?The interstate nature of the electric utility industry is generally

recognized. Forty-seven of the forty-eight continental states were

electrically interconnected as of 1972. Federal Power Commission v.

Florida Power & Light Co., 404 U.S. 453, 471 (1972) (Douglas, J.,

dissenting). Since then, the utilities in Texas have been added to the

electric interconnection for some purposes.

) The possibility ‘hat there might be a situation wherein a given

producer will not generate amounts of electricity greater than his

own energy needs is irrelevant to the exclusive authority of Congress

over that producer’s sale of its generation to the utility, for that sale

is in interstate commerce. The fact that the cogenerator or small

power producer is on the utility's interstate system, thus contribut-

ing to or affecting the electricity flow on the interstate grid, is suffi-

cient to bring the activity within the exclusive jurisdiction of Con-

gress under the Attleboro doctrine. See Federal Power Commission v.

Florida Power & Light Co., supra, 404 U.S. at 460-61.

ll

utility’s wholesale customers in other states.‘ PURPA

Section 210 provides for the promulgation by the Federal

Energy Regulatory Commission of certain regulations to

govern purchases and sales of electric energy by utilities

to and from certain other producers of electricity. See 18

C.F.R. §§292.401 et seg. PURPA Section 210(f) requires,

however, that the States implement the regulations and

that the States establish the rates for purchases and sales

between utilities and certain other electricity producers.

Under the Attleboro doctrine, supra, the States may not

constitutionally carry out this regulation over rates for

the sale of electricity in interstate commerce by any pro-

ducer of electricity to a utility for resale. That regulation

is within the plenary and exclusive authority of Congress.

The exclusive authority of Congress under the Com-

merce Clause to regulate the sale of electricity by a pro-

ducer of electricity to a utility for resale is not changed by

the fact that Congress itself under PURPA has directed

the States to exercise regulatory authority over such sales

for resale. Congress may not grant to the States ‘‘a power

not possessed by the States.’’ Wilkerson v. Rahrer, 140

U.S. 545, 561 (1891). In Churchill v. City of Utica, 70 U.S.

(3 Wall.) 573, 585 (1866), the Court stated the following:

It is said that Congress possesses no power to confer

upon a state authority to be exercised which has

been exclusively delegated to that body by the Con-

stitution ... nor is a state competent to receive a

— of any such power from Congress. We agree to

this.

*PURPA Section 210 also addresses rates for retail sales by a

utility to cogenerators and small power producers for their own con-

sumption. While this aspect of Section 210 does not in itself offend

the exclusive authority of Congress over wholesale rates, it does

offend the Tenth Amendment. See pages 12-22, infra.

12

In summary, Section 210 of Title Il of PURPA un-

constitutionally grants to the States regulatory authority

over sales of electricity by certain other producers of

electricity to utilities in interstate commerce for resale.

Such sales are subject to the plenary and exclusive

jurisdiction of Congress under the Commerce Clause.

Congress has no power to grant to the States its exclusive

authority over such sales of electricity and the States are

not competent to receive such authority from Congress.

Therefore, Section 210 of Title Il of PURPA is an un-

constitutional violation of the exclusive authority held by

Congress under the Commerce Clause and is void.

PURPA Titles I And III And Section 210 Of Title II Violate The

Tenth Amendment To The Constitution

As noted previously, see page 6, supra, the power given

to Congress pursuant to the Commerce Clause of the

Constitution is plenary. It includes exclusive authority to

govern commerce which is directly in interstate com-

merce and authority to govern intrastate commerce in-

ternal to the States — as opposed to governance of intra-

state commerce internal to the States — if that commerce

substantially affects interstate commerce. Fry v. United

States, supra, 421 U.S. at 547; Brown v. EPA, 521 F.2d

827, 838-39 (9th Cir. 1975).

