Amicus Curiae Brief — Gulf States Util. Co. v. FPC

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MICHAEL RODAK, d2..CL ER

IN THE ; +

Supreme Court of the United States

OcToBER TERM 1972

No. 71-1178

Gur States UTILITIES ComMPANny, Petitioner,

Vv.

_ FEDERAL POWER CoMMISSION,

Crry oF LAFAYETTE, LOUISIANA,

City OF PLAQUEMINE, LOUISIANA, Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

MOTION FOR LEAVE TO TILE BRIEF AMICUS CURIAE

eed

BRIEF AMICUS CURIAE

Of Counsel: Howarp.E. WAHRENBROCK

CHARLES W. CAMPBELL Attorney for Public

General Counsel Service Company

Public Service Company of Indiana, Ince.

of Indiana, Ine. Room 605

1000 East Main Street 1725 K Street, N.W.

Plainfield, Indiana 46168 Washington, D.C. 20006

Press or Brnon S. ADAMS PRINTING, INC., WASHINGTON, D. C.

>>

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s

:

‘

an —— Co. v. United States, 321 U.S. 67

1944

SINT DD Lnteeng MEN

INDEX

Page

Motion for leave to file brief amicus curiae .......... 1

Brief for the Public Service Company of Indiana, Inc.,

es ES Siig ccs Sk 6 CRO Va eka eae eee en ns 5

I. Antitrust laws and policy are not applicable ...... 6

Tho. Citien® BOMTIOR.. .. Sri goers Fee cies 6

The bulk power supply statutory objective .... 8

The objective remained unchanged throughout

ee ee rere erry 9

Plain repugnancy means supersedure of anti-

ee 8 errr ry rere err 15

II. The cases relied on are inapposite, while apposite

SN ONO: IO, inion ccd ci cansscransansicansen 16

CITATIONS

Cases:

California v. FPC, 369 U.S. 482 (1962) .............. 17

Consolidated Gas, Elec. L, and P. Co. of Baltimore v.

Pennsylvania W. and P. Co., 194 F.2d 89 (1952),

certiorari denied, 343 U.S. 963 (1952) ........... 20

Denver & Rio Grande Western R.R. v. United States,

Sg ee er re 17

First Iowa Hydro-Electric Cooperative v. FPC, 328

TS Ne SUE hoa eens Cc ce kena ka cba no's 9

FPC v. Idaho Power Co., 344 U.S. 17 (1952) ......... 9

FPC vy. Southern California Ed. Co., 376 U.S. 205

NE nics 0s CUR ds Fk ae cose oa eee kins 9

FMC vy. Aktiebolaget Svenska Amerika Linien, 390

ey Se oe Bree oe mea 18

Marine Space Enclosures v. FMC, 137 U.S. App. D.C.

Se we EE CRUD oi ends Sava Sbigecckas cess 18

CD AAP 2 LOSERS

DEY LOR

CAD SO AE GT

Peas! aut

i, ee

CTS Re RRL Eg oe

LOL ESP 2

a

ii Citations Continued

Page

Municipal Electric Association of Massachusetts v.

S.E.C., 134 U.S. App. D.C. 145, 413 F.2d 1052

(i965) Secs akc ok 0h knee kad bak ORS E eR 18

Northern Natural Gas Co. v. FPC, 130 U.S. App. D.C.

ee ES ge ee re are 17

Penneyivania W. and P. Co. v. FPC, 343 U.S. 414

SSO ae eee ee renee er ne

Pennsylvania W. and P. Co. v. FPO, 89 U.S. App. D.C.

235, 193 F.2d 230 (1951), affirmed, 343 US Poa”

(1952) peo ara cuas Ga chee aba sadn bees eee baa 9, 19

Pennsylvania W. and P. Co. v. Consolidated Gas, E.L.

and P. Co. of Baltimore, 184 F.2d 552 (1950), cer-

tiorari denied, 343 U.S. 963 (1952) ........... 18, 19, 20

City of Pittsburgh v. FPC, 99 U.S. App. D.C. 113, 237

oe ye Re ER ey ie Ry rere re 17

United States v. El Paso Natural Gas Co., 376 U.S. 651

NS ra ok os oe os OS i Geb ksi aks 17

United States v. PUC of California, 345 U.S. 295 (1953) 18

United States v. Philadelphia Nat. Bank, 374 U.S. 321

SEE bic k 6 hc fa enka ands cian ches dha es 15, 18

STATUTES:

