16 USC 824(d)

Page 1277

§ 824d

TITLE 16—CONSERVATION

§ 824c. Issuance of securities; assumption of liabilities
(a) Authorization by Commission
No public utility shall issue any security, or
assume any obligation or liability as guarantor,
indorser, surety, or otherwise in respect of any
security of another person, unless and until, and
then only to the extent that, upon application
by the public utility, the Commission by order
authorizes such issue or assumption of liability.
The Commission shall make such order only if it
finds that such issue or assumption (a) is for
some lawful object, within the corporate purposes of the applicant and compatible with the
public interest, which is necessary or appropriate for or consistent with the proper performance by the applicant of service as a public utility and which will not impair its ability to perform that service, and (b) is reasonably necessary or appropriate for such purposes. The provisions of this section shall be effective six
months after August 26, 1935.
(b) Application approval or modification; supplemental orders
The Commission, after opportunity for hearing, may grant any application under this section in whole or in part, and with such modifications and upon such terms and conditions as it
may find necessary or appropriate, and may
from time to time, after opportunity for hearing
and for good cause shown, make such supplemental 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 authorized or the proceeds thereof may be applied, subject 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 proceeds 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 capitalization of the right to be a corporation or of
any franchise, permit, or contract for consolidation, merger, or lease in excess of the amount
(exclusive of any tax or annual charge) actually
paid as the consideration for such right, franchise, 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 maturity 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 outstanding. In the case of securities having no par
value, the par value for the purpose of this subsection 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 regulation 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 Commission duplicate copies of reports filed with the
Federal Power Commission in lieu of the reports, 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.)
TRANSFER OF FUNCTIONS
Executive and administrative functions of Securities
and Exchange Commission, with certain exceptions,
transferred to Chairman of such Commission, with authority 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 Employees.

§ 824d. Rates and charges; schedules; suspension
of new rates; automatic adjustment clauses
(a) Just and reasonable rates
All rates and charges made, demanded, or received 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 pertaining 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 disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in
any other respect, either as between localities
or as between classes of service.

§ 824d

TITLE 16—CONSERVATION

(c) Schedules
Under such rules and regulations as the Commission 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 regulations 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 schedules 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 without requiring the sixty days’ notice herein provided 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 Commission, upon filing with such schedules and delivering to the public utility affected thereby a
statement in writing of its reasons for such suspension, may suspend the operation of such
schedule and defer the use of such rate, charge,
classification, or service, but not for a longer period 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 effective. 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 detail of all amounts received by reason of such increase, specifying by whom and in whose behalf
such amounts are paid, and upon completion of
the hearing and decision may by further order

Page 1278

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 decision shall be found not justified. At any hearing
involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and reasonable
shall be upon the public utility, and the Commission shall give to the hearing and decision of
such questions preference over other questions
pending before it and decide the same as speedily as possible.
(f) Review of automatic adjustment clauses and
public utility practices; action by Commission; ‘‘automatic adjustment clause’’ defined
(1) Not later than 2 years after November 9,
1978, and not less often than every 4 years thereafter, the Commission shall make a thorough review of automatic adjustment clauses in public
utility rate schedules to examine—
(A) whether or not each such clause effectively 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 determinations 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 proceedings 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 utility 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 evidentiary 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 energy, or other items, the cost of which is included in any rate schedule under an automatic
adjustment clause.
(4) As used in this subsection, the term ‘‘automatic 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 effect subject to refund and subject to a later determination of the appropriate amount of such
rate.
(June 10, 1920, ch. 285, pt. II, § 205, as added Aug.
26, 1935, ch. 687, title II, § 213, 49 Stat. 851; amended Pub. L. 95–617, title II, §§ 207(a), 208, Nov. 9,
1978, 92 Stat. 3142.)

Page 1279

TITLE 16—CONSERVATION
AMENDMENTS

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).
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 consultation with Secretary, to conduct a study of legal requirements and administrative procedures involved in
consideration and resolution of proposed wholesale
electric rate increases under Federal Power Act, section 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 Commission to be just and reasonable and otherwise lawful,
and improving procedures designed to prohibit anticompetitive or unreasonable differences in wholesale
and retail rates, or both, and that chairman report to
Congress within nine months from Nov. 9, 1978, on results of study, on administrative actions taken as a result 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 classification, demanded, observed, charged, or collected
by any public utility for any transmission or
sale subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or
contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory 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 complaint 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 adjudicated.
(b) Refund effective date; preferential proceedings; statement of reasons for delay; burden
of proof; scope of refund order; refund orders in cases of dilatory behavior; interest
Whenever the Commission institutes a proceeding 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 complaint. 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

§ 824e

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 section, the Commission shall give to the decision
of such proceeding the same preference as provided under section 824d of this title and otherwise act as speedily as possible. If no final decision is rendered by the conclusion of the 180-day
period commencing 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 estimate as to when it
reasonably expects to make such decision. In
any proceeding under this section, the burden of
proof to show that any rate, charge, classification, rule, regulation, practice, or contract is
unjust, unreasonable, unduly discriminatory, or
preferential shall be upon the Commission or
the complainant. At the conclusion of any proceeding under this section, the Commission 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 reasonable
rate, charge, classification, rule, regulation,
practice, or contract which the Commission 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 proceeding
was not resolved within the fifteen-month period primarily because of dilatory behavior 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 proceeding. The refunds
shall be made, with interest, to those persons
who have paid those rates or charges which are
the subject of the proceeding.
(c) Refund considerations; shifting costs; reduction in revenues; ‘‘electric utility companies’’
and ‘‘registered holding company’’ defined
Notwithstanding subsection (b), in a proceeding commenced under this section involving two
or more electric utility companies of a registered 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 production 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 increase 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 determines that the registered holding company
would not experience any reduction in revenues
which results from an inability of an electric
utility company of the holding company to recover such increase in costs for the period between the refund effective date and the effective
date of the Commission’s order. For purposes of
this subsection, the terms ‘‘electric utility companies’’ and ‘‘registered holding company’’ shall