Consolidated Edison Co. of New York, Inc. v. Public Service Commission | Cases | Westlaw

At the outset, petitioners challenge the commission's statutory authority to regulate the content of billing envelopes and the promotional advertising practices of public utilities. It is, of course, a fundamental postulate of administrative law that the Public Service Commission, like other agencies, is possessed of only those powers expressly delegated by the Legislature, together with those powers required by necessary implication (see, e. g, Suffolk County Bldrs. Assn. v. County of Suffolk, 46 N.Y.2d 613, 415 N.Y.S.2d 821, 389 N.E.2d 133; Matter of National Merchandising Corp. v. Public Serv. Comm. of State of N. Y., 5 N.Y.2d 485, 489, 186 N.Y.S.2d 47, 49, 158 N.E.2d 714, 715; cf. Matter of Bates v. Toia, 45 N.Y.2d 460, 464, 410 N.Y.S.2d 265, 267, 382 N.E.2d 1128, 1130). Nevertheless, the absence of explicit statutory authorization ***34 need not be fatal to a given assertion of regulatory power by the commission. For, as we have recognized previously, the Legislature on occasion broadly declares its will, specifying only the goals to be achieved and policies to be promoted, while leaving the implementation of a program to be worked out by an administrative body (see, e. g., Matter of Sullivan County Harness Racing Assn. v. Glasser, 30 N.Y.2d 269, 276, 332 N.Y.S.2d 622, 625, 283 N.E.2d 603, 606; cf. Matter of Bates v. Toia, supra ). In such cases, the sheer breadth of delegated authority precludes a precise demarcation of the line beyond which the agency may not tread. What is called for, rather, is a realistic appraisal of the particular situation to determine whether the administrative action reasonably promotes or transgresses the pronounced legislative judgment (cf. **753 Matter of Broidrick v. Lindsay, 39 N.Y.2d 641, 646, 385 N.Y.S.2d 265, 267, 350 N.E.2d 595, 597).

In the context of this case, without doubt, the Legislature has conferred vast power upon the Public Service Commission (see, e. g., Public Service Law, ss 4, 5, 65, 66; cf. Matter of Public Serv. Comm. of State of N. Y. v. Jamaica Water Supply Co., 42 N.Y.2d 880, 397 N.Y.S.2d 784, 366 N.E.2d 872, affg. 54 A.D.2d 10, 386 N.Y.S.2d 230). Indeed, the commission is expressly endowed with “all powers necessary or proper to enable it to carry out the purposes of” the Public Service Law (Public Service Law, s 4, subd. 1). Added to this is the commission's specific power of “general supervision of all gas corporations and electric corporations” and “all gas plants and electric plants” (Public Service Law, s 66, subd. 1).

It necessarily follows, therefore, that the commission possesses ample power to prescribe reasonable measures designed to prevent wasteful consumption or unneeded expansion of utility services. By prohibiting promotional advertising of electric power, the commission has taken precisely such a step. In its expertise, the commission could have reasonably concluded that promotional advertising might tend to increase injudicious and unnecessary consumption of electrical power. Given this, the authority for the advertising ban becomes apparent.

Nor did the commission exceed its jurisdiction by prohibiting the inclusion of inserts in utility billing envelopes. The Legislature has granted the commission express authority “to fix and alter the format and informational requirements of bills utilized by public and private gas corporations, electric corporations and gas and electric corporations in levying charges for service, to assure simplicity and clarity” (Public Service Law, s 66, subd. 12-a).¹ Incident to that authority and in the same subdivision ***35 it is provided that the “commission shall further ensure periodic explanation of applicable rates and rate schedules for the purpose of assisting customers in making the most efficient use of energy.” Thus, the Legislature has authorized the commission to regulate not only the format and informational content of the bill itself but the entire billing communication. Petitioners invite us to read these provisions narrowly, restricting the commission's jurisdiction to the actual billing instrument itself rather than extending it to the entire contents of the billing envelope. This *104 artificial distinction must be rejected. By necessary implication, the statute, if it is to amount to more than an empty adage, must provide the commission with authority to oversee the distribution of bill inserts. Were the agency's power construed to extend only to the bill itself, control over informational content and format “to assure simplicity and clarity” could be severely hampered if not totally undermined. While the bill **754 might be simple and clear, utilities could literally inundate consumers with a morass of irrelevant and conflicting data, forms, and pamphlets, causing confusion and oversight. Indeed, granting the utilities unfettered discretion to include all materials would negate the legislative goals of simplicity and clarity. It is difficult to conceive a legislative intent to permit such a disordered pattern. A more acceptable alternative is an interpretation of the statute empowering the commission to regulate the billing process as a whole.

