United States Court of Appeals, District of Columbia Circuit
January 8, 2018
Petition for Review of Orders of the Federal Energy
F. Eisenstat argued the cause and filed the briefs for
Nicholas M. Gladd, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on the
brief were David L. Morenoff, General Counsel, and Robert H.
C. Parrish argued the cause for intervenor for respondent
West Deptford Energy, LLC. With him on the brief were Justin
A. Torres, Neil L. Levy, and Stephanie S. Lim.
Before: Millett and Wilkins, Circuit Judges, and Edwards,
Senior Circuit Judge.
WILKINS, CIRCUIT JUDGE.
second time, we consider the ramifications of a utility
filing more than one rate with the Federal Energy Regulatory
Commission ("FERC" or the "Commission")
during the time in which the utility negotiates an agreement
with a prospective customer. See W. Deptford Energy, LLC
v. FERC, 766 F.3d 10 (D.C. Cir. 2014). Specifically, we
are asked to determine which rate governs: the rate in effect
at the time negotiations commenced or the rate in effect at
the time the agreement was completed. We are also asked to
consider whether, if the rate on file at the time the
agreement was completed governs, FERC reasonably interpreted
the new rate.
review, we uphold FERC's determination that the governing
rate is the rate in effect at the time the agreement was
completed. Because we find that FERC properly considered the
Court's findings on remand, adequately explained its
decision, and properly considered the evidence, FERC did not
act arbitrarily and capriciously in interpreting the new
rate. We therefore deny the Petition for Review.
Federal Power Act, 16 U.S.C. §§ 791a et
seq., charges the Commission with regulating "the
transmission of electric energy" and "the sale of
electric energy at wholesale" in interstate commerce,
id. § 824(b)(1). In exercising that authority,
the Commission must ensure that "[a]ll rates and
charges" for the "transmission or sale of electric
energy subject to" its jurisdiction are "just and
reasonable, " and that no public utility's rates are
unduly discriminatory or preferential. Id. §
824d(a), (b); see NRG Power Mktg., LLC v. Maine Pub.
Utils. Comm'n, 558 U.S. 165, 167 (2010).
end, the Act requires every public utility to "file with
the Commission" and "keep open in convenient form
and place for public inspection schedules showing all rates
and charges for any transmission or sale subject to the
jurisdiction of the Commission." 16 U.S.C. §
824d(c). That obligation applies whether the rates and
charges are set "unilaterally by tariff" or agreed
upon in individual contracts between sellers and buyers.
NRG Power Mktg., 558 U.S. at 171. When a public
utility seeks to change its filed rate, it must "fil[e]
with the Commission . . . new schedules stating plainly the
change or changes . . . and the time when the change or
changes will go into effect." 16 U.S.C. § 824d(d).
Federal Power Act's express mandate of openness,
transparency, and consistency in rates prevents
discrimination, promotes fair and equal access to the
utilities' services, ensures the stability and
predictability of rates, and reinforces the Commission's
jurisdictional authority. See Maislin Indus., U.S., Inc.
v. Primary Steel, Inc., 497 U.S. 116, 130-31 (1990);
Consol. Edison Co. of N.Y. v. FERC, 347 F.3d 964,
969 (D.C. Cir. 2003); Consol. Edison Co. of N.Y. v.
FERC, 958 F.2d 429, 432 (D.C. Cir. 1992).
foster competition in the wholesale energy market, the
Commission drastically overhauled the regulatory scheme for
public utilities in 1996. As part of that effort, the
Commission ordered regulated utilities to separate
financially their wholesale power-generation and
power-transmission services. See Promoting Wholesale
Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities; Recovery of
Stranded Costs by Public Utilities and Transmitting
Utilities, Order No. 888, 61 Fed. Reg. 21, 540 (Apr. 24,
1996); see also New York v. FERC, 535 U.S. 1, 11
(2002) (describing Order No. 888). Accordingly, public
utilities must now file tariffs with the Commission
establishing separate rates for wholesale power-generation
service, transmission service, and any ancillary service.
New York, 535 U.S. at 11. In addition, they must
"take transmission of [their] own wholesale sales and
purchases under a single general tariff applicable equally to
[themselves] and to others." Id.
soon arose, however, because every time a new generator of
electricity asked to use a transmission network owned by
another - to interconnect the two entities - disputes between
the generator and the owner of the transmission grid would
arise, delaying completion of the interconnection process.
See Standardization of Generator Interconnection
Agreements and Procedures, Order No. 2003, 104 FERC
¶ 61, 103 at P. 11 (2003). The Commission waded into
those disputes case by case, delaying entry into the market
by new generators and providing an unfair competitive
advantage to utilities owning both transmission and
generation facilities. Id. at PP. 10-11.
address those issues, the Commission in 2003 issued Order No.
2003, 104 FERC at PP. 11-12. That order replaced the
Commission's case-by-case approach with a standardized
process. The Order requires all regulated utilities that
"own, control, or operate" transmission facilities
to include standardized interconnection procedures and a form
interconnection agreement in their filed tariffs.
Id. at P. 2. By mandating that "standard set of
procedures, " the Commission "minimize[d]
opportunities for undue discrimination and expedit[ed] the