18 C.F.R. § 2.17

Price discrimination and anticompetitive effect (price squeeze issue)

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To implement compliance with the Supreme Court decision in F.P.C. v. Con-Way Corp., 426 U.S. 271 (1976), aff'g 510 F. 2d 1264 (D.C. Cir. 1975) and to expedite the consideration of price squeeze issues in wholesale electric rate proceedings, the Commission adopts the following procedures for raising price squeeze issues which are to be followed unless they are demonstrated in an individual case to be inadequate:

(a) Any wholesale customer, state commission or other interested person may file petitions to intervene alleging price discrimination and anticompetitive effects of the wholesale rates. In order to have the issue of price discrimination considered in the rate proceeding, the intervening customer or other interested person must support its allegation by a prima facie case. The elements of the prima facie case shall include at a minimum:

(1) Specification of the filing utility's retail rate schedules with which the intervening wholesale customer is unable to compete due to purchased power costs;

(2) A showing that a competitive situation exists in that the wholesale customer competes in the same market as the filing utility;

(3) A showing that the retail rates are lower than the proposed wholesale rates for comparable service;

(4) The wholesale customer's prospective rate for comparable retail service, i.e. the rate necessary to recover bulk power costs (at the proposed wholesale rate) and distribution costs;

(5) An indication of the reduction in the wholesale rate necessary to eliminate the price squeeze alleged.

(b) Where price squeeze is alleged, the Commission shall, in the order granting intervention, direct the Administrative Law Judge to convene a prehearing conference within 15 days from the date of the order for the purpose of hearing intervenors' request for data required to present their case, including prima facie showing, on price squeeze issues.

(c) Within 30 days from the date of the conference the filing utility shall respond to the data requests authorized by the Administrative Law Judge.

(d) Within 30 days from the filing utility's response, the intervenors shall file their case-in-chief on price squeeze issues, which shall include their prima facie case, unless filed previously.

(e) The burden of proof (i.e. the risk of nonpersuasion) to rebut the allegations of price squeeze and to justify the proposed rates are on the utility proposing the rates under section 205(e) of the Federal Power Act.

(f) In proceedings where price squeeze is an issue, the Secretary shall include the state commission, agency or body which is responsible for regulation of retail rates in the state affected in the service list maintained under § 385.2010(c) of this chapter.

[Order 563, 42 FR 16132, Mar. 25, 1977, as amended by Order 225, 47 FR 19054, May 3, 1982]

Notes of Decisions

Cited in 15 cases, 1977–2011 · leading case: Town of Norwood v. Fed. Energy Regulatory Comm'n, 202 F.3d 392 (1st Cir. 2000).

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Town of Norwood v. Fed. Energy Regulatory Comm'n, 202 F.3d 392 (1st Cir. 2000). · cites it 2× “18 C.F.R. § 2.17 provides special procedures for triggering a hearing where a wholesale customer makes a prima facie showing that price discrimination results in a "price squeeze” (in short, a combination of high wholesale prices and low retail prices that makes it impossible…”

Town of Concord, Massachusetts v. Boston Edison Co., 915 F.2d 17 (1st Cir. 1990). “Fifth and finally, a distributor who disagrees with the utility’s, or the commission’s, cost-allocation methods or with its rates, or who believes that a price squeeze will harm it (whether or not the price squeeze also harms the competitive process), has an administrative…”

Nat'l Commc'ns Ass'n v. AT & T Corp., 238 F.3d 124 (2d Cir. 2001). “17 (e) (burden-shifting furthers the policy of the anti-discrimination provision of the Federal Power Act in price-squeeze situations, where a dominant utility supplier competes with a wholesale customer in a retail market). Taking all these factors into consideration, we find…”

Kansas Cities v. Fed. Energy Regulatory Comm'n, Kansas Gas & Elec. Co., Intervenor, 723 F.2d 82 (D.C. Cir. 1983). “2d at 88-89; 18 C.F.R. § 2.17 (1983); Public Service Co.”

Illinois Cities of Bethany v. Fed. Energy Regulatory Comm'n, Cent. Illinois Pub. Serv. Co., Intervenor, 670 F.2d 187 (D.C. Cir. 1981). · cites it 2× “18 C.F.R. § 2.17 . . Respondent’s Petition For Rehearing and Suggestion For Rehearing En Banc at 8 n.”

Cities of Bethany v. Fed. Energy Regulatory Comm'n, 727 F.2d 1131 (D.C. Cir. 1984). “See 18 C.F.R. § 2.17 (1983). See also Illinois Cities of Bethany v.”

City of Mishawaka, Indiana v. Indiana & Michigan Elec. Co., 560 F.2d 1314 (7th Cir. 1977). “A new regulation, 18 CFR § 2.17 , entitled “Price discrimination and anti-competitive effect (price squeeze issue),” was issued on March 21, 1977, to implement the Commission’s mandate under Conway.”

City of Winnfield, Louisiana v. Fed. Energy Regulatory Comm'n, Louisiana Power & Light Co., Intervenor, 744 F.2d 871 (D.C. Cir. 1984). “See 18 C.F.R. § 2.17 (e) (1983) (burden of proof to justify new rates referred to as “risk of non-persuasion”).”

City of Newark v. Delmarva Power & Light Co., 467 F. Supp. 763 (D. Del. 1979). “On August 25, 1978, the Commission further ordered that the proceedings with respect to the proposed rates would include a “price squeeze investigation” pursuant to the provisions of 18 C.F.R. § 2.17 , 42 Fed.Reg. 16131. It is likely that a number of issues which will confront…”

Borough of Lansdale v. PP & L, INC., 503 F. Supp. 2d 730 (E.D. Pa. 2007). · cites it 2× “Plus, the federal and state regulatory systems do not work in perfect harmony, so it is possible for a utility to time or manipulate its rate filings in a way that causes a price squeeze.”

Cities of Batavia v. Fed. Energy Regulatory Comm'n, 672 F.2d 64 (D.C. Cir. 1982). · cites it 4× “563, 18 C.F.R. § 2.17 , which set out the following guidelines for the establishment of a prima facie price squeeze case: (1) Specification of the filing utility’s retail rate schedules with which the intervening wholesale customer is unable to compete due to purchased power…”

Cities of Anaheim, Riverside, Banning, Colton, & Azusa, California v. Fed. Energy Regulatory Comm'n, 941 F.2d 1234 (D.C. Cir. 1991). · cites it 2× “See 18 C.F.R. § 2.17 (a) (1991). As will be seen, the hearing process is dominated by a progression of evidentiary presumptions.”

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