This construction becomes all the more reasonable when viewed in the context of the entire regulatory scheme. Rather than restricting the PSC's authority, the Legislature has invested that agency with all powers needed to carry out the purposes of the Public Service Law, as well as power to supervise generally the operation of electric and gas corporations and electric and gas plants (Public Service Law, s 4, subd. 1; s 66, subd. 1). In view of the expansive definitions of electric and gas plants (Public Service Law, s 2, subds. 10, 12), the commission's supervisory authority must be taken to extend to those “useful and necessary service(s) (and property) which facilitates” or are used in connection with the “manufacture, conveying, transportation, distribution, sale, or furnishing” of utility power (Matter of National Merchandising Corp. v. Public Serv. Comm., 5 N.Y.2d 485, 490-491, 186 N.Y.S.2d 47, 51, 158 N.E.2d 714, 716, Supra ; Public Service Law, s 2, subds. 10, 12). Control of the billing procedure, a process necessarily adjunct to the furnishing of utility service, thus fits neatly into the PSC's supervisory role. This supervisory power, combined with the more specific billing regulatory authority, provides ample justification for commission oversight of billing envelope content.

Analysis in the First Amendment area proceeds on one of two tiers, depending upon the nature of the restriction which government has imposed (see, e. g., Ely, Flag Desecration: A Case Study in the Roles of Categorization and Balancing in First Amendment Analysis, 88 Harv.L.Rev. 1482). At one level, government regulation designed to suppress traditional communicative activity because of its content or potential impact is subject to the most rigorous scrutiny. Absent some compelling justification, such as a likelihood that speech will incite “imminent lawless action”, ***36 content-oriented restrictions may not stand (Brandenburg v. Ohio, 395 U.S. 444, 447, 89 S.Ct. 1827, 23 L.Ed.2d 430; see Hess v. Indiana, 414 U.S. 105, 94 S.Ct. 326, 38 L.Ed.2d 303; United State v. O'Brien, 391 U.S. 367, 376-377, 88 S.Ct. 1673, 20 L.Ed.2d 672; see, generally, Gunther, Learned Hand and the Origins of Modern First Amendment Doctrine: Some Fragments of History, 27 Stan.L.Rev. 719). On the second tier are those governmental measures which, although not directly aimed at all communication, inhibit the free flow of information or ideas. The validity of such a restraint is gauged by balancing the various competing interests, with due regard for the status of First Amendment rights in our constitutional scheme. Thus, so long as a facially neutral regulation does not unduly constrict the exercise of protected rights, it is not unconstitutional (compare Buckley v. Valeo, 424 U.S. 1, 60-84, 96 S.Ct. 612, 46 L.Ed.2d 659, with Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155; see, generally, Note, Less Drastic Means and the First Amendment, 78 Yale L.J. 464).

It is well settled that government may impose reasonable restrictions upon the time, place and manner of communication *106 (see, e. g., Grayned v. City of Rockford, 408 U.S. 104, 115-117, 92 S.Ct. 2294, 33 L.Ed.2d 222; Kovacs v. Cooper, 336 U.S. 77, 69 S.Ct. 448, 93 L.Ed. 513; Cox v. New Hampshire, 312 U.S. 569, 575, 61 S.Ct. 762, 85 L.Ed. 1049). To constitute a valid time, place and manner restriction, a regulation must be content neutral, supported by a significant governmental interest, and not foreclose alternative channels of expression (e. g., Virginia Pharmacy Bd. v. Virginia Consumer Council, 425 U.S. 748, 771, 96 S.Ct. 1817, 48 L.Ed.2d 346). Respondent PSC urges that its billing insert decree satisfies these criteria. It is correct.

