Gulf States Utilities Co. v. Fpc, 411 U.S. 747 (1973)
Gulf States Utilities Co. v. Federal Power Commission
No. 71-1178
Argued December 5, 1972
Decided May 14, 1973
411 U.S. 747
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Syllabus
Following petitioner’s application under § 204 of the Federal Power Act to respondent Federal Power Commission (FPC) for authorization of a bond issue, two intervening cities opposed the authorization on the ground that the proceeds of the bond issue would be used to finance or refinance certain anticompetitive activities in violation of the antitrust laws, the Federal Power Act, and the Public Utility Holding Company Act of 1935. Section 204(a) empowers the FPC to authorize a security issue only if the issue is found to be for some lawful purpose and compatible with the public interest. The FPC granted the cities’ petition to intervene, denied their request for a hearing, and authorized the bond issue, holding that the cities’ allegations were irrelevant to a requested authorization of securities under § 204. The Court of Appeals remanded the case for consideration of the cities’ claim, holding that, in line with the reasoning in Denver R. G. W. R. Co. v. United States, 387 U.S. 485, the FPC should have considered the alleged competitive consequences of the bond issue in the § 204 proceeding.
Held:
1. The FPC, as a general rule, must consider the anticompetitive consequences of a security issue under § 204. Pp. 756-762.
(a) The Federal Power Act did not render antitrust policy irrelevant to the FPC’s regulation of the electric power industry. Pp. 757-759.
(b) The fact that the FPC has broad authority under other provisions of the Act to determine whether a public utility’s conduct is in the public interest does not mean that the same standard is not equally germane under § 204. P. 759.
(c) Consideration of antitrust policies in the context of § 204 provides a first line of defense against anticompetitive practices that might later become the subject of an antitrust proceeding. P. 760.
(d) The FPC, like the Interstate Commerce Commission, has broad regulatory authority, which includes responsibility for considering antitrust policy in discharging its statutory obligations. Cf. Denver & R. G. W. R. Co. v. United States, supra. Pp. 760-762.
2. Though the FPC is not necessarily required to hold a hearing or make a full investigation in all cases, its summary disposition of proffered objections to the security issue requires strict scrutiny by a reviewing court in light of the Commission’s obligations to protect the public interest and enforce the antitrust laws. Pp. 762-763.
3. Unexplained summary administrative action is incompatible with the requirements of § 204, and precludes appropriate judicial review. Pp. 763-764.
147 U.S. App. D.C. 98, 454 F.2d 941, affirmed.
BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and DOUGLAS, BRENNAN, WHITE, and MARSHALL, JJ., joined. POWELL, J., filed a dissenting opinion, in which STEWART and REHNQUIST, JJ., joined, post, p. 764.