Respondent, a private utility company, sued to enjoin the
Tennessee Valley Authority (TVA) from supplying TVA power in
alleged violation of § 15d of the TVA Act for use in two small
Tennessee, towns where, as of July 1, 1957, respondent had supplied
94% of the electric power and TVA 6%. At that time, TVA supplied
62% of the power used in all Claiborne County. It supplied most of
the county's rural areas, and on a relatively unprofitable basis.
Respondent's retail rates in the two towns were about 2 1/2 times
those of TVA. Section 15d of the Act bars TVA from expanding sales
outside "the area for which [it] or its distributors were the
primary source of power on July 1, 1957." The District Court upheld
the determination of the TVA Board of Directors that Claiborne
County as a whole constituted TVA's primary service "area," and
dismissed the action. The Court of Appeals reversed, holding that
the towns and a narrow corridor between them and respondent's main
service area in nearby Kentucky constituted
Page 390 U. S. 2
the "area." Both courts ruled against petitioners' contention
that the respondent lacked standing to sue.
1. Respondent, being within the class of private utilities which
§ 15d is designed to protect from TVA competition, has standing to
maintain this suit. Pp. 390 U. S. 5
2. TVA's determination that Claiborne County constituted the
primary service "area" within the meaning of § 15d should be
upheld, since it was within the range of permissible choices
contemplated by the Act and had reasonable economic and technical
support in relation to the statutory purpose of controlling, but
not altogether prohibiting, TVA's territorial expansion. Pp.
390 U. S.
375 F.2d 403, reversed.
MR. JUSTICE BLACK delivered the opinion of the Court.
The question for decision in these cases is whether Congress has
prohibited the Tennessee Valley Authority from competing in the
sale of electricity with respondent, the Kentucky Utilities
Company, in two small villages in Claiborne County, Tennessee, and
in a narrow corridor between the two villages and the
Tennessee-Kentucky state boundary 16 miles away. By § 15d of the
Tennessee Valley Authority Act of 1933, as added by the 1959
amendments to that Act, Congress barred the TVA from expanding its
sales outside "the area for which the Corporation [TVA] or its
distributors were the primary
Page 390 U. S. 3
source of power supply on July 1, 1957," [Footnote 1
] and our problem is therefore the
narrow one of deciding whether these villages and the narrow
corridor are part of an "area" for which TVA was the primary source
of power on the crucial date. The difficulty lies in determining
the location and extent of the "area" to which the statute refers.
In June, 1957, TVA supplied 62% of the power used in all of
Claiborne County, and therefore, if the entire county is an "area"
within the meaning of the statute, TVA would have been the
"primary" source of power, and its expansion into the two villages
Page 390 U. S. 4
permissible. On the other hand, in the villages themselves, TVA
supplied only 6% of the power in June, 1957, while respondent
supplied 94%; thus, if the two villages, either alone or with the
corridor, constitute an "area," TVA would not have been the primary
source of power, and it would be barred by § 15d from expanding
into that area.
The question of statutory interpretation now before us arose in
this way. TVA is the major supplier of electric power in Tennessee
and in many adjoining areas of Alabama, Mississippi, Georgia,
Virginia, and Kentucky. Respondent, whose service area is centered
in Kentucky, has long served customers in Tazewell and New
Tazewell, the two villages within 16 miles of the Kentucky border
in Claiborne County, Tennessee. The power lines of TVA distributors
also crisscross Claiborne County, and TVA has therefore been able
to serve a small number of customers in the two villages, even
though respondent was the predominant source of power. Because
Kentucky Utilities' retail rates for electricity in the two
villages were approximately 2 1/2 times higher for typical
consumers than the rates for TVA power, [Footnote 2
] the value of residential and commercial
properties served by TVA was substantially and uniformly higher
than the value of similar properties served by respondent. This
rate disparity created a seething discontent among residential and
industrial consumers in the villages. Pointing out that they lived
in the very heart of the TVA watershed and in immediate proximity
to TVA's large Norris Lake, these citizens contended that it was
wholly unjust and inequitable to deny them the benefits and
advantages of cheap TVA power. After complaints, planning, and
consultations over a period of more than three years, the local
Page 390 U. S. 5
governments engaged a contractor to build the facilities
necessary to establish a municipal system linked to TVA's cheap
power. Kentucky Utilities' customers immediately began to
discontinue their service and become customers of the municipal
Kentucky Utilities then filed this suit against TVA, the mayors
of the two Tazewells, and the Powell Valley Electric Cooperative, a
TVA distributor, charging them with conspiracy to destroy its
Tazewell business and asking the court to enjoin TVA from supplying
power to the new municipal system in alleged violation of § 15d.
