FPC v. FLORIDA POWER & LIGHT CO.

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Argument of Samuel Huntington

Chief Justice Warren E. Burger: We will hear arguments next to number 38, Federal Power Commission against Florida Power and Light.

You may proceed Mr. Huntington.

Mr. Samuel Huntington: Mr. Chief Justice, may it please the court.

The question in this case here on writ of certiorari to the Fifth Circuit is whether respondent owns and operates facilities for the transmission of electric energy in interstate commerce.

If respondent does, then it is a “public utility” subject to the Commission’s jurisdiction under Section 201 of the Federal Power Act.

Under section 201, electric energy is deemed to be transmitted in interstate commerce if “transmitted from a state and consumed at any point outside thereof.”

On the basis of an extensive record, the Commission concluded that electric energy was indeed transmitted from respondent’s facilities in Florida and consumed out of state.

This conclusion was based independently, one on analysis of the independence of respondent and out of state utilities and two on studies introduced by the Commission staff showing that electric power flows could be traced from respondent’s facilities to an out-of-state utility.

Before turning to the facts of this case, I would like to note just briefly the consequences of Commission jurisdiction.

The only immediate consequence in this case, if the Commission’s order is upheld by this court, would be to require respondent to comply with the Commission's uniform system of account.

The establishment of jurisdiction however would also subject respondent's future wholesale sales of electric energy to Commission jurisdiction and also would enable the Commission under certain circumstances to what a respondent could interconnect and sell electric energy to other utilities.

The pertinent facts in this case are as follows: Respondent is a major electric utility, it is the largest utility in Florida and in 1965 ranked ninth in the nation in terms of revenues.

Its facilities are located wholly within the state of Florida and serve over 900,000 customers -- six of them were wholesale customers.

Although, none of its facilities extend to the state line, respondent is interconnected with the Florida Power Corporation and the Florida Power Corporation in turn is interconnected with the Georgia Power Company as well as other utilities across the state line.

In addition to its interconnection with the Florida Power Corporation, respondent is interconnected with three other Florida utilities and these five Florida utilities make up the Florida Operating Committee.

Through the Committee, these utilities coordinate the installation and maintenance of generating equipment.

They share generating reserves and they exchange information on a daily basis to better coordinate their operations.

By these activities therefore each member is able to provide its customers with more reliable service.

As I mentioned before, the Florida Power Corporation has interconnections across the state line with the Georgia Power Company and these two companies exchange substantial amounts of electric energy from year to year.

All of the utilities, that I have referred to thus far are members of the 140-member Interconnected Systems Group, a group of interconnected utilities spanning the southeast and central portions of the United States.

The first ground of the Commission's finding of jurisdiction in this case was based on an analysis of respondents operation as a part of its vast interconnected system.

As the Commission staff expert witness testified, all our 140 members of the Interconnected Systems Group and indeed all interconnected systems, operate in synchronism -- that is they all operate at precisely the same frequency.

On modern systems charges as current is supplied as alternating current, alternating at 60 cycles per second.

Unknown Speaker: But suppose, I do not know what this record shows but is this the same?

It is hardly a generating electric system, I noted that it is not somehow interconnected with others in this grid pattern?

Mr. Samuel Huntington: Well, there are some isolated municipal operations.

Unknown Speaker: That is quite actually contrary.

Mr. Samuel Huntington: At this point there are -- most of the nation’s facilities are interconnected, yes.

Unknown Speaker: Well, is the government's argument in this case going to take this so far as to say, this means that the Federal Power Commission now has regulatory authority over virtually every --

Mr. Samuel Huntington: Every utility has been interconnected.

I do not think the argument does not go quite that far because we depend upon an analysis of the operations by reason of interconnection.

I think there could be—

Unknown Speaker: What I am trying to get at necessarily though would be argument should go in that analysis that brings to that result.

Mr. Samuel Huntington: Well, I do not think necessarily because hence, I think it depends to some extent on the extent to which the operations are coordinated.

Now it is possible--

Unknown Speaker: I am not suggesting at the wrong result—

Mr. Samuel Huntington: No, it is possible for instance to have an interconnection that will open in the event of any kind of disturbance.

Now that situation we would say that the two utilities would not be coordinated so as to provide mutual system in the case—

Chief Justice Warren E. Burger: Are talking about standby agreements there?

Stand by service, when you said the connection will open when needed and something like that?