Administrative Procedure Act, 5 U.S.C. 554(e) ...... 7, 16

Bank Merger Act of 1960, 12 U.S.C. 1828(c) ........ 18

Federal Power Act, 41 Stat. 1063 (1920), 46 Stat. 797

(1930), 49 Stat. 838 (1935), as amended 16 U.S.C,

791-823 :

Part I, Sections 1-23, 16 U.S.C. 792-823 ....... 9

Section 10(h), 16 U.S.C. 803(h) .............. q

Part II, Sections 201-209, 16 U.S.C. 824-824h . .9, 10

Section 202(a), 16 U.S.C. 824a(a) .2, 3, 6, 8,10, 14-19

Section 202(b), 16 U.S.C. 824a(b) ..2, 3, 7, 11, 15, 16

Section 204, 16 U.S.C. 824c .............. 2, 5, 17, 19

Section 204(a), 16 U.S.C. 824ce(a) ............ 8

SPUOENOM DOU, BO Ul OMOE 6. ccc cece ci veses 2, 7,16

Section 206(a), 16 U.S.C. 824e(a) ............ 16

action Sar, be ae. GOT) . .... 6 fois aes 7, 16

oe Rs ee rer re 7, 16

Section 314(a), 16 U.S.C. 825m(a) ............ 18

Federal Water Power Act, 41 Stat.. 1063 (1920), as

amended, 41 Stat. 1353 (1921), 46 Stat. 197 (1930) 9

Citations Continued iii

Page

Interstate Commerce Act, Section 20a ............. 11,17

Natural Gas Act, 52 Stat. 821-823 (1938), as amended,

Oh Re ST iso okk biked ac cvecsacesks 17

Section 20(a), 15 U.S.C. § 717s(a) ............ 18

Public Utility Act of 1935, 49 Stat. 847, 16 U.S.C. 803. 9

Public Utility Holding Company Act of 1935, Section

Se Oe SHUN BO SANA cores ek Bb ek cvs casene vases 18

MISCELLANEOUS:

Rayburn Bill, H.R. 5423, 74th Cong., Ist Sess. (1935) :

I EOE owe ins cdcuan kk 6 aden isdn 10, 17

Wheeler Bill, S. 1725, 74th Cong., Ist Sess. (1935) ...10, 17

I NE oo inhi c i 6 hb ond 0X6 sew ck hae wne 11

SE No ihn 650 biG 0-004.6 bec kaounb ounce 11

PE oso CAG eacpacn cas canevensen 10, 12

a eS 11

I EE ik kas Su ka whcd0 6 ok caw hee sd 11,12

I i oon 5 vs wake x kk Aww 11, 12

S. 2796, 74th Cong., Ist Sess., Senate Committee on In-

terstate Commerce, substitute for S. 1725, 74th

Cong., Ist Sess. (1935)

NN NS ees cid ube chide ccdaacasi 12, 14, 15

PN gS eee 15

Hearings, H.R. Committee on Interstate and Foreign

Commerce on H.R. 5423, 74th Cong., 1st Sess.

CE oo ee a a is tions 10, 11, 12

Hearings, 8S, Committee on Interstate Commerce, on

S. 1725, 74th Cong., Ist Sess. (1935) ........... 11, 12

Report No. 621, S. Committee on Interstate Commerce,

to accompany 8S. 2796, 74th Cong., 1st Sess. (1935)

13, 14

H.R. Report No. 1318, H.R. Committee on Interstate

and Foreign Commerce, to accompany S. 2796,

74th Cong., Ist Sess. (1935)

H.R. Report No. 1903, Conference Report, to accom-

pany S. 2796, 74th Cong., Ist Sess. (1935) ....... 15

FPC, Regulations, Section 1.7(c) (18 C.F.R. 1.7(c))..7, 16

ow ee ee

SPP OE PA PE OR TE PEO .

2 CATE BB SINT GENIE 0 0" Ale RM 08 Ry

SRN. oT he ete aR

IN THE

Supreme Court of the United States

OcToBER TERM 1972

Seve ae

No. 71-1178

Gutr States UTitities Company, Petitioner,

‘ ¥.