The District Court upheld the determination of the TVA Board of
Directors that the two Tazewells were within TVA's primary service
"area" and dismissed the case, 237 F. Supp. 502 (1964), but the
Court of Appeals reversed, holding that the two villages plus the
corridor constituted an "area," and that TVA accordingly was barred
from extending its service in the Tazewells. 375 F.2d 403 (1966).
We granted certiorari, 386 U.S. 980 (1967), to resolve this
important question in the administration of the TVA Act. We
reverse, and agree with the District Court that the TVA Board
properly determined the relevant service "area" to extend beyond
the two Tazewells and to include the entire county. TVA, as the
primary power source within this area, could therefore properly
make its low-cost power available to consumers in this entire
county area, including the two villages.
Before discussing the merits, we shall briefly consider
petitioners' contention that the Kentucky Utilities Company lacks
standing to challenge the legality' of TVA's activities. We agree
with both the courts below that this contention is without merit.
This Court has, it is true, repeatedly held that the economic
injury which results from lawful competition cannot, in and of
Page 390 U. S. 6
confer standing on the injured business to question the legality
of any aspect of its competitor's operations. Railroad Co. v.
Ellerman, 105 U. S.
(1882); Alabama Power Co. v. Ickes,
302 U. S. 464
(1938); Tennessee Power Co. v. TVA, 306 U.
(1939); Perkins v. Lukens Steel Co.,
310 U. S. 113
(1940). But competitive injury provided no basis for standing in
the above cases simply because the statutory and constitutional
requirements that the plaintiff sought to enforce were in no way
concerned with protecting against competitive injury. In contrast,
it has been the rule, at least since the Chicago Junction
Case, 264 U. S. 258
(1924), that, when the particular statutory provision invoked does
reflect a legislative purpose to protect a competitive interest,
the injured competitor has standing to require compliance with that
provision. See Alton R. Co. v. United States, 315 U. S.
, 315 U. S. 19
(1942); Chicago v. Atchison, T. & S.F. R. Co.,
357 U. S. 77
357 U. S. 83
Petitioners concede, as, of course, they must, that one of the
primary purposes of the area limitations in § 15d of the Act was to
protect private utilities from TVA competition. This is evident
from the provision itself, and is amply supported by its
legislative history. The provision grew out of TVA's efforts to
find some way to meet the cost of new facilities without dependence
upon annual appropriations from Congress. In 1955, TVA began to
seek authority to issue bonds to finance these expenditures.
Although TVA spokesmen assured Congress that the objective was not
territorial expansion, but only improvement of facilities in TVA's
existing service area, many members of Congress were apprehensive,
and thought that, if congressional budgetary control was to be
weakened, some substitute to prevent territorial expansion should
be found. A series of bills to give TVA borrowing power failed to
pass. [Footnote 3
Page 390 U. S. 7
bills were then introduced combining the grant of borrowing
power with various provisions to prohibit territorial expansion,
] and one of these
bills was eventually enacted as the TVA amendments of 1959.
Although discussions of the territorial limitation mentioned a
number of policy reasons for the restriction, [Footnote 5
] it is clear and undisputed that
protection of private utilities from TVA competition was almost
universally regarded as the primary objective of the limitation.
] Since respondent
is thus in the class which § 15d is designed to protect, it has
standing under familiar judicial principles to bring this suit,
see Stark v. Wickard, 321 U. S. 288
321 U. S. 309
(1944); cf. United States v. ICC, 337 U.
, 337 U. S.