The plenary authority granted Congress by the Com-

merce Clause, however, is limited by other provisions of

the Constitution. See Gibbons v. Ogden, 22 U.S. (9

Wheat.) 1, 196 (1824); National League of Cities v. Usery,

426 U.S. 833, 841 (1976). Thus, Congress may not enact

legislation under the Commerce Clause which impairs

the rights reserved to the States by the Tenth Amend-

ment to the Constitution. /d.

13

Under the Tenth Amendment, ‘‘Congress may not

exercise power in a fashion that impairs the States’ in-

tegrity or their ability to function effectively in a federal

system.”’ Fry v. United States, 421 U.S. at 547 n. 7. In or-

der to determine whether or not Congress has imper-

missibly intruded upon the rights reserved to the States

by the Tenth Amendment, the Court has established a

three-part test. If the Congressional enactment regulates

the States as States with respect to a matter which is in-

disputably an attribute of state sovereignty and does so in

such a manner as to impair the ability of the States to

structure integral operations in areas of traditional func-

tions, then a violation of the Tenth Amendment may be

found. Hodel v. Virginia Surface Mining and Reclamation

Association, Inc., 101 S, Ct. 2352, 2366 (1981); National

League of Cities v. Usery, supra, 426 U.S. at 845-52.

When judged by the test set forth in National League of

Cities and reaffirmed in greater detail in Virginia Surface

Mining, PURPA violates the Tenth Amendment to the

Constitution.

1. PURPA “regulates the States as States”’

PURPA Titles I and III and Section 210 of Title II re-

quire the States, through State agencies, to undertake

significant regulatory activities to carry out a federal pro-

gram. PURPA mandates, inter alia, that State regulatory

authorities shall consider specific ratemaking standards,

and requires that designated factual determinations shall

be made respecting the federal standards if prescribed ev-

idence is shown in utility regulatory proceedings.’ These

5 See, e.g., the PURPA requirement that State regulatory au-

thorities shall consider a federally-defined time of day rate standard

for electric utilities, PURPA §$111(d)(3) and 112, 16 U.S.C.

§§ 2621(d) (3), 2622 (1980 Supp.), and that specific factual deter-

minations that time of day rates are cost effective shall be made if

oe

‘

ed

14

federally-mandated requirements unconstitutionally dic-

tate the nature and specific course of conduct of proceed-

ings conducted by State authorities respecting utility reg-

ulatory matters and also constitute an unwarranted

attempt by the federal government to shape the outcome

of State proceedings by prescribing the nature and extent

of the inquiry undertaken by State regulatory bodies in

detail. The activities mandated by PURPA require sub-

stantial reallocation of the time, personnel, and other re-

sources of the States, and revision in the substantive and

procedural operations of the States’ regulatory agencies.

Failure by the States to carry out the requirements

imposed by PURPA subjects the States and their regula-

tory agencies to suit in state and federal court.

Pursuant to PURPA §$111(a) of Title I, 16 U.S.C.

§2621(a) (1980 Supp.), each State regulatory agency

which has ratemaking authority over an electric utility

must hold hearings within prescribed time limitations to

consider each of the rate design standards established by

the Act. The hearings mandated by PURPA must be held

in accordance with the procedural requirements set forth

in PURPA §111(b), 16 U.S.C. $2621(b) (1980 Supp.).

Pursuant to PURPA $113(a), 16 U.S.C. § 2623(a) (1980

Supp.), each State regulatory authority must also hold

hearings within prescribed time limitations to consider

each of the regi .tory standards established by the Act.

Those hearings must also be held in accordance with the

detailed procedural mandates set forth in §113(c). Pur-

suant to PURPA §114, 16 U.S.C. § 2624 (1980 Supp.),

each State regulatory authority must hold an evidentiary

hearing to consider the adoption of lifeline rates whether

certain federally-prescribed factual showings are made in proceed-

ings before the State regulatory authority. PURPA $115(b), 16

U.S.C. $2625(b) (1980 Supp.).

