881 F.3d 924
D.C. Cir.2018Background
- FERC regulates wholesale electric transmission rates and must ensure rates are "just and reasonable" under the Federal Power Act (sections 205 and 206).
- The Southwest Power Pool (SPP) is a regional transmission organization; utilities bid to develop transmission projects within the SPP footprint, and tariffs use formula rates to calculate charges.
- Transource Energy and MPT Heartland formed state-specific subsidiaries (Transource Kansas, Kanstar) and sought FERC preapproval of a formula rate for those subsidiaries and authorization for future, not-yet-formed affiliates (e.g., Transource Arkansas, Arkstar) to replicate the approved formula rate if they later won SPP bids.
- Kansas Corporation Commission (KCC) protested, arguing FERC cannot preapprove rates for entities that do not yet exist and thus has not satisfied section 205’s requirement that rates be proven just and reasonable by the rate-filing utility.
- FERC approved the requested preapprovals; KCC sought rehearing and then petitioned for review in the D.C. Circuit challenging those orders.
- The D.C. Circuit dismissed KCC’s petitions for lack of Article III standing, holding KCC’s alleged injury is speculative and contingent on a chain of future events (bids, SPP selection, affiliates using the rates, and KCC initiating a section 206 challenge).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FERC may preapprove formula rates for not-yet-formed affiliates | KCC: Preapproval violates §205 because future affiliates never proved their rates just and reasonable; shifts burden to challengers under §206 | FERC: Preapproval permissible where affiliates are similarly situated and parent’s showing suffices for pro forma approval | Court: Dismissed on standing grounds; did not reach merits because plaintiff lacked injury in fact |
| Whether KCC has Article III standing to challenge FERC orders now | KCC: FERC’s orders injure KCC by predetermining rights and forcing KCC to bear burden in any future §206 challenge | FERC: Any alleged injury is speculative and depends on uncertain future events (bids, selection, use, challenge) | Court: No standing; alleged harm is conjectural and not imminent |
| Whether the possibility of future litigation or collateral estoppel creates immediate injury | KCC: Needs judicial review now to avoid inability to relitigate issues later | FERC: Precedential effect alone does not create an injury in fact | Court: Precedential-consequence theory insufficient to confer standing |
| Whether prior precedent (e.g., ANR Pipeline) supports KCC’s standing | KCC: Cites ANR to show approval can be necessarily adverse | FERC: Distinguishes ANR because that case involved an unavoidable immediate injury upon implementation | Court: ANR inapplicable; here harm is avoidable and speculative |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires concrete, particularized, actual or imminent injury)
- Clapper v. Amnesty Int'l USA, 568 U.S. 398 (speculative chains of contingencies do not establish imminent injury)
- N.Y. Reg'l Interconnect, Inc. v. FERC, 634 F.3d 581 (D.C. Cir.) (administrative participation alone does not confer Article III standing)
- Pub. Utils. Comm'n of Cal. v. FERC, 254 F.3d 250 (D.C. Cir.) (defines and explains formula rate concept)
- ANR Pipeline Co. v. FERC, 771 F.2d 507 (D.C. Cir.) (distinguishes cases where rate approval causes unavoidable immediate harm)
- Pub. Citizen v. NHTSA, 489 F.3d 1279 (D.C. Cir.) (uncertain timing of future harm defeats imminence)
- Whitmore v. Arkansas, 495 U.S. 149 (injuries must be concrete in temporal sense)
- New England Power Generators Ass'n, Inc. v. FERC, 707 F.3d 364 (D.C. Cir.) (legal reasoning or collateral-estoppel concerns do not by themselves confer standing)