16 U.S.C. § 824d — Rates and charges; schedules; suspension

Page 1412 TITLE 16—CONSERVATION § 824d mental orders in the premises as it may find necessary or appropriate, and may by any such supplemental order modify the provisions of any previous order as to the particular purposes, uses, and extent to which, or the conditions under which, any security so theretofore author- ized or the proceeds thereof may be applied, sub- ject always to the requirements of subsection (a) of this section. (c) Compliance with order of Commission No public utility shall, without the consent of the Commission, apply any security or any pro- ceeds thereof to any purpose not specified in the Commission’s order, or supplemental order, or to any purpose in excess of the amount allowed for such purpose in such order, or otherwise in contravention of such order. (d) Authorization of capitalization not to exceed amount paid The Commission shall not authorize the cap- italization of the right to be a corporation or of any franchise, permit, or contract for consolida- tion, merger, or lease in excess of the amount (exclusive of any tax or annual charge) actually paid as the consideration for such right, fran- chise, permit, or contract. (e) Notes or drafts maturing less than one year after issuance Subsection (a) shall not apply to the issue or renewal of, or assumption of liability on, a note or draft maturing not more than one year after the date of such issue, renewal, or assumption of liability, and aggregating (together with all other then outstanding notes and drafts of a ma- turity of one year or less on which such public utility is primarily or secondarily liable) not more than 5 per centum of the par value of the other securities of the public utility then out- standing. In the case of securities having no par value, the par value for the purpose of this sub- section shall be the fair market value as of the date of issue. Within ten days after any such issue, renewal, or assumption of liability, the public utility shall file with the Commission a certificate of notification, in such form as may be prescribed by the Commission, setting forth such matters as the Commission shall by regula- tion require. (f) Public utility securities regulated by State not affected The provisions of this section shall not extend to a public utility organized and operating in a State under the laws of which its security issues are regulated by a State commission. (g) Guarantee or obligation on part of United States Nothing in this section shall be construed to imply any guarantee or obligation on the part of the United States in respect of any securities to which the provisions of this section relate. (h) Filing duplicate reports with the Securities and Exchange Commission Any public utility whose security issues are approved by the Commission under this section may file with the Securities and Exchange Com- mission duplicate copies of reports filed with the Federal Power Commission in lieu of the re- ports, information, and documents required under sections 77g, 78l, and 78m of title 15. (June 10, 1920, ch. 285, pt. II, § 204, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 850.) Executive Documents TRANSFER OF FUNCTIONS Executive and administrative functions of Securities and Exchange Commission, with certain exceptions, transferred to Chairman of such Commission, with au- thority vested in him to authorize their performance by any officer, employee, or administrative unit under his jurisdiction, by Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out in the Appendix to Title 5, Government Organization and Em- ployees. § 824d. Rates and charges; schedules; suspension of new rates; automatic adjustment clauses (a) Just and reasonable rates All rates and charges made, demanded, or re- ceived by any public utility for or in connection with the transmission or sale of electric energy subject to the jurisdiction of the Commission, and all rules and regulations affecting or per- taining to such rates or charges shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful. (b) Preference or advantage unlawful No public utility shall, with respect to any transmission or sale subject to the jurisdiction of the Commission, (1) make or grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvan- tage, or (2) maintain any unreasonable dif- ference in rates, charges, service, facilities, or in any other respect, either as between localities or as between classes of service. (c) Schedules Under such rules and regulations as the Com- mission may prescribe, every public utility shall file with the Commission, within such time and in such form as the Commission may designate, and shall keep open in convenient form and place for public inspection schedules showing all rates and charges for any transmission or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regula- tions affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services. (d) Notice required for rate changes Unless the Commission otherwise orders, no change shall be made by any public utility in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after sixty days’ notice to the Commission and to the public. Such notice shall be given by filing with the Commission and keeping open for public inspection new sched- ules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. The Commission, for good cause shown, may allow changes to take effect with- out requiring the sixty days’ notice herein pro- Page 1413 TITLE 16—CONSERVATION § 824d vided for by an order specifying the changes so to be made and the time when they shall take effect and the manner in which they shall be filed and published. (e) Suspension of new rates; hearings; five-month period Whenever any such new schedule is filed the Commission shall have authority, either