15

or not the agency has already repeatedly rejected this

concept. Pursuant to PURPA §115, 16 U.S.C. $2625

(1980) Supp.), each State regulatory agency must make

certain detailed factual findings in the context of ex-

tremely complex matters of evidence, structuring those

findings in certain specific ways. Pursuant to PURPA

$116, 16 U.S.C. $2626 (1980 Supp.), each State regula-

tory authority must report to the Secretary of Energy

annually, for ten years, the determinations which the au-

thority has made with respect to each of the rate design

and regulatory standards. Pursuant to PURPA §121, 16

U.S.C. $2631 (1980 Supp.), each State regulatory au-

thority must permit intervention of the Secretary of

Energy and of any electric consumer in the proceedings.

Also pursuant to §121, the State regulatory authority

must permit any intervenor to have access to certain

information. Failure to comply with any of the foregoing

requirements subjects the State regulatory authority to

suit in the appropriate court. 16 U.S.C. §2633 (1980

Supp.).

PURPA Section 210, 16 U.S.C. §824a-3 (1980 Supp.),

of Title II requires each State regulatory authority, within

prescribed time limitations, to implement regulations

promulgated by the Federal Energy Regulatory Commis-

sion with respect to certain producers of electricity and to

set rates and terms of service for certain wholesale for re-

sale transactions in interstate commerce. Failure to com-

ply with the implementation requirements of Section 210

subjects the State regulatory authority to suit in federal

court. 16 U.S.C. §824a-3(h) (1980 Supp.).

PURPA Title III, 15 U.S.C. §§3201 et seg. (1980

Supp.), imposes requirements on State regulatory au-

thorities in connection with natural gas companies

analogous to the requirements imposed on State regula-

tory authorities by Title I in connection with electric

utilities.

16

All of the foregoing requirements, which constitute

the principle regulatory framework of PURPA Titles I

and III and Section 210 of Title II, clearly address the

States as States. The control of the States is direct and

there is no means by which a State may opt out of the

federal scheme whether a State wishes to adopt a federal

standard or whether it does not.

Thus, PURPA is clearly and significantly distinguish-

able from the Surface Mining Control and Reclamation

Act of 1977, 30 U.S.C. §§1201 et seg. (1980 Supp.), the

constitutionality of which was before the Court for con-

sideration in Hodel v. Virginia Surface Mining and Rec-

lamation Association, Inc., supra, 101 S. Ct. 2352. In

Virginia Surface Mining, implementation by the States of

the federal program imposed under that act was volun-

tary. The Secretary of the Interior was responsible for en-

forcement of the federal program if a State declined to

undertake implementation of the federal program. The

Court therefore concluded that ‘‘there can be no sugges-

tion that the Act commandeers the legislative processes

of the States by directly compelling them to enact and

enforce a federal regulatory program.”’ /d. at 2366.

By contrast, PURPA is not significantly distinguishable

from the federal program promulgated by the Admin-

istrator of the Environmental Protection Agency pur-

suant to the 1970 Amendments to the Clean Air Act, 42

U.S.C. $1857, certain aspects of which were the subject of

substantial constitutional concern in cases before the

United States Courts of Appeal for the District of Colum-

bia, Fourth, Fifth and Ninth Circuits.* The program pro-

6 See District of Columbia v. Train, 521 F.2d 971 (D.C. Cir. 1975),

vacated and remanded sub nom. EPA v. Brown, 431 U.S. 99 (1977);

Maryland v. EPA, 530 F.2d 215 (4th Cir. 1975), vacated and

remanded sub nom. EPA v. Brown, 431 U.S. 99 (1977); Texas v. EPA,

17

mulgated by the Administrator, like the federal program

under PURPA, mandated the States to provide, through

their own agencies and resources, regulatory enforce-

ment over intrastate and interstate commerce of the pro-

visions of the federal program. Each of the courts of ap-

peals noted that the commerce power held by Congress

did not include authority to compel the States to admin-

ister the details of a federal regulatory scheme.’ The

Fourth Circuit Court of Appeals stated the following:

[I}t is one thing to strike down a state law under the

supremacy clause, or to decide that a state which

chooses to engage in activities which Congress has a

right to control must do so on Congress’ terms, or to

hold that Congress may induce a state to act by offer-

ing favors or exacting financial penalties if it does

not, but it is quite another thing to extract from a

state a most fundamental attribute of its sovereignty.

