FEDERAL POWER COMMISSION, Petitioner, v. NEW ENGLAND POWER COMPANY et al.
415 U.S. 345 (94 S.Ct. 1151, 39 L.Ed.2d 383)
FEDERAL POWER COMMISSION, Petitioner, v. NEW ENGLAND POWER COMPANY et al.
Argued: Dec. 3, 1973.
Decided: March 4, 1974.
- opinion, DOUGLAS [HTML]
The Independent Offices Appropriation Act, 1952 (the Act), authorizes each federal agency to prescribe a fee, charge, or price for services provided by the agency 'to or for any person (including groups . . .),' determined to be fair and equitable consideration being taken of 'direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts . . ..' Pursuant to the Act, the Federal Power Commission imposed an annual assessment against all jurisdictional electric utilities in proportion to their wholesale sales and interchange of electricity, and against all natural gas companies with operating revenues of $1,000,000 or more in proportion to their deliveries of natural gas in interstate commerce. On petitions for review, the Court of Appeals set aside these annual charges, holding that whole industries are not in the category of those who may be assessed under the Act, the thrust of which reaches only specific charges for specific services to specific individuals or companies. Held:
1. While the Act includes services rendered 'to or for any person (including groups . . .),' since the Act is to be construed to cover only 'fees' and not 'taxes,' National Cable Television Ass'n v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370, the 'fee' presupposes an application for the agency's services, whether by a single company or group of companies or the receipt of a specific beneficial service. P. 349.
2. The Act is to be construed as authorizing a reasonable charge to 'each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit,' and as precluding a charge for services rendered 'when the identification of the ultimate beneficiary is obscure and the services can be primarily considered as benefitting broadly the general public.' Pp. 349351.
151 U.S.App.D.C. 371, 467 F.2d 425, affirmed.
Keith A. Jones, Washington, D.C., for petitioner.
Stanley M. Morley and Thomas M. Debevoise, Washington, D.C., for respondents.
Mr. Justice DOUGLAS delivered the opinion of the Court.
This case, companion to National Cable Television Ass'n v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370, raises another important problem of construction of the provisions of the Independent Offices Appropriation Act, 1952, Tit. 5, 65 Stat. 290, 31 U.S.C. 483a. The Federal Power Commission established filing fees under the Natural Gas Act and under the Federal Power Act. These filing fees have not been challenged. What was challenged were annual assessments under both Acts, levied in an effort of the agency to recoup some of the remaining costs under the two Acts.
With respect to electric utilities, the Commission determines each year the costs of administering the Federal Power Act. The costs associated with the Commission's efforts to promote the coordination and reliability of nonjurisdictional electric systems are not included. The Commission also deducts from administration costs the costs associated with services rendered to electric systems not subject to the Commission's jurisdiction and the amount received during the year from filing fees. The remaining balance is assessed against jurisdictional utilities 1 in proporation to their wholesale sales and interchange of electricity. In 1971 these companies had gross revenues of some $21 billion and net income of nearly $4 billion. The annual assessment challenged here involved 1973 and for all such electric companies was $5 million or 0.024% of gross revenue and 0.14% of net income.
As respects natural gas companies, the Commission determines each year the costs of administering the natural gas pipeline programs under the Natural Gas Act, 52 Stat. 821, 15 U.S.C. 717 et seq. These costs, after deducting amounts received from filing fees, are assessed against all natural gas companies with annual operating revenues of $1,000,000 or more in proportion to their deliveries of natural gas in interstate commerce. In addition, all natural gas companies required to file an annual report on their total gas supply (18 CRF § 260.7) are assessed one-tenth of a mill for each thousand cubic feet of new reserves of natural gas certificated each year to support the cost of the producer certificate program.
The Commission in its report, 45 F.P.C. 440 and 964, said as respects both eletric utilities and natural gas companies that regulations have provided 'the foundation for the sound financial condition which public utilities and natural gas companies have achieved.' Id., at 445. It mentioned the 'industry-wide recognition of the benefits accruing from only one facet of the Commission's activitiesthe adoption of a uniform accounting system.' Id., at 445 n. 5. The Commission, while noting that its regulatory activities were beneficial to consumers, added that its actions
'have redounded to the benefit of both industries by creating the economic climate for greater usage of the services of the regulated companies which in turn have further strengthened their financial stability and their ability to sell debt and equity securities required for capital additions to meet ever-increasing demands.' Id., at 445.
As respects electric utilities it noted that its regime was 'system wide and beneficial' to the companies. Id., at 966. As respects natural gas pipelines it listed its activities that were beneficial to them:
'the issuance of temporary certificates to expedite deliveries, the elimination of indefinite price escalation provisions, and the control over the quality of natural gas to be delivered and the length of the period in which supplies may be delivered where advance payments are made by the pipelines.' Id., at 967.
On petitions for review the Court of Appeals set aside that portion of the Commission's order establishing annual charges, 151 U.S.App.D.C. 371, 467 F.2d 425. The case is here on a petition for certiorari, 411 U.S. 981, 93 S.Ct. 2267, 36 L.Ed.2d 957.