-434 (1949), and no explicit statutory provision is
necessary to confer standing. [Footnote 7
Page 390 U. S. 8
Basic to our consideration of the merits of these cases is an
appraisal of the significance of the TVA Board's determination that
all of Claiborne County, including the two Tazewells, constituted a
single "area" in which TVA is the primary source of power.
Petitioners argue that the Court of Appeals gave no weight whatever
to this determination, and urge that the finding should instead
have been treated like an administrative interpretation by an
agency or executive officer, to be set aside only if it is not
properly related to the purposes of the statute. The opinion of the
Court of Appeals is not altogether clear in dealing with this
question, however, [Footnote 8
and respondent has not attempted to argue here that the Court of
Appeals could have decided the matter entirely on its own, without
any consideration of the TVA Board's finding. Rather, respondent
appears to agree with petitioners that the determination of the TVA
Board is entitled to acceptance unless it lies outside the range of
permissible choices contemplated by the statute, and we think this
is the proper rule. The initial determination as to the extent of
the "area" under § 15d must be made by the TVA Board in every case,
since TVA is required under the Act to make power available to
public bodies and cooperatives within the permissible
Page 390 U. S. 9
area. [Footnote 9
] In making
this determination as to the most appropriate boundaries for its
service area, the TVA Board will normally evaluate the economic and
engineering aspects of providing its service to the customers in
question, especially in relation to the particular topography of
the affected region. Given the innate and inevitable vagueness of
the "area" concept and the complexity of the factors relevant to
decision in this matter, we think it is more efficient, and thus
more in line with the overall purposes of the Act, for the courts
to take the TVA's "area" determinations as their starting points,
and to set these determinations aside only when they lack
reasonable support in relation to the statutory purpose of
controlling, but not altogether prohibiting, territorial expansion.
Cf. SEC v. New England Electric, 384 U.
, 384 U. S. 185
(1966); Bates & Guild Co. v. Payne, 194 U.
, 194 U. S.
Tested by this standard, we think the determination of the TVA
Board with respect to Claiborne County should have been upheld by
the court below. Neither the language of § 15d, its legislative
history, nor any of the economic and technical circumstances of
this particular locality suggest that the TVA Board's determination
here exceeded the outer boundaries of choice contemplated in the
Certainly nothing in the language of § 15d(a) itself forecloses
the TVA's present decision. The second paragraph of that section
"Nothing in this subsection shall prevent the Corporation or its
distributors from supplying electric power to any customer within
any area in which the Corporation or its distributors had generally
Page 390 U. S. 10
electric service on July 1, 1957, and to which electric service
was not being supplied from any other source on the effective date
of this Act."
In light of this provision, respondent argues that, even
its "area," TVA may not extend its services to new
customers previously served by a private company. Literally, of
course, this language does not establish such a rule. It simply
states that, when a customer is served by a private utility in this
area of generally established service, an area perhaps broader than
the "area" of primary service which is controlling under the first
paragraph of § 15d(a), the Act may prevent TVA from supplying the
customer; other parts of the subsection must be looked to for the
actual prohibition. This literal reading, moreover, is the only
appropriate one in light of other provisions of the statute. The
first paragraph of § 15d(a) authorizes TVA to provide power not
only within its "area", but also within an additional region
"extending not more than five miles around the periphery of such
area." This is followed by a proviso denying TVA the right to serve
within this additional region any "municipality receiving electric
service from another source on or after July 1, 1957." Since the
Act makes the existence of a private supplier an explicit bar to
TVA expansion only within the additional region, we cannot read the
statute as also making the existence of a private supplier, in and
of itself, an automatic bar to expansion in the primary service
The parties have also called our attention to numerous incidents
in the legislative history suggesting that Congress may have
regarded the very villages involved in this case as either inside
or outside of TVA's service area. Petitioners note that maps placed
before the congressional committees showed the Tazewells as within
TVA's primary service area. Respondent counters that one map
submitted to the House Public Works Committee
Page 390 U. S. 11
showed the Tazewells as within respondent's service area. In
addition, respondent notes that a "gentlemen's agreement" between
TVA and neighboring private utilities had placed the Tazewells
within respondent's area, and respondent refers to a number of
statements indicating that various sponsors of the territorial
limitations intended to enact the "gentlemen's agreement" into
We do not find any of this information particularly helpful in
resolving the question before us. The maps on which petitioners
rely were large-scale representations of TVA's entire multistate
system, and they were submitted to various committees for general