Maryland v. EPA, supra, 530 F.2d at 225-26. The Ninth

Circuit Court of Appeals emphasized the distinction be-

tween the regulation of commerce and the regulation of

the ‘‘governance’’ of commerce.

Neither [Maryland v. Wirtz nor Fry v. United States]

holds or even suggests that a state’s exercise of its

police power with respect to an economic activity

which affects interstate commerce is itself an eco-

nomic activity or ‘‘species of commercial inter-

course’’ subject to regulation by Congress. See Gib-

bons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824). Nor do

we believe that it is proper to equate the operation by

a state of a railroad, an economic activity, in-

499 F.2d (Sth Cir. 1974); Brown v. EPA, 521 F.2d 827 (9th Cir.

1975), vacated and remanded sub nom. EPA v. Brown, 431 U.S. 99

(1977).

’ District of Columbia v. Train, 521 F.2d at 990-94, Maryland v.

EPA, 530 F.2d at 225-28; Texas v. EPA, 499 F.2d at 320 n. 51, Brown

v. EPA, 521 F.2d at 838-40.

18

distinguishable from that of private parties, with its

governance of the use of highways and automobiles,

an exercise of its police power with respect to com-

merce.

To treat the governance of commerce by the states

as within the plenary reach of the Commerce Power

would in our opinion represent such an abrupt

departure from previous constitutional practice as to

make us reluctant to adopt an interpretation of the

Clean Air Act which would force us to confront the

issue. Such treatment, for example, would authorize

Congress to direct the states to regulate any eco-

nomic activity that affects interstate commerce in

any manner Congress sees fit. .. . To make gover-

nance indistinguishable from commerce for the pur-

poses of the Commerce Power cannot be equated to

the “‘unintrusive’’ regulation of economic activities

of the states upheld by the Supreme Court in Mary-

land v. Wirtz and Fry v. United States. A Commerce

Power so expanded would reduce the states to pup-

pets of a ventriloquist Congress.'

* Brown v. EPA, 521 F.2d at 838-39 (footnote omitted) (emphasis

original). The principle that Congress may not commandeer the

States, their personnel or their resources to enforce a federal regula-

tory program is one long recognized by the Court. In Kentucky v.

Dennison, 65 U.S. (24 How.) 66, 107 (1861), the Court stated: **And

we think it clear that the Federal government, under the Constitu-

tion, has no power to impose on a state officer, as such, any duty

whatever, and compel him to perform it. . . .’ This principle remains

valid today. The suggestion by Appellants herein that the principle

has»not survived (Appellants’ Brief, at 30 n. 34) is in error and repre-

sents a misreading of the Court’s statement in Monell v. New York

City Department of Social Services, 436 U.S. 658 (1978). The prece-

dent which the Court in Monell stated had not survived, 426 U.S. at

676, was that precedent which had held that the federal government

could not tax the income of employees of the States, and vice versa.

See Ex parte Virginia, 100 U.S. 339 (1880) and Graves v. New York,

306 U.S. 466 (1939), cited in Monell, 436 U.S. at 676. The Court in

19

PURPA regulates the States as States by regulating the

“*governance”’ of intrastate commerce through usurpa-

tion of specific legislative processes of the States.’ The

States’ personnel are compelled to perform federal func-

tions whether or not their state-mandated authority,

state law, and state funding permit the performance of

such functions. Such regulation is beyond the authority

of Congress under the Commerce Clause and it thus vio-

lates the Teath Amendment.

The fact that Congress permitted the States discretion

with respect to the ultimate decision of whether or not to

adopt the rate design and regulatory standards estab-

lished in Titles I and III of PURPA does not remedy the

constitutional invalidity of the Act.'' This discretion does

not extend to the decision of whether or not the State will

undertake implementation of the federal program estab-

lished by PURPA.