FEDERAL PowER CoMMISSION,

City oF LAFAYETTE, LOUISIANA,

Ciry OF PLAQUEMINE, LOUISIANA, Respondents.

a On Writ of Certiorari to the United States Court of Appeals

: for the District of Columbia Circuit

BRIEF FOR PUBLIC SERVICE COMPANY OF INDIANA,

INC,. AMICUS CURIAE

PAINE ALATELMR OIE 2 LUIGI PRIMM PSEA

Subject to the granting of the attached motion for

leave to file, Public Service Company of Indiana, Inc.,

submits this brief amicus curiae to bring to the Court’s '

attention a basic argument in support of petitioner

on the first question presented (Pet. Br. p. 2), which is:

Whether the FPC has a duty to investigate

charges of Sherman Act violations under § 204 of :

the Federal Power Act. ;

[5]

DPS: yt BR FEN GEER OO te OA ee ERP SY a

6

I. ANTITRUST LAWS AND POLICIES

ARE NOT APPLICABLE

PSCI’s argument, stated in broad general terms, is

that the legality of prevention of competition in bulk

supply of electric power by the alleged company activi-

ties is governed by § 202(a) of the Federal Power Act,

not by antitrust laws or policy. This argument. has

not been elucidated by petitioner or the FPC in this

Court or at any stage in the proceedings that are here

for review, nor has the support for it in the legislative

history of the Power Act been shown.’

The Cities position—Lafayette and Plaquemine,

Louisiana : (‘‘Cities’’), seek to stop certain alleged

activities of Gulf States Utilities Company, by delaying

its raising of needed capital. By means of those ac-

tivities, according to the allegations, Gulf States, to-

gether with Louisiana Power and Light Company and

Central Louisiana Electric Company,’ has:

(1) blocked construction by Louisiana Electric

Cooperative, Ine. (‘‘LEC’’)* of a competing (and

duplicative) electric generating and transmission

system designed to take over the supply of power

to a number of distribution cooperatives that are

now supplied by Companies through their inter-

connected and coordinated bulk power supply sys-

tems ;

1 The closet approach is at Pet. Br., p. 16.

2 The three companies are referred to herein collectively as ‘‘Com-

panies.’’

3 LEC is described in the opinion of the court below as a “‘gener-

ation and tranmission cooperative financed by the Rural Electrifica-

tion Administration... [and] made up of twelve electric distri-

bution cooperatives ....’’ City of Lafayette, Louisiana v. FPC, 454

F.2d 941, 944-45 (D.C. Cir. 1971); Pet., App. A, p. 5a).

RIES NE el MOBO HS AOI SI LOG A ERI LORN OOOO ERIS LD eat CCDC

7

(2) imposed conditions upon transmitting power

for LEC, Dow Chemical Company, and Cities,

and, by means thereof, has

(3) prevented carrying out an agreement among

Cities, Dow, and LEC for interconnection and co-

ordination of their generating systems to supply

their combined loads.

In other words, Cities say that the Companies first

prevented construction of a competing bulk power

supply system and are now preventing establishment

of a competing system that would use Companies’

transmission facilities. (Pet. App. A, pp. 5a-Ta).

There is no allegation that there has been any pre-

vention of access to the FPC for

(1) an order under § 202(b) of the Federal

Power Act that would make available the benefits

of regionally integrated bulk power supply sys-

tems,

(2) a § 207 order for adequate and sufficient

service,

(3) a § 205 order for rates, facilities, contract,

practices or services that are just, reasonable, and

not unduly discriminatory or preferential, or

(4) a declaratory order under § 309 of the

Power Act, the Administrative Procedure Act (5

U.S.C. § 554(e), and § 1.7(e) of the FPC Regu-

lations (18 C.F.R. § 1.7(e)) to implement the pur-

poses and standards of provisions of the Power

Act.‘

The Cities contend that the Companies’ alleged ac-

tivities amount to a conspiracy for bulk power supply

‘For the cited sections of the Federal Power Act, see Pet., App.

G, pp. 43a et seq.

8

monopolization that is illegal under the antitrust la

and that the funds that Gulf States sought FPC au-

thority to raise would be used in the course of, or

in furtherance of, that conspiracy and, hence, for

objects that do not meet the Power Act’s § 204(a)!

stipulation that the securities issue be ‘‘for some law-

ful object ... and compatible with the public interest”

(Cities’ Mem. in Opp., p. 2).

