Title 16, ConservationRelease 119-110
§824e Power of Commission to Fix Rates and Charges; Determination of Cost of Production or Transmission
Title 16 › CHAPTER 12 — FEDERAL REGULATION AND DEVELOPMENT OF POWER › SUBCHAPTER II — REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE COMMERCE › § 824e
Summary
The Commission can change rates, charges, rules, or contracts for electric transmission or sales it oversees if, after a hearing or a complaint, it finds they are unfair, unreasonable, or favor some customers. It must say what changes it wants and why, set a hearing time if one is needed, and list the specific issues to be decided. If a proceeding starts, the Commission sets a "refund effective date." For complaints that date is no earlier than the complaint filing and no later than 5 months after filing. For proceedings the Commission starts, that date is no earlier than the public notice and no later than 5 months after the notice. The Commission must move quickly, and if no final decision is made within a 180-day period it must explain the delay and give its best estimate of when it will decide. The Commission or the complainant has the burden to prove the rates are unfair. The Commission can order refunds with interest for amounts charged after the refund effective date up through 15 months after that date. If the case runs longer than 15 months and the utility caused the delay, the Commission can order refunds for the full delayed period. If multiple electric companies are part of the same registered holding company, the Commission will not order refunds that only come from shifting costs between those companies, unless the holding company would not lose revenue because one company could not recover its higher costs between the refund date and the order date. The Commission may also investigate production or transmission costs on its own or at a state commission’s request. For short-term sales (31 days or less) made voluntarily through an organized market under a tariff, certain large sellers under section 824(f) can be ordered to refund money if they broke the tariff or applicable rules, but small sellers (under 8,000,000 megawatt hours per year) and electric cooperatives are excluded. Special limits apply to the Bonneville Power Administration and other federal power agencies and the Tennessee Valley Authority: refunds for BPA only if the sale was unjust and at a higher rate than any other nearby short-term sale, and for federal agencies the Commission may only order refunds to reach a just and reasonable rate.
Full Legal Text
Title 16, §824e
Conservation, Source: USLM XML via OLRC
(a)Unjust or preferential rates, etc.; statement of reasons for changes; hearing; specification of issues
Whenever the Commission, after a hearing held upon its own motion or upon complaint, shall find that any rate, charge, or classification, demanded, observed, charged, or collected by any public utility for any transmission or sale subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force, and shall fix the same by order. Any complaint or motion of the Commission to initiate a proceeding under this section shall state the change or changes to be made in the rate, charge, classification, rule, regulation, practice, or contract then in force, and the reasons for any proposed change or changes therein. If, after review of any motion or complaint and answer, the Commission shall decide to hold a hearing, it shall fix by order the time and place of such hearing and shall specify the issues to be adjudicated.
(b)Refund effective date; preferential proceedings; statement of reasons for delay; burden of proof; scope of refund order; refund orders in cases of dilatory behavior; interest
Whenever the Commission institutes a proceeding under this section, the Commission shall establish a refund effective date. In the case of a proceeding instituted on complaint, the refund effective date shall not be earlier than the date of the filing of such complaint nor later than 5 months after the filing of such complaint. In the case of a proceeding instituted by the Commission on its own motion, the refund effective date shall not be earlier than the date of the publication by the Commission of notice of its intention to initiate such proceeding nor later than 5 months after the publication date. Upon institution of a proceeding under this section, the Commission shall give to the decision of such proceeding the same preference as provided under section 824d of this title and otherwise act as speedily as possible. If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such decision. In any proceeding under this section, the burden of proof to show that any rate, charge, classification, rule, regulation, practice, or contract is unjust, unreasonable, unduly discriminatory, or preferential shall be upon the Commission or the complainant. At the conclusion of any proceeding under this section, the Commission may order refunds of any amounts paid, for the period subsequent to the refund effective date through a date fifteen months after such refund effective date, in excess of those which would have been paid under the just and reasonable rate, charge, classification, rule, regulation, practice, or contract which the Commission orders to be thereafter observed and in force: Provided, That if the proceeding is not concluded within fifteen months after the refund effective date and if the Commission determines at the conclusion of the proceeding that the proceeding was not resolved within the fifteen-month period primarily because of dilatory behavior by the public utility, the Commission may order refunds of any or all amounts paid for the period subsequent to the refund effective date and prior to the conclusion of the proceeding. The refunds shall be made, with interest, to those persons who have paid those rates or charges which are the subject of the proceeding.
(c)Refund considerations; shifting costs; reduction in revenues; “electric utility companies” and “registered holding company” defined
Notwithstanding subsection (b), in a proceeding commenced under this section involving two or more electric utility companies of a registered holding company, refunds which might otherwise be payable under subsection (b) shall not be ordered to the extent that such refunds would result from any portion of a Commission order that (1) requires a decrease in system production or transmission costs to be paid by one or more of such electric companies; and (2) is based upon a determination that the amount of such decrease should be paid through an increase in the costs to be paid by other electric utility companies of such registered holding company: Provided, That refunds, in whole or in part, may be ordered by the Commission if it determines that the registered holding company would not experience any reduction in revenues which results from an inability of an electric utility company of the holding company to recover such increase in costs for the period between the refund effective date and the effective date of the Commission’s order. For purposes of this subsection, the terms “electric utility companies” and “registered holding company” shall have the same meanings as provided in the Public Utility Holding Company Act of 1935, as amended.
