UNITED STATES OF AMERICA, PETITIONER V. CITY OF FULTON, ET AL. No. 84-1725 In The Supreme Court Of The United States October Term, 1985 On Writ Of Certiorari To The United States Court Of Appeals For The Federal Circuit Brief For The United States Parties to the Proceeding In addition to the parties named in the caption, the cities of Lamar, Missouri, and Thayer, Missouri, were appellees in the court of appeals and are respondents in this Court. The city of Piggott, Arkansas, reached a settlement with the government in the Claims Court, and accordingly was not an appellee in the court of appeals. TABLE OF CONTENTS Question Presented Parties to the Proceeding Opinions below Jurisdiction Statutory and regulatory provisions involved Statement Summary of argument Argument: The Secretary of Energy may place into effect an interim increase in the rate charged for electricity generated by federal hydroelectric projects pending final confirmation of the new rate by the Federal Energy Regulatory Commission A. The Floor Control Act and the Department of Energy Organziation Act empower the Secretary to impose interim rate increases 1. The Floor Control Act of 1944 2. The Department of Energy Organization Act B. Respondents' contracts do not immunize respondents from interim rate increases authorized by the relevant statutes Conclusion Opinions Below The opinion of the court of appeals (Pet. App. 1a-4a) is reported at 751 F.2d 1255. The prior opinion of the Court of Claims (Pet. App. 5a-18a) is reported at 680 F.2d 115. The order of the Claims Court (Pet. App. 19a-21a) is unreported. Jurisdiction The judgment of the court of appeals (Pet. App. 23a) was entered on January 9, 1985. By order dated April 1, 1985, the Chief Justice extended the time within which to file a petition for a writ of certiorari to and including May 9, 1985. The petition for a writ of certiorari was filed on May 2, 1985, and was granted on July 1, 1985. The jurisdiction of this Court rests on 28 U.S.C. 1254(1). Statutory and Regulatory Provisions Involved The relevant provisions of the Flood Control Act of 1944, the Department of Energy Organization Act, and Department of Energy Delegation Order No. 0204-33 are set forth in the appendix to the petition (Pet. App. 67a-71a). Question Presented Whether the Secretary of Energy may place into effect on an interim basis an increase in the rate charged for electricity generated by federal hydroelectric projects, subject to final approval of the rate increase by the Federal Energy Regulatory Commission. Statement 1. The federal government operates more than 100 hydroelectric dams on the Nation's waterways. The electricity generated by these projects is sold to the public by five regional power marketing administrations (PMAs): the Southwestern Power Administration, the Southeastern Power Administration, the Bonneville Power Administration, the Western Area Power Administration, and the Alaska Power Administration. /1/ The PMAs together provide approximately 6% of the Nation's electric power, serving wholesale customers in 33 states. This case concerns sales of power by the Southwestern Power Administration (SWPA), which markets electricity produced at dams operated by the Army Corps of Engineers in Arkansas, Missouri, Oklahoma, and Texas. The SWPA's authority to sell electricity rests upon Section 5 of the Floor Control Act of 1944, 16 U.S.C. 825s, which provides for the sale of electricity generated "at reservoir projects under the control of the Department of the Army and * * * not required in the operation of such projects." See also 10 Fed. Reg. 14527 (1945) (order designating the SWPA as marketing agent for this electricity). Revenues from sales of this power must be sufficient to cover production costs. Thus, Section 5 states that rates "shall be drawn having regard to the recovery * * * of the cost of producing and transmitting" the electricity, "including the amortization of the capital investment allocated to power over a reasonable period of years" (16 U.S.C. 825s). Prior to its amendment in 1977, the Floor Control Act authorized the Secretary of the Interior to propose the rates to be charged for electricity, with the rates to "become effective upon confirmation and approval by the Federal Power Commission" (16 U.S.C. (1976 ed.) 825s). The Commission acted upon the Secretary's proposal after providing interested parties with notice and an opportunity to comment and, in some circumstances, an oral hearing. See 18 C.F.R. 2.1(a)(1)(vi)(A) (1976); United States Department of the Interior, Southwestern Power Administration, 56 F.P.C. 795, 799 (1976) (public notice and opportunity to comment); United States Department of the Interior, Bonneville Power Administration, 58 F.P.C. 2498, 2500 (1977) (formal hearing ordered). This arrangement for setting the rates for power sold pursuant to the Flood Control Act was altered in 1977 by the Department of Energy Organization Act (DOE Act), 42 U.S.C. 7101 et seq. The DOE Act transferred the Secretary of the Interior's rate-proposing function to the Secretary of Energy (42 U.S.C. 7152(a)(1)). /2/ In addition, the statute abolished the Federal Power Commission (FPC) and stated that "(e)xcept as provided in subchapter IV of this chapter, there are transferred to, and vested in, the Secretary (of Energy) the function of the Federal Power Commission" (42 U.S.C. 7151(b)). Subchapter IV of the DOE Act, which consists of 42 U.S.C. 7171-7177, contains no reference to the Federal Power Commission's authority under the Floor Control Act to approve rates for hydroelectric power generated at federal reservoir projects. Thus, the DOE Act vests the Secretary of Energy with plenary authority over the rates for electricity sold by the PMAs. As the Fifth Circuit observed in United States v. Tex-La Electric Cooperative, Inc. (Tex-La), "after October 1, 1977, the effective date of the DOE Act, the Secretary of Energy was charged both with developing federal hydroelectric power rates as the Secretary of the Interior used to do, and then with confirming and putting those rates into effect as the Federal Power Commission used to do" (Pet. App. 31a (citations omitted)). /3/ The Secretary of Energy, acting pursuant to Section 642 of the DOE Act, 42 U.S.C. 7252, delegated to the Administrator of the Economic Regulatory Administration within the Department of Energy "the authority * * * to confirm and approve power or transmission rates of federal power marketing agencies" (Delegation Order No. 0204-4, para. 15, 42 Fed. Reg. 60726, 60727 (1977)). The Secretary revised this procedure in an order that became effective on January 1, 1979 (Delegation Order No. 0204-33, 43 Fed. Reg. 60636 (1978)). He delegated to the Assistant Secretary for Resource Applications, acting through the PMA Administrators, the authority to develop power rates. The Assistant Secretary for Resource Applications also was empowered (id. at 60636-60637) "to confirm, approve, and place in effect such rates on an interim basis, for such period or periods as he may provide, subject to refund with interest as determined by the Federal Energy Regulatory Commission." The order delegated to the Federal Energy Regulatory Commission (FERC) the authority to confirm and approve rates on a final basis (id. at 60636). /4/ Accordingly, under current law the Assistant Secretary may place a rate into effect on an interim basis pending final approval of the rate by the FERC. /5/ 2. By the late 1970s, it was apparent that the SWPA, the entity whose rates are at issue here, had failed to satisfy the requirement of the Flood Control Act that rates generate revenues sufficient to recover the cost of producing the electricity. The SWPA did not increase its basic rate between 1957 and 1979 and, as a result of the inflation that occurred during that period, the SWPA consistently incurred a deficit. 