The bulk power supply statutory objective——The

Cities are mistaken. Preventing competing indepen-

dent bulk power supply is not in itself an unlawful

object. It serves the public interest plainly stated by

Congress in the Power Act. Indeed, Congress made it

the duty of the FPC to “‘ promote and encourage’’ non-

competitive regionally-integrated bulk power supply

systems. Section 202(a)° provides:

For the purpose of assuring an abundant supply

of electric energy throughout the United States

with the greatest possible economy and with re-

gard to the proper utilization of natural resources,

the Commission is empowered and directed to di-

vide the country into regional districts for the vol-

untary interconnection and coordination of fa-

cilities for the generation, transmission and sale

of electric energy. . . . Each district shall embrace

an area which, in the judgment of the Commission,

can economically be served by such interconnected

and coordinated electric facilities. Jt shall be the

duty of the Commission to promote and encourage

such interconnection and coordination within each

district and between such districts. . . . [Emphasis

supplied. |]

5 49 Stat. 850 (1935) ; 16 U.S.C. 824¢(a) ; Pet., App G, p. 47a.

®Td., 824a(a) ; Pet., App. G, pp. 44a-45a.

9

The objective remained unchanged throughout the

legislative process.—The legislative history of the

1935 Federal Power Act shows that the objective of

interconnection and coordination of bulk power sup-

ply facilities was embodied in the proposed Part II

from its first introduction in Congress. It demon-

strates that the intended integration and coordination

was the antithesis of the competition that is the ob-

jective of the antitrust laws. It also reveals the de-

liberateness with which Congress embraced the aban-

donment of competition as a method of control of the

bulk supply of electric power.

The adoption of this objective represented a marked

difference from the approach taken by Congress in

Part I of the present Federal Power Act, which was

originally enacted in 1920 as the Federal Water Power

Act.” There, in seeking the comprehensive develop-

ment of the water power resources of the nation,® Con-

gress in 1920 simplistically followed the approach of

the Sherman Act and prohibited restraints of trade.®

741 Stat. 1063, 16 U.S.C. 791-823.

®See First Iowa Hydro-Electric Cooperative vy. FPC, 328 US.

152, 180 (1946).

®Part I of the present Federal Power Act, enacted in 1920 as

the Federal Water Power Act for the licensing of hydro-electric

projects, expressly made antitrust policies applicable (41 Stat.

1068 (1920), § 10(h) ; 16 U.S.C. 803). That section is inapplicable

in the field of interstate commerce in electric energy which Congress

first occupied with the enactment of the Federal Power Act in

1935 (Part II of Title II of the Public Utility Act of 1935, 49

Stat. 847-853 ; 16 U.S.C. 824-824h). Pennsylvania W. and P. Co. v.

FPC, 89 U.S. App. D.C. 235, 242-243, 193 F.2d 230, 237-238 (1951),

affirmed, 343 U.S. 414 (1952). Numerous decisions establish the

necessity for reading the 1935 Part II independently of the 1920

Part I. See, ¢.g., United States v. P.1.C. of California, 345 U.S.

295, 302-304 (1953) ; FPC v. Idaho Power Co., 344 U.S. 17, 22-24

(1952) ; FPC v. Southern California Ed. Co., 376 U.S. 205, 216-220

(1964).

i

Si Sas Chal a a ad

a

10

But in 1935, representatives of the FPC, who drafted

Part I of the originally proposed new Federal Power

Act” for the regulation of interstate commerce in

electric energy, set forth in their § 203(a) the first ver-

sion of what was ultimately enacted as § 202(a).

Their proposal was introduced in Congress as Title IT

of the Wheeler-Rayburn Bill.”

As they originally drafted Part II of that bill, it

contained broad provisions to enable the FPC to

achieve the objective of interconnection and coordina-

tion of bulk power supply facilities by compulsory

means and to initiate action if necessary for that pur-

pose.” FPC Commissioner Seavey submitted a pre-

10 Hearings, H.R. Committee on Interstate and Foreign Com-

merce, 74th Cong., Ist Sess., on H.R. 5423 (1935), pp. 57, 190,

400-401, 515.

11§. 1725, 74th Cong., Ist Sess. (1935) and H.R. 5423, 74th

Cong., Ist Sess. (1935). Section 203.(a) of Part IT in Title IT of the

bill read as follows: The Commission is empowered and directed

to establish regional districts for the control of the production and

transmission of electric energy, including interchange of energy,

interconnection of facilities, and determination of the uses to be

made of the facilities in such districts. Such control shall be de-

signed to secure an abundant supply of electricity with the great-

est possible economy and in the interest of the national defense

and the proper utilization and conservation of natural resources.

Such control, except in time of war or other emergency declared

to exist by proclamation of the President, shall, as far as practic-

able; be by voluntary coordination under the supervision and

direction of the Commission of the privately and publicly owned

electric facilities in and between the several districts so estab-

lished.’’