There is no doubt but that the regulation leaves open numerous alternative means of communication. On its face, the ban only reaches expressional activity conducted through the billing envelope. Whatever other modes of speech were open to utilities prior to the effective date of the commission order remain available. That the cost of utilizing these alternative channels may be higher is not determinative, especially where, as here, petitioner has wholly failed to demonstrate that it will be effectively precluded from exercising its rights (see, e. g., Kovacs v. Cooper, 336 U.S. 77, 88-89, 69 S.Ct. 448, 93 L.Ed. 513, Supra ).

Until recently, communication in the commercial sphere would not have been accorded any First Amendment recognition (compare Valentine v. Chrestensen, 316 U.S. 52, 62 S.Ct. 920, 86 L.Ed. 1262, with Bigelow v. Virginia, 421 U.S. 809, 95 S.Ct. 2222, 44 L.Ed.2d 600). While now entitled to a measure of constitutional protection, the full panoply of safeguards afforded more traditional communications does not necessarily attach (Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 456, 98 S.Ct. 1912, 56 L.Ed.2d 444). Our task, therefore, is to apply the emerging principles of the commercial speech doctrine to the present context.

By the same token, where the importance of the free flow of commercial information is diminished, either because of market structure of the industry or hazards associated with a particular means of communication, First Amendment protection reaches its nadir.² This dichotomy is aptly illustrated by Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444, Supra, where a prohibition of in-person solicitation by attorneys was upheld. Ohralik Recognizes the “ ‘commonsense’ distinction between speech proposing a commercial transaction, which occurs in an area traditionally subject to government regulation, and other varieties of speech.” For this reason, commercial speech occupies a “subordinate position in the scale of First Amendment values” (Id., at p. 456, 98 S.Ct. at p. 1918). Thus, a particular mode of advertising which would not well serve the societal interest in informed decisionmaking, such as in-person solicitation, may constitutionally be banned: “In-person solicitation is as likely as not to discourage persons needing counsel from engaging in a critical comparison of the ‘availability, nature, and prices' of legal services * * * it actually may disserve the individual and societal interest * * * in facilitating ‘informed and reliable decisionmaking’ ” (Id., at pp. 457-458, 98 S.Ct. at p. 1919). Such speech, Ohralik teaches, may be prohibited in the public interest.

Applying these principles, the ban on promotional advertising of electricity is consistent with First Amendment strictures. Public utilities, from the earliest days in this State, have been regulated and franchised to serve the commonweal. Our ***39 policy is “to withdraw the unrestricted right of competition between corporations occupying * * * the public streets * * * and supplying the public with their products or utilities which are well-nigh necessities” (People ex rel. New York Edison Co. v. Willcox,207 N.Y. 86, 99, 100 N.E. 705, 708; Matter of New York Elec. Lines Co.,201 N.Y. 321, 94 N.E. 1056). The realities of the situation all but dictate that a utility be granted monopoly status (see People ex rel. New York Elec. Lines Co. v. Squire, 107 N.Y. 593, 603-605, 14 N.E. 820, 823). To protect against abuse of this superior economic *110 position, extensive governmental regulation has been deemed a necessary coordinate (see People ex rel. New York Edison Co. v. Willcox, supra, 207 N.Y. at pp. 93-94, 100 N.E. at pp. 706-707).

Indeed, promotional advertising is not at all concerned with furnishing information as to the “availability, nature, and prices” of electrical service. It seeks, instead, to encourage the increased consumption of electricity, whether during peak hours or off-peak hours. Thus, not only does such communication lack any beneficial **758 informative content, but it may be affirmatively detrimental to the society. It would not strain the bounds of judicial notice for us to take cognizance of the present energy crisis. Conserving diminishing resources is a matter of vital State concern and increased use of electrical energy is inimical to our interests. Promotional advertising, if permitted, would only serve to exacerbate the crisis. In short, this constitutes a compelling justification for the ban.