The possibility that Congress, arguendo, might have

been able to preempt the States’ regulation of retail

utility rates completely also does not remedy the con-

Monell gave current recognition to the validity of the precedent

which held that the federal government may not impose duties on

States and state officers. See 436 U.S. at 678-79.

°**[Hjow an Act of Congress may be construed to permit an

agency of the United States to direct a state legislature to legislate is

difficult to understand.”’ Maryland v. EPA, supra, §30 F.2d at 225.

” For example, a State must implement PURPA Section 210 with

respect to wholesale transactions in interstate commerce by certain

producers of electricity using ratemaking criteria which are inconsis-

tent with the criteria specified for utilities under its jurisdiction. Com-

pare PURPA Sections 210(b) and (c) with, e.g., Md. Code. Ann. art.

78, 881, 68(a) and 69(a).

'' Pepco notes that a similar discretion is not granted under PUR-

PA Section 210 of Title II.

20

stitutional invalidity of PURPA.'"? What Congress might

have been able to do within the limits of its constitutional

powers does not alter what it has done beyond the limits

of its constitutional powers. Cf. District of Columbia v.

Train, 521 F.2d at 992-93; Maryland v. EPA, 530 F.2d at

225-26.

2. PURPA addresses matters which are “indisputably attri-

butes of State sovereignty”

Congress may not ‘‘extract from a state a most funda-

mental attribute of its sovereignty.’’ Maryland v. EPA,

530 F.2d at 225-26. The most fundamental attribute of

State sovereignty is the right of the State to legislate in

the exercise of the State’s inherent police powers.

By the Constitution, a republican form of govern-

ment is guaranteed to every State in the Union, and

the distinguishing feature of that form is the right of

the people to choose their own officers for govern-

mental administration, and pass their own laws in

virtue of the legislative power reposed in representa-

tive bodies... .

Duncan v. McCall, 139 U.S. 449, 461 (1891). See Mary-

land v. EPA, supra, 530 F.2d at 225.

The regulation of public utility rates is one example of

the State’s sovereign exercise of its police powers, recog-

nized since ‘‘time immemorial.’’ Munn v. Illinois, 94

U.S. 113, 125 (1877). The only limitation on this

sovereign legislative authority under the police powers is

the prohibition against regulation which imposes a direct

burden on interstate commerce. Missouri ex rel. Barrett v.

Kansas Natural Gas Company, 265 U.S. 298 (1924); Pub-

2 Pepco does not agree that such preemption would have been

within the constitutional powers of Congress under the Commerce

Clause. See pages 23-26, in/ra.

21

lic Utilities Commission v. Attleboro Steam & Electric Com-

pany, 273 U.S. 83 (1927).

The enactment by Congress of Parts II and III of the

Federal Power Act, 16 U.S.C. $$ 824 et seq. (1976), and

the Natural Gas Act, 15 U.S.C. §§ 717 et seg. (1976), did

not limit the legislative regulatory authority of the States

over public utility retail rates. '’ On the contrary, the Fed-

eral Power Act and the Natural Gas Act were intended

to, and did, establish federal regulation only over those

aspects of the electric and natural gas utility industries

which were in interstate commerce, which the Supreme

Court had held in Attleboroand Kansas Natural Gas could

not be regulated by the States. /d. Therefore, the States

fully maintained their legislative authority, prior to PUR-

PA, to regulate all of the retail aspects of the electric and

natural gas industries in intrastate commerce.

3. State compliance with PURPA directly impairs the ability

of the States “‘to structure integral operations in areas of

traditional functions”’

PURPA directly intrudes upon the sovereign legisla-

tive authority reserved to the States by the Tenth

Amendment to regulate retail utility rates. The regula-

tion of electric and natural gas public utility retail rates in

intrastate commerce is a function which has always been

performed by the States. Such regulation has occurred

pursuant to the sovereign police powers inherent in the

States and was pursued by the States well before the fed-

eral government entered the field of wholesale for resale

electric and natural gas utility regulation in interstate

') See Federal Power Commission v. Hope Natural Gas Company,

320 U.S. 591, 609-10 (1944); Connecticut Light and Power Company

v. Federal Power Commission, 324 U.S. 515, 522-23 (1945).