12The powers that would have been conferred by the original

bills included :

(1) The power to compel a public utility to connect with,

and to sell electric energy to, or exchange energy with, any other

11

pared memorandum at the tte Committee hearing

stating with respect to § 203"of the bill: *

This section furnishes the basis on which inte-

grated regional systems of power generation and

transmission may be built. . . . It also affords a

means of eliminating the evils that accompany ri-

valries and jealousies between systems in a field

where competition has long been abandoned as a

method of control. Present companies would gain

strength and stability through the increased use

of their facilities and the elimination of wasteful

duplication of plant and services. [Emphasis

supplied. ]

FPC Solicitor DeVane described the provisions for

| the interconnection and coordination of electric facili-

| ties into regionally integrated systems as, being to his

: mind, ‘‘the most important part of this bill.’’* He

“‘person’’ without being limited to acting on an application by a

State commission or a ‘‘ person engaged in the transmission or sale

of electric energy.’’ S. 1725 and H.R. 5423 (supra, p. 10, n. 11),

§ § 203(b) ; compare § 202(b) of the Act as enacted, 49 Stat. 848 :

(1935), 16 U.S.C. 824a(b). i

(2) Broad requirements for certificates of publie convenience j

and necessity for all facilities and services subject to FPC juris-

diction and abandonments. Id. § § 204(a) and (b).

(3) A provision subjecting the regulated public utility to the

obligation to serve any person on reasonable request, similar to

the usual utility obligation in retail service. Id., § 202(a). : 1

(4) A ‘‘common ecarrier’’ type of obligation to transmit

energy for other ‘‘persons.’’ Id., § § 203 (b).

Hearings (supra, p. 10, n. 10) pp. 383-385. 4

“Hearings (supra, p. 10, n. 10), p. 501. Mr. DeVane later

went on to explain why: ‘‘... [W]ith proper interconnections and

the formation of regional districts standby facilities can be re-

duced 15 per cent on the average and not to exceed 20 per cent, .

which will result in very substantial savings to the publie.’’ (Id.,

p. 2148; see also pp. 269-274, 2152-3, 2165-8: and Hearings, S.

Committee on Interstate Commerce, on S. 1725, 74th Cong., 1st

Sess. (1935), pp. 238-239, 245-246, 257-258, 272-274, 797-800.)

a

a =

12

contrasted it with the Interstate Commerce Act: ™

There is nothing in this bill . . . that provides for

competition. It is entirely silent in that respect

and differs from the language of the Interstate

Commerce Commission... .

There, as you recall, Congress provided that

competition should be preserved and if Congress

should desire to establish competition in this in-

dustry it should be written in any legislation

adopted by Congress.

Questioned whether the elimination of competition was

part of a conception of making the whole electric in-

dustry into a single entity (as charged by some op-

ponents of the bill) so that it would be more readily

subject to ‘‘nationalization,’’’* Mr. DeVane answered

that there was already ‘‘practically no duplication in

the field.’’ ” mosey

In the course of the bill through Congress the lan-

guage of § 203(a)** was altered, but without changing

the purpose to achieve non-competitive regionally inte-

grated bulk power supply. Most of the provisions for

compulsion * were eliminated because it was felt that

15H. Hearings (supra, p. 10, n. 10), p. 554; see also p. 385.

16 See, ¢.g., S. Hearings (supra, p. 11, n. 14), p. 271; H. Hear-

ings (supra, p. 10, n. 10) pp. 436, 444-45; cf. pp. 855-56, 59.

17H. Hearings (supra, p. 10, n. 10), p. 2148.

18 Renumbered § 202(a) in the Senate Committee substitute bill,

S. 2796, 74th Cong., 1st Sess. (1935).

19 The provisions of S. 1725 referred to above, pp. 10-11, n. 12,

for certificates of public convenience and necessity, and imposing

public utility and common carrier type obligations were eliminated

in S. 2796.

13

in this first Federal exercise of power over the electric

industry reliance should be placed on voluntary action

and the enlightened self-interest of the utilities. These

changes were made initially in a substitute bill ”° re-

ported out by Senator Wheeler’s Committee.”

2. 2796, 74th Cong., Ist Sess. (1935).