reference. Even if all these maps had placed the Tazewells in the
same area, it would be artificial in the extreme to assume that
Congress actually entertained any specific intention with respect
to these small villages in one tiny portion of the county, the
State and the map. With respect to the "gentlemen's agreement," it
is undeniable that many members of Congress did hope to freeze
completely the existing situation by enactment of the territorial
limitation. Others, the majority of the Senate Public Works
Committee in particular, undoubtedly sought to include language
that would authorize adjustments and permit a certain amount of
elasticity in the availability of TVA service. We think it is
sufficient to note, without tracing all the changes in the wording
of the territorial limitation, that the language of the Act in its
final form is a compromise, and that the views of those who sought
the most restrictive wording cannot control interpretation of the
Finally, we think that, apart from the structure of the Act and
its legislative history, the facts of the situation in Claiborne
County, in Tennessee, and in Kentucky support, rather than
undercut, the TVA Board's determination. The parties place great
stress on the question
Page 390 U. S. 12
whether respondent's service area should be characterized as a
"peninsula" attached to its main region of service, or as a mere
"island" surrounded by TVA territory, and therefore more properly
subject to TVA intrusion. But we can attribute no controlling
significance to such characterizations. The most isolated area of
private service will necessarily be connected to the private
company's main area by at least one power line such as the one
present here, and the company may even, as here, serve scattered
customers along the line -- if, indeed, the region contains any
customers to serve. At the same time, a broad area served almost
entirely by a private company and contiguous with its main service
area may be crisscrossed by the lines of TVA distributors and TVA
may even have scattered customers along these lines; the fact that
the private company was thus surrounded by TVA might not, under
this statute, justify TVA expansion into the "peninsula" or
"island," whatever it may be, served by private power. In the
present cases, respondent did serve a substantial number of
customers in the corridor between the Tazewells and its main
service area in Kentucky, but, if a "peninsula," it was, at best, a
very narrow and tiny one in relation to the possible patterns of
power distribution. TVA, on the other hand, served most of the
rural areas in Claiborne County, and had a substantial minority of
the customers in the Tazewells themselves. Under these
circumstances, the TVA Board could properly have concluded that the
pattern of electric power distribution would be more sensible and
efficient if TVA competed in the entire Tazewell municipal area as
well as serving the relatively unprofitable rural customers, many
of whom were rather close to respondent's transmission line into
the Tazewells. In addition, the Board could have considered the
existence of its significant, though not primary, service in the
Tazewells themselves as a compelling reason for including these
villages in its
Page 390 U. S. 13
"area," since the factors supporting inclusion were, in any
event, significant, and since the great disparity of rates in the
villages had resulted in significant economic dislocations.
Under all these circumstances, we cannot say that the conclusion
of the TVA Board in the present cases is incompatible with the
"area" concept formulated in the Act. We therefore reverse the
judgment of the Court of Appeals and affirm that of the District
It is so ordered.
MR. JUSTICE DOUGLAS and MR. JUSTICE MARSHALL took no part in the
consideration or decision of these cases.
* Together with No. 50, Powell Valley Electric Cooperative
v. Kentucky Utilities Co.,
and No. 51, Tennessee Valley
Authority v. Kentucky Utilities Co.,
also on certiorari to the
Tennessee Valley Authority Act of 1933, § 15d(a), 73 Stat. 280,
as amended, 73 Stat. 338, 16 U.S.C. § 831n(a). The full text of the
relevant portion of § 15d(a) is as follows:
"Unless otherwise specifically authorized by Act of Congress the
Corporation shall make no contracts for the sale or delivery of
power which would have the effect of making the Corporation or its
distributors, directly or indirectly, a source of power supply
outside the area for which the Corporation or its distributors were
the primary source of power supply on July 1, 1957, and such
additional area extending not more than five miles around the
periphery of such area as may be necessary to care for the growth
of the Corporation and its distributors within said area:
That such additional area shall not, in
any event, increase by more than 2 1/2 percentum (or two thousand
square miles, whichever is the lesser) the area for which the
Corporation and its distributors were the primary source of power
supply on July 1, 1957: And provided further,
That no part
of such additional area may be in a State not now served by the
Corporation or its distributors or in a municipality receiving
electric service from another source on or after July 1, 1957, and
no more than five hundred square miles of such additional area may
be in any one State now served by the Corporation or its
"Nothing in this subsection shall prevent the Corporation or its
distributors from supplying electric power to any customer within
any area in which the Corporation or its distributors had generally
established electric service on July 1, 1957, and to which electric
service was not being supplied from any other source on the
effective date of this Act."