(d)Investigation of costs
The Commission upon its own motion, or upon the request of any State commission whenever it can do so without prejudice to the efficient and proper conduct of its affairs, may investigate and determine the cost of the production or transmission of electric energy by means of facilities under the jurisdiction of the Commission in cases where the Commission has no authority to establish a rate governing the sale of such energy.
(e)Short-term sales
(1)In this subsection:
(A)The term “short-term sale” means an agreement for the sale of electric energy at wholesale in interstate commerce that is for a period of 31 days or less (excluding monthly contracts subject to automatic renewal).
(B)The term “applicable Commission rule” means a Commission rule applicable to sales at wholesale by public utilities that the Commission determines after notice and comment should also be applicable to entities subject to this subsection.
(2)If an entity described in section 824(f) of this title voluntarily makes a short-term sale of electric energy through an organized market in which the rates for the sale are established by Commission-approved tariff (rather than by contract) and the sale violates the terms of the tariff or applicable Commission rules in effect at the time of the sale, the entity shall be subject to the refund authority of the Commission under this section with respect to the violation.
(3)This section shall not apply to—
(A)any entity that sells in total (including affiliates of the entity) less than 8,000,000 megawatt hours of electricity per year; or
(B)an electric cooperative.
(4)(A)The Commission shall have refund authority under paragraph (2) with respect to a voluntary short term sale of electric energy by the Bonneville Power Administration only if the sale is at an unjust and unreasonable rate.
(B)The Commission may order a refund under subparagraph (A) only for short-term sales made by the Bonneville Power Administration at rates that are higher than the highest just and reasonable rate charged by any other entity for a short-term sale of electric energy in the same geographic market for the same, or most nearly comparable, period as the sale by the Bonneville Power Administration.
(C)In the case of any Federal power marketing agency or the Tennessee Valley Authority, the Commission shall not assert or exercise any regulatory authority or power under paragraph (2) other than the ordering of refunds to achieve a just and reasonable rate.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Public Utility Holding Company Act of 1935, referred to in subsec. (c), is title I of act Aug. 26, 1935, ch. 687, 49 Stat. 803, which was classified generally to chapter 2C (§ 79 et seq.) of Title 15, Commerce and Trade, prior to repeal by Pub. L. 109–58, title XII, § 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables.
Amendments
2005—Subsec. (a). Pub. L. 109–58, § 1295(b)(1), substituted “hearing held” for “hearing had” in first sentence. Subsec. (b). Pub. L. 109–58, § 1295(b)(2), struck out “the public utility to make” before “refunds of any amounts paid” in seventh sentence. Pub. L. 109–58, § 1285, in second sentence, substituted “the date of the filing of such complaint nor later than 5 months after the filing of such complaint” for “the date 60 days after the filing of such complaint nor later than 5 months after the expiration of such 60-day period”, in third sentence, substituted “the date of the publication” for “the date 60 days after the publication” and “5 months after the publication date” for “5 months after the expiration of such 60-day period”, and in fifth sentence, substituted “If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such decision” for “If no final decision is rendered by the refund
Effective Date
or by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, whichever is earlier, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such decision”. Subsec. (e). Pub. L. 109–58, § 1286, added subsec. (e). 1988—Subsec. (a). Pub. L. 100–473, § 2(1), inserted provisions for a statement of reasons for listed changes, hearings, and specification of issues. Subsecs. (b) to (d). Pub. L. 100–473, § 2(2), added subsecs. (b) and (c) and redesignated former subsec. (b) as (d).
Statutory Notes and Related Subsidiaries
Effective Date
of 1988 Amendment Pub. L. 100–473, § 4, Oct. 6, 1988, 102 Stat. 2300, provided that: “The
Amendments
made by this Act [amending this section] are not applicable to complaints filed or motions initiated before the date of enactment of this Act [Oct. 6, 1988] pursuant to section 206 of the Federal Power Act [this section]: Provided, however, That such complaints may be withdrawn and refiled without prejudice.” Limitation on Authority Provided Pub. L. 100–473, § 3, Oct. 6, 1988, 102 Stat. 2300, provided that: “Nothing in subsection (c) of section 206 of the Federal Power Act, as amended (16 U.S.C. 824e(c)) shall be interpreted to confer upon the Federal Energy Regulatory Commission any authority not granted to it elsewhere in such Act [16 U.S.C. 791a et seq.] to issue an order that (1) requires a decrease in system production or transmission costs to be paid by one or more electric utility companies of a registered holding company; and (2) is based upon a determination that the amount of such decrease should be paid through an increase in the costs to be paid by other electric utility companies of such registered holding company. For purposes of this section, the terms ‘electric utility companies’ and ‘registered holding company’ shall have the same meanings as provided in the Public Utility Holding Company Act of 1935, as amended [15 U.S.C. 79 et seq.].” Study Pub. L. 100–473, § 5, Oct. 6, 1988, 102 Stat. 2301, directed that, no earlier than three years and no later than four years after Oct. 6, 1988, Federal Energy Regulatory Commission perform a study of effect of
Amendments
to this section, analyzing (1) impact, if any, of such
Amendments
on cost of capital paid by public utilities, (2) any change in average time taken to resolve proceedings under this section, and (3) such other matters as Commission may deem appropriate in public interest, with study to be sent to Committee on Energy and Natural Resources of Senate and Committee on Energy and Commerce of House of Representatives.
Reference
Citations & Metadata
Citation
16 U.S.C. § 824e
Title 16, Conservation
Last Updated
Sep 23, 2026
Release point: 119-110