44 Fed. Reg. 13068, 13069 (1979); Pet. App. 33a-34a (Tex-La decision). The Federal Power Commission observed in 1977 that "SWPA's existing system rates now fail by at least $9,000,000 per year to generate the revenue necessary to repay the costs of producing and transmitting the system projects' power" (United States Department of the Interior, Southwestern Power Administration, 58 F.P.C. 2170, 2173 (1977)). See also United States Department of the Interior, Southwestern Power Administration, 43 F.P.C. 804, 807 (1970) (after 26 years of operations, the SWPA's revenues had failed to cover $30 million in interest due on the government's investment in power facilities). The Commission at first refused the SWPA's request for an extension of the existing rates in 1977, finding that they were "not set at a level that recovers the Government's investment in power facilities over a reasonable period of years" (58 F.P.C. at 2173 (footnote omitted)); it agreed to extend the rates only after the SWPA filed a schedule for proposing new rates (United States Department of the Interior, Southwestern Power Administration, 59 F.P.C. 2235 (1977)). Congress also urged the SWPA to increase its rates to cover costs during this period. The House and Senate Appropriations Committees stated in 1978 that they expected the Department of Energy "to move promptly in establishing the new rates for Southwestern Power Administration, and other Administrations as necessary, to recover costs and meet repayment requirements on a current basis" (H.R. Rep. 95-1247, 95th Cong., 2d Sess. 59 (1978); S. Rep. 95-1069, 95th Cong. 2d Sess. 53 (1978)). See also H.R. Rep. 96-243, 96th Cong., 1st Sess. 69 (1979); Energy and Water Development Appropriations for 1980: Hearings Before the Subcomm. on Appropriations, 96th Cong., 1st Sess. 2995-2998 (1979). In April 1978, the SWPA issued a notice of a proposed rate increase (43 Fed. Reg. 16545-16546). The notice stated that the SWPA had prepared a study of its progress in repaying the government's investment in generation facilities and had concluded "that the legal requirement to repay the power investment with interest is not being met" (id. at 16546). The SWPA found that additional revenues of $20 million, an increase of 42% over current revenues, uere needed to meet its statutory obligation to cover costs and repay the government's investment. The notice stated that the SWPA had prepared a tentative rate schedule that was available to interested parties. It solicited written comments and announced that a forum would be held for oral presentations. Ibid. /6/ On March 1, 1979, the Assistant Secretary of Energy for Resource Applications issued an order confirming and approving increased power rates for the SWPA and placing the new rates into effect on an interim basis as of April 1, 1979. 44 Fed. Reg. 13068. The Assistant Secretary observed that the SWPA had not increased its general rate since 1957 (id. at 13069). He stated that the SWPA had revised its repayment study on the basis of the public comments and concluded that a revenue increase of 33%, as opposed to 42%, was required to meet the statutory repayment obligation. The Assistant Secretary ordered the new rates submitted to the FERC for final approval (id. at 13073). /7/ After a second extensive round of public notice and comment, the FERC rendered its decision on the interim rates. The FERC at first disapproved the new rates because they were too low (see 46 Fed. Reg. 30877 (1981)). In January 1982, however, after the SWPA submitted additional data, the FERC approved the 33% increase for the period April 1, 1979 through September 30, 1982. 47 Fed. Reg. 4562 (1982); see also 47 Fed. Reg. 16857 (1982) (denying rehearing and confirming approval of rate increase). Thus, the rates finally were approved 33 months after they were placed into effect on an interim basis and proposed to the FERC. 3. Respondents are three cities that purchase power from the SWPA -- Fulton, Missouri; Lamar, Missouri; and Thayer, Missouri. /8/ Each respondent's contract with the SWPA includes a clause concerning rate changes that essentially incorporates the pertinent language of the Flood Control Act. The clauses provide that new rates may be imposed with the "confirmation and approval of the Federal Power Commission" and that such rates "shall * * * become effective * * * in accordance with and on the effective date specified in the order of the Federal Power Commission containing such confirmation and approval." C.A. App. 93, 127, 157. Respondents commenced this action in the Court of Claims seeking to recover the money paid pursuant to the interim rate increase between April 1979 and January 1982. /9/ Respondehts did not challenge the amount of the rate increase; they asserted only that interim rate increases are not permitted under either the Floor Control Act or their contracts with the SWPA. The government contended that the DOE Act authorized the Secretary of Energy to confirm rates under the Flood Control Act, that the decision to place into effect an interim rate was a proper exercise of this authority, and that respondents' contracts permitted the imposition of the interim rate increase. The Court of Claims granted respondents' motion for summary judgment on the issue of liability (Pet. App. 5a-18a). It rejected the government's argument that the rate-confirming function of the FPC had been transferred to the Secretary of Energy by the DOE Act, observing that "many of the rate approval functions of the FPC were transferred to the FERC in subchapter IV (of the DOE Act), such administrative review to be exercised independently of the Secretary of Energy" (Pet. App. 10a (emphasis in original)). The court also noted that the FPC'S authority under the Flood Control Act was not listed in another provision of the DOE Act transferring authority to the Secretary (Pet. App. 10a-11a). Finally, the court stated that Section 501(a)(1) of the DOE Act, 42 U.S.C. 7191(a)(1), preserves pre-existing administrative procedure requirements and concluded that the requirement of "FPC confirmation and approval * * * (prior to implementation of a rate increase) continues to apply to administrative actions under the Flood Control Act" (Pet. App. 12a). The Court of Claims also found that "the terms of the contracts clearly contemplate an increase in rate charges only after 'confirmation and approval' by the FPC. No provision for interim increases even exists in the contracts" (Pet. App. 13a). It noted that decisions of this Court prohibit unilateral rate increases in violation of the express terms of utility contracts. Id. at 14a & n.15, citing United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956); FPC v. Sierra Pacific Power Co., 350 U.S. 348 (1956). The court held that these cases "dictate() that the express contracts between plaintiffs and the SWPA, which contracts provide procedural safeguards prior to initiation of a rate increase, cannot be unilaterally modified by administrative fiat" (Pet. App. 14a). Finally, the Court of Claims asserted that past administrative practice supported its conclusion that interim rate increases were not authorized under the statute or contracts. It distinguished three interim rate increases approved by the FPC on the ground that they involved PMAs other than the SWPA (Pet. App. 14a-16a). The court thus concluded that "the rate increase ordered by the Assistant Secretary of Energy on an interim basis violated that provision of the contracts between (respondents) and the Government which required 'confirmation and approval' by the Federal Power Commission" (id. at 18a). It remanded the action to its trial division to determine the amount of damages (ibid.). While this case was pending in the trial division of the Court of Claims, that court ceased to exist pursuant to the Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25 et seq. The newly-created Claims Court assumed jurisdiction over the case. See id. Section 403(d), 96 Stat. 58. The parties agreed upon the amount of damages, the Claims Court entered a final judgment in the amount of approximately $950,000 (see Pet. App. 19a-21a, 22a), and the United States appealed to the United States Court of Appeals for the Federal Circuit (see 28 U.S.C. 1295(a)(3)). 