22

commerce. See Missouri ex rel. Barrett v. Kansas Natural

Gas Company, supra, 265 U.S. 298; Public Utilities Com-

mission v, Attleboro Steam & Electric Company, supra, 273

U.S. 83; Munn vy. Illinois, supra, 94 U.S. 113. According

to the Conference Report which accompanied H. R. 4018

(enacted as PURPA), public utility retail rate regulation

involves ‘‘activities which have traditionally been subject

to primary regulation by the States.’’ H. Rep. No. 95-

1750, 95th Cong., 2d Sess. 67 (1978).

The traditional regulation by the States of utility retail

rates has necessarily required decisions with respect to

when a particular issue is appropriate for consideration

and by what means such legislative consideration should

be effected. All of these decisions directly involve inte-

gral operations of the legislative ratemaking process.

PURPA destroys, for it completely usurps, the States’

authority to make such decisions with respect to the leg-

islative function of utility retail rate regulation. PURPA

mandates the timing, substance, and procedures for state

retail ratemaking in connection with each of the federal

standards established by PURPA, and attempts to shape

the outcome of state regulatory proceedings by prescrib-

ing the nature of the inquiry undertaken and the factual

determinations to be made in such proceedings. Thus,

PURPA directly impairs the ability of the States ‘‘to

structure integral operations in areas of traditional func-

tions.’’ Virginia Surface Mining, supra, 101 S. Ct. at 2366."

4 According to PURPA Section 2, 16 U.S.C. § 2601 (1980 Supp.),

PURPA was enacted not only under the commerce power of Con-

gress, but also under its powers to preserve the national security. The

test of constitutionality, however, should be the same in either case.

See Peel v. Florida Departmert af Transportation, 600 F.2d 1070, 1084

(Sth Cir. 1979). While there may be circumstances where the nature

of the national emergency and need for collective action by the fed-

eral government warrant intrusion upon the rights reserved to the

23

Cc,

In The Presence Or Absence Of Tenth Amendment

Considerations, PURPA Titles I And III And Section 210 Of Title

II Violate The Commerce Clause For There Is No Rational Basis

Upon Which To Conclude That Retail Ratemaking Requires

Uniform National Regulation

The furnishing of public utility services to retail con-

sumers is not interstate commerce, but is ‘‘a business of

purely local concern exclusively within the jurisdiction of

the state.’’ East Ohio Gas Company v. Tax Commission,

283 U.S. 465, 471 (1931). Congress may not regulate in-

trastate business unless such regulation can be rationally

related to necessary exefcise of control over commerce

among the States. Fry v. United States, supra, 421 U.S. at

547. There is no rational basis for federal regulation over

retail ratemaking. Retail ratemaking is not commerce, it

is the governance of commerce, into which the federal

government cannot intrude. Brown v. EPA, supra, 521

F.2d at 838-39.

The attempt to foster national goals of energy conser-

vation and reduced dependence on foreign oil through

retail rates and regulatory practices is not rational. Retail

ratemaking does not permit uniform application of stand-

ards on a nationwide basis. Retail rate design and regula-

tory practices must be tailored to meet the unique charac-

teristics of individual utilities and their retail customers.

Appropriate rate design and regulatory decisions will vary

from utility to utility depending upon factors such as the

local climate, density and urbanization of the area, the

types of fuels used to power generating plants, the age

States, for the reasons stated herein with respect to the commerce

power of Congress, the circumstances surrounding PURPA could

not justify such an intrusion. See National League of Cities v. Usery,

supra, 426 U.S. at 852-53.