Mr. Samuel Huntington: Well, it might be such an interconnection so that if a utility wanted to purchase power from the other utility it could at a certain rate over period of time but the interconnection would not be strong enough to allow emergency service in the event at a very large generating unit would go out on one side of the interconnection.

In these circumstances, we would suggest that you have quite a, you have a minimal amount of coordination between utilities and you certainly do not have the situation that you have.

Unknown Speaker: Oh then, I asked you, how often if that is the case?

Is it not a usual situation or the—

Mr. Samuel Huntington: It is not the usual situation now, I think at the time the Federal Power Act was enacted, there were situations where you had a limited type interconnections.

Most of the interconnections in this country today allow for the type of operations that we are describing here.

Unknown Speaker: Well that being too—

Mr. Samuel Huntington: That being too well—

Unknown Speaker: If we agree with the government in this case.

I am not saying this is wrong, that really is going to mean that Federal Power Commission has regulatory authority but over virtually every electric --

Mr. Samuel Huntington: Well, we do admit that yes that is right, that there will be certain small utilities that will be subject to the Commission’s jurisdiction.

I would like to just point out—

Chief Justice Warren E. Burger: Are there other any, are there any other than—the municipal—

Mr. Samuel Huntington: Well, municipals are not covered.

They are exempted—

Chief Justice Warren E. Burger: I don't know that Power Act has no interest in them.

Mr. Samuel Huntington: There about 450 privately owned utilities in the country I think, or about 350 of them are public utilities subject to the Commission’s jurisdiction at this point.

There would be some additional ones which would become public utilities and our theory here is accepted by this court.

I would like to just point out that the constant—

Unknown Speaker: Part of this deal is the geographical contours in the state of Florida, and here is Florida Power and Light in a peninsular state.

I take it from much you just said, most other large utilities in this country today are subject to FPC jurisdiction as a public utility.

Mr. Samuel Huntington: Yes, but the exception of the state of Texas which is isolated has no interconnections across the state line, but virtually every other large utility, well, not every other, but certainly most large utilities are subject to the Commission’s jurisdictions.

With respect to the small utilities, I would like to just point out that the consequences of jurisdiction maybe very small for some utilities.

Without reaching the question as to whether the Commissions has discretion to decline to exercise jurisdiction in certain circumstances.

The Commission does have the specific authority to classify utilities and to prescribe different rules depending upon the class.

Now this is done with respect to the Commission’s accounting requirements, the Commission has established five different classes of utilities based on their revenues with very specific requirements for the large utilities and very minimal requirements for the small utilities.

So in the event that a relatively small utility is interconnected to the interstate grid and is subject to the Commission’s jurisdiction, the effect on that utility maybe very small, the effect of the federal jurisdiction.

Well, because all systems operate in synchronism, this means that the generators connected to the interstate network, all operate at precisely the same frequency and that they speed up and slow down in units.

And all electric clocks for instance attached to the interstate network whether it be in Saint Louis or Miami, will keep precisely the same time.

Now, electric energy cannot be stored so that the total generation of a network is constantly adjusting to meet the networks total load.

In order to assure that each utility ultimately produces enough power to supply its customers and any obligation it might have to neighboring utilities and in order to assure that frequency is maintained as closely as possible at 60 cycles per second, each system employs what is known as high line control with frequency bias.

Now, the operation of high line control with frequency bias is explained in some detail in our brief and I do not plan go into the mechanics of it here.

What is important to note is that this control method, under this control method, each member of the Interconnected Systems Group shares in the burden of maintaining network frequency as closely as possible to 60 cycles per second and under the control method, each member will contribute increased generation to meet an emergency on another members system.

The record contains a dramatic example of the response of systems comprising this interstate network to an emergency.

On February 17th , 1965 a Midwestern utility in the Interconnected Systems Groups suffered a generation loss of 580 megawatts.

This loss caused a drop in frequency on the Interconnected System.

Each of the other systems including respondent reacted automatically to make up the deficiency.

Respondent’s contribution as shown by exhibits in the record was to increase each generation by eight megawatts.

Other benefits that also accrue from interconnected operations are as follows: As a result of frequency bias, deviations in the frequency are kept to a minimum, clocks keep better time, precision industrial operations are benefited, speed ups and slow downs of generating equipment are minimized, and as a result the inadvertent exchange of energy between systems is also minimized.

In short, the evidence before the Commission showed that respondent, the other Florida utilities and the other members of Interconnected Systems Group, all operates interdependently.

All the components of their respective systems are bonded together electromagnetically.