4. The court of appeals affirmed (Pet. App. 1a-4a). The court rejected respondents' claim that because the Court of Claims previously had issued a decision in the case the court of appeals lacked jurisdiction to review the judgment of the Claims Court (id. at 2a). The court of appeals concluded, however, that the prior decision of the Court of Claims regarding the Secretary's rate-setting authority constituted the law of the case (id. at 2a-3a). /10/ It declined to overrule that decision because it was "convinced the Court of Claims reached the correct result: the interim rate increase was a breach of contract" (id. at 3a (footnote omitted)). Summary of Argument A. This case concerns the scope of the Secretary of Energy's authority to set the rates for hydroelectric power generated at certain federal reservoir projects. The Secretary has determined that he may place a rate increase into effect on an interim basis pending final approval of the new rate by the Federal Energy Regulatory Commission (FERC). The Secretary's construction of the statutes he is charged with administering is entitled to "considerable" deference and should be upheld if it is reasonable. Chevron U.S.A. Inc. v. Natural Resources Defense Council, No. 82-1005 (June 25, 1984), slip op. 5. Here, the plain language of the statutes, the statutes' purposes, and prior administrative practice all mandate the conclusion that the Secretary is authorized to impose interim rates. The Secretary's rate-setting authority rests upon two statutes. The basic provision, Section 5 of the Flood Control Act of 1944, 16 U.S.C. (1976 ed.) 825s, states that "rate schedules" proposed by the Secretary of the Interior for the sale of hydroelectric power "become effective upon confirmation and approval by the Federal Power Commission." Section 5 thus draws no distinction between interim rate schedules and final rate schedules. Since Congress enacted this provision in order to confer broad authority for the efficient administration of the federal power marketing program, it is most unlikely that Congress intended to limit the types of rates that could be imposed by the Secretary and the Commission. Moreover, a narrow interpretation of the statute would make quite difficult the achievement of Congress's primary goal of establishing an efficient, business-like program not dependent upon government subsidies, because interim rates often are essential if revenues are to cover the cost of producing the electricity. Finally, the Federal Power Commission's administrative practice of placing interim rate increases into effect under the Flood Control Act and related statutes confirms that Section 5 authorizes the imposition of interim rates. This rate-setting authority of the Secretary of the Interior and the Federal Power Commission was consolidated in the Secretary of Energy when Congress created the Department of Energy in 1977. The Secretary of Energy therefore succeeded to the interim rate authority conferred by the Flood Control Act. Furthermore, the consolidation of all rate-setting authority in the Secretary of Energy independently supports the conclusion that the Secretary may impose rates on an interim basis. This Court has held that the power to impose interim rates can be implied from plenary rate-setting authority of the type possessed by the Secretary of Energy. B. The provisions of respondents' purchase contracts relating to rate changes are virtually identical to the portion of the Flood Control Act addressing that subject. The only possible conclusion is that the parties intended to incorporate the statutory language into the contracts so that any lawful rate change automatically would be permissible under the contracts. Even if, as respondents argue, the contracts should be interpreted to guarnatee them an opportunity to be heard prior to the imposition of a new rate, the contracts would not prohibit the rate increase at issue here because respondents had a full opportunity to comment upon the interim rate before it became effective. Moreover, respondents had the right to a refund, with interest, if the FERC ultimately rejected the interim rate and approved a lower rate. Respondents' complaint, at bottom, is that the imposition of an interim rate deprived them of the opportunity to enjoy the old, lower rate while the proposed rate was under review. There is no warrant for interpreting the statutes or the contracts in a manner that permits respondents to benefit from delay in the implementation of a lawful rate increase. Argument The Secretary of Energy may place into effect an interim increase in the rate charged for electricity generated by Federal hydroelectric projects pending final confirmation of the new rate by the Federal Energy Regulatory Commission A. The Flood Control Act And The Department Of Energy Organization Act Empower The Secretary To Impose Interim Rate Increases The Secretary of Energy's authority to set rates for the sale of hydroelectric power produced at federal reservoir projects operated by the Army Corps of Engineers flows from two separate statutes. The Flood Control Act of 1944 provides for the sale of surplus power generated at these projects and authorizes the Secretary of the Interior and the Federal Power Commission to set rates for this power. The Department of Energy Organization Act consolidates this rate-setting authority in the Secretary of Energy. The Secretary of Energy established a rate-setting process involving several components of the Department of Energy. See Delegation Order No. 0204-33, 43 Fed. Reg. 60636 (1978). The PMA Administrators develop the rates for sales of electricity, subject to review by an Assistant Secretary of Energy. If the Assistant Secretary approves the rates, he proposes them to the FERC, which is authorized to confirm rates on a final basis. Most important for purposes of this case, the Secreatry's delegation order provides that the Assistant Secretary may place the rates into effect on an interim basis at the time he proposes the rates to the FERC. Customers' payments pursuant to such interim rates must be refunded with interest if a lower rate subsequently is approved by the FERC. See pages 4-5, supra. The courts below held that the Secretary acted in excess of his statutory authority by delegating interim rate-setting power to the Assistant Secretary. They concluded that the Secretary himself could not place rates into effect prior to confirmation and approval of the rates by the FERC. In our view, these decisions impose a completely unjustified limitation upon the Secretary's broad authority to administer the federal power marketing program. Nothing in the statutes or their legislative histories even remotely indicates that Congress intended to prohibit the Secretary from imposing interim rate increases, and Congress's purposes in enacting both the Flood Control Act and the Department of Energy Organization Act compel the conclusion that interim rate increases are authorized by these statutes. The Secretary's determination that he may place hydroelectric power rates into effect on an interim basis therefore should be upheld by this Court. 1. The Flood Control Act of 1944 a. Section 5 of the Flood Control Act of 1944, 16 U.S.C. (1976 ed.) 825s, authorizes the Secretary of the Interior to "transmit and dispose of" surplus electric power "generated at reservoir projects under the control of the Department of the Army." The statute directs the Secretary of the Interior to act in such manner as to encourage the most widespread use (of the electricity) at the lowest possible rates to consumers consistent with sound business principles, the rate schedules to become effective upon confirmation and approval by the Federal Power Commission" (ibid.). It specifically requires that rates be set at levels that will recoup the cost of generating the electricity. The terms of the statute and its legislative history clearly demonstrate that Congress conferred upon the Secretary of the Interior and the Commission the power to impose interim rates. The plain language of Section 5 -- the starting point in interpreting the statute (CPSC v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980)) -- authorizes the Secretary of the Interior and the Federal Power Commission to place rates into effect on an interim basis pending final action by the Commission. Although the statute does not separately refer to interim rates, Congress's broad authorization of "rate schedules" encompasses both interim rate schedules and final rate schedules. An interim rate schedule -- like a final rate schedule -- would "become effective upon" approval by the Commission as provided