21S. Report No. 621, 74th Cong., Ist Sess. (1935), p. 19. The

report stated (pp. 17-18, 49):

“The necessity for Federal leadership in securing planned co-

ordination of the facilities of the industry which alone can produce

an abundance of electricity at the lowest possible cost has been

clearly revealed in the recent reports of the Federal Power Com-

mission, the Mississippi Valley Committee, and the National Re-

sources Board, Assertion of the power of the Federal Government

in this direction becomes the more important at the time when

the Federal Government is compelling the reorganization of hold-

ing companies along regional lines. The new part 2 of the Federal

Water Power Act seeks to bring about the regional coordination

of the operating facilities of the interstate utilities along the same

lines within which the financial and managerial control is limited

by title I of the bill.’’

“SECTION 202. INTERCONNECTION AND

COORDINATION OF FACILITIES

“This section sets up the machinery for the promotion of the

coordination of electric facilities. By subsection (a) the Commis-

sion is directed to divide the country into regional districts, con-

sisting of areas which can economically be served by intercon-

nected and coordinated facilities. Within each such district and

between such districts the Commission is directed to secure such

interconnection and coordination by voluntary action as far as:

practicable. To the extent that this action is to be voluntary,

public as well as private plants are included. Before establishing

any district the Commission is to give notice to the State commis-

sions and afford them an opportunity to present their reeommenda-

tions. é

“Under this subsection the Commission would have authority to

work out the ideal utility map of the country and supervise the

development of the industry toward that ideal. The committee is

confident that enlightened self-interest will lead the utilities to

cooperate with the Commission and with each other in bringing

about the economies which can alone be secured through the

PERE IE ST Raa gs tree

ee)

14

The Report was careful to make clear that the elimi-

nation of the compulsory features was not an aban-

donment of the objective of regional interconnection

and coordination of bulk power supply facilities, for

it said that while such provisions ‘‘may ultimately be

found -to be desirable, the committee does not think

that they should be included in this first exercise of

Federal power over electric companies. . . .”’* In-

deed, Congress’ increased reliance on voluntary action

for achievement of the objective necessarily empha-

sizes its intention that the antitrust laws not apply,

for their applicability would discourage or prevent

the desired voluntary actions.

The House Committee manifested its adherence to

the original objective of the provision by strengthening

202(a). It changed its wording so as to expressly lay

upon the FPC the ‘‘duty to promote and encourage

planned coordination which has long been advocated by the most _

able and progressive thinkers on this subject.

‘When interconnection cannot be secured by voluntary action,

subsection (b) gives the Commission limited authority to compel

interstate utilities to connect their lines and sell or exchange

energy. The power may only be invoked upon complaint by a

State commission or a utility subject to the act. The Commission

is given authority to prescribe the terms under which the inter-

connection and exeha are to be carried on, including the price

to be paid for the ice.

‘*Subsection (¢) gives the Commission a much broader and more

complete authority to compel the connection of facilities and the

generation, delivery, or interchange of energy during times of

war or other emergency. This is a temporary power designed to

avoid a repetition of the conditions during the last war, when a

serious power shortage arose. Drought and other‘ natural ener-

gencies have created similar crises in certain sections of the coun-

try; such conditions should find a Federal agency ready to do all

that can be done in order to prevent a breakdown in electric

supply.”’

27d. p. 19.

15

such interconnection and coordination ... by volun-

tary action of the private and public owners of such

electric facilities. ”? 28 It also broadened the compulsery

power of the FPC under § 202(b). Where the Senate

had limited that power to interconnections between in-

terstate utilities, the House Committee ‘‘saw no reason

for denying the same privilege to a company engaged

in intrastate commerce.’ ** .

The House amendment of § 202(a) was adopted in

the Conference Committee substitute, “with minor

modifications.” * The broadening of § 202(b) by the

House was retained.”

Plain repugnancy means supersedure of antitrust

» laws pro tanto.—That which § 202(a) makes it the

FPC’s explicit “‘duty . . . to promote and encourage”’

cannot be unlawful under the antitrust laws. The re-

pugnaney is plain * and the legislative history to which

we have referred confirms Congress’ intention that the

anti-trust laws should not apply.

The lawfulness of the Companies’ alleged activities

was, therefore, not properly called in question by

Cities’ charges of violations of the antitrust laws. If

facts could properly be alleged showing that there is

a question whether

(1) the Companies’ bulk power supply facili-

ties (or the terms upon which sales or exchanges

*8 See H. Report No. 1318, 74th Cong., 1st Sess., p. 74.

* H. Report No. 1318, 74th Cong., Ist Sess. (1935), p. 28.

*° H. Report No. 1903, 74th Cong., 1st Sess. (1935, p. 74.

