FPC v. New England Power Co., 415 U.S. 345 (1974)
FPC v. New England Power Co., 415 U.S. 345 (1974)
FPC v. New England Power Co., 415 U.S. 345 (1974)
345
94 S.Ct. 1151
39 L.Ed.2d 383
Syllabus
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
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 utilities1 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.
4
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
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:
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 . . ..'
10
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.
11
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 19592 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
12
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.
13
Affirmed.
14
Mr. Justice BLACKMUN and Mr. Justice POWELL took no part in the
decision of this case.
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.'