in Section 5, because both types of rate schedules go into effect following Commission approval. Thus, nothing in the language of Section 5 supports the view that only final rate schedules may be proposed by the Secretary of the Interior and confirmed and approved by the Federal Power Commission. /11/ As the Fifth Circuit correctly concluded in United States v. Tex-La Electric Cooperative, Inc. (Tex-La), "the Flood Control Act (does not) impose() a requirement that implemented rates be somehow 'final'" (Pet. App. 59a). The legislative history of the Flood Control Act confirms that Congress's use of broad language in Section 5 was not accidential. The purpose of Section 5 was to grant general authority to market surplus electricity "consistent with sound business principles." The provision therefore cannot be read to impose artificial restriction on that authority, contrary to normal industry practice, such as by prohibiting the imposition of interim rates. The passage of the Flood Control Act of 1944 marked a significant change in Congress's approach to the sale of surplus hydroelectric power generated at federal projects operated by the Army Corps of Engineers. Prior to that time, Congress had authorized the sale of such electricity on a project-by-project basis. Section 5, by contrast, grants authority to dispose of surplus power at all such projects. S. Rep. 1030, 78th Cong., 2d Sess. 3 (1944); 90 Cong. Rec. 9281 (1944) (remarks of Rep. Whittington). Secretary of the Interior Ickes suggested that Congress include in the Flood Control Act of 1944 a provision authorizing the sale of surplus electricity generated at federal reservoir projects. He pointed out that such a provision would simplify the government's power marketing activities by applying on a general basis the policies adopted in the earlier statutes. Flood Control: Hearings on H.R. 4485 Before a Subcomm. of the Senate Comm. on Commerce, 78th Cong., 2d Sess. 461-462 (1944) (statement of Secretary Ickes); see also Rivers and Harbors Omnibus Bill: Hearings on H.R. 3961 Before a Subcomm. of the Senate Comm. on Commerce, 78th Cong., 2d Sess. 530, 534, 536 (1944) (statement of Secretary Ickes) (testimony regarding identical provision in related bill); id. at 562-565 (statement of Arthur Goldschmidt) (same). The Senate committee that added Section 5 to the Flood Control Act stated in its report that the provision was intended to establish a "convenient and practical method of disposing of power" generated by federal projects (S. Rep. 1030, supra, at 3). The committee observed that the Director of the Division of Power of the Department of the Interior had stated that "the provisions of (Section 5) contain sufficient authority and latitude for efficient administration" of the hydroelectric power program (id. at 3)). /12/ This express statement of legislative intent, combined with the fact that Congress knew it was adopting a provision that would govern a large part of the federal hydroelectric power marketing program, precludes a restrictive interpretation of the rate-setting authority set forth in Section 5. Congress plainly intended Section 5 to confer broad authority for the marketing of surplus hydroelectric power, leaving the particulars of the program -- including the selection of appropriate rate-setting techniques -- to the informed discretion of the Secretary and the Commission. The conclusion that Congress could not have intended to withhold authority to impose interim rates is strongly supported by the fact that Congress previously had authorized private electric utilities to place interim rate increases into effect under certain circumstances. The Federal Power Act provides that a utility may place a rate into effect on an interim basis if the Federal Power Commission (now the Federal Energy Regulatory Commission) suspends the rate and fails to take action concerning the rate within five months (16 U.S.C. 824d(e)). It seems most unlikely that Congress would have intended to bar a government agency selling electricity from using a rate-setting procedure available to private electric companies. This is especially true because the Flood Control Act requires approval of an interim rate by the Federal Power Commission; under the Federal Power Act a private utility may impose the interim rate unilaterally after the appropriate time period has elapsed. /13/ Moreover, Section 5 must be construed as authorizing the imposition of interim rates because this type of rate increase furthers one of Comgress's chief goals in enacting Section 5 -- ensuring that revenues equal the cost of producing the electricity. Section 5 directs the Secretary to dispose of electricity "at the lowest possible rates to consumers consistent with sound business principles" and states that "(r)ate schedules shall be drawn having regard to the recovery * * * of the cost of producing and transmitting such electric energy" (16 U.S.C. (1976 ed.) 825s (emphasis added)). Congress plainly intended rates to be set in a business-like manner that would ensure the recovery of all relevant costs in order to avoid any need for subsidies from the federal treasury. /14/ Interim rates often are essential in ensuring that a rate increase will result in revenues sufficient to cover costs. When a rate is proposed, the determination that the rate will generate sufficient revenues necessarily rests upon the assumption that the rate will be placed into effect on a specified date. If the regulatory process takes longer than expected, and the scheduled implementation of the rate increase is delayed, the revenues generated by the new rate will be reduced. Interim rates prevent this problem from arising because they permit the implementation of a new rate on schedule, subject to refunds with interest if the rate is later disapproved because it is too high. Congress's goal of a federal hydroelectric program administered in an "efficient" manner so as to fully recover its costs in accordance with "sound business Principles" therefore would be quite difficult to achieve if Section 5 were interpreted to probhit the utilization of interim rates. In the present case, for example, the SWPA would have lost almost $1 million in revenues from respondents alone if the rates had not been placed into effect on an interim basis. Finally, the conclusion that Section 5 authorizes interim rates does not conflict with the concern for power customers reflected in Section 5's directive that power should be sold "at the lowest possible rates to consumers consistent with sound business principles." /15/ As we have discussed (see pages 18-20, supra) interim rates clearly constitute a "sound business principle()." They do not unfairly raise rates because the customer receives a refund, with interest, if a lower final rate is adopted. Thus, interim rates simply prevent the government from losing revenues as a result of delay in the approval of a new rate. Indeed, it is the decisions below that are unfair because they permit purchasers of hydroelectric power such as respondents to reap a financial windfall as a result of regulatory delay. b. The prior administrative practice under the Flood Control Act and related statutes of placing rates into effect on an interim basis provides still more support for the conclusion that the statute confers interim rate authority. See Morrison-Knudsen Construction Co. v. Director, Office of Workers' Compensation Programs, 461 U.S. 624, 635 (1983) (interpretation of statute reflected in consistent agency practice is entitled to deference). In United States Department of the Interior, Southereastern Power Administration, 54 F.P.C. 3, motion to dismiss proceedings denied, 54 F.P.C. 1631 (1975), for example, the FPC reviewed a proposed rate increase pursuant to the Flood Control Act and concluded that a hearing was necessary in order to evaluate the proposed new rate. Nonetheless, it permitted the rate to go into effect immediately, "upon the condition that (the Southeastern Power Administration) agrees to refund or credit to its customers such portions of the proposed rates and charges as may result from Commission disapproval" (54 F.P.C. at 6). /16/ The Commission took similar action with respect to two rate increases sought by the Bonneville Power