New England Power Generators Ass'n v. Federal Energy Regulatory Commission
404 U.S. App. D.C. 66
D.C. Cir.2013Background
- FERC must ensure rates for electric generation capacity are just and reasonable under FPA § 205(a).
- Capacity auctions introduced a new context beyond traditional tariff/contract rates and Mobile-Sierra presumption.
- Suppliers in New England used capacity auctions through a Forward Capacity Auction mechanism established by a settlement, reviewed under Mobile-Sierra public-interest standard.
- NRG Power Marketing and MPUC cases guided the Mobile-Sierra application to auctions and settled arrangements; Supreme Court clarified Mobile-Sierra applies to third parties as well as contracting parties.
- NEPGA (petitioners) challenged standing and the Mobile-Sierra application; State Petitioners challenged the reliance on public-interest review for auction rates; the court dismissed NEPGA for lack of standing and denied the State Petitioners on merits.
- Court disposition: NEPGA’s petition dismissed for lack of standing; State Petitioners’ petition denied on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NEPGA has Article III standing to sue | NEPGA claims injury from regulatory uncertainty and future adverse orders. | FERC's actions do not cause concrete injury to NEPGA; speculative future actions are insufficient. | No standing; petition dismissed. |
| Whether Forward Capacity Auction rates are contract rates or not | NEPGA seeks Mobile-Sierra presumption if auction rates are contract-like. | Auction rates may be non-contract but can still fall under Mobile-Sierra as a public-interest review. | Auction rates are not contract rates, but Mobile-Sierra public-interest review applies. |
| Whether it was lawful to apply Mobile-Sierra public-interest review to the auction rates | State Petitioners argue absence of contract rate precludes public-interest review. | Mobile-Sierra public-interest review is an appropriate tool under Chevron deference; it is within FERC’s discretion. | Proper to apply public-interest review; State Petitioners’ challenge fails. |
Key Cases Cited
- Morgan Stanley Capital Grp., Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cnty., 554 U.S. 527 (2008) (cost-of-service and deference in rate decisions; just and reasonable standard)
- United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956) (Mobile-Sierra presumption on contract rates)
- Fed. Power Comm’n v. Sierra Pac. Power Co., 350 U.S. 348 (1956) (Mobile-Sierra public-interest standard)
- NRG Power Marketing, LLC v. Me. Pub. Utils. Comm’n, 130 S. Ct. 693 (2010) (Mobile-Sierra applies to contract and third-party challenges; remand on whether auction rates were contract rates)
- Me. Pub. Utils. Comm’n v. FERC (MPUC I), 520 F.3d 464 (2008) (D.C. Cir. per curiam; Mobile-Sierra applicability context)
- PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203 (2011) (D.C. Cir. decision on capacity markets and rate review)
- Consumers Energy Co. v. FERC, 428 F.3d 1065 (2005) (standing and contract-related agency decisions)
- CNG Transmission Corp. v. FERC, 40 F.3d 1289 (1994) (standing where regulatory action creates concrete injury)
- Wis. Pub. Power Inc. v. FERC, 493 F.3d 239 (2007) (standing requirements and injury in fact)