That is as an engineering fact, the components are tied together electrically and magnetically.

As a result, the occurrence of an event on one system will have a necessary and measurable effect in other systems.

In a thorough and clear opinion, the hearing examiner concluded that the cause and effect relationship among respondent and the out of state utilities constituted the interstate transmission of electric energy.

This conclusion was approved by the Commission and we believe this is fully supported by the evidence just summarized and furthermore is consistent with the scheme of regulation adopted by Congress in enacting the Federal Power Act.

Chief Justice Warren E. Burger: Now, that is your big jump, isn't it?

Mr. Samuel Huntington: Well, I would like to turn to that now.

The legislative history of the Act reveals the dual concern on the part of congress.

On the one hand, Congress recognized the increasing tendency to interconnect utilities and recognized that there is a need for federal leadership in coordinating the interconnection of these utilities and coordinating the nation’s power facilities.

On the other hand, Congress made clear that its intention not do unduly interfere with the authority of State Regulatory Commissions.

As this court recognized in the Connecticut Light and Power case, Congress resolved these competing concerns first by defining the terms of grant of federal jurisdiction, broadly and precisely, employing in the words of this court an engineering or scientific test.

Second, the granted jurisdiction was then limited by exempting certain facilities and most importantly by limiting the Commission’s rate jurisdiction to sales of interstate energy at wholesale.

Now, since the enactment of the Federal Power Act, vast interconnected systems have replaced relatively modest networks and the interstate nature of the electric industry has steadily risen.

What happens on one part of a network can have a dramatic and sometimes catastrophic effect on the other parts of the network as is happened in various power failures in the last few years.

The hearing examiner noted the 1965 northeast power failure.

We are not talking here about some remote effect on commerce such as you might be discussing in terms of other regulatory statutes.

What we are talking about here is an electrical effect throughout a common network.

We are talking about an engineering fact that when you have a disturbance on one system it causes a reaction on other systems.

In short, we submit that the jurisdictional test adopted by Congress was designed to and is capable of taking into account the complex and interdependent nature of interconnected electric systems.

Chief Justice Warren E. Burger: To what extent do you rely on this propositions, disturbance in one system has some spillover effect is reflected in another system?

How much of it depends on that?

Mr. Samuel Huntington: We place a great deal of reliance on this, Your Honor.

Chief Justice Warren E. Burger: It is quite a bit away from the language of statute, is it not?

Mr. Samuel Huntington: No.

We do not believe so.

We believe the language of statute is transmitted in interstate commerce, electric energy moving from moving from one state to another.

Now, if there is a disturbance in one state such as a loss of generating equipment and if the other states contribute by plan control mechanism, this high line bias with frequency control, this is a system developed in the last ten or fifteen years which was not in effect when the Power Act was first enacted.

If true, this common control mechanism signals a sent-out to the other systems supply extra power until this disturbance is cleared up.

We submit that this is a transmission of electric energy that the cause and effect relationship here, disturbance plus contribution in neighboring systems to increase generation in response to a very sophisticated control mechanism.

We claim that this does constitute the jurisdictional standard and engineering fact which is what Congress had in mind in setting forth the bounds of jurisdiction.

Well, I would like to turn to the alternate basis for Commission jurisdiction which is completely independent from the basis I have been discussing thus far.

At the hearing before the examiner, the Commission’s staff introduced studies based on data for commercial meters which show that at times during 1964, electric energy flowed from the Georgia Power Company to respondent over the facilities at the Florida Power Corporation and at other times flowed the other way.

Respondents attack on these studies focuses on the staff’s treatment of the conducted bars used to join together transmission lines.

These bars or junction points are known as buses.

What the staff did was to assume that energy flowing into a bus on two or more transmission lines becomes mixed together or commingled, thus energy flowing out of the bus on other transmission lines would be commingled energy.

That is would include energy from all the lines entering the bus.

To understand the basis for this assumption, some background is necessary.

Electric energy on all commercial systems in use today is transmitted from generator to point of distribution not as a unit on a single transmission line but on three physically separate lines.

In other words, from generator to point of distribution point, you have three lines not one.

If you observe power lines crisscrossing the country, you will notice they come in sets of three that is because there are three separate lines coming out the generator.

Now, the power in each line is not steady but pulses back and forth.

Now, the pulses in the three lines, in the three separate lines, are not in phase.

By that I mean, on the first line the power maybe pulsing forward when on the second line the power is changing in direction and on the third line the power is pulsing backwards.