Administration under its essentially identical statutory authority. See United States Department of the Interior, Bonneville Power Administration, 58 F.P.C. 2498, 2502 (1977); United States Department of the Interior, Bonneville Power Administration, 52 F.P.C. 1912, 1919 (1974). /17/ This uncontradicted administrative interpretation of Section 5 makes clear that the provision authorizes the imposition of interim rates. /18/ In sum, the language, legislative history, and purpose of Section 5, as well as administrative practice under the statute, leave no doubt that the Flood Control Act authorized the Secretary of the Interior and the Federal Power Commission to place power rates into effect on an interim basis pending final approval of the rates by the FPC. 2. The Department Of Energy Organization Act. The Department of Energy Organization Act transferred all Flood Control Act rate-setting authority to the Secretary of Energy, and thus empowers the Secretary to place rates into effect on an interim basis pursuant to that statute. Moreover, the consolidation of plenary rate-setting authority in the Secretary provides an independent basis for upholding the Secretary's determination that he may impose interim rates. a. Congress created the Department of Energy in order to "achieve * * * effective management of energy functions of the Federal Government" (42 U.S.C. 7112(2)). It found that "responsibility for energy policy, regulation, and research, development and demonstration is fragmented in many departments and agencies and thus does not allow for the comprehensive, centralized focus necessary for effective coordination of energy supply and conservation programs" (42 U.S.C. 7111(4)), and concluded that "formulation and implementation of a national energy program require the integration of major Federal energy functions into a single department in the executive branch" (42 U.S.C. 7111(5)). See also H.R. Rep. 95-346, 95th Cong., 1st Sess. Pt. 1, at 2-4, 4-7 (1977); S. Rep. 95-164, 95th Cong., 1st Sess. 1-6 (1977). The statute creating the new department, the Department of Energy Organization Act (DOE Act), 42 U.S.C. 7101 et seq., applied these principles to the federal power marketing program, consolidating in the Secretary of Energy all authority to set rates for sales of hydroelectric power under the Flood Control Act. /19/ Sections 302(a)(1) and (2) of the DOE Act, 42 U.S.C. 7152(a)(1) and (2), transferred to the Secretary of Energy "all functions of the Secretary of the Interior under section 825s of title 16 (Section 5 of the Flood Control Act of 1944)," and provided that this authority "shall be exercised by the Secretary, acting by and through" the administrators of the PMAs. In addition, the DOE Act abolished the Federal Power Commission and created the Federal Energy Regulatory Commission (42 U.S.C. 7151(b), 7171, 7172). The FERC was vested with specific categories of authority formerly exercised by the FPC (see 42 U.S.C. 7172(a)), and the remainder of the FPC's responsibilities were transferred to the Secretary of Energy (42 U.S.C. 7151(b)). Since the FPC's authority over the rates charged for sales of federal hydroelectric power was not transferred to the FERC, the plain language of the statute makes clear that this authority now resides in the Secretary. As the Fifth Circuit concluded in Tex-La, "(t)he inevitable conclusion, and the one that nearly everyone has drawn, is that the Secretary of Energy * * * exercises the confirmation and approval function of the old Federal Power Commission" (Pet. App. 30a). /20/ As we have shown (see pages 13-22, supra), prior to 1977 the FPC had authority under the Flood Control Act to approve rates proposed by the Secretary of the Interior on an interim basis. Accordingly, the transfer to the Secretary of Energy of all Flood Control Act rate-setting authority in 1977 plainly endowed the Secretary of Energy with the identical power to place interim rates into effect under that statute. The Secretary delegated his interim rate authority to the Assistant Secretary (Delegation Order No. 0204-33, 43 Fed. Reg. 60636 (1978)), and the interim rate increases placed into effect pursuant to that delegation of authority therefore are authorized by the Flood Control Act. b. This consolidation of authority in the Secretary of Energy did more than transfer the interim rate authority conferred by the Flood Control Act; it supplies an independent basis for concluding that the Secretary may impose interim rate increases. Thus, even if this Court disagrees with our submission that the Flood Control Act authorizes the imposition of interim rates, the Secretary's interim rate authority should be upheld on the basis of his plenary rate-setting authority under the DOE Act. This Court has concluded in several different contexts that plenary authority over utility rates, such as that possessed by the Secretary here, necessarily includes the power to impose interim rates. Trans Alaska Pipeline Rate Cases, 436 U.S. 631, 654-656 (1978); FPC v. Tennessee Gas Transmission Co., 371 U.S. 145, 150-155 (1962); FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 583-585 (1942); The New England Divisions Case, 261 U.S. 184 (1923). /21/ Trans Alaska Pipeline Rate Cases, supra, for example, concerned tariffs filed with the Interstate Commerce Commission by the owners of the Alaska oil pipeline prior to the opening of the pipeline. The Commission exercised its statutory authority to suspend the tariffs because it found that the rates probably were unlawful. In order to enable the pipeline to operate, however, the Commission calculated a reasonable interim rate and stated that it would not suspend a tariff containing that rate, provided that the owners agreed to refund any amount that exceeded the final approved rate. 436 U.S. at 636-637. This Court upheld the Commission's action, which essentially placed into effect an interim rate set by the Commission. The Court observed that the Commission has "powers 'ancillary' to its (power to suspend rates) which do not depend on an express grant of statutory authority." 436 U.S. at 654. Noting that the Commission is obligated to "strike a proper balance" between the interests of carriers and the interests of the public, the Court held that the Commission's action was a reasonable means of accommodating the public interest and the pipeline owners' need for revenues pending a final determination concerning the proper rate. Id. at 654-655; see also FPC v. Natural Gas Pipeline Co., 315 U.S. at 583-585. The same reasoning supports the exercise of interim rate authority at issue here. Indeed, this is an a fortiori case because the Secretary's authority over rates far exceeds that exercised by the ICC. The Secretary not only approves rates, he proposes them in the first instance. If an agency empowered only to suspend a rate may in effect establish an interim rate when required to do so in the public interest, the Secretary's far broader power must be sufficient to enable him to place interim rates into effect when necessary to satisfy the statutory mandate that revenues meet the cost of producing federally-generated hydroelectricity. Moreover, as the Fifth Circuit observed in Tex-La, a contrary conclusion would produce "a most unlikely result" (Pet. App. 66a). Under the system established by the DOE Act, the Secretary of Energy could have dispensed completely with any review by the FERC. Therefore, if the Secretary's decision to authorize the Assistant Secretary to impose interim rates is invalidated, it "would have been struck down because it gave litigants too much 'process' by giving them one last, truly independent review before the FERC. * * * (W)e think that at the very least it requires searching study and careful consideration before we strike down a scheme that gives the complainants too much process" (ibid. (emphasis in original)). c. The Court of Claims nonetheless determined that the Secretary lacks statutory authority to impose rates on an interim basis. This conclusion is largely attributable to the court's view that the DOE Act transferred the FPC'S confirmation and approval authority to the FERC, not to the Secretary. This construction of the DOE Act is clearly incorrect. The linchpin of the Court of