26 Tq. » pp. 48-49.

“Compare United States v. Philadelphia Nat. Bank, 374 U.S.

321, 350-351 (1963).

.

meee tions a

16

of energy are available to the Cities) satisfy the

requirements and standards of § 202(a) and (b),

(2) the service rendered or offered is inade-

quate or insufficient under § 207,”* or

(3) a rate, charge or classification (or facili-

ties, rule, regulation, practice or contract affecting

or relating thereto) is unjust, unreasonable, or

unduly discriminatory or preferential within the

meaning of § 205,”

such questions might appropriately be raised by an

application to the FPC under § 202(b), or by com.

plaint under § 206(a)* or 207" or by an application

for a declaratory order under § 309 of the Power Act,

the Administrative Procedure Act (5 U.S.C. § 554(e),

and § 1.7(¢c) of the FPC Regulations (18 C.F.R. §1.7

(c)). But no question outside the scope of the FPC’s

regulation under these sections is presented by allega-

tions of prevention of the establishment of a competing

bulk power supply system. Until and unless such a

question is presented, no question of applicability of

the antitrust laws can be involved.

Il. THE CASES RELIED ON ARE INAPPOSITE,

WHILE APPOSITE CASES ARE IGNORED

In the light of the foregoing, the cases relied upon

by the Cities in their petition, and by the court below,

are plainly inapposite.

28 49 Stat. 853 (1935) ; 16 U.S.C. 824f.

29 49 Stat. 851 (1935) ; 16 U.S.C. 824d; Pet., App. G, pp. 49a-50a,

3949 Stat. 852 (1935); 16 U.S.C. 824e(a); Pet. App. G, pp.

5la-52a.

$1 49 Stat. 853 (1935) ; 16 U.S.C. 824(f).

eae ROI a

17

The court rested its decision mainly on Denver &

Rio Grande Western R.R. v. United States, 387 U.S.

485 (1967),° saying that § 204 of the Power Act “‘is

almost identical with the pertinent provisions of § 20a

of the Commerce Act... .”"* But, as we have seen,

this overlooks the distinction FPC Solicitor DeVane

pointed out when the Wheeler-Rayburn Bill was un-

der consideration by Congress. He contrasted what is

now § 202(a), which was intended, inter alia, as “‘a

means of eliminating the evils that accompany rival-

ries and jealousies between systems in a field where

competition has long been abandoned as a method of

control’, with the Interstate Commerce Act (supra,

pp. 11-12) .**

McLean Trucking Co. v. United States, 321 U.S. 67

(1944), cited by the court below is similarly inapposite.

The absence of any provision in the Natural Gas

Act * and anything in its history comparable to that

of §202(a), (supra, p. 8), makes the decisions *

under that Act that were relied on by the court below,”

*° 454 F.2d at 948-953; Pet., App. A, pp. 12a, n. 9, 14a-20a, 22a.

This ease is also cited by Cities, Mem. in Opp. p. 3.

8454 F.2d at 949; Pet., App. A, p. 14a. The Court below quotes

from § 202(a) in another connection (454 F.2d at p. 951; Pet.,

App. A, pp. 18a-19a) but nowhere recognizes the basic question of

its effect on the applicability of the antitrust laws.

54454 F.2d at 948, n. 9; Pet., App. A, p. 13a, n. 9.

8552 Stat. 821-833 (1938), as amended; 15 U.S.C. 717-717w.

%% £.g., United States v. El Paso Natural Gas Co., 376 U.S. 651

(1964) ; California v. FPC, 369 U.S. 482 484-485 (1962) ; Northern

Natural Gas Co. v. FPC, 130 U.S. App. D.C. 220, 226, 399 F.2a

953, (1968).; City of Pittsburgh v. FPC, 99 U.S. App. D.C. 113,

237 F.2d 741 (1956).

37454 F.2d at 948 n. 8 and 9, 953, n. 25 and 27; Pet., App. A,

p. 18a, n. 9, p. 23a, n. 25 and 27.

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18

and by the Cities in opposing the petition for cer—

tiorari,* wholly inapposite.”