In reference to exhibit 59 at page 241 of the appendix, gives diagrams of the actual power curves and by studying those diagrams you can see graphically what I am describing here.

In short, modern systems use what is called as three-phase power with each phase being transmitted separately from generation all the way to the distribution point thus buses which I discussed before as the junction device for joining transmission lines really does not consist of one conductive bar but consists of three conductive bars, one bar for each phase in three-phase power.

Now, the problem that persons attempting to trace power flows have is this, commercial meters do not measure what actually takes place from instant to instant in each phase.

Instead, they merely record the average power flow in all three phases considered together but this is not a fact because the power flows are separated, if you would adjoin together the three phases you would have a short circuit.

Thus, reliance solely on meters, reliance solely on commercial meter readings will lead you to conclude that over a given period of time, power on any part of a system is constant in direction and magnitude.

Well, this is not the fact, the engineering fact is that power is transmitted in three phases and then on each phase the power pulses back and forth.

Staff witness Dr. Jessel testified at some length that in using the meter readings for tracing purposes, the treatment of a bus as a point to allow for commingling was appropriate to take into account the physical reality of what happens in each phase of a three-phase bus.

Now, the references to his testimony which have to be, his testimony has to be studied carefully in relation to the exhibits on this matter, for it is fairly technical but the references to his testimony are listed in our brief at page 13, are particularly like to draw the courts attention to his testimony at pages 142 to 145 and 149 to 153 of the appendix and exhibit 61 which is at page 243 of the appendix, I think a study of these exhibits show that Dr. Jessel was able to demonstrate that power entering a bus on a single phase would at times contribute to the power flowing out of the bus on all other lines, flowing out from that phase.

Chief Justice Warren E. Burger: Was that because it is unavoidable or is that by design or what is the explanation scientifically to that?

Mr. Samuel Huntington: Well, the explanation scientifically Your Honor is that, it is unavoidable.

This is an effect which can be measured by using scientific instruments by using oscillograph, attaching it to the various parts of a phase, you can show that the power coming in on a given line will at times be greater.

Well, if you would turn to the page 5 of respondents brief, I think I can explain on this diagram here.

If you consider AB there to be a single-phase of the bus, in other words it is a conductive bar joining together, let us say, all the phase As of various transmission lines.

Now, respondent claims that power from G3, the generator at the extreme right could never serve L1 because L2 being a 10 kilowatt load is greater than the five kilowatt generating power coming out of G3.

Now I think, in reference to Dr. Jessel's testimony shows that his testimony is that if you compare the power curves of G3, L2, and L1 or just G3 and L2, you can show that at instance during each cycle, there will be an instant or more than one instant when the power coming out of G3 will be greater than the power being consumed by L2.

Exhibit 61, which I will not go into now, but exhibit 61 keyed in to Dr. Jessel's testimony does show how this can be shown graphically.

Furthermore, the respondent introduced an exhibit in which he attempted to show that converse and Dr. Jessel testified with respect to that exhibit that you could verify experimentally that power did in fact in each phase, did in fact go over an intervening lines so that it might flow out on other lines.

Dr. Jessel was questioned extensively on these exhibits and these testimony by the hearing examiner and we submit that the hearing examiner was in a very good position to probe the validity of his assumptions underlying these tracing methods.

The examiner's conclusion that the treatment of a bus as a point did indeed appropriately reflect the actual dynamics, the physical reality of three-phase power transmission in out view is completely sound.

In conclusion, we urge that the judgment of the court of appeals should be reversed, I would like to reserve the remaining portion my time.

Chief Justice Warren E. Burger: Very well.

Unknown Speaker: Mr. Samuel Huntington, this is very parallel to hydrodynamics, Does not the permeation of water to water, can it be proved, actually proved, I take it do you feel that Dr. Jessel did?

Mr. Samuel Huntington: I feel he did.

Yes, this is no theory.

This was by attaching in a oscillograph which measures the power curve and can show which direction at any given instant power is flowing in the line, he said by hooking these up to the various parts of a single phase of a bus, you could show that power coming in on one line at instances was contributing to the power flowing out on other lines.

Unknown Speaker: (Inaudible) is not that sufficient evidence to support the Federal Power Commission assumptions jurisdiction?

Mr. Samuel Huntington: Yes, certainly.

Yes, it is the—

Unknown Speaker: Well, then it can be proved, or was it proved or anything else, I think in Colton, we set that kind of evidence was out of—

Mr. Samuel Huntington: That kind of evidence, we are saying that it is a substantial basis for the conclusion that the commingling method is appropriate way of tracing—

Unknown Speaker: Remembering Colton, what is the proof?

