798 F.3d 796
9th Cir.2015Background
- Bonneville Power Administration (Bonneville) markets hydroelectric power and operates ~80% of the Pacific Northwest transmission grid; it is self-funded and must recover costs through rates.
- In 2011 Bonneville adopted an Environmental Redispatch Policy (ER Policy) to unilaterally curtail wind generation during "oversupply events" caused by high water and rising wind output.
- Wind generators filed a FERC complaint; in Dec. 2011 FERC found Bonneville’s policy produced noncomparable transmission service and, under FPA § 211A, ordered prospective tariff revisions requiring non-discriminatory, comparable transmission service.
- Bonneville implemented interim and revised Oversupply Management Protocols (OMP I and OMP II) providing compensation/cost-allocation for redispatched generators; FERC conditionally approved the protocols and later approved the cost-allocation methodology.
- Preference wholesale customers of Bonneville (petitioners) challenged FERC’s orders, arguing § 211A regulates only transmission (not redispatch/generation) and that FERC failed to adequately explain its decision; they seek review in the Ninth Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing: injury, causation, redressability | Petitioners (wholesale customers) will be harmed by rate increases from compensating redispatched generators | FERC and record show redispatch costs would likely be passed through by Bonneville to customers | Court: Article III standing satisfied — concrete injury, causation, and redressability shown |
| Statutory standing / zone-of-interests under FPA § 313(b) & APA § 10 | Petitioners are "aggrieved" because § 211A enforcement forces Bonneville to change redispatch practices and raise rates | § 211A protects open access and non-discrimination in transmission; petitioners’ interest in minimizing Bonneville’s rates is not within that zone | Held: Petitioners lack statutory standing — their economic interest in lower rates is not arguably within § 211A’s zone of interests |
| Scope of § 211A: transmission vs. generation (merits) | § 211A regulates only "transmission services," so redispatch (a generation action) exceeds FERC authority | FERC interpreted § 211A to reach discriminatory transmission practices even when tied to redispatch/generation effects; orders prospective only | Court did not reach the merits because petitioners lacked statutory standing (though Court notes § 211A is aimed at preventing transmission-based discrimination) |
| Procedural challenge (adequacy of FERC’s reasoning) | FERC failed to consider relevant evidence and adequately explain its nondiscrimination mandate | FERC provided a prospective nondiscrimination remedy and reviewed compliance through tariffs and protocols | Court did not resolve merits due to statutory standing defect |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury in fact, causation, redressability)
- Bennett v. Spear, 520 U.S. 154 (agency action can have coercive/determinative effect on third parties for causation)
- New York v. FERC, 535 U.S. 1 (market power through transmission control impedes competition)
- Ass’n of Pub. Agency Customers v. Bonneville Power Admin., 733 F.3d 939 (Ninth Circuit standing and Bonneville cost-pass-through precedent)
- Grand Council of Crees v. FERC, 198 F.3d 950 (zone-of-interests limits review for parties whose interests frustrate statutory purposes)
- Sierra Club v. EPA, 292 F.3d 895 (burden to show substantial probability of standing)