Claims' analysis is its statement that "many of the rate approval functions of the FPC were transferred to the FERC" (Pet. App. 10a). As we have discussed (see pages 23-24, supra), however, the plain lanaguage of the statute makes clear that the FPC'S Flood Control Act authority was not transferred to the FERC. The Fifth Circuit in Tex-La correctly pointed out that the Court of Claims simply "misread() the statute" (Pet. App. 30a). The Tex-La court noted that "(a)t a first reading, Title IV of the DOE Act appears to transfer all of the hydroelectric power regulating functions of the Federal Power Commission to the new FERC," but that "a closer reading" reveals that the Flood Control Act authority was not transferred to the FERC (id. at 29a-30a (emphasis in original)). The Court of Claims also relied upon Section 501(a)(1) of the DOE Act, 42 U.S.C. 7191(a)(1), which provides that the Act was not intended to abrogate "administrative procedure requirements" imposed by other statutes. The court concluded (Pet. App. 12a) that "FPC confirmation and approval (prior to implementation of a rate increase) * * * constitutes an additional 'administrative procedure requirement' which * * * continues to apply to administrative actions under the Flood Control Act." But this reading of Section 501(a)(1) would prevent the accomplishment of Congress's principal purpose in enacting the DOE Act by mandating the continuation of bifurcated decisionmaking despite Congress's determination to consolidate authority in order to eliminate inefficiency. As the Tex-La court concluded, "(i)n the eyes of Congress, divisions of authority -- here, between the Secretary of the Interior and the Federal Power Commission -- were a positive evil, something which the statute was designed to correct. Congress did not, in other words, unite the federal hydroelectric ratemaking authority of the Secretary of the Interior and the Federal Power Commission in the person of the Secretary of Energy by mistake. On the contrary, Congress seems to have done everything within its power to indicate that the unification was accomplished on purpose" (Pet. App. 44a (emphasis in original)). Section 501(a)(1) by its terms relates only to the procedures applicable to rulemakings and other types of administrative proceedings. It therefore preserves only "administrative procedure" requirements such as on-the-record hearings and opportunities for cross-examination, and does not apply to substantive matters such as the allocation of authority among agencies. See S. Conf. Rep. 95-367, 95th Cong., 1st Sess. 81 (1977); Pet App. 47a (Tex-La decision) ("Congress intended (Section 501(a)(1)) to apply to the substance of the technical procedural requirements, and not to the identity of the agencies responsible for implementing them") (emphasis in original). /22/ Section 501(a)(1) thus cannot be read as an implicit renunciation of Congress's explicit decision to endow the Secretary of Energy with complete authority over the rates for power sold pursuant to the Flood Control Act. See Escondido Mut. Water Co. v. LaJolla Indians, No. 82-2056 (May 15, 1984), slip op. 10, quoting Clark v. Uebersee Finanz-Korp., 332 U.S. 480, 489 (1947) ("Congress could not have intended to 'paralyze with one hand what it sought to promote with the other'"). /23/ d. The Secretary's determination that the Flood Control Act and the DOE Act authorize interim rates is entitled to "considerable" deference because the Secretary is charged with the administration of the hydroelectric power marketing program. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, slip op 5 (footnote omitted). As long as the Secretary's determination that he is authorized to impose interim rate increases is "based on a permissible construction of the statute(s)," the Secretary's construction of the statutes should be upheld (ibid.). See also id. at 6-7 & n.14; Chemical Manufacturers Ass'n v. Natural Resources Defense Council, Inc., No. 83-1013 (Feb. 27, 1985), slip op. 8-9; Aluminum Co. of America v. Central Lincoln Peoples' Utility District, No. 82-1071 (June 5, 1984), slip op. 8. Deference to the Secretary's determination is especially appropriate because the Secretary's delegation order is "'"a contemporaneous construction of (the DOE Act) by the men charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new"'" (Udall v. Tallman, 380 U.S. 1, 16 (1965) (citations omitted)). In view of the plain language and legislative history of both the Flood Control Act and the DOE Act, the Secretary's reasonable interpretation of the statutes should be upheld by this Court. /24/ B. Respondents' Contracts Do Not Immunize Respondents From Interim Rate Increases Authorized By The Relevant Statutes Respondents' contracts provide that rates may be changed "with the confirmation and approval of the Federal Power Commission" and that a new rate "shall thereupon become effective * * * in accordance with and on the effective date specified in the order of the Federal Power Commission containing such confirmation and approval" (see page 8, supra). As the Court of Claims observed (Pet. App. 13a), these provisions incorporate "the very language of the statute * * * into the contract(s') terms." The contracts accordingly do not insulate respondents from interim rate increases authorized by the Flood Control Act and the DOE Act. 1. The contract terms, like the language of Section 5 that they incorporate, plainly permit the imposition of the interim rate increase at issue here. The order of the Assistant Secretary placing the interim rate increase into effect expressly "confirm(ed) and approve(d)" the new rates (44 Fed. Reg. 13073 (1979)), and therefore satisfied the contracts' requirement that new rates "shall * * * become effective" after "confirmation and approval." /25/ Of course, the contracts refer to "the order of the Federal Power Commission" containing confirmation and approval of the new rate, but the Commission no longer exists and the substitution of the Secretary, the successor to the Commission's authority, cannot seriously be contested. See note 23, supra. Any other result would bar any change in rates for the duration of the contracts -- a result even respondents do not urge. Moreover, because the contract terms so closely resemble the statutory language concerning rate increases, it is impossible to escape the conclusion that the parties intended simply to incorporate the statutory requirement into the contracts, so that any rate increase permissible under the statute also would be permissible under the contracts. See Pet. App. 60a n.22 (Tex-La decision) (contracts were written "to do nothing more than track the language of section 5 of the Flood Control Act"). If the parites had intended to impose additional restrictions upon the government's right to change power rates, it is reasonable to assume that language specifying those restrictions would have been inserted in the contracts. /26/ Respondents (Br. in Opp. 14) and the Court of Claims (Pet. App. 14a) nonetheless assert that the contract provisions bar the Secretary from placing a rate increase into effect unless he follows the procedures previously used by the Federal Power Commission. Even if this interpretation of the contracts were correct, it would not bar the interim rate increase at issue here because respondents received the benefit of these procedural protections before the interim rate increase became effective. The SWPA solicited comments and held meetings with interested parties prior to submitting its rate request (see pages 6-7, supra), and the rate increase was evaluated by the Assistant Secretary before it was placed into effect on an interim basis (44 Fed. Reg. 13068-13073 (1979)). /27/ In addition, respondents had a second full opportunity to challenge the rate increase in the FERC proceeding. Thus, in contrast to the procedure prior to the passage of the DOE Act, under which customers could only contest a proposed rate increase before the FPC, respondents had two opportunities to be heard regarding the rate increase at issue here. /28/ Indeed, in view of the requirement that payments pursuant to the interim rate increase be refunded with interest in the event that a lower rate were approved by the FERC, it is difficult to see how respondents have been injured in any manner by the procedure that was followed. All that they have been deprived of is the opportunity to benefit unfairly from regulatory delay attendant to a rate increase. This fact does not justify interpreting the contracts to bar interim rate increases. 