Mr. Samuel Huntington: Well I think looking at this testimony will show you that he did proved this, that there was expert testimony the other way but of course that is to be resolved by the Commission.

Unknown Speaker: Incidentally, is Florida Power Corporation subject to a jurisdiction of the—

Mr. Samuel Huntington: Yes, Florida Power Corporation is a public utility that was Florida Power Corporation was before this court, in the Gainesville case at 402 U.S. just last term on a interconnection matter.

Unknown Speaker: The Florida Power may take -- Florida Power Corporation or something in the interconnection.

Does that subject to the FPC jurisdiction?

Mr. Samuel Huntington: Well, no, the interconnection was affected.

Well, actually history of the interconnection was ordered by the Commission back in the war as an emergency interconnection and then after the emergency terminated the utilities found, it was in their mutual interest to maintain it.

Now, they do pay—

Unknown Speaker: Does Florida Power Corporation need any consent in a Federal Power Commission to interconnect--

Mr. Samuel Huntington: Oh, no.

The utilities can interconnect voluntarily, the Power Commission can order them to interconnect under certain circumstances but there is nothing to stop them from interconnecting voluntarily.

Unknown Speaker: (Inaudible)

Mr. Samuel Huntington: Well, it can do it can only do on the application of the state Commission or the application of the authority.

Unknown Speaker: How about the application?

Mr. Samuel Huntington: Oh, yes, on a proper application they could but it is unlikely that Florida Power and Light Company would apply for such an interconnection.

But to get back to the question about the terms of compensation, they do pay for energy which flows across that interconnection.

There is no --

Unknown Speaker: How did the Florida Power Corporation (Inaudible)

Mr. Samuel Huntington: The respondent and the Florida Power Corporation disconnected?

Unknown Speaker: What if Florida Power Corporation said that we do not want to be connected?

Mr. Samuel Huntington: Well, then I suppose Florida Power will likely—

Unknown Speaker: (Inaudible)

Mr. Samuel Huntington: It is certainly is to their benefit.

The reserve situation in the Southern Florida is very critical these days.

Certainly, these interconnections and the interconnections with other Florida utilities are essential.

Now, if they were to break all these interconnections then of course the Commission jurisdictions would evaporate.

Chief Justice Warren E. Burger: Mr. Giller.

Argument of Jefferson D. Giller

Mr. Jefferson D. Giller: Mr. Chief Justice, may it please the court.

At first I would like to answer two or three statements made by the FPC with respect to the Colton case.

Florida Power Light Company used the tracing used in the Colton case.

The FPC used a different method as in this present situation here, we FPL use the Colton method of tracing.

Please do not confuse the terms power and the electric energy, they are not synonymous.

This is a play on words, it was brought in the record before the examiners and I will get into that in a little more detail later on.

The electric energy never reverses.

It always goes from generator to load.

Your house bulb does not supply electric energy back to the generator.

There is something called reactive power which during part of a cycle does reverse but that by definition is not energy.

And the Commission witnesses be very careful to speak about power and not about electric energy.

Next, getting back to there first and primary basis, cooperation between utilities does not determine jurisdiction, interstate transmission does.

Neither does clock speed determine jurisdiction.

And further, we have we been unable to find in the record any testimony of any witness that the cause and effect theory is actual transmission of electric energy in interstate commerce.

Dr. Jessel and the others did not so testify that we can find or what we look for.

This was a 3:2 decision by the Commission with the strong dissent.

To review for a moment the jurisdictional requirements, a statute says, jurisdiction depends upon transmission of electric energy only in interstate commerce and it specifically excludes jurisdiction over facilities used for the transmission electric energy only in intrastate commerce.

The statute also says that electric energy shall be held to be transmitted in interstate commerce if transmitted from a state and consumed at any point outside thereof.

The Commissions positions seems to be that it should not be subject these restrictions or it may take astonishing position on page 36 of this brief right in the middle of that page that it should not have to abstain from asserting his jurisdiction “until such time if ever as it can be proven as a fact in common law terms that there is an actual transmission.”

We say there is tantamount to an admission that they have not been able to prove their case.

And it is a good reason but they could not prove because the facts just are not there.

Since we are talking about transmission of electric energy, I plead that thermal electric energy needs to be known.

Electric energy is defined by the Commission in its text, by others, as that which does work and is normally measured in kilowatt hours.

