Stanley Forman Reed

“ No public utility shall issue any security, or assume any obligation or liability as guarantor, indorser, surety, or otherwise in respect of any security of another person, unless and until, and then only to the extent that, upon application by the public utility, the Commission by order authorizes such issue or assumption of liability. ”

“ Jersey Central owns and operates a transmission line seven-eighths of a mile long extending from its power plant to another point in the State where the line connects to a cable owned by Public Service running to a station owned by the latter at Perth Amboy, New Jersey. Over these connecting facilities exchanges of two sorts are made. One is of emergency service whereby, in case of a break down in either company's system, energy is drawn from that of the other. ”

“ The business of transmitting and selling electric energy is said to be affected with a public interest and federal regulation of a portion of that business is declared necessary. Section 201 (a) . The fact that a company is engaged in this business is not determinative of its inclusion in this act. The determinative fact is the ownership of facilities used in transmission. Such use makes the owner or operator of such facilities a public utility under the act (e) . We conclude, therefore, that Jersey Central is a public utility under this Act. ”

“ A 'wholesale' transaction is defined to mean the sale of electric energy for resale and the Commission is given no jurisdiction over local rates even where the electric energy moves in interstate commerce. ”

“ Any flow of electric energy from Jersey Central to Public Service is carried from the point of connection over Public Service cable to a so-called bus bar, a facility of Public Service located in New Jersey having a number of connections, one of which is with a transmission line connecting the Public Service system with that of Staten Island Edison in the State of New York. ”

“ I am of opinion that the provisions of the Act require the contrary conclusion, and this reading of the statute is powerfully reinforced when the mischief intended to be remedied and the legislative history of the Act are considered. ”

“ From this record of the pains taken by the Congress to make clear the respective responsibilities of federal and state authorities, we conclude that power was given the Federal Power Commission by section 203 to regulate the present transaction. ”

“ Section 204 is not rendered useless by subsection (f) since it is applicable to states without state commissions authorized to regulate security issues. See notes 12 and 13, supra. In view of the contemporaneous legislation as to holding companies (Title I, Public Utility Act of 1935, 49 Stat. 803) which left independent operating companies or subsidiaries of unregistered holding companies free to acquire securities in other operating companies, [20] it is difficult to conclude that by section 201 (a) Congress limited the regulation of the acquisition of securities by section 203 (a) . ”

“ Their examination of Public Service records discloses that there were moments of time between January 26, 1937, and September 6, 1938, when all the energy flowing into the bus bar at Mechanic Street came from Jersey Central and at the same moments energy flowed from Mechanic Street in New Jersey to the Atlantic substation in New York. As no pools of energy exist from which the flow to New York could have been drawn, it necessarily follows that Jersey Central production was instantaneously transmitted to New York. ”