911 F.3d 1236
D.C. Cir.2018Background
- Exelon, a New England generator owner, challenged FERC’s approval of ISO‑NE tariff changes governing retirement bids in the Forward Capacity Auction (FCA).
- Under the new tariff, all retirement requests must include a retirement bid; ISO‑NE’s Internal Market Monitor (IMM) can substitute a lower “mitigated” (proxy) bid if it finds certain cost items unsupported and the difference exceeds 10%.
- ISO‑NE files mitigated bids with FERC under § 205; if FERC approves a mitigated bid and the auction clears between the mitigated and the supplier’s original bid, the auction is re‑cleared and the retiring unit may be forced out of the market.
- Exelon argued this process eliminates its § 205 right to have its own retirement bids accepted if they are just and reasonable, effectively shifting § 205 treatment to the IMM’s bids and imposing economic harm.
- FERC’s orders defended the tariff but did not clearly resolve whether suppliers retain the ability to obtain § 205 review such that their supported bids prevail over IMM mitigated bids; at oral argument FERC counsel represented a view more favorable to Exelon.
- The D.C. Circuit found standing and remanded to FERC for prompt clarification—directing FERC to explain whether and how a supplier can secure Commission acceptance of its original retirement bid when contested by a mitigated bid, with a deadline for clarification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether suppliers’ retirement bids are “rates” entitled to § 205 just‑and‑reasonable review | Exelon: Retirement bids are rates under § 205 and must be accepted if just and reasonable; the tariff improperly substitutes IMM bids | FERC: Retirement bids are not § 205 rates or Exelon waived § 205 rights; tariff mirrors existing IMM review | Court: Did not decide; remanded for clarification |
| Whether the tariff makes IMM mitigated bids the only § 205‑filed rates that FERC will approve, displacing supplier bids | Exelon: Tariff requires FERC to accept IMM mitigated bids if just and reasonable, blocking supplier bids even if also just and reasonable | FERC: IMM mitigation is limited; FERC can and will treat supplier‑supported cost items so supplier bids can prevail | Court: Unclear from orders; remanded for explicit clarification |
| Whether Exelon has standing to sue | Exelon: Faces concrete economic harms from mitigation (lower clearing prices; forced retirements) | FERC: Did not contest standing | Court: Exelon has Article III standing |
| Remedy/relief requested (interpretation and timeliness) | Exelon: Seek vacatur or clarification and protection of § 205 rights before next FCA | FERC: Defend tariff but offered oral representations clarifying process | Court: Remanded to FERC to clarify process expeditiously (by Feb 1, 2019) |
Key Cases Cited
- Summers v. Earth Island Inst., 555 U.S. 488 (standing principles for Article III)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (Article III standing test)
- Kansas Corp. Comm’n v. FERC, 881 F.3d 924 (D.C. Cir. 2018) (standing and review of FERC action)
- Atlantic City Elec. Co. v. FERC, 295 F.3d 1 (D.C. Cir. 2002) (utilities may contractually limit § 205 filing rights)