upon complaint or upon its own initiative without complaint, at once, and, if it so orders, without answer or formal pleading by the public utility, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, charge, classification, or service; and, pending such hearing and the decision thereon, the Com- mission, upon filing with such schedules and de- livering to the public utility affected thereby a statement in writing of its reasons for such sus- pension, may suspend the operation of such schedule and defer the use of such rate, charge, classification, or service, but not for a longer pe- riod than five months beyond the time when it would otherwise go into effect; and after full hearings, either completed before or after the rate, charge, classification, or service goes into effect, the Commission may make such orders with reference thereto as would be proper in a proceeding initiated after it had become effec- tive. If the proceeding has not been concluded and an order made at the expiration of such five months, the proposed change of rate, charge, classification, or service shall go into effect at the end of such period, but in case of a proposed increased rate or charge, the Commission may by order require the interested public utility or public utilities to keep accurate account in de- tail of all amounts received by reason of such in- crease, specifying by whom and in whose behalf such amounts are paid, and upon completion of the hearing and decision may by further order require such public utility or public utilities to refund, with interest, to the persons in whose behalf such amounts were paid, such portion of such increased rates or charges as by its deci- sion shall be found not justified. At any hearing involving a rate or charge sought to be in- creased, the burden of proof to show that the in- creased rate or charge is just and reasonable shall be upon the public utility, and the Com- mission shall give to the hearing and decision of such questions preference over other questions pending before it and decide the same as speed- ily as possible. (f) Review of automatic adjustment clauses and public utility practices; action by Commis- sion; ‘‘automatic adjustment clause’’ defined (1) Not later than 2 years after November 9, 1978, and not less often than every 4 years there- after, the Commission shall make a thorough re- view of automatic adjustment clauses in public utility rate schedules to examine— (A) whether or not each such clause effec- tively provides incentives for efficient use of resources (including economical purchase and use of fuel and electric energy), and (B) whether any such clause reflects any costs other than costs which are— (i) subject to periodic fluctuations and (ii) not susceptible to precise determina- tions in rate cases prior to the time such costs are incurred. Such review may take place in individual rate proceedings or in generic or other separate pro- ceedings applicable to one or more utilities. (2) Not less frequently than every 2 years, in rate proceedings or in generic or other separate proceedings, the Commission shall review, with respect to each public utility, practices under any automatic adjustment clauses of such util- ity to insure efficient use of resources (including economical purchase and use of fuel and electric energy) under such clauses. (3) The Commission may, on its own motion or upon complaint, after an opportunity for an evi- dentiary hearing, order a public utility to— (A) modify the terms and provisions of any automatic adjustment clause, or (B) cease any practice in connection with the clause, if such clause or practice does not result in the economical purchase and use of fuel, electric en- ergy, or other items, the cost of which is in- cluded in any rate schedule under an automatic adjustment clause. (4) As used in this subsection, the term ‘‘auto- matic adjustment clause’’ means a provision of a rate schedule which provides for increases or decreases (or both), without prior hearing, in rates reflecting increases or decreases (or both) in costs incurred by an electric utility. Such term does not include any rate which takes ef- fect subject to refund and subject to a later de- termination of the appropriate amount of such rate. (g) Inaction of Commissioners (1) In general With respect to a change described in sub- section (d), if the Commission permits the 60- day period established therein to expire with- out issuing an order accepting or denying the change because the Commissioners are divided two against two as to the lawfulness of the change, as a result of vacancy, incapacity, or recusal on the Commission, or if the Commis- sion lacks a quorum— (A) the failure to issue an order accepting or denying the change by the Commission shall be considered to be an order issued by the Commission accepting the change for purposes of section 825l(a) of this title; and (B) each Commissioner shall add to the record of the Commission a written state- ment explaining the views of the Commis- sioner with respect to the change. (2) Appeal If, pursuant to this subsection, a person seeks a rehearing under section 825l(a) of this title, and the Commission fails to act on the merits of the rehearing request by the date that is 30 days after the date of the rehearing request because the Commissioners are divided two against two, as a result of vacancy, inca- pacity, or recusal on the Commission, or if the Commission lacks a quorum, such person may appeal under section 825l(b) of this title. (June 10, 1920, ch. 285, pt. II, § 205, as added Aug. 26, 1935, ch. 687, title II, § 213, 49 Stat. 851; amend- ed Pub. L. 95–617, title II, §§ 207(a), 208, Nov. 9, 1978, 92 Stat. 3142; Pub. L. 115–270, title III, § 3006, Oct. 23, 2018, 132 Stat. 3868.) 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