16 U.S.C. § 824e — Power of Commission to fix rates and

Page 1414 TITLE 16—CONSERVATION § 824e Editorial Notes AMENDMENTS 2018—Subsec. (g). Pub. L. 115–270 added subsec. (g). 1978—Subsec. (d). Pub. L. 95–617, § 207(a), substituted ‘‘sixty’’ for ‘‘thirty’’ in two places. Subsec. (f). Pub. L. 95–617, § 208, added subsec. (f). Statutory Notes and Related Subsidiaries STUDY OF ELECTRIC RATE INCREASES UNDER FEDERAL POWER ACT Section 207(b) of Pub. L. 95–617 directed chairman of Federal Energy Regulatory Commission, in consulta- tion with Secretary, to conduct a study of legal re- quirements and administrative procedures involved in consideration and resolution of proposed wholesale electric rate increases under Federal Power Act, sec- tion 791a et seq. of this title, for purposes of providing for expeditious handling of hearings consistent with due process, preventing imposition of successive rate increases before they have been determined by Com- mission to be just and reasonable and otherwise lawful, and improving procedures designed to prohibit anti- competitive or unreasonable differences in wholesale and retail rates, or both, and that chairman report to Congress within nine months from Nov. 9, 1978, on re- sults of study, on administrative actions taken as a re- sult of this study, and on any recommendations for changes in existing law that will aid purposes of this section. § 824e. Power of Commission to fix rates and charges; determination of cost of production or transmission (a) Unjust or preferential rates, etc.; statement of reasons for changes; hearing; specification of issues Whenever the Commission, after a hearing held upon its own motion or upon complaint, shall find that any rate, charge, or classifica- tion, demanded, observed, charged, or collected by any public utility for any transmission or sale subject to the jurisdiction of the Commis- sion, or that any rule, regulation, practice, or contract affecting such rate, charge, or classi- fication is unjust, unreasonable, unduly dis- criminatory or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force, and shall fix the same by order. Any com- plaint or motion of the Commission to initiate a proceeding under this section shall state the change or changes to be made in the rate, charge, classification, rule, regulation, practice, or contract then in force, and the reasons for any proposed change or changes therein. If, after review of any motion or complaint and answer, the Commission shall decide to hold a hearing, it shall fix by order the time and place of such hearing and shall specify the issues to be adju- dicated. (b) Refund effective date; preferential pro- ceedings; statement of reasons for delay; bur- den of proof; scope of refund order; refund orders in cases of dilatory behavior; interest Whenever the Commission institutes a pro- ceeding under this section, the Commission shall establish a refund effective date. In the case of a proceeding instituted on complaint, the refund effective date shall not be earlier than the date of the filing of such complaint nor later than 5 months after the filing of such com- plaint. In the case of a proceeding instituted by the Commission on its own motion, the refund effective date shall not be earlier than the date of the publication by the Commission of notice of its intention to initiate such proceeding nor later than 5 months after the publication date. Upon institution of a proceeding under this sec- tion, the Commission shall give to the decision of such proceeding the same preference as pro- vided under section 824d of this title and other- wise act as speedily as possible. If no final deci- sion is rendered by the conclusion of the 180-day period commencing upon initiation of a pro- ceeding pursuant to this section, the Commis- sion shall state the reasons why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such deci- sion. In any proceeding under this section, the burden of proof to show that any rate, charge, classification, rule, regulation, practice, or con- tract is unjust, unreasonable, unduly discrimi- natory, or preferential shall be upon the Com- mission or the complainant. At the conclusion of any proceeding under this section, the Com- mission may order refunds of any amounts paid, for the period subsequent to the refund effective date through a date fifteen months after such refund effective date, in excess of those which would have been paid under the just and reason- able rate, charge, classification, rule, regula- tion, practice, or contract which the Commis- sion orders to be thereafter observed and in force: Provided, That if the proceeding is not concluded within fifteen months after the