Competition or Control V: Production and Distribution of Electric Energy

Abstract

* Prior installments in this series appeared in 106 U. PA. L. REV. 641 (1958) (public utilities generally); in 107 U. PA. L. REV. 585 (1959) (radio and television broadcasting); in 108 U. PA. L. REV. 775 (1960) (motor carriers); and in 109 U. PA. L. REV. 311 (1961) (air carriers). The present Article is based upon an examination of the Federal Power Act, various state power acts, and leading cases thereunder. The authors also made a page by page examination of volumes 38 through 100 of Public Utility Reports, New Series, and volumes 1 through 13, 21, and 27 through 31 of Public Utility Reports, Third Series. The authors gratefully acknowledge the assistance of W. P. Gilbert, Esq., of the Illinois bar, whose long experience in the law of electric utility regulation permitted him to eliminate several erroneous statements appearing in an earlier draft of this Article. t A.B. 1935, Yale University; LL.B. 1938, Harvard University; J.S.D. 1940, University of Chicago. Member, Illinois Bar. t A.B. 1940, Mount Holyoke College; M.A. 1946, American University. Lecturer in Economics, Lake Forest College. 1We do not consider questions with respect to the definition of public utilities. See, e.g., Boston Edison Co., 98 P.U.R. (n.s.) 427, 441, 443, 449, 459 (Mass. Dep't Pub. Util. 1953). 2 Federal Power Act, 41 Stat. 1063 (1920), as amended, 16 U.S.C. ?? 791a-825r (1958), as amended, 16 U.S.C. ??791a-823 (Supp. II, 1961). Section 19 of that act, 41 Stat. 1073 (1920), 16 U.S.C. ?812 (1958), provides for jurisdiction over rates and service of public utilities until state authority is exercised. The FPC also enjoys authority over interstate transmission of energy. 41 Stat. 1063 (1920), added by 49 Stat. 847 (1935), 16 U.S.C. ?? 824-824h (1958); see TROXEL, ECONOMICS OF PUBLIC UTILITIES 92-93 (1947); TWENTIETH CENTURY FUND, ELECTRIC POWER AND GOVERNMENT POLICY 196 (1948) [hereinafter cited as POWER AND POLICY]. The latter is a valuable survey of regulation of the electrical energy industry in action on which the authors of the present study have relied extensively. 3E.g., ILL. ANN. STAT. ch. 111%, ?? 1-344 (Smith-Hurd 1954). Comparable statutes in other states are described in POWER AND POLICY 54. State controls are not necessarily comprehensive. POWER AND POLICY 54; TROXEL, op. cit. supra note 2, at 74, 77. 4 JONES & BIGHAM, PRINCIPLES OF PUBLIC UTILITIES 166-67, 188-90, 619-22 (1931); POWER AND POLICY 106-16. It is generally considered that regulation by municipalities, particularly the smaller cities, is ineffective. POWER AND POLICY 107-08, 113, 116.