2. Despite the contentions of respondents (Br. in Opp. 8-11) and the Court of Claims (Pet. App. 13a-14a), this Court's decisions in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), and FPC v. Sierra Pacific Power Co., 350 U.S. 348 (1956), do not require a different result. In these cases, utilities subject to regulation under the Natural Gas Act and the Federal Power Act entered into contracts to sell power at a fixed rate. This Court held that the utilities were bound by the contract provisions, even if a rate increase was permissible under the standard set forth in the regulatory statute. In a subsequent decision, United Gas Pipe Line Co. v. Memphis Light, Gas & Water Division, 358 U.S. 103 (1958), the Court held that where a contract provides for sales "not at a single fixed rate, * * * but at what in effect amounted to (the utility's) 'going' rate," the utility remains free to file new rate schedules pursuant to the statutory scheme (id. at 110 (emphasis in original)). The Court stated that "(t)he reason these procedures were unavailable to (the utility) in Mobile was because the company had bargained away by contract the right to change its rates unilaterally" (id. at 111). Respondents' contracts plainly reserve to the government the right to change the rates paid by respondents for hydroelectric power. Therefore, even if the rule of Sierra and Mobile applies to contracts for the sale of power under the Flood Control Act, it plainly does not prohibit the rate increase at issue here. Conclusion The judgment of the court of appeals should be reversed. Respectfully submitted. CHARLES FRIED Acting Solicitor General RICHARD K. WILLARD Acting Assistant Attorney General KENNETH S. GELLER Deputy Solicitor General ANDREW J. PINCUS Assistant to the Solicitor General DAVID M. COHEN JOHN W. SHOWALTER Attorneys SEPTEMBER 1985 /1/ Power produced at projects located in the Tennessee Valley is marketed by the Tennessee Valley Authority, which differs from the PMAs in that it has sole control over the rates it charges for power (16 U.S.C. 831i, 831m). /2/ The Act also transferred the SWPA and the other PMAs from the Department of the Interior to the Department of Energy and provided that the rate-proposing authority "shall be exercised by the Secretary, acting by and through (the PMA) Administrators" (42U.S.C. 7152(a)(1) and (2)). /3/ The decision in Tex-La, which resolved in the government's favor the precise question presented here, is reported at 693 F.2d 392 (5th Cir. 1982), and is reprinted in the appendix to the petition (see Pet. App. 24a-66a). /4/ The FERC is a component of the Department of Energy that succeeded to some, but not all, of the Federal Power Commission's rate-making responsibilities. See 42 U.S.C. 7134, 7171-7175. /5/ The most recent delegation order modifies this allocation slightly by authorizing the PMA Administrators to submit rates to the FERC for final approval and by authorizing the Deputy Secretary of Energy to place rates into effect on an interim basis (Delegation Order No. 0204-108, 48 Fed. Reg. 55664 (1983)). See also 10 C.F.R. Part 903. /6/ The SWPA eventually held two meetings to provide information to the public about the rate proposal and two meetings to receive presentations by members of the public. 44 Fed. Reg. 13069 (1979); 43 Fed. Reg. 36514 (1978); 43 Fed. Reg. 25865-25866 (1978). /7/ The Assistant Secretary initially approved the rate increase for 12 months, but subsequently extended the interim increase until the rates were approved by the FERC. See 45 Fed. Reg. 19303 (1980); 46 Fed. Reg. 19849 (1981). /8/ The city of Piggot, Arkansas, originally was a plaintiff in this action, but its claims were settled in the Claims Court. See City of Fulton v. United States, No. 509-80 C (Cl. Ct. Apr. 6, 1984). /9/ Respondents invoked the Court of Claims' jurisdiction under 28 U.S.C. (Supp. III 1979) 1491, which provided that the Court of Claims had "jurisdiction to render judgment upon any claim against the United States founded * * * upon any express * * * contract with the United States." /10/ Recognizing that the decision in City of Fulton constituted the law of the Federal Circuit (see Capital Electric Co. v. United States, 729 F.2d 743, 746 (Fed. Cir. 1984)), the government sought an initial en banc hearing in the court of appeals, but that request was denied )Pet. App. 3a-4a). /11/ As we discuss below (see pages 20-22), prior to the passage of the Department of Energy Organization Act interim rate schedules were placed into effect under both Section 5 and virtually identical statutes governing the sale of power generated by federal hydroelectric projects in the Pacific Northwest. /12/ The major point of controversy regarding Section 5 was the limitation imposed upon the Secretary's authority to construct power transmission facilities. See Flood Control: Hearings on H.R. 4485 Before a Subcomm. of the Senate Comm. on Commerce, 78th Cong., 2d Sess. 803-812 (1944). However, the discussion in the committee report is not limited to this issue; it expresses Congress's intent generally to grant broad authority for the administration of the power marketing program. /13/ Respondents argue (Br. in Opp. 15) that the absence of express statutory authorization for the imposition of interim rates under the Flood Control Act should be viewed as dispositive because Congress expressly authorized the use of interim rates in statutes regulating the rates of private utilities. However, it is not surprising that a statute dealing with review of rates set by a government agency would be less specific than a statute regulating the conduct of private parties. It is quite reasonable for Congress to confer greater administrative discretion with regard to federal proprietary activities. Thus, all of the provisions of the Federal Power Act concerning regulation of private utility charges are considerably more complex than the analogous provisions of the Flood Control Act. Compare, e.g., 16 U.S.C. 824 with 16 U.S.C. (1976 ed.) 825s. It is therefore inappropriate to draw any adverse inference from the absence of an express authorization of interim rates. /14/ Section 5 is based upon a virtually identical provision of the Bonneville Project Act of 1937 (see 16 U.S.C. 832e). 90 Cong. Rec. 9281 (1944) (remarks of Rep. Whittington); H.R. Conf. Rep. 2051, 78th Cong., 2d Sess. 7 (1944); S. Rep. 1030, supra, at 3. The legislative history of the latter statute reveals that confirmation of rates by the Federal Power Commission was viewed as appropriate at least in part in order to ensure that rates would not be set too low. Thus, one committee report on an earlier version of the statute observed that the Commission's involvement in rate-setting would "eliminate the attempts of private interests to play one Federal project against another in the matter of rates charged for industrial uses, and * * * permit of an orderly and consistent rate policy for the protection and benefit of all the users of surplus electric energy generated at such projects." H.R. Rep. 2955, 74th Cong., 2d Sess. 2 (1936); see also Columbia River (Bonneville Dam), Oreg. and Wash.: Hearings on H.R. 7642 Before the House Comm. on Rivers and Harbors, 75th Cong., 1st Sess. 143-144 (1937) (statement of Secretary Ickes). /15/ The legislative history of the provision of the Bonneville Project Act of 1937 that served as the model for Section 5 (see page 19 note 14, supra) suggests that the Federal Power Commission's review of proposed rates was designed in part to ensure fairness to consumers. Columbia River (Bonneville Dam), Oreg. and Wash.: Hearings on H.R. 7642 Before the House Comm. on Rivers and Harbors, 75th Cong., 1st Sess. 143-144 (1947) (statement of Secretary Ickes); Pet. App. 38a-40a (Tex-La decision). /16/ Respondents (Br. in Opp. 16) and the Court of Claims (Pet. App. 15a-16a) both argue that this example of prior practice is flawed because the Department of the Interior protested the FPC's decision