EXELON WIND 1, L.L.C., fоrmerly known as JD Wind 1, L.L.C.; Exelon Wind 2, L.L.C., formerly known as JD Wind 2, L.L.C.; Exelon Wind 3, L.L.C., formerly known as JD Wind 3, L.L.C.; Exelon Wind 4, L.L.C., formerly known as JD Wind 4, L.L.C.; Exelon Wind 5, L.L.C., formerly known as JD Wind 5, L.L.C.; Exelon Wind 6, L.L.C., formerly known as JD Wind 6, L.L.C., Plaintiffs-Appellees, v. Donna L. NELSON, in her official capacity as Chairman of the Public Utility Commission of Texas; Kenneth W. Anderson, Jr., in his official capacity as Commissioner of the Public Utility Commission of Texas; Rolando Pablos, in his official capacity as Commissioner of the Public Utility Commission of Texas, Defendants-Appellants, Southwestern Public Service Company; Occidental Permian, Limited, Intervenors-Appellants.
No. 12-51228
United States Court of Appeals, Fifth Circuit
Sept. 8, 2014
766 F.3d 380
Finally, the district court did not err in sentencing Vasquez based on a mandatory minimum without a special jury verdict as to the fact of Vasquez‘s previous drug conviction. Vasquez‘s argument to the contrary is foreclosed by Almendarez-Torres v. United States, 523 U.S. 224, 246-47, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998).18
CONCLUSION
For the reasons stated above, we AFFIRM the convictions and sentences as to both Echeverria and Vasquez.
AFFIRMED.
Andrew S. Oldham, Deputy Solicitor General Office of the Attorney General, Office of the Solicitor General, John Richard Hulme, Esq., Assistant Attorney General, Office of the Attorney General, Austin, TX, for Defendants-Appellants.
Ron H. Moss, Esq., Attorney, Winstead, P.C., Stephen E. Fogel, Xcel Energy Service, Incorporated, F. Michael Stenglein, King & Spalding, L.L.P., Austin, TX, Ashley Charles Parrish, Esq., King & Spalding, L.L.P., Washington, DC, for Intervenors-Appellants.
Before SMITH, PRADO, and ELROD, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
This appeal addresses the Texas Public Utilities Commission‘s (PUC) interpreta-
I.
Congress enacted the Public Utilities Regulatory Policies Act of 1978 (PURPA) to reduce the dependence of electric utilities on foreign oil and natural gas and to control consumer costs. Congress sought to do so in part by encouraging development of alternative energy sources. See FERC v. Mississippi, 456 U.S. 742, 745, 102 S.Ct. 2126, 72 L.Ed.2d 532 (1982); Power Res. Grp. v. Pub. Util. Comm‘n, 422 F.3d 231, 233 (5th Cir.2005) (hereinafter Power Resource III].1 PURPA directs the Federal Energy Regulatory Commission (FERC) to promulgate regulations to promote energy purchases from cogeneration and small power production facilities, in-
“State regulatory agencies, such as the PUC, are directed to adopt rules which comply with FERC‘s regulations and implement PURPA.” Power Resource III, 422 F.3d at 233 (citing
As the Supreme Court has noted, the mandatory nature of PURPA‘s directive to states raises “troublesome” Tenth Amendment concerns. FERC v. Mississippi, 456 U.S. at 759. In FERC v. Mississippi, the Supreme Court was able to avoid those concerns by explaining that FERC‘s regulations allow the states to implement PURPA simply by adjudicating disputes arising under the statute. Id. at 760. The Supreme Court found PURPA acceptable because it does not require states to pass regulations implementing FERC‘s regulations; instead, states have the option of “resolving disputes on a case-by-case basis” by opening up their courts to adjudicate such claims. Id. at 751, 760. Texas has opted to have the PUC implement FERC‘s regulations through rulemaking, rather than case-by-case adjudication.2
FERC provides state regulatory authorities like the PUC “great latitude in determining the manner of implementation of the Commission‘s rules, provided that the manner chosen is reasonably designed to implement the requirements” of FERC regulations. See Regulations Implementing Section 210 of the Public Utility Regulatory Policies Act of 1978, 45 Fed.Reg. 12214, 12230-31 (Feb. 25, 1980). At issue here is one of the rules that the PUC promulgated to implement a FERC regulation.
