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Gainesville Utilities Dept. v. Florida Power Corp., 402 U.S. 515 (1971)

Gainesville Utilities Department v. Florida Power Corp.

No. 464

Argued February 24, 1971

Decided May 24, 1971*

402 U.S. 515


Pursuant to § 202(b) of the Federal Power Act, the Federal Power Commission (FPC) is empowered to direct one electric utility to interconnect its electric system with another utility, and it

"may prescribe the terms and conditions of the arrangement to be made . . . including the apportionment of the cost between them and the compensation or reimbursement reasonably due to any of them."

After hearings and staff studies the FPC found that an interconnection between Gainesville, a small municipally owned utility, and respondent, a major investor-owned electric utility, would be in the public interest, would not unduly burden respondent, and would benefit both parties. The FPC ordered the interconnection, requiring Gainesville to pay the entire $3 million cost thereof and to maintain certain generating capacity. In the light of these circumstances, the FPC imposed no standby charge on Gainesville. The Court of Appeals denied enforcement of the order, agreeing with respondent's claim that the omission of an annual $150,000 payment to it by petitioner for the backup service provided by the interconnection resulted in a failure to satisfy the statutory mandate of "reimbursement reasonably due" respondent because respondent would obtain no benefit from the interconnection. Section 313(b) of the Act provides that "findings of the Commission as to the facts, if supported by substantial evidence, shall be conclusive."

Held: Since there was substantial evidence to support the FPC's findings that benefits will accrue to respondent from the interconnection, the Court of Appeals erred in not deferring to the FPC's expert judgment. Pp. 402 U. S. 521-529.

425 F.2d 1196, reversed and remanded.

BRENNAN, J., delivered the opinion of the Court, in which all members joined except BLACKMUN, J., who took no part in the decision of the cases.

Page 402 U. S. 516

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