Statute (FPA 205)

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§ 824d

TITLE 16—CONSERVATION

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) of this section 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.
(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

§ 824e

TITLE 16—CONSERVATION

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
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

Page 1334

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.)
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 classi-