24

and efficiency of generating plants using such fuels, the

extent to which various generating plants are required at

various times of the day to meet individual customer

service requirements, the historic and forecasted rates of

growth in customer demand and consumption within the

utility’s service territory, the nature of utility intercon-

nections, safety and reliability of service, and characteris-

tics and size of customer classes on the system. The

impact of these factors upon retail, rather than wholesale,

rates is substantial. Federal regulation of retail sales in

these circumstances ‘‘would require, not uniform legisla-

tion generally applicable throughout the United States,

but a swarm of statutes only locally applicable and utterly

inconsistent.’’ Kidd v. Pearson, 128 U.S. 1, 21 (1888).

It is not a sufficient defense that Congress merely

enacted ‘‘standards’’ and not retail rates or regulations

themselves. The ‘‘standards”’ are designed to compel the

fixing ‘‘in stone,’’ by rule, of priorities and preferences

which are utterly inconsistent with the States’ case-by-

case determinations of local utility rates which are just

and reasonable based upon the evidence of the case. The

‘“*standards’’ require the States to make antecedent

determinations of national policy and then to give effect

to those determinations in the course of retail ratemak-

ing. It is not rational for fifty States to attempt separately

to determine national policy. It also is not rational for

those several determinations to be grafted onto the

States’ regulation of retail utility prices and services to

the consuming public with any expectation that national

aims will be better served than if the ‘‘standards’’ did not

exist.

Congress found its aim to be ‘‘increased conservation

of electric energy, increased efficiency in the use of facil-

ities and resources by electric utilities, and equitable rates

> &

for electric consumers.’’ PURPA, §2(1), 16 U.S.C.

§ 2601 (1980 Supp.). Accepting this aim, arguendo, it is

nowhere established that adoption of any of the PURPA

‘**standards’’ will increase conservation, efficiency or

equity. Moreover, nowhere is there any Congressional

finding that retail rates as already fixed by the States do

not sufficiently foster conservation, efficiency, or equity.

Indeed, all three concepts — conservation, efficiency,

equity — are undefined, vague terms which, at the local

level, have no more specificity or meaning than a charac-

terization of local taxes or local government services as

inadequately ‘‘conserving,’’ inadequately ‘‘efficient,’’ or

inadequately ‘‘equitable.”’

In enacting PURPA, Congress itself conceded that

‘rate structures must reflect the individual needs and

local peculiarities of each utility’s service area: an ap-

propriate rate design for Hawaii will not be appropriate

for Idaho, nor is there any national consensus as to the

proper costing methodology to be used to set rates for the

various utilities.”’ S. Rep. No. 95-442, 95th Cong., Ist

Sess. 9 (1977).

In light of the necessarily localized nature of retail rate-

making decisions explicitly recognized by Congress, a

finding that federal regulation of retail rates and regula-

tory practices is required is unreasonable. Unlike the

problem which led to the Economic Stablization Act of

1970 — an Act upheld by the Court in Fry v. United

States, 421 U.S. 542 (1975) — the energy problem which

prompted the enactment of PURPA is not a problem

which can be reached solely through ‘‘collective action by

the National Government,”’ National League of Cities v.

Usery, supra, 426 U.S. at 853, by means of uniform ap-

plication of standards and practices for retail utility rate-

making. Indeed, precisely the opposite is true.

26

Congress’ attempt to regulate retail utility rates and

practices has no rational basis. Thus, in the presence or in

the absence of Tenth Amendment considerations, Con-

gress has acted in violation of its constitutional powers

granted to it by the Commerce Clause.

CONCLUSION

The decision of the district court should be affirmed.

Respectfully submitted,

/s/ EDWARD A. CAINE

Edward A. Caine

Attorney for Amicus Curiae

Potomac Electric Power Company

EDWARD A. CAINE

ALLEN C, BARRINGER

WILLIAM DANA SHAPIRO

Betty K. CAULEY

1900 Pennsylvania Avenue, N.W.

Washington, D.C. 20068

(202) 872-2890

Of Counsel for

Potomac Electric Power Company

Washington, D.C.

October 28, 1981