Arkansas Electric Cooperative Corporation v. Arkansas Public Service Commission

PETITIONER: Arkansas Electric Cooperative Corporation
RESPONDENT: Arkansas Public Service Commission
LOCATION: Bleckly County Superior Court

DOCKET NO.: 81-731
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: Arkansas Supreme Court

CITATION: 461 US 375 (1983)
ARGUED: Jan 17, 1983
DECIDED: May 16, 1983

ADVOCATES:
Jeff Broadwater - on behalf of the Appellee
Robert D. Cabe - on behalf of the Appellant

Facts of the case

Question

Media for Arkansas Electric Cooperative Corporation v. Arkansas Public Service Commission

Audio Transcription for Oral Argument - January 17, 1983 in Arkansas Electric Cooperative Corporation v. Arkansas Public Service Commission

Warren E. Burger:

We will hear arguments next in Arkansas Electric Cooperative Corporation against Arkansas Public Service Commission.

Mr. Cabe, you may proceed whenever you're ready.

Robert D. Cabe:

Mr. Chief Justice, and may it please the Court:

This case arises out of an attempt by the Arkansas Public Service Commission to regulate the wholesale sales of power and energy by Arkansas Electric Cooperative Corporation to its member cooperatives.

This is an appeal from the decision of the Arkansas Supreme Court, affirming the PSC's assertion of jurisdiction over these wholesale rates.

The facts of the case, while undisputed, are most important to a determination of the issues before the Court.

AECC is a generation and transmission electric cooperative which makes no sales at retail to ultimate consumers.

It is engaged exclusively in sales at wholesale.

Most of these sales are to its 17 members who are themselves local distribution cooperatives.

The remainder of AECC sales are to other utilities which also generate, transmit and sell electricity in interstate commerce.

AECC's member cooperatives sell the energy they obtain to their customers, who are the ultimate consumers of the power.

The retail rates and operations of the member cooperatives are fully regulated by the PSC.

AECC is concededly subject to PSC jurisdiction for purposes other than regulation of wholesale rates.

AECC's rates, including the ones at issue before the Court in this case, are established by AECC's board of directors which includes two representatives of each of the 17 local distribution cooperatives who are the members.

Succinctly stated, AECC arranges for the power and energy necessary to supply the needs of its member cooperatives in the following manner.

First, it owns and operates generating plants.

Second, it contracts with three separate multi-state systems to buy energy when its facilities are insufficient to provide the needs or when it could even buy the power and energy more economically than it can generate it.

Third, because AECC has very limited transmission facilities, it arranges with these same three multi-state systems for dispatch and transmission on the part of the grid that is operated by each of these multi-state systems.

Pursuant to these arrangements, most of the output of the AECC generating plants is delivered to the grid.

AECC's member cooperatives then obtain from the grid the energy they need to serve their customers.

In fact, only about 10 percent of the energy which AECC sells to its member cooperatives is ever involved with transmission facilities actually owned by AECC.

The other 90 percent passes exclusively over the system or grid of the multi-state utilities with which it does business.

All of the systems which transmit energy for and sell energy to and buy energy from AECC have generating facilities both in Arkansas and in other states, and all of these generating facilities are tied into integrated systems among themselves.

When energy is delivered by the grid to a local distribution cooperative, the amount of the energy can, of course, be metered and precisely measured.

However, the generating source of that energy may have been at any plant attached to that grid whether inside or outside Arkansas, whether belonging to AECC or belonging to the generating facility of one of the other multi-state systems.

The PSC in this case does not appear to seriously dispute the proposition that AECC sales are sales at wholesale in interstate commerce.

The decisions in Attleboro and Colton make clear that the state is prohibited by the Commerce Clause from regulating sales at wholesale in interstate commerce.

William H. Rehnquist:

Mr. Cabe, it's your position that that prohibition arises from the Commerce Clause itself, I take it, and not from any other federal legislation.

Robert D. Cabe:

That is correct, Your Honor.

Sandra Day O'Connor:

So you're not arguing, then, that the REA has preempted.