This FERC regulation provides Qualifying Facilities with two ways to sell power to utilities. See
The PUC‘s rule implementing FERC‘s Regulation permits only a Qualifying Facility that generates “firm power” to enter into a Legally Enforceable Obligation.
Exelon is a Qualifying Facility, but cannot supply firm power, due in part to the nature of wind generation. Wind is a notoriously fiсkle energy source, as it blows intermittently and the power it generates is difficult to store.3 Technological advancements have made it possible for some wind farms to provide more consistent service, but Exelon lacks such technology, and the winds in the Texas Panhandle, where Exelon‘s facilities are located, do not blow in a predictable pattern. Because it is subject to the whims of these winds, Exelon cannot guarantee that a particular amount of energy will be available at a particular time.
Southwestern Public Service Company (Southwestern) is a utility company that is required under PURPA to buy all of Exelon‘s wind-generated energy. See
In June 2007, Exelon filed a complaint with the PUC alleging that it had formed a Legally Enforceable Obligation with Southwestern, and that Southwestern was underpaying for its power. Exelon‘s complaint did not challenge PUC Rule 25.242 or any other Texas rule implementing FERC‘s regulations under PURPA. Instead, Exelon argued in the PUC proceeding that its power was firm because Exelon promised to sell all of the power it produced to Southwestern. Exelon‘s case was first heard by an administrative law judge at the PUC. The administrative law judge determined that Exelon‘s power was
The PUC Commission issued an order (PUC Order) that adopted the administrative law judge‘s conclusions, with one notable exception. The administrative law judge had proposed including a categorical finding that wind generators could not create Legally Enforceable Obligations because “wind generated power is not readily available.” The Commission rejected this proposal. Instead, the Commission concluded that while Exelon was unable to produce firm power, other wind generators may be able to do so and may therefore be capable of forming Legally Enforceable Obligations. The PUC Order noted this conclusion:
The [administrative law judge] found that wind-generated power is not readily available. The Commission disagrees with this broad statement encompassing all wind-generated power. The Commission notes that disparate wind patterns in the diverse geographic regions of the state can result in significantly different characteristics for wind-generated power. Further combining wind with energy storage techniques or other energy sources, like solar energy, can also result in significant differences.
Exelon appealed the PUC‘s ruling to the state district court in Travis County, Texas. While the state court appeal was pending, Exelon filed a petition for enforcement and request for declaratory order from FERC, arguing that all Qualifying Facilities are entitled to create Legally Enforceable Obligations, regardless of whether the energy they produce is firm or non-firm. FERC declined to initiate an enforcement action against the PUC, and instead issued an informal declaratory order (FERC‘s Letter) stating that the PUC Order was inconsistent with FERC‘s Rеgulation. FERC‘s Letter stated that a Qualifying Facility may form a Legally Enforceable Obligation even if its power is non-firm.5
Exelon voluntarily non-suited its state court appeal of the PUC Order. In December 2009, Exelon filed this lawsuit in federal district court seeking declaratory and injunctive relief against the PUC Commissioners in their official capacities. In its complaint, Exelon requested that the district court declare that: (1) the PUC Order did not implement FERC‘s Regulation; (2) all Qualifying Facilities may form Legally Enforceable Obligations; and (3)
Southwestern and Southwestern‘s biggest consumer, Occidental Permian Limited (Occidental), intervened. The PUC, Southwestern, and Occidental moved to dismiss Exelon‘s claims under
The parties then moved for summary judgment. The district court issued an order granting Exelon‘s motion for summary judgment and denying all other motions for summary judgment. The district court concluded that the PUC Order failed to implement PURPA and permanently enjoined the PUC from requiring a Qualifying Facility to provide firm power as a condition of creating a Legally Enforceable Obligation. The district court subsequently amended its judgment to enjoin the PUC Commissioners, rather than the PUC itself. The PUC, Southwestern, and Occidental (collectively, Appellants) appealed.
II.
We begin by addressing Appellants’ argument that there is no subject matter jurisdiction to hear Exelon‘s claims. We review de novo a district court‘s determination of subject matter jurisdiction. In re FEMA Trailer Formaldehyde Prods. Liab. Litig. (Miss. Plaintiffs), 668 F.3d 281, 286 (5th Cir.2012). Exelon, as the plaintiff, has the burden of establishing subject matter jurisdiction. Id. If we conclude that there is no subject matter jurisdiction, the case must be dismissed. Home Builders Ass‘n, Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.1998).