refund effective date and if the Commission determines at the conclusion of the proceeding that the pro- ceeding was not resolved within the fifteen- month period primarily because of dilatory be- havior by the public utility, the Commission may order refunds of any or all amounts paid for the period subsequent to the refund effective date and prior to the conclusion of the pro- ceeding. The refunds shall be made, with inter- est, to those persons who have paid those rates or charges which are the subject of the pro- ceeding. (c) Refund considerations; shifting costs; reduc- tion in revenues; ‘‘electric utility companies’’ and ‘‘registered holding company’’ defined Notwithstanding subsection (b), in a pro- ceeding commenced under this section involving two or more electric utility companies of a reg- istered holding company, refunds which might otherwise be payable under subsection (b) shall not be ordered to the extent that such refunds would result from any portion of a Commission order that (1) requires a decrease in system pro- duction or transmission costs to be paid by one or more of such electric companies; and (2) is based upon a determination that the amount of such decrease should be paid through an in- crease in the costs to be paid by other electric utility companies of such registered holding company: Provided, That refunds, in whole or in part, may be ordered by the Commission if it de- termines that the registered holding company would not experience any reduction in revenues which results from an inability of an electric Page 1415 TITLE 16—CONSERVATION § 824e 1 See References in Text note below. utility company of the holding company to re- cover such increase in costs for the period be- tween the refund effective date and the effective date of the Commission’s order. For purposes of this subsection, the terms ‘‘electric utility com- panies’’ and ‘‘registered holding company’’ shall have the same meanings as provided in the Pub- lic Utility Holding Company Act of 1935, as amended.1 (d) Investigation of costs The Commission upon its own motion, or upon the request of any State commission whenever it can do so without prejudice to the efficient and proper conduct of its affairs, may inves- tigate and determine the cost of the production or transmission of electric energy by means of facilities under the jurisdiction of the Commis- sion in cases where the Commission has no au- thority to establish a rate governing the sale of such energy. (e) Short-term sales (1) In this subsection: (A) The term ‘‘short-term sale’’ means an agreement for the sale of electric energy at wholesale in interstate commerce that is for a period of 31 days or less (excluding monthly contracts subject to automatic renewal). (B) The term ‘‘applicable Commission rule’’ means a Commission rule applicable to sales at wholesale by public utilities that the Com- mission determines after notice and comment should also be applicable to entities subject to this subsection. (2) If an entity described in section 824(f) of this title voluntarily makes a short-term sale of electric energy through an organized market in which the rates for the sale are established by Commission-approved tariff (rather than by con- tract) and the sale violates the terms of the tar- iff or applicable Commission rules in effect at the time of the sale, the entity shall be subject to the refund authority of the Commission under this section with respect to the violation. (3) This section shall not apply to— (A) any entity that sells in total (including affiliates of the entity) less than 8,000,000 megawatt hours of electricity per year; or (B) an electric cooperative. (4)(A) The Commission shall have refund au- thority under paragraph (2) with respect to a voluntary short term sale of electric energy by the Bonneville Power Administration only if the sale is at an unjust and unreasonable rate. (B) The Commission may order a refund under subparagraph (A) only for short-term sales made by the Bonneville Power Administration at rates that are higher than the highest just and reasonable rate charged by any other entity for a short-term sale of electric energy in the same geographic market for the same, or most nearly comparable, period as the sale by the Bonneville Power Administration. (C) In the case of any Federal power mar- keting agency or the Tennessee Valley Author- ity, the Commission shall not assert or exercise any regulatory authority or power under para- graph (2) other than the ordering of refunds to achieve a just and reasonable rate. (June 10, 1920, ch. 285, pt. II, § 206, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 852; amend- ed Pub. L. 100–473, § 2, Oct. 