It is what we all as householders pay for each month, when we pay our bill.

So many kilowatt hours of electric energy measured by that electric meters sitting on the back of our house.

We believe in essential to understanding of this case that certain facts concerning undisputed nature of an electric energy be understood.

I realize there are some facts that are not agreed upon but these facts at least are.

One there is no storage or pooling of electric energy.

It is generated and consumed instantly.

A generator never puts out more electric energy than is consumed.

The load tells how much is to be put out.

For example, if a generator is running at full speed, there is no load on it, there is no electric energy being produced by that generator.

Next, there can be no flow of electric energy in opposite directions in a conduit simultaneously.

They all, the Commission fully agrees.

Third, you cannot get the electric energy flow from a generator pass the first load that is bigger than the generation is.

That load is insatiable and instantaneous, it gobbles up all electric energy and not one bit gets fastest and there is no disagreement in the record on that.

On electric energy, and I am talking about reactive power.

If you could get pass it, then you would have counter current flows of electric energy and the Commission experts with us has agreed that that can not be done.

Now, for the FPC, the Commission to have jurisdiction over us, it has to prove this, electric energy from Florida flowed 180 miles through the system of what we called Corp or Power Corp into our system or vice versa went from us up to Corp into the state of Georgia without meeting any barriers of a load big enough to swallow it or a counter current flow.

Unknown Speaker: I take it that if the FPL had the same connection across the Georgia line and that Florida Power had, you would conceive the Commission at jurisdiction?

Mr. Jefferson D. Giller: Yes sir, because we can not control the flow with that interface.

You had to hold a switch --

Unknown Speaker: Yes, so you had a direct connection with some corporative company across the line, that would be no question.

Mr. Jefferson D. Giller: That is correct.

Unknown Speaker: Since the intervention of Florida Power between --

Mr. Jefferson D. Giller: Yes.

Unknown Speaker: A larger company with more bigger or higher load.

Mr. Jefferson D. Giller: It is a large company, it is not larger than ours.

It is a large company and it has numerous sources of power within it, it has a bunch of buses that have to go through with flows going at different directions.

So, this electric current does not just travel a straight line from one system through the middle one up to Georgia.

Unknown Speaker: So thus, you are saying that never and it is just necessarily does not do FPL any good at all that Florida power is connected to other states.

Mr. Jefferson D. Giller: No sir, I am not saying that it necessarily does not do Florida Power or FPL any a good.

We do not depend on it.

It might be that there are some great strategies.

Unknown Speaker: We cannot depend on it but could it ever happen that if your capacity went out and you have to draw on Florida Power, that Florida Power would be giving you energy from across straight line.

Mr. Jefferson D. Giller: We can only draw up to 100 megawatts from the state of Georgia other than most favorable circumstances that could ever happen.

But as far as it can be determined, we would get all our energy from Corp, the intervening company in case we need it that much.

Unknown Speaker: If they had to give --

Mr. Jefferson D. Giller: If they had it.

Now, the Commission does admit Mr. Justice, that jurisdiction did not depend on what might possibly happen but what actually does happen.

Transmission facilities --

Unknown Speaker: You can conceive these are there?

You were really using energy from across state lines through the intermediary of Florida Power that you nevertheless are subject to the jurisdiction of Commission.

Mr. Jefferson D. Giller: Maybe I did understand.

If Georgia electric energy flows through Corp into our system, we are subject to the jurisdiction of the Commission.

Unknown Speaker: Would that be true if it ever could happen?

Mr. Jefferson D. Giller: Not if it ever could happen because any system can be arranged to where such flows can take place but even the Commission agree that it does not depends on or some way you could arrange it to make it happen but depends on what actually does happen.

Unknown Speaker: Well, are you arranging it so that it could happen?

Mr. Jefferson D. Giller: It could possibly happen.

Unknown Speaker: Are your engineering structure arrangements such, that you are equipped to receive energy from Georgia?

Mr. Jefferson D. Giller: Only if all the loads and flows in Corp are in one certain way and they are not.

Chief Justice Warren E. Burger: Has it ever happened?

Mr. Jefferson D. Giller: There is no suggestion, that has ever happened, they tried on 22 different days over a period of months to trace such flows.

By their theory, they said they did, by our theory, we say they did not, the Fifth Circuit says we do not necessarily follow FPL’s theory but we think the one that they have is to inspect --the Commission has to inspect it.

Unknown Speaker: Well, I gather the Commission’s theory is all premised on the the expert evidence?