PURPA provides for two types of review of a state utility regulatory authority‘s actions: implementation and as-applied challenges. See Power Resource III, 422 F.3d at 234-35. Federal courts have exclusive jurisdiction over implementation challenges, while state courts have exclusive jurisdiction over as-applied challenges.6 The type of claims brought by Exelon thus determines whether we have jurisdiction. Id. at 235. “An implementation claim involves a contention that the state agency... has failed to implement a lawful implementation plan under
The parties disagree as to whether Exelon asserted as-applied or implementation
A.
Appellants argue that Exelon raised as-applied challenges because Exelon only challenged the PUC‘s application of PUC Rule 25.242 to Exelon. In response, Exelon contends that this was an implementation challenge because the PUC Order had broad effects, and because the PUC Order and PUC Rule 25.242 together fail to implement FERC‘s Regulation. The district court agreed with Exelon, and characterized Exelon‘s claims as implementation challenges. The district court first reasoned that Exelon was asserting that it was entitled to form a Legally Enforceable Obligation under FERC‘s Regulation. The district court explained that, because the PUC Order denied Exelon the right to create a Legally Enforceable Obligation, Exelon was challenging that PUC Order as a failure to implement FERC‘s Regulation. Second, the district court determined that the PUC Order “implicitly broadened its findings when it explained what other conditions could allow a wind energy facility to succeed in providing firm power” and thus concluded that the PUC Order did not limit its effect only to Exelon. We agree with the district court with respect to only some of Exelon‘s claims.
i.
To help elucidate the difference between implementation and as-applied challenges, we begin by reviewing our decision in Power Resource III, 422 F.3d at 231. There, the PUC had determined that a Qualifying Facility called PRG could not form a Legally Enforceable Obligation because it could not guarantee power delivery within ninety days, as required by PUC Rule 23.66. Id. at 234. PRG filed suit in both state and federal court asserting both as-applied and implementation challenges to the PUC‘s determination. The Texas state courts adjudicated PRG‘s as-applied claims, including whether the PUC properly interpreted its own rule, and whether that interpretation was preempted by FERC‘s regulations. See Power Res. Grp., Inc. v. Pub. Util. Comm‘n, 73 S.W.3d 354, 356-57 (Tex. App.—Austin 2002, pet. denied) (hereinafter Power Resource I].
PRG then brought suit in federal district court, where it requested several additional forms of relief, including: (1) a declaration that the PUC had failed to implement the requirements of PURPA; (2) a declaration that the PUC‘s actions with respect to PRG violated PURPA; and (3) injunctive relief requiring the PUC to implement new Legally Enforceable Obligation regulations, and then requiring the PUC to consider PRG‘s petition under that new regulatory framework. See Power Res. Grp. v. Pub. Util. Comm‘n, No. 1:03-CV-762-HLH, Dkt. No. 1, at *12 (W.D.Tex. Oct. 10, 2003) [hereinafter Power Resource II]. The district court dismissed all but one of PRG‘s claims for lack of jurisdiction after determining that they were as-applied challenges:
PRG again asks this Court to grant relief in the form of an ordеr directing [PUC] to consider PRG‘s claims under a revised system of regulation.... These allegations state an “as applied” claim, which this Court has no jurisdiction to hear.... [T]he one ultimate and limited issue before the Court at this time is whether [PUC] failed to implement the [Legally Enforceable Obligation] option provided by FERC‘s regulations.
Id. (emphasis in the original). The district court then granted summary judgment to the PUC and other defendants on PRG‘s implementation claim. We affirmed, without reaching the issue of whether the district court could have also heard PRG‘s other claims. Power Resource III, 422 F.3d at 239.
ii.