Similar considerations apply to the decision under

the Public Utility Holding Company Act of 1935,

§ 10, 15 U.S.C. 79, in Municipal Electric Association

of Massachusetts v. SEC, 134 U.S.App.D.C. 145, 413

F.2d 1052 (1969),*° for that Act, too, has no provision

like § 202(a) of the Power Act. So, also, to the de-

cision in United States, v. Philadelphia National Bank,

374 U.S. 321 (1963), under the Bank Merger Act of

1960 (12 U.S.C. § 1828(c)).“

The Federal Maritime Commission cases cited by

the court below are also inapposite. The antitrust

law immunity that the statute in each of those cases

gives to agreements approved by that Commission is

38 Cities Mem., p. 3.

*% Indeed, omias*-:. .com § 314(a) of the Power Act (16 U.S.C.

§ 825m(a)) of any provision for referring evidence of apparent

violations of antitrust laws to the Attorney General, like that in

§ 20(a) of the Natural Gas Act (15 U.S.C. §717s(a))—which

puzzled the court below (454 F.2d at 953, n. 27; Pet., App. A,

p. 23a, n. 27)—may be a corroborative indication of the highly

limited scope of the antitrust laws in regulation under the Power

Act.

*° Cited by Cities, Mem. in Opp., p. 3, and by the court below,

454 F.2d 948, n. 9; Pet. App. 13a n. 9.

*! Cited by the court below, 454 F.2d at 948, n. 9; Pet., App. A,

p. 13a, n. 9. ¢

42 FMC vy. Aktiebolaget Svenska Amerika Linien, 390 U.S. 238

(1968) ; Marine Space Enclosures vy. FMC, 137 U.S.App. D.C. 9,

17f, 420 F.2d 577, 585 (1969). Cited by the court below, 454 F.2d

at 948, n. 9; Pet., App. A, p. 13a, n. 9. Cited by cities, Mem. in

Opp., p. 3. Pennsylvania W. and P. Co. v. Consolidated Gas, E.L.

and P. Co. of Baltimore, 184 F.2d 552 (1950), certiorari denied,

343 U.S. 963 (1952).

19

subject to,an almost circular provision governing

Commission disapproval of any agreement found to be

“contrary to the public interest.’’ This ‘public in-

terest” concept is unlimited by any statutory provi-

sion like § 202(a), and the decisions upholding con-

sideration of antitrust principles as part of such un-

limited ‘‘public interest’? concept are obviously in-

applicable where § 202(a) is controlling.

This completes the ‘‘host of decisions” cited by the

court below to support relevancy of the asserted anti-

competitive purpose or consequence of the authoriza-

tion Gulf States sought under § 204. Decisions under

the Power Act are conspicuous by their absence from

the court’s list. But attention may be called to Penn-

sylvania Water and Power Company v. FPC, 343 U.S.

414, 421-423 (1952), and to the District of Columbia

Cireuit’s decision that was there affirmed (89 U.S.App.

D.C. 235, 237-243, 193 F.2d 230, 233-238). In that case,

although an interconnected and coordinated generating

and transmission arrangement had previously been

held illegal by the Fourth Circuit under the antitrust

laws (in a case to which the FPC was not a party), the

FPC was there sustained in nevertheless ordering that

arrangement continued. This Court relied on § 202)

(343 U.S. at 423), as had the District of Columbia Cir-

cuit (193 F.2d at 237). There have been no subsequent

decisions under the Power Act to detract from the au-

thority of those decisions.

It is to be noted that the antitrust law violations

here alleged, like those involved in the Penn Water

ease run to interconnected and coordinated systems

8 Consolidated Gas, E.L. and P. Co. of Baltimore v. Pennsylvania

W. and P. Co., 184 F.2d 552 (1950), certiorari denied, 343 U.S. 963

(1952). :

20

operations, not to the managerial freedom of those in- #

volved. Compare 343 U.S. at pp. 421-422. Thus the =

questions do not arise here on which the Fourth Cir- ~

cuit (in Consolidated Gas Elec. L. and P. Co. of Balti- 3

more v. Pennsylvania W. and P. Co., 194 F.2d 89 ©

(1952) certiorari dented, 343 U.S. 963 (1952)) differed ¢

with the District of Columbia Circuit decision in Penn”

Water (193 F.2d 230). See supra, p. 19.

CONCLUSION

For the foregoing reasons it is submitted that thes

decision of the Court of Appeals should be reversed.

Respectfully submitted,

Howarp E. WAHRENBROCK

Attorney for Public

Service Company

of Indiana, Inc.

Room 605

1725 K Street, N.W.

Washington, D.C. 20006

Of Counsel:

CHARLES W. CAMPBELL

General Counsel

Publie Service Company

of Indiana, Inc.

100 East Main Street

Plainfield, Indiana 46168