Mr. Jefferson D. Giller: We are talking about the actual flows as distinguished from the cause and the effect.

Unknown Speaker: I thought, the actual.

Well let me put it to you, did the Commission try to prove through the expert testimony, actual flow?

Mr. Jefferson D. Giller: Yes.

Unknown Speaker: And did they conclude that they had it based on that expert testimony?

Mr. Jefferson D. Giller: The examiner was very honest in what he said, he said based upon the Commission’s theory actual flows are proved based upon FPL’s theories that reverse is proved that no such flows and I will be happy to discuss what went in on those flows.

Unknown Speaker: Well, what I am trying to get at, in what position are we or was the Fifth Circuit for that matter?

Mr. Jefferson D. Giller: Addressing myself, I have to say that the Commission’s conclusion even though your experts was contrary -- the Commission's conclusions were not binding upon the Fifth Circuit.

That is our position that the Commission’s conclusion are not bindings on the Fifth Circuit or upon this court.

Chief Justice Warren E. Burger: Where does the examiner make the statement you just alluded to in response to Justice Brennan?

If you can not put your finger on it now, your colleague can perhaps give it you and let us know a little later.

Mr. Jefferson D. Giller: I think it is page 13 of our brief, top of page 13, the examiner in our brief.

On the basis of the commingled method, that is FPC’s, it can be proved that electric energy is transmitted between Florida or FPL and Georgia on the basis of the system study method, that is one we use, the contrary follows.

Unknown Speaker: Suppose that would be particularly relevant in case wholesale rates were an issue here?

Mr. Jefferson D. Giller: But we only have six wholesale sales and it would be required not electric energy just get in to our system but it get there to those wholesale sales.

And this court held in the Colton case that merely being --

Unknown Speaker: This is the ultimate thrust of the decision of the Power Commission decision does not control of a wholesale rate?

Mr. Jefferson D. Giller: It is our belief that is why we have the Federal Power, I guess a principal concern.

But here the Commission says “that is not what we are asking, we are asking to keep your books --

Unknown Speaker: To sense all of this, but if they win this case, then the next case would be wholesale rates?

Mr. Jefferson D. Giller: I do not know whether they go that far.

Unknown Speaker: Well let me get it straight on the -- Does the Commission claim that if you have jurisdiction or is it a government claim to have jurisdiction, if the only time power might flow to FPL from across state lines as is an emergency when some of FPL's equipment was out or is on their theory that this flow back and forth is flowing on all the time?

Mr. Jefferson D. Giller: Their theory is that quite a few days to 1964, electric energy flowed from Georgia into our system.

Unknown Speaker: Just flowing through all the time.

Mr. Jefferson D. Giller: And that is enough and not just going on all the time.

Unknown Speaker: Was that an emergency situation where some of the equipment was down?

Mr. Jefferson D. Giller: No, it was not emergency.

And our disagreement with them is this.

There is so called commingled in a bus theory that they use which treats a bus as a point which it is not because, it is just a wire big as my thumb 225 feet long.

And the only excuse that they use for doing that and by the way the treatment of a bus, the difference between us and them.

The only excuse they use and they set it forth several times in their brief, is that there are reverse flows of power in each of the 120 power cycles per second in an electric conduit.

That is while the power goes one direction most of the time, every 120th of a second, there is a little reverse blip.

And they say because of that, we need to treat as a point because these reverse blips are not shown on watt meters and I answer that is two fold.

One, that reverse blip is reactive power, they so admit it, they pay 184 or 174 of the transcript.

By definition reactive power is not electric energy.

The real power which is the fourth part of the transmission is by definition electric energy and they agree on page 174, that the real power does not reverse.

It always goes through --

Unknown Speaker: May I ask, let me if I understand that what you are telling, do you agree that every 120th cycle, there is a reverse blip.

Mr. Jefferson D. Giller: Reactive power.

Unknown Speaker: But you say that reverse blip is not electrical energy -- that is something called reactive power.

Mr. Jefferson D. Giller: Yes, sir.

Unknown Speaker: And therefore it cannot be a measure of whether or not this transmission in the interstate of commerce of electric energy.

Mr. Jefferson D. Giller: Yes, sir because again --

Unknown Speaker: Again I have to define.

This been the fight of each among between the expert on each side to this and before the Commission.

Mr. Jefferson D. Giller: The experts do not disagree that reactive power only reverses.

They do not disagree that real power goes only from generation to load and by definition we have set forth in one of our footnotes, the reactive power is not energy.