We now turn to Exelon‘s claims, which fall into two main categories. The majority of Exelon‘s requests for relief focus on the specific PUC Order, rather than PUC Rule 25.242. For example, Exelon asked the district court for a declaration that the PUC Order did not implement FERC‘s Regulation and is preempted. These claims challenging the PUC Order are identical to the as-applied claims that the state court of appeals adjudicated in Power Resource I, 73 S.W.3d at 361-62. Exelon also asked the district court to declare that the PUC must reopen Exelon‘s proceedings for further consideration, and to issue an injunction prohibiting the PUC from enforcing the PUC Order. In a thoughtful, well-reasoned opinion, the federal district court in Power Resource II dismissed these types of claims for lack of jurisdiction because they were as-applied challenges. Power Resource II, No. 1:03-CV-762-HLH, Dkt. No. 44, at 17-18. We agree with the conclusions reached by both the state and federal district courts in Power Resource I & II regarding their exclusive jurisdiction under PURPA. Exelon‘s challenges to the PUC Order are “contention[s] that the state agency‘s... implementation plan is unlawful, as it applies to or affects an individual petitioner” and are thus as-applied challenges over which we have no jurisdiction. Power Resource III, 422 F.3d at 235 (internal quotation marks and citations omitted).7
The district court in this case reasoned that Exelon‘s claims challenging the PUC Order were implementation challenges based on what it considered to be a broad ruling in the PUC Order that prevented all wind generators from forming Legally Enforceable Obligations. We disagree. The PUC explicitly declined to create a categorical rule preventing wind generators from forming Legally Enforceable Obligations and instead issued an order limited to only Exelon‘s capacity to produce firm power:
The [administrative law judge] found that wind-generated power is not readily available. The Commission disagrees with this broad statement encompassing all wind-generated power. The Commission notes that disparate wind patterns in the diverse geographic regions of the state can result in significantly different characteristics for wind-generated power. Further combining wind with energy storage techniques or other
energy sources, like solar energy, can also result in significant differences.8
The PUC thus left open the possibility that other wind generators might be able to comply with the firm power requirement, either through technological advances or based on their locations in regions with more predictable wind patterns than those found around the Exelon facilities. As both the PUC and Occidental aptly note, the fact that as-applied challenges may establish precedent relevant to future cases does not transform them into facial or implementation challenges. Courts routinely adjudicate as-applied constitutional challenges to statutes; these decisions do not become facial challenges simply because of their stare decisis effect in future cases presenting similar facts or legal theories. Cf. In re Cao, 619 F.3d 410, 430 (5th Cir.2010) (en banc); see also id. at 443 (Jones, C.J., concurring in part and dissenting in part). The PUC Order is best viewed as an application of PUC Rule 25.242—which the PUC promulgated more than thirty years ago—to an individual petitioner.9 As a result, Exelon‘s challenges to the PUC Order are as-applied challenges.
iii.
Exelon offers one additional argument for why these claims are implementation challenges. Exelon points to FERC‘s Letter, which Exelon requested from FERC after receiving an unfavorable ruling from the PUC. While this FERC-issued document is rather impressively called a Declaratory Order, it is actually akin to an informal guidance letter. See Indus. Cogenerators v. FERC, 47 F.3d 1231, 1235 (D.C.Cir.1995) (“The Commission nowhere purported to make the Declaratory Order binding upon the FPSC, nor can we imagine how it could do so. Unlike the declaratory order of a court, which does fix the rights of the parties, this Declaratory Order merely advised the parties of the Commission‘s position.“). In this Letter, FERC states that Exelon‘s claims are implementation challenges. Exelon cites City of Arlington v. FCC, — U.S. —, 133 S.Ct. 1863, 1872, 185 L.Ed.2d 941 (2013), and maintains that we should give deference to FERC‘s characterization, in its Letter, of these claims as an implementation challenge. Exelon argues that, based on this deference, we should conclude that the federal courts have jurisdiction to hear Exelon‘s claims. The district court here adopted Exelon‘s position without providing any reasoning or case law in support: “That Exelon is in fact challenging PUC[ ]‘s implementation of PURPA, rather [than] a particular application, is
We disagree. In City of Arlington, the Supreme Court afforded Chevron deference to an agency‘s interpretation of its own jurisdiction. Id. at 1867-68.10 Indeed, the Supreme Court explicitly noted that it granted certiorari “limited to the first question presented: Whether... a court should apply Chevron to... an agency‘s determination of its own jurisdiction.” Id. at 1867-68 (internal quotation marks omitted). In contrast, the question here is not whether FERC has jurisdiction to address Exelon‘s claims, but rather whether these claims belong in a state or a federal court. City of Arlington does not address this entirely different proposition advocated by Exelon, and does not support the argument that we should defer to FERC‘s interpretation of our own jurisdiction under the statutory scheme.