6, 1988, 102 Stat. 2299; Pub. L. 109–58, title XII, §§ 1285, 1286, 1295(b), Aug. 8, 2005, 119 Stat. 980, 981, 985.) Editorial Notes REFERENCES IN TEXT The Public Utility Holding Company Act of 1935, re- ferred to in subsec. (c), is title I of act Aug. 26, 1935, ch. 687, 49 Stat. 803, which was classified generally to chap- ter 2C (§ 79 et seq.) of Title 15, Commerce and Trade, prior to repeal by Pub. L. 109–58, title XII, § 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables. AMENDMENTS 2005—Subsec. (a). Pub. L. 109–58, § 1295(b)(1), sub- stituted ‘‘hearing held’’ for ‘‘hearing had’’ in first sen- tence. Subsec. (b). Pub. L. 109–58, § 1295(b)(2), struck out ‘‘the public utility to make’’ before ‘‘refunds of any amounts paid’’ in seventh sentence. Pub. L. 109–58, § 1285, in second sentence, substituted ‘‘the date of the filing of such complaint nor later than 5 months after the filing of such complaint’’ for ‘‘the date 60 days after the filing of such complaint nor later than 5 months after the expiration of such 60-day pe- riod’’, in third sentence, substituted ‘‘the date of the publication’’ for ‘‘the date 60 days after the publica- tion’’ and ‘‘5 months after the publication date’’ for ‘‘5 months after the expiration of such 60-day period’’, and in fifth sentence, substituted ‘‘If no final decision is rendered by the conclusion of the 180-day period com- mencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best esti- mate as to when it reasonably expects to make such de- cision’’ for ‘‘If no final decision is rendered by the re- fund effective date or by the conclusion of the 180-day period commencing upon initiation of a proceeding pur- suant to this section, whichever is earlier, the Commis- sion shall state the reasons why it has failed to do so and shall state its best estimate as to when it reason- ably expects to make such decision’’. Subsec. (e). Pub. L. 109–58, § 1286, added subsec. (e). 1988—Subsec. (a). Pub. L. 100–473, § 2(1), inserted provi- sions for a statement of reasons for listed changes, hearings, and specification of issues. Subsecs. (b) to (d). Pub. L. 100–473, § 2(2), added sub- secs. (b) and (c) and redesignated former subsec. (b) as (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–473, § 4, Oct. 6, 1988, 102 Stat. 2300, provided that: ‘‘The amendments made by this Act [amending this section] are not applicable to complaints filed or motions initiated before the date of enactment of this Act [Oct. 6, 1988] pursuant to section 206 of the Federal Power Act [this section]: Provided, however, That such complaints may be withdrawn and refiled without prej- udice.’’ LIMITATION ON AUTHORITY PROVIDED Pub. L. 100–473, § 3, Oct. 6, 1988, 102 Stat. 2300, provided that: ‘‘Nothing in subsection (c) of section 206 of the Federal Power Act, as amended (16 U.S.C. 824e(c)) shall be interpreted to confer upon the Federal Energy Regu- latory Commission any authority not granted to it elsewhere in such Act [16 U.S.C. 791a et seq.] to issue an order that (1) requires a decrease in system production or transmission costs to be paid by one or more electric utility companies of a registered holding company; and (2) is based upon a determination that the amount of such decrease should be paid through an increase in the Page 1416 TITLE 16—CONSERVATION § 824f costs to be paid by other electric utility companies of such registered holding company. For purposes of this section, the terms ‘electric utility companies’ and ‘reg- istered holding company’ shall have the same meanings as provided in the Public Utility Holding Company Act of 1935, as amended [15 U.S.C. 79 et seq.].’’ STUDY Pub. L. 100–473, § 5, Oct. 6, 1988, 102 Stat. 2301, directed that, no earlier than three years and no later than four years after Oct. 6, 1988, Federal Energy Regulatory Commission perform a study of effect of amendments to this section, analyzing (1) impact, if any, of such amendments on cost of capital paid by public utilities, (2) any change in average time taken to resolve pro- ceedings under this section, and (3) such other matters as Commission may deem appropriate in public inter- est, with study to be sent to Committee on Energy and Natural Resources of Senate and Committee on Energy and Commerce of House of Representatives. § 824f. Ordering furnishing of adequate service Whenever the Commission, upon complaint of a State commission, after notice to each State commission and public utility affected and after opportunity for hearing, shall find that any interstate service of any public utility is inad- equate or insufficient, the Commission shall de- termine the proper, adequate, or sufficient serv- ice to be furnished, and shall