Also the experts agree that reactive power is not measured by watt meters.

Watt meters only measure real powers and that is what--

Unknown Speaker: Are you speaking of all the experts who testified in this case?

Mr. Jefferson D. Giller: There is not a disagreement on point because the Commission expert very carefully use the word power in a broad sense.

It was only when they were pinned down, they pointed out the distinction between real power and reactive power.

The only time we know of that is business of reverse flows has been passed on a jurisdiction case is in the Connecticut Power case who came up to this court.

And in that case the expert for the Connecticut company trying to show lack of jurisdiction by saying, look there are some reverse flows that you got to take in to consideration and they do not show up on watt meters.

The Commission way back then rejected that saying “Look, we go on what is shown on a watt meter” that is what the electric energy business is based on.

The Court of Appeals agrees.

According this Court’s decision in the Jersey Central case and this Court on appeals said there was no question about interstate flow.

So, our positions on the trace is this that the experts, taking their own expert evidence there is still no reversed flow of electric energy and that is what the statute says is required to have --

Unknown Speaker: Are you suggesting Mr. Giller that the experts for the Commission position did not say that the reverse flow involved a flow of electric energy.

Is that what you are telling us?

Mr. Jefferson D. Giller: That is correct, they did not say that which was reversing was electric energy because they say on page 174, that this real power goes forward only and that by definition is electric energy and reverse flow by definition is not.

Unknown Speaker: If I may, so far I guess, we have just been talking of one position that the Commission has.

Mr. Jefferson D. Giller: I will be happy to talk about the other.

Unknown Speaker: There was reason, because your time is running and I would like to hear you on the other again.

Mr. Jefferson D. Giller: Yes.

Chief Justice Warren E. Burger: We are going to continue right through and let you finish today, Mr. Giller.

Mr. Jefferson D. Giller: Thank you.

Now, with respect to what the Commission says it is a principal thrust is a so-called cause and effect of electro magnetic entity of response.

There is nothing magic about that, this has existence ever since the first two alternating current generators were ever hooked up to a load.

Ever since then which was long before the Federal Power Commission was ever heard of.

It means that anytime two or more generators are supplying one or more loads, they inherently and unavoidably generate electricity at the same frequency.

They can not help it.

And as a result when the load is changed on one it has an effect on the other but it does not change the direction of transmission.

For example, if you would look on page 11 of our brief, there is shown there a line, a horizontal line CD which is a transmission line.

Unknown Speaker: What page?

Mr. Jefferson D. Giller: 11.

Below that line are letters G which shows generators and letters L that show loads.

If the right hand load L5 were increased a little bit, what happens?

The next generator to it, the one that is normally supplying it, will instantaneously pick up a little generation and draw also perhaps a little bit a current from electric energy from L4.

Well, that means then that G5, the next one to the left is going to have to pick up a little to supply L4 and so on down the line, but the directions of flow of electric energy do not change merely the magnitude.

Now, that is a cause and effect, that is the swapping that the examiner talked about and we say that is not the jurisdictional event.

Say no experts testify that we confine.

Testified as result of that there was inherently transmission across the state line.

The high line control with frequency bias is nothing magic.

What that means is at the edge of each system are tie lines to another systems.

And each systems senses what the frequency is, if it drops it just generates a little more electric energy.

No signal could come from some place way out.

We say this cause and effect is directly contrary to this court's decision in the Jersey Central case where it specifically said interconnection does not mean everything that actual transmission is required.

I believe that concludes my argument.

Chief Justice Warren E. Burger: Well, your time is consumed Mr. Samuel Huntington unless you have something very special and purely factual to—

Rebuttal of Samuel Huntington

Mr. Samuel Huntington: I do have one point your honor just one reference with respect to reactive power. Reactive power, the Commission expert did not testify that the negative blip on the power curve is reactive power.

I refer the court to --

Unknown Speaker: They testified was electric energy?

Mr. Samuel Huntington: First of all, the negative blip does not account for the contribution across the bus to other lines that is done on appositive power portion in a cycle I have refer to exhibit 61 for that and on for the difference between reactive power and apparent power and I refer the court to a 151 to 152 and page 174.

What the power currents used by Dr. Jessel, we did not have anything to do with reactive power and so it is completely erroneous to equate the negative blips on those curves with reactive power.

Chief Justice Warren E. Burger: Thank you Mr. Huntington.

Thank you Mr. Giller.

The case is submitted.