While the Supreme Court has not addressed this novel argument, our own precedent forecloses it. As Judge Wisdom noted long agо, “[t]he courts, however, have to make their own determination whether the district court has jurisdiction, rather than defer to the [federal agency] in the first instance.” Reeb v. Econ. Opportunity Atlanta, Inc., 516 F.2d 924, 926 (5th Cir.1975); see also Lopez-Elias v. Reno, 209 F.3d 788, 791 (5th Cir.2000) (explaining that “the determination of our jurisdiction is exclusively for the court to decide“). More recently, our sister circuit explained that, “the Supreme Court has repeatedly affirmed that federal courts have an independent obligation to determine their own subject-matter jurisdiction.” Shweika v. Dep‘t of Homeland Sec., 723 F.3d 710, 719 (6th Cir.2013) (citing Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 131 S.Ct. 1197, 1202, 179 L.Ed.2d 159 (2011); Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006); Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)). “Requiring that a court defer to an agency‘s interpretation of the court‘s own subject-matter jurisdiction would interfere with this independent obligation.” Id.
Even assuming arguendo that an agency‘s interpretation of a court‘s jurisdiction could warrant deference, FERC‘s Letter would still not be entitled to Chevron deference because it is an informal guidance document. As the Supreme Court has explained, “[i]nterpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law—do not warrant Chevron-style deference.” Christensen v. Harris Cnty., 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000). Exelon conceded as much at oral argument, and acknowledged that FERC‘s Letter is “entitled to respect,” but only to
B.
i.
Exelon‘s second category of claims challenges PUC Rule 25.242. Exelon argues that the Rule does not fully implement FERC‘s Regulation because PUC Rule 25.242 limits the category of Qualifying Facilities that may form Legally Enforceable Obligations. In response, Occidental contends that Exelon did not plead a proper implementation challenge because it did not explicitly ask the district court to require the PUC to engage in new rulemaking or to invalidate PUC Rule 25.242. Exelon did, however, raise a more general challenge to PUC Rule 25.242 by asking for a declaration that all Qualifying Facilitiеs may form Legally Enforceable Obligations, and requesting that the court issue an injunction requiring the PUC to fully implement FERC‘s regulations. Either form of relief would necessarily require the PUC to alter its current rules. We see little difference between these requests for relief and those that we addressed as implementation challenges in Power Resource III, 422 F.3d at 237-39. Exelon‘s claims challenging PUC Rule 25.242 are thus implementation challenges.
Occidental asserts that our “drive-by” jurisdictional ruling in Power Resource III is not entitled to precedential effect. We disagree. While “questions of jurisdiction [that] have been passed on in prior decisions sub silentio” are not entitled to preclusive effect, Power Resource III is not such a case. See Hagans v. Lavine, 415 U.S. 528, 533 n. 5, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974). The district court opinion in Power Resource II devoted substantial time to the jurisdictional question. We, in turn, devoted a large portion of our opinion to recounting the district court‘s jurisdictional determination before reaching the merits of the case. See Power Resource III, 422 F.3d at 234-37. The appellant in Power Resource III also briefed the issue of whether the district court erred in determining that it lacked jurisdiction to grant relief on PRG‘s as-applied claims. Id. at 239. While our decision in Power Resource III certainly could have given more guidance on its jurisdictional determination, the issue was clearly before the court. Power Resource III is thus distinguishable from cases where we have held that the jurisdictional determination had no precedential effect because the prior court did not appear to consider the issue. See, e.g., USPPS, Ltd. v. Avery Dennison Corp., 647 F.3d 274, 283 (5th Cir.2011) (“No one contends that the propriety of jurisdiction in this Circuit was actually argued to the prior panel or that the prior panel‘s decision actually addresses that question.“); Kershaw v. Shalala, 9 F.3d 11, 13 n. 3 (5th Cir.1993) (“[T]he jurisdictional issue was neither raised by the parties nor addressed by the Court.“). Even assuming arguendo that we were not bound by the jurisdictional determination in Power Resource III, we would conclude that the delineation drawn by the district court in Power Resource II between implementation and as-applied challenges is a persuasive reading of PURPA‘s text, and would follow the same approach here.
ii.
