82 F.4th 1095
D.C. Cir.2023Background
- SEEM (Southeast Energy Exchange Market) was filed Aug. 11, 2021 by Southern Company Services/Alabama Power on behalf of 19 Members across the Southeast; it creates an automated platform for 15‑minute, intra‑hour, non‑firm trades and a zero‑charge transmission product (NFEETS) using e‑Tags.
- SEEM requires Participants to be a Source or Sink in the SEEM footprint, to sign participant/enabling agreements, and to meet a 3‑eligible‑counterparty rule; nonmembers may not access Member governance.
- FERC did not issue a decision within 60 days; by operation of law the deadlock (2–2) meant the SEEM filing went into effect (Oct. 2021) under the amended FPA; Commissioners filed statements.
- FERC later (Nov. 8, 2021) issued a majority order accepting tariff revisions implementing NFEETS; petitioners sought rehearing of both the deadlock acceptance and the Tariff Order.
- The D.C. Circuit: (1) held petitioners had associational standing; (2) held rehearing of the Deadlock Order was timely under Fed. R. App. P. 26 and vacated FERC’s untimeliness rulings and remanded for FERC to decide rehearing; (3) reviewed the Tariff Order on the merits and found parts deficient—ordering remand and vacating the Tariff Order—while rejecting some petitioner claims (e.g., speculative anticompetitive intent and cost‑causation).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to seek review | Trade association (AEU) and members (e.g., Voltus) suffer competitive and rate injuries from SEEM | FERC did not dispute adequacy of evidence | Associational standing satisfied; one petitioner’s standing suffices for others to participate |
| Timeliness of rehearing of FERC deadlock order (§205(g) and §313) | Petitioners filed rehearing Nov. 12, 2021; FERC erred in treating it untimely | FERC computed deadline as Nov. 10, 2021 and denied rehearing as untimely | Court held the statutory deadlines are computed per FRAP 26 (weekend/holiday rule); petitioners’ Nov. 12 filing was timely; FERC’s denials vacated and matter remanded for FERC to address rehearing |
| Whether Tariff revisions (NFEETS) are consistent with Order No. 888 / pro forma OATT (open access) given SEEM’s geographic/participation limits | SEEM excludes ~65 prior bilateral trading partners and denies open access; FERC failed to show SEEM’s design is superior to pro forma tariff | FERC: SEEM is a new service using unused capacity; geographic limits are operationally necessary (e‑Tag timing) and deviations are consistent/superior | Court found FERC failed adequately to explain how design choices that exclude existing market participants are consistent with or superior to pro forma open‑access tariff; remand required |
| Whether SEEM is a "loose power pool" (Order No. 888/A) because NFEETS is a "discounted/special" transmission arrangement | Petitioners: NFEETS eliminates pancaking (non‑pancaked example in Order No. 888) and therefore is a discounted/special arrangement triggering loose‑pool rules and mandatory joint pool tariff | FERC: NFEETS uses otherwise‑unused capacity, entails no opportunity cost, and is not a discount or special favor; prior FERC precedent supports that zero‑rate for unused capacity need not be a discount | Court held FERC’s interpretation of "discounted/special" was not adequately justified in light of Order No. 888’s examples (non‑pancaked) and remand is required so FERC can explain or revisit its conclusion; vacatur of Tariff Order appropriate |
Key Cases Cited
- FERC v. Elec. Power Supply Ass'n, 577 U.S. 260 (2016) (describing FERC authority over interstate wholesale sales and transmission and limits on state regulation)
- Pub. Citizen, Inc. v. FERC, 839 F.3d 1165 (D.C. Cir. 2016) (prior D.C. Cir. holding on FERC deadlocks and reviewability)
- City of Bethany v. FERC, 727 F.2d 1131 (D.C. Cir. 1984) (statutory framework for section 205 changes and 60‑day notice rule)
- Morgan Stanley Capital Grp. v. Pub. Util. Dist. No. 1 of Snohomish Cnty., 554 U.S. 527 (2008) (FERC’s competition‑enhancing approach to assure just and reasonable wholesale rates)
- New England Power Generators Ass'n v. FERC, 879 F.3d 1192 (D.C. Cir. 2018) (rehearing requirement under §313 and timeliness as jurisdictional prerequisite)
- Allegheny Defense Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020) (agency may not have deference to interpret jurisdictional statutory timing; courts decide)
- Util. Workers Union of Am. Loc. 464 v. FERC, 896 F.3d 573 (D.C. Cir. 2018) (standing on direct review; petitioners must support standing with record or evidence)
- Transmission Access Pol'y Study Grp. v. FERC, 225 F.3d 667 (D.C. Cir. 2000) (recognizing transmission owners’ incentives and concern about discriminatory access)
- Sacramento Mun. Util. Dist. v. FERC, 616 F.3d 520 (D.C. Cir. 2010) (deviations from pro forma tariff must be consistent with or superior to pro forma OATT)
- Midwest ISO Trans. Owners v. FERC, 373 F.3d 1361 (D.C. Cir. 2004) (cost‑causation principle in ratemaking)
- Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (deference to reasonable agency interpretations of ambiguous rules but narrower after Kisor)