The Act in question, 31 U.S.C. 483a authorizes the head of each federal agency to prescribe a 'fee, charge, or price' for any 'benefit, privilege, . . . license, permit, certificate, registration or similar thing of value . . . provided . . . by (the) Federal agency . . . for any person (including groups, . . . corporations . . .)' which he determines 'to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts . . ..'
The Court of Appeals held that whole industries are not in the category of those who may be assessed, the thrust of the Act reaching only specific charges for specific services to specific individuals or companies. We agree with the Court of Appeals.
The report on the Act, H.R.Rep.No.384, 82d Cong., 1st Sess., 2, states that '(t)he Committee is concerned that the Government is not receiving full return from many of the services which it renders to special beneficiaries' (emphasis added). It is true that the Act includes services rendered 'to or for any person (including groups . . .).' But if we are to construe the Act to cover only 'fees' and not 'taxes'as we held should be done in the National Cable Television case, ante, p. 1146the 'fee' presupposes an application whether by a single company or by a group of companies. The Office of Management and Budget (then known as the Bureau of the Budget) issued a circular in 1959 2 construing the Act. That circular stated that a reasonable charge 'should be made to each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit.' 3 (Emphasis added.) The circular also states that no charge should be made for services rendered, 'when the identification of the ultimate beneficiary is obscure and the service can be primarily considered as benefitting broadly the general public.' 4
We believe that is the proper construction of the Act. Though it greatly narrows the Act from the dimensions urged by the Commission, it keeps it within the parameters of the 'fee' system and away from the domain of 'taxes' toward which the Commission's 'economic climate' argument would lead. Some of the assessments made by the Commission under its formula would be on companies which had no proceedings before the Commission during the year in question. The 'identifiable recipient' of a unit of service from which 'he derives a special benefit,' to quote the Office of Management and Budget, does not describe members of an industry which have neither asked for nor received the Commission's services during the year in question. A blanket ruling by the Commission, say on accounting practices, may not be the result of an application. But each member of the industry which is required to adopt the new accounting system is an 'identifiable recipient' of the service and could be charged a fee, if the new system was indeed beneficial to the members of the industry. There may well be other variations of a like nature which would warrant the fixing of a 'fee' for services rendered. But what was done here is not within the scope of the Act. Hence the judgment of the Court of Appeals is affirmed.
Mr. Justice BLACKMUN and Mr. Justice POWELL took no part in the decision of this case.
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Part I of the Federal Power Act covering licenses to hydroelectric companies, see 16 U.S.C. 797 et seq., is not involved in this litigation, only Parts II, 49 Stat. 847, 16 U.S.C. 824 et seq., and III, 49 Stat. 854, 16 U.S.C. 825 et seq. Moreover, the 'jurisdictional' aspect of a public utility's activities refers, inter alia, to the transmission of electric energy in interstate commerce and to the sale of electric energy at wholesale in interstate commerce as contained in § 201 of the Act, 49 Stat. 847, 16 U.S.C. 824 et seq., the provision that filled the gap created by Public Utilities Comm'n v. Attleboro Steam & Electric Co., 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549. See United States v. Public Utilities Comm'n, 345 U.S. 295, 73 S.Ct. 706, 97 L.Ed. 1020.
Budget Circular No. A25, Sept. 23, 1959.
The circular goes on to state that the services include agency action which 'provides special benefits . . . above and beyond those which accrue to the public at large . . .. For example, a special benefit will be considered to accrue and a charge should be imposed when a Government-rendered service:
'(a) Enables the beneficiary to obtain more immediate or substantial gains or values (which may or may not be measurable in monetary terms) than those which accrue to the general public (e.g., receiving a patent, crop insurance, or a license to carry on a specific business); or
'(b) Provides business stability or assures public confidence in the business activity of the beneficiary (e.g., certificates of necessity and convenience for airline routes, or safety inspections of craft); or
'(c) Is performed at the request of the recipient and is above and beyond the services regularly received by other members of the same industry or group, or of the general public (e.g., receiving a passport, visa, airman's certificate, or an inspection after regular duty hours).'
Since oral argument we have been advised by the Solicitor General that of all federal agencies 'having industry-wide regulatory authority' there are two, other than the Federal Power Commission and the Federal Communications Commission, which impose 'annual industry-wide fees analogous' to those in the instant case. The Solicitor General summarizes the actions of the other two federal agencies as follows:
'The fee schedule of the Atomic Energy Commission is set forth at 10 C.F.R. (ss) 170.21 and 170.31 and was last revised on October 29, 1973 ( 38 Fed.Reg. 3025430255). Under that schedule, operators of nuclear power reactors are subject to a minimum annual fee of $20,000 and operators of other nuclear facilities are subject to annual fees ranging from $8,500 to $215,000. Holders of materials licenses are assessed annual fees of up to $27,000. The Commission estimates that approximately $7 million will be recovered from these annual fees in fiscal year 1974. The Commission's fee schedule, including annual fees, was first adopted in 1968.
'The Securities and Exchange Commission imposes an annual fee of $100 on each of the approximately 1100 investment advisers registered with it under the Investment Advisors Act of 1940, 15 U.S.C. (s) 80b1 et seq. See 17 C.F.R. (s) 275.2033(b). This fee was first adopted in 1972.'
This statement covers only fees imposed under Tit. 5, 31 U.S.C. 483a, not those authorized, 'under more specific grants of statutory authority.'