The PUC insists that we should read PURPA‘s jurisdictional grant more nar-
Moreover, we do not think that the PUC‘s approach is necessary to avoid constitutional problems in this case. As the Supreme Court noted in FERC v. Mississippi, states have the option of implementing FERC‘s regulations through state regulations, but may decline to do so if they would prefer to open their state courts only to hear disputes over FERC‘s regulations. 456 U.S. at 760. As a result, Texas was not forced to pass laws implementing FERC‘s regulations. Cf. Printz v. United States, 521 U.S. 898, 933, 117 S.Ct. 2365, 138 L.Ed.2d 914 (1997). Instead, Texas opted to have the PUC promulgate regulations implementing FERC‘s Regulations. See
Accordingly, we VACATE the portion of the judgment regarding Exelon‘s challenge to the PUC‘s order and direct the district court to dismiss for want of subject matter jurisdiction, and review only Exelon‘s claims that PUC Rule 25.242 fails to implement FERC‘s Regulation.
III.
We now turn to whether the district court properly granted summary judgment in favor of Exelon on its claims that the PUC failed to implement FERC‘s Regulation. “We review a district court‘s ruling on a motion for summary judgment de novo and apply the same legal standards as the district court.” Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir.2012). “The court shall grant summary judgment if the movant shows that there is no genuinе dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
We review the PUC‘s implementation of PURPA and the FERC Regulation with deference because “a state has broad authority to implement PURPA with respect to the approval of purchase contracts between utilities and [Qualifying Facilities].” Power Resource III, 422 F.3d at 236 (citations omitted).
PURPA requires states to implement FERC‘s regulations. See
In determining whether PUC Rule 25.242 fails to implement FERC‘s Regulation, we turn once again to our binding precedent in Power Resource III, 422 F.3d at 237-39. The dissenting opinion‘s view of this case apparently flows from the view that we are not bound by Power Resource III here. We disagree, and explain below why that case forecloses the position taken in the dissenting opinion.
A.
In Power Resource III, we upheld the PUC‘s determination that PRG—which was also a Qualifying Facility—could not form a Legally Enforceable Obligation because it could not guaranteе power delivery within ninety days as required by the PUC‘s 90-day Rule. Id. at 234. PRG—like Exelon—argued that the PUC‘s 90-day Rule did not meaningfully implement the same FERC Regulation at issue here because the PUC‘s 90-day Rule “eviscerate[d]” the Legally Enforceable Obligation option for an entire category of Qualifying Facilities that were unable to meet the rule‘s requirements. Id. at 238. We disagreed, and upheld the PUC‘s 90-day Rule, explaining that,
PRG has failed to show that PURPA and the FERC regulations mandate that all [Qualifying Facilities], including unbuilt ones, must be able to create a [Legally Enforceable Obligation] at any time.... FERC regulations grant the states discretion in setting specific parameters for [Legally Enforceable Obligations].
....
If FERC had determined it necessary to set more specific guidelines concerning [Legally Enforceable Obligations], it could have done so.... The plain text of the FERC regulation, however, fails to mandate that requirement. Rather, defining the parameters for creating a [Legally Enforceable Obligation] is left to the states and their regulatory agencies.
Id. at 238-39 (emphasis added). Power Resource III thus forecloses the dissenting opinion‘s first argument, that under the plain language of FERC‘s Regulation, all Qualified Facilities must always be allowed to enter into Legally Enforceable Obligations. Instead, Power Resource III held that state regulatory agencies—rather than FERC—were empowered to define the parameters of the circumstances in which Qualified Facilities could form Legally Enforceable Obligations. Id. It is this essential holding which binds us here: under the cooperative federalism scheme created by PURPA, it is the PUC, rather than FERC, that defines the parameters for when a Qualified Facility may form a Legally Enforceable Obligation.
The same holds true here. The PUC had the discretion to determine the specific parameters for when a wind farm can form a Legally Enforceable Obligation, and through regulation determined that only when a wind farm can provide firm power may it enter into a Legally Enforceable Obligation. This does not, as the dissenting opinion fears, prevent all wind farms from ever forming Legally Enforceable Obligations. To the contrary: As we noted in our jurisdictional analysis, the PUC explicitly left open the possibility that other wind farms might be able to provide firm power, and thus form Legally Enforceable Obligations. Even Exelon is not, as the dissenting opinion claims, “ineligible” to form a Legally Enforceable Obligation. If Exelon is able to demonstrate that it can provide firm power, either through modification or through advances in technology, then it too may enter into Legally Enforceable Obligations.13 Cf. Matthew L. Wald, Texas Is Wired for Wind Power, and More Farms Plug In, N.Y. Times, July 24, 2014, at B1 (noting improvements in transmission infrastructure for Texas wind farms).