fix the same by its order, rule, or regulation: Provided, That the Commission shall have no authority to compel the enlargement of generating facilities for such purposes, nor to compel the public utility to sell or exchange energy when to do so would impair its ability to render adequate service to its cus- tomers. (June 10, 1920, ch. 285, pt. II, § 207, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 853.) § 824g. Ascertainment of cost of property and de- preciation (a) Investigation of property costs The Commission may investigate and ascer- tain the actual legitimate cost of the property of every public utility, the depreciation therein, and, when found necessary for rate-making pur- poses, other facts which bear on the determina- tion of such cost or depreciation, and the fair value of such property. (b) Request for inventory and cost statements Every public utility upon request shall file with the Commission an inventory of all or any part of its property and a statement of the origi- nal cost thereof, and shall keep the Commission informed regarding the cost of all additions, bet- terments, extensions, and new construction. (June 10, 1920, ch. 285, pt. II, § 208, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 853.) § 824h. References to State boards by Commis- sion (a) Composition of boards; force and effect of proceedings The Commission may refer any matter arising in the administration of this subchapter to a board to be composed of a member or members, as determined by the Commission, from the State or each of the States affected or to be af- fected by such matter. Any such board shall be vested with the same power and be subject to the same duties and liabilities as in the case of a member of the Commission when designated by the Commission to hold any hearings. The action of such board shall have such force and effect and its proceedings shall be conducted in such manner as the Commission shall by regula- tions prescribe. The board shall be appointed by the Commission from persons nominated by the State commission of each State affected or by the Governor of such State if there is no State commission. Each State affected shall be enti- tled to the same number of representatives on the board unless the nominating power of such State waives such right. The Commission shall have discretion to reject the nominee from any State, but shall thereupon invite a new nomina- tion from that State. The members of a board shall receive such allowances for expenses as the Commission shall provide. The Commission may, when in its discretion sufficient reason ex- ists therefor, revoke any reference to such a board. (b) Cooperation with State commissions The Commission may confer with any State commission regarding the relationship between rate structures, costs, accounts, charges, prac- tices, classifications, and regulations of public utilities subject to the jurisdiction of such State commission and of the Commission; and the Commission is authorized, under such rules and regulations as it shall prescribe, to hold joint hearings with any State commission in connec- tion with any matter with respect to which the Commission is authorized to act. The Commis- sion is authorized in the administration of this chapter to avail itself of such cooperation, serv- ices, records, and facilities as may be afforded by any State commission. (c) Availability of information and reports to State commissions; Commission experts The Commission shall make available to the several State commissions such information and reports as may be of assistance in State regula- tion of public utilities. Whenever the Commis- sion can do so without prejudice to the efficient and proper conduct of its affairs, it may upon re- quest from a State make available to such State as witnesses any of its trained rate, valuation, or other experts, subject to reimbursement to the Commission by such State of the compensa- tion and traveling expenses of such witnesses. All sums collected hereunder shall be credited to the appropriation from which the amounts were expended in carrying out the provisions of this subsection. (June 10, 1920, ch. 285, pt. II, § 209, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 853.) § 824i. Interconnection authority (a) Powers of Commission; application by State regulatory authority (1) Upon application of any electric utility, Federal power marketing agency, geothermal power producer (including a producer which is not an electric utility), qualifying cogenerator, or qualifying small power producer, the Com- mission may issue an order requiring— (A) the physical connection of any cogenera- tion facility, any small power production fa-