For the owner of an electrically heated home, TVA power might
cost $30.50 for a winter month as against $75.53 for the identical
amount of power supplied by respondent.
S. 2373, 84th Cong., 1st Sess. (1955); H.R. 4266, 85th Cong.,
1st Sess. (1957).
S. 1855, S. 1869, S.1986, S. 2145, 85th Cong., 1st Sess. (1957);
S. 931, H.R. 3460, 86th Cong., 1st Sess. (1959).
One of the Senators active in framing the territorial limitation
expressed concern over TVA's powerful bargaining position with
respect to its purchase of coal. See
S.Rep. No. 470, 86th
Cong., 1st Sess., 54 (1959) (supplemental views of Senator
See, e.g., id.
at 9 (majority report); id.
54-55 (supplemental views of Senator Randolph); 105 Cong.Rec. 13053
(July 9, 1959) (remarks of Senator Cooper); id.
(remarks of Senator Holland); id.
at 13055 (remarks of
Senator Kerr); id.
at 13060-13061 (remarks of Senator
at 13061 (remarks of Senator Byrd);
hearings on H.R. 3460 before House Committee on Public Works, March
10-11, 1959, 86th Cong., 1st Sess., 110, 115 (testimony of
Representative Vinson); id.
at 122 (testimony of
Petitioners' reliance on Kansas City Power & Light Co.
96 U.S.App.D.C. 273, 225 F.2d 924, cert.
350 U.S. 884 (1955), is thus misplaced. The Court in
ruled that an explicit statutory provision was
necessary to confer standing because of the "long established rule"
that an injured competitor cannot sue to enforce statutory
requirements not designed to protect competitors. In the case of
statutes concerned with protecting competitive interests, the "long
established rule" is, of course, precisely the opposite.
The Court of Appeals stated at one point:
"But, TVA argues, the 1959 Act must be read as committing to its
Board of Directors authority to determine 'the area' in which it
was the primary source of power on that date. We find no words in
the Act which directly or impliedly delegated to TVA's Board such
375 F.2d at 412. Later in its opinion, however, the court
suggests that this statement was not intended to deny any role to
the Board's determination
"We hold that the resolution of the TVA Board did not foreclose
the testing of its validity by the District Judge or by this Court
on this appeal."
375 F.2d at 415.
§ 12 of the Tennessee Valley Authority Act, 48
Stat. 65, 16 U.S.C. § 831k.
MR. JUSTICE HARLAN, dissenting.
These cases present a narrow question of statutory construction
upon which differing views might reasonably be entertained. I
cannot, however, agree that the position now adopted by the Court
will satisfactorily achieve the purposes evidently sought by
Congress in 1959. I therefore respectfully dissent.
The scope of judicial review of administrative action is, of
course, governed principally by the terms and purposes of the
underlying statutory system. Compare generally
Administrative Law Treatise § 30.03 (1958); Jaffe, Judicial Review:
Question of Law, 69 Harv.L.Rev. 239; Jaffe, Judicial Control of
Administrative Action 546 et seq.
(1965). The purposes of
these statutory provisions are uncommonly plain. The Court
acknowledges, as it must, that
"it is clear and undisputed that protection of private utilities
from TVA competition was almost universally regarded as the primary
objective of the [service area] limitation."
at 390 U. S. 7
The provisions in question were expected to protect private
utilities by "defin[ing]" and "limit[ing]" the
Page 390 U. S. 14
"working arrangement that now exists with respect to" the
Authority's service area. S.Rep. No. 470, 86th Cong., 1st Sess., 8.