Here, just as in Power Resource III, the mere fact that PUC Rule 25.242 prevents some Qualifying Facilities from entering into Legally Enforceable Obligations at certain times does not mean that the PUC failed to implement FERC‘s Regulation. As we said in Power Resource III, “[t]he plain text of the FERC regulation... fails to mandate” that all Qualifying Facilities be allowed to form Legally Enforceable Obligations. Id. at 239. To determine otherwise here would put us in conflict with our own controlling precedent in Power Resource III.
B.
Exelon maintains that we should instead defer to FERC‘s Letter, which determined that PUC Rule 25.242 failed to implement, and was inconsistent with, FERC‘s Regulation. Specifically, FERC interpreted its Regulation to allow all Qualifying Facilities—even those that produce non-firm power—to form Legally Enforceable Obligations. Exelon conceded at oral argument that FERC‘s Letter is not entitled to deference under either Chevron or Auer v. Robbins, 519 U.S. 452, 457, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997).14 Instead, Exelon argues that we ought to give weight to FERC‘s informal determination based on its persuasive value. We disagree for several reasons.
We begin by noting that FERC is not a party to this litigation, and did not take a position on this question of interpretation before our court. FERC‘s involvement in this case has been limited to sending Exelon a single letter that supports the position that Exelon has taken in this case. We cannot defer to Exelon‘s proffered interpretation of the FERC Regulation, because it is foreclosed by our own reading of the Regulation in Power Resource III.15
Even if Exelon had not conceded that FERC‘s Letter was entitled to no deference under Chevron and Auer, a court‘s prior construction of a statute trumps an agency construction otherwise entitled to Chevron deference when the prior court decision held that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. Nat‘l Cable & Telecomm. Ass‘n v. Brand X Internet Servs., 545 U.S. 967, 982, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005).16
Power Resource III makes clear that our prior reading of FERC‘s Regulation unambiguously forecloses the interpretation offered by Exelon here:
If FERC had determined it necessary to set more specific guidelines concerning [Legally Enforceable Obligations], it could have done so. For example, the FERC regulations could have mandated
that the [Qualifying Facilities] must be able to lock in purchase rates with a [Legally Enforceable Obligation] prior to construction of a facility. The plain text of the FERC regulation, however, fails to mandate that requirement. Rather, defining the parameters for creating a [Legally Enforceable Obligation] is left to the states and their regulatory agencies.
Power Resource III, 422 F.3d at 239 (emphasis added).
Our approach does not, as the dissenting opinion argues, “flip [] Brand X on its head.” Dissent at 21. Rather, it is a straight-forward application of the doctrine, which is consistent with the way in which this court and our sister circuits have applied the decision. See Burks v. United States, 633 F.3d 347, 360 (5th Cir.2011); Tran v. Mukasey, 515 F.3d 478, 484 (5th Cir.2008); Sierra Club v. EPA, 479 F.3d 875, 880-84 (D.C.Cir.2007) (vacating an EPA rule that conflicted with circuit precedent and explaining that the EPA “must obey the Clean Air Act as written by Congress and interpreted by this court“).
Our decision is also consistent with the approach used in cases where our sister circuits have previously interpreted statutes and regulations to be ambiguous, and thus deferred to the agency‘s interpretation following the Supreme Court‘s ruling in Brand X, 545 U.S. 967, 125 S.Ct. 2688. In those cases, the courts emphasize that their prior decisions also noted аmbiguity in the text at issue. See, e.g., Garfias-Rodriguez v. Holder, 702 F.3d 504, 512 (9th Cir.2012) (“We wrote in Acosta that ‘[t]he statutes involved do not clearly indicate whether the inadmissibility provision or the penalty-fee adjustment of status provision should take precedence,’ and reached our conclusion by relying heavily on our earlier Perez-Gonzalez decision.“); Hernandez-Carrera v. Carlson, 547 F.3d 1237, 1245 (10th Cir.2008) (“The Supreme Court has twice explicitly found the statute to be ambiguous.“); Fernandez v. Keisler, 502 F.3d 337, 347-48 (4th Cir.2007) (“We thus do not hold that a court must say in so many magic words that its holding is the only permissible interpretation of the statute in order for that holding to be binding on an agency. In many instances, courts were operating without the guidance of Brand X, and yet the exercise of statutory interpretation makes clear the court