to confirm the rate on an interim basis. However, the Interior Department did not contend that the FPC lacked authority to confirm interim rates; it claimed that the Commission could not take such action in that case because the Commission's authority was restricted to approving or rejecting the rate proposed by the Secretary. See C.A. App. 357, 381-384 (Interior Department filings). The Interior Department's protest therefore does not undermine the conclusion that the Flood Control Act authorized interim rate increases where the Secretary concurred in the Commission's decision to establish an interim rate. Compare United States Department of the Interior, Bonneville Power Administration, 58 F.P.C. 2498, 2501 (1977) (Interior Department requested imposition of interim rate). Now that all rate-setting authority is consolidated in the Secretary of Energy, action by the Secretary is all that is required under the statutes to impose interim rates (see pages 22-24, infra). /17/ The Commission specifically rejected the argument that it lacked the authority to confirm the 1977 rate increase on an interim basis. United States Department of the Interior, Bonneville Power Administration, 59 F.P.C. 1194 (1977). /18/ Respondents assert (Br. in Opp. 15-16) that these decisions interpreting the Flood Control Act are not entitled to deference because they are inconsistent with decisions confirming rates on a final basis. However, confirmation of rates on an interim basis was not required in every case; the statute simply supplied the option of taking such action. Moreover, the Commission's interpretation of the statute is not rendered inconsistent by the fact that it concluded in relatively few situations that the imposition of interim rates was appropriate. As the Fifth Circuit noted in Tex-La (Pet. App. 27a-28a), the PMAs did not require frequent rate increases until the high inflation of the mid-1970s, and the FPC therefore would have had little occasion to place rates into effect on an interim basis prior to that time. /19/ At a congressional hearing concerning the proposal to create a Department of Energy, the chairman of the Federal Power Commission pointed to rate-making for sales of federally-generated hydroelectric power as "an example of (an area in which) * * * greater coordination can be achieved." Department of Energy Organization Act: Hearings on S. 826 and S. 591 Before the Senate Comm. on Governmental Affairs, 95th Cong., 1st Sess. 179 (1977) (statement of Chairman Dunham). Thus, as the Tex-La court concluded, "(f)ar from being overlooked or somehow forgotten, the two-stage ratemaking procedure at issue in the present case represented specifically the kind of inefficiency and fragmentation of authority that the DOE Act was designed to correct" (Pet. App. 46a (emphasis in original)). /20/ The FERC itself has acknowledged that the DOE Act invested the Secretary with sole authority over rates for electricity sold pursuant to the Flood Control Act. See 47 Fed. Reg. 16857, 16858 (1982). /21/ The Court of Claims stated (Pet. App. 11a n.10) that this principle was limited to the Natural Gas Act, but Trans Alaska Pipeline Rate Cases, supra, concerns the authority of the Interstate Commerce Commission and therefore makes clear that the rule is a general one. In addition, state statutes endowing a regulatory body with plenary authority over rates consistently have been interpreted to authorize the imposition of interim rates. See, e.g., Colorado Municipal League v. Public Utilities Commission, 197 Colo. 106, 116-117, 591 P.2d 577, 584 (1979); In re Kauai Electric Division, 60 Hawaii 166, 178-181, 590 P.2d 524, 534-535 (1978); Grindstone Butte Mutual Canal Co. v. Idaho Power Co., 98 Idaho 860, 864, 574 P.2d 902, 906 (1978); Kansas-Nebraska Natural Gas Co. v. State Corporation Commission, 217 Kan. 604, 613-615, 538 P.2d 702, 711 (1975); Chesapeake & Potomac Telephone Co. v. Public Service Commission, 330 A.2d 236 (D.C. 1974). /22/ It is not clear that Section 501(a)(1) even applies here because the statute preserves only procedural requirements set forth in a "provision of any Act, the functions of which are transferred, vested, or delegated pursuant to (the DOE) Act," and the Flood Control Act does not specify any procedural protections. In any event, respondents received all of the procedural protections available in proceedings before the Federal Power Commission. They had opportunities to submit written and oral comments to the SWPA, and the SWPA rates were subject to review by the Assistant Secretary and final review by the FERC. In addition, respondents would have received a refund, with interest, if a lower rate had been approved by the FERC. See pages 6-7, supra. The imposition of the interim rate increase therefore could not have violated Section 501(a)(1). See Pet. App. 55a-58a (Tex-La decision). /23/ Respondents apparently do not dispute this conclusion; they conceded in the court of appeals that "the final confirmation and approval (of the new rate schedule) could have come from the Secretary himself" (C.A. Br. 24 n.11). /24/ The Secretary's interpretation of his authority also is supported by the fact that the 96th Congress -- which immediately followed the Congress that enacted the DOE Act -- expressly approved the Secretary's authority to place rates into effect on an interim basis. In 1980, Congress enacted the Pacific Northwest Electric Power Planning and Conservation Act, 16 U.S.C. 839 et seq., which provides new ratemaking authority with respect to rates charged by the Bonneville Power Administration. The statute authorizes the FERC to place rates into effect on an interim basis, but it empowers the Secretary of Energy "to approve such interim rates during (a) one-year (transition) period in accordance with the applicable procedures followed by the Secretary prior to (the effective date of this Act)" (16 U.S.C. 839e(i)(6)). Thus, Congress considered and approved the Secretary's determination that he possesses authority to impose interim rates. See 126 Cong. Rec. 29812 (1980) (remarks of Rep. Dingell); id. at 27821 (remarks of Rep. Swift). One committee report recognized that "prior to the Department of Energy Organization Act, the Federal Power Commission exercised interim rate approval authority with respect to the Administrator's rates" (S. Rep. 96-272, 96th Cong., 1st Sess. 31 (1979)). In view of the close similarity between the statutes governing the sale of electricity by the Bonneville Power Administration and the Flood Control Act, this legislative history supports the Secretary's interpretation of his authority under the latter statute. It is, of course, necessary to "take great care * * * before relying on the understandings of Members of a subsequent Congress as to the actions of an earlier one" (Heckler v. Turner, No. 83-1097 (Feb. 27, 1985), slip op. 24), but here, as in Turner, Congress was legislating with respect to an issue close to the very question that is presented in this case. Its statements therefore provide additional support for the Secretary's determination that the Flood Control Act and the DOE Act confer authority to impose interim rate increases. See Pet App. 60a-62a (Tex-La decision). /25/ The Court of Claims' statement (Pet. App. 16a) that the contracts require "final" approval of a rate increase prior to its implementation is puzzling because the term "final" does not appear in the relevant provisions of the contracts. /26/ Indeed, the purchasers of electricity that were parties in Tex-La conceded that their contracts adopted the meaning of the statute (see Pet. App. 49a-50a) even though one of the contracts at issue in that case, unlike respondents' contracts, expressly referred to a "final" order of the FPC confirming and approving a new rate (id. at 60a n.22). /27/ These procedures have been made applicable to all proposals for rate changes under the Flood Control Act (10 C.F.R. Part 903). /28/ Respondents state (Br. in Opp. 14) that the contracts require "complete administrative review prior to the new rates taking effect." However, there is no support for this conclusion in the terms of the contracts and, as we have discussed (see pages 20-22, supra), respondents' position is contrary to prior administrative practice.