Fahy, Senior Circuit Judge, and Robinson and Wilkey, Circuit Judges.
UNITED STATES COURT OF APPEALS FOR THE DISTRICT COLUMBIA CIRCUIT
Municipal Gas Assoc., Etc., Intervenors. Public
Service Commission of the State of New
Reported at: 462 F.2d 813 at 865. 1972.CDC.131
Date Reported: Original Opinion of February 18, 1972 at: 462 F.2d 813
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WILKEY
Petitions of the Federal Power Commission and Texas Gas Transmission Corporation, an intervenor, for rehearing and suggestions for rehearing en banc, of this court's action in vacating the order of the Commission with respect to Texas Gas' pre-1970 and post-1969 non-expansion property, focus on three main points:
*fn1. Whether Congress' enactment of the 1969 Tax Reform Act limited the extent of the Commission's authority to permit regulated utilities such as Texas Gas to shift from accelerated depreciation with flow -through to similar depreciation with normalization with respect to their pre-1970 and post-1969 non-expansion property.
*fn2. The import of the explanation of Section 441(a) of the 1969 Tax Reform Act in regard to point 1 (supra) provided by the Staff of the Joint Committee on Internal Revenue Taxation.
*fn3. The court's caveat, at the end of its opinion, with respect to the effect of Section 441(a) of the Act on the Commission's discretion to permit regulated utilities such as Texas Gas to abandon flow-through.
We deny the petitions for rehearing, as we find the Commission's and Texas Gas' arguments unpersuasive. Since both manifest some confusion over the meaning of our opinion and what we deem the proper interpretation of the statute involved, we set forth these additional views on the specific points raised in an effort at clarification for the responsible regulatory agency and the industry involved. I. The Extent of the Commission's Authority under Section 441(a) of the
1969 Tax Reform Act re Non-Expansion Property
The Commission and Texas Gas return to the initial House version of Section 441(a) of the 1969 Tax Reform Act to support their contention that Section 441(a), as finally enacted, did not curtail the Commission's discretion, with respect to pre-1970 and post-1969 non-expansion (existing or replacement) property, to permit regulated utilities such as Texas Gas to shift from accelerated depreciation with flow -through to similar depreciation with normalization. They point out (we do not disagree, see first full paragraph of text, page 862) that the House version would have permitted Texas Gas, with the Commission's approval, to shift from flow -through to normalization with respect to its pre-1970 and post-1969 non- expansion (as well as its post-1969 expansion) property.
It is at the Senate stage of the proceedings that our views diverge. Texas Gas and the Commission argue that the FPC's discretion to permit a regulated utility such as Texas Gas to shift its depreciation treatment of non-expansion property survived through both the Senate and Conference Committee versions of the legislation. Their interpretation is that subsequent versions reflect additional provisions (e.g., the 180-day period during which the company may elect to change its method of depreciation) rather than substitute provisions which eventually made up the final bill. We think our analysis (pp. 861-863) of the changes at different stages of the legislation makes clear why this contention is not valid, but for greater clarity we shall chart the transformations as the Tax Reform Act progressed through the legislative stages.
House Version House Senate Conference
Version Pro- Version Envi-
sioned Three posed These sioned Same Committee
ble Present sible Changes, with Present ...