LSP Transmission Holdings II v. FERC, 28 F.4th 1285

LSP Transmission Holdings II, LLC (a transmission developer) challenged FERC’s termination of a §206 investigation into ISO New England’s implementation of Order No. 1000 competitive-selection rules.
Order No. 1000 eliminated federal rights of first refusal for transmission projects and directed competitive selection, but allowed an exception for reliability projects when solicitation would delay urgently needed work.
FERC’s Compliance Order allowed ISO New England to treat projects as "immediate need" if the reliability need arises within three years (using a need-by date), not ISO-NE’s proposed five-year window.
ISO New England routinely used conservative need-by dates that often preceded projects’ expected in-service dates; ISO-NE exempted nearly all recent reliability projects from competitive solicitation.
FERC issued a Show Cause Order under FPA §206, invited interventions (including LSP), and ultimately concluded in a Termination Order that ISO-NE’s use of need-by dates and application of the exemption were just and reasonable.
LSP petitioned for review in the D.C. Circuit, arguing lack of competition because FERC/ISO-NE’s use of need-by dates improperly swallows the competition requirement; the court denied the petition.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing	LSP was ready, willing, and able to bid and was deprived of opportunities by ISO‑NE’s implementation, so it suffered Article III injury	FERC argued no change to planning criteria, so LSP suffered no concrete injury	Court: LSP has standing; it identified specific projects and lost opportunity to compete
Reviewability (Heckler immunity)	FERC’s Show Cause/Termination Order is a substantive adjudicative decision subject to judicial review	FERC claimed its action was an enforcement/declination decision immune from review under Heckler v. Chaney	Court: Order was a reviewable §206 contested proceeding and decided on the merits; not immune
Use of need-by dates vs. in-service dates	LSP: Commission should require in-service dates for the three-year exemption threshold because need-by dates let nearly all projects bypass competition	FERC: Using need-by dates is reasonable to ensure reliability and avoid delaying urgent projects; consistent with precedent and NERC standards	Court: Upheld FERC’s use of need-by dates as reasonable and adequately explained
Alleged departure from Order No. 1000 / exception overuse	LSP: The frequency of exemptions shows the exception swallows the rule and departs from Order No.1000	FERC: Frequency alone is insufficient; ISO‑NE applied the established criteria correctly; policy balancing is for the agency	Court: Deferred to FERC’s policy judgment and found no unlawful departure; petition denied

O’Donnell Constr. Co. v. District of Columbia, 963 F.2d 420 (D.C. Cir. 1992) (standing standard where denial of opportunity to compete injures bidder)
Carney v. Adams, 141 S. Ct. 493 (2020) (Article III standing principles)
Ne. Fla. Chapter of Associated Gen. Contractors v. City of Jacksonville, 508 U.S. 656 (1993) (standing requires readiness and ability to perform)
Heckler v. Chaney, 470 U.S. 821 (1985) (agency enforcement declinations and reviewability doctrine)
Pub. Citizen, Inc. v. FERC, 7 F.4th 1177 (D.C. Cir. 2021) (FPA §206 proceedings produce substantive adjudicative decisions)
Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971) (agency action reviewability and scope of judicial review)
Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993) (agency may rely on prior decisions when earlier reasoning remains valid)
Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965 (D.C. Cir. 1999) (courts defer to agency policy judgments in balancing competing regulatory goals)