They were thus intended to constrict the Authority's discretion as
to the expansion of its area of service. It is no disparagement of
the Authority to recognize that an orderly system of law does not
place the enforcement of a restraint upon discretion into the
unfettered hands of the party sought to be restrained; surely,
therefore, the scope of judicial review of proceedings involving
such limitations should be measured generously.
The role of the courts should, in particular, be viewed
hospitably where, as here, the question sought to be reviewed does
not significantly engage the agency's expertise. This is an
instance "where the only or principal dispute relates to the
meaning of the statutory term," NLRB v. Marcus Trucking
286 F.2d 583, 591; it may, as Judge Friendly has noted,
therefore appropriately be denominated a "question of law."
It presents issues on which courts, and not the
Authority, are relatively more expert. See
at § 30.04. No doubt "economic and engineering
U. S. 9
, including topography, may influence the
Authority's wish to expand its area of service, but such factors
can hardly prescribe the terms or stringency of Congress'
prohibitions against expansion.
In light of these considerations, I am unable to accept this
decision, the effect of which is to restrict severely the scope of
judicial review of the Authority's determinations under § 15d(a).
The Court forbids reviewing courts to set aside such determinations
unless they lack "reasonable support," and then discovers such
support here in the most minimal evidence. [Footnote 2/1
] At bottom, the support
Page 390 U. S. 15
adduced for this determination by the Court consists of two
facts: first, the Authority's distributor served on July 1, 1957,
eight customers in New Tazewell and 20 customers in Tazewell;
] and second, at least
some of the other residents of the two municipalities quite
understandably would prefer to pay the lower rates for electrical
power charged by the Authority. [Footnote 2/3
] If these facts illustrate the "reasonable
support" demanded by the Court, Congress' stringent limitation upon
the Authority has proved extraordinarily fragile. [Footnote 2/4
Page 390 U. S. 16
Neither the statute nor the pertinent legislative history
provides any formula for the precise measurement of the Authority's
service area. However, given Congress' clear purpose to restrict
stringently the expansion of the area served by the Authority on
July 1, 1957, I think that the emphasis placed by the Court of
Appeals on the number of customers served on that date by
respondent and the Authority offers the basis of a sensible and
practical standard. Certainly Congress did not wish or expect that,
as this Court now holds, the question should be left largely, if
not entirely, in the hands of the Authority. I would therefore
affirm the judgment below for the reasons given in Judge
O'Sullivan's opinion for the Court of Appeals, 375 F.2d 403,
supplemented by the considerations discussed in this opinion.
It should be noted that the agency determination upon which the
Court places so much weight was reached at a "special meeting" of
the Board of Directors on August 26, 1964, more than eight months
after respondent filed its complaint, and only three weeks before
trial. One of the staff memoranda upon which the determination was
based refers specifically to this litigation. One might have
supposed that a determination which was made post litem
warranted at least cautious treatment.
The Court's choice of descriptive phrase is noteworthy. The
Court suggests that the Authority's distributor served "a
substantial minority" of the customers in the two Tazewells. The
District Court found, in fact, that, on July 1, 1957, respondent
served 95.3% of those customers. 237 F. Supp. 502, 513.
The Court intimates darkly that "economic dislocations" have
occurred. The pertinent evidence appears to consist at bottom of
allegations that housing and other forms of economic development
tend to locate in areas in which the Authority's less expensive
electrical power is available. Surely the Court does not suppose
that Congress in 1959 was unaware that the Authority's electrical
power is relatively inexpensive, or that it did not recognize that
those who reside outside the Authority's service area would find it
economically desirable to have that area extended so as to include
It is pertinent to note that neither of the two staff memoranda
upon which the Authority's belated determination was explicitly
based included among the "facts which appear to be relevant"
(Memorandum from the Manager of Power to the General Manager,
Tennessee Valley Authority, August 25, 1964, 2 Transcript of Record
801) any references to "economic and engineering aspects"
at 390 U. S. 9
even to any "economic dislocations" (ante
at 390 U. S.
Whatever the relevance of these factors in the eyes of the
Court, the Authority's staff appears to have thought them
immaterial. The determination itself does not, of course, refer to