Braintree Electric Light Department v. Federal Energy Regulatory Commission
399 U.S. App. D.C. 135
D.C. Cir.2012Background
- Municipally owned utilities petition for review of four FERC orders denying challenges to LSCPR charges for Cape Cod reliability.
- LSCPR designation caused Canal Units to be funded regionally, spreading costs among SE MA load obligations.
- Settlement Agreement (2007) settled litigation rights while barring reclassification and other broad cost allocations, subject to reserved rights.
- Section 7 reserved two litigation rights: (7.1) relief from LSCPR charges via challenges to alternatives; (7.2) permission to seek a SEMA boundary change effective no earlier than Jan 1, 2008.
- Petitioners sought, initially, (i) alternative protection schemes to reduce charges and (ii) division of SEMA into two subregions for cost allocation; later narrower to retroactive/ hypothetical relief during a fixed period.
- FERC denied relief, ultimately construing the Settlement Agreement to bar the petitioners’ challenged claims during the refund period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement permits the challenged reliefs. | Municipals argue Section 7 allows reserved challenges to alternatives and region changes to reduce charges. | FERC properly construed the settlement, barring reclassification and retroactive bifurcation remedies. | Yes; FERC reasonably construed settlement and Chevron deference supported. |
| Whether a hypothetical retroactive SEMA division could yield refunds. | Municipals seek retroactive, hypothetical division for the refund period to reduce charges. | Settlement bars reallocation absent an actual boundary change. | No; settlement bars retroactive reallocation and thus rejects the claim. |
| Whether cost-causation challenges fall within reserved rights. | Municipals argue charges do not reflect costs actually caused by them. | Cost-causation claims are not within the reserved rights in Section 7. | No; barred by the settlement and rejected on the merits. |
Key Cases Cited
- Ameren Servs. Co. v. FERC, 330 F.3d 494 (D.C. Cir. 2003) (Chevron step-two deference for ambiguous settlements)
- Koch Gateway Pipeline Co. v. FERC, 136 F.3d 810 (D.C. Cir. 1998) (agency interpretations given deference when settlement ambiguous)
- PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194 (D.C. Cir. 2005) (requires rational connection between facts and agency action)
- MarkWest Mich. Pipeline Co., LLC v. FERC, 646 F.3d 30 (D.C. Cir. 2011) (affirms deference to agency interpretation of settlement)
- B&J Oil & Gas v. FERC, 353 F.3d 71 (D.C. Cir. 2004) (technical judgments presumed reasonable)
- Midwest ISO Transmission Owners v. FERC, 373 F.3d 1361 (D.C. Cir. 2004) (cost allocation and reliability considerations under review)
- KN Energy, Inc. v. FERC, 968 F.2d 1295 (D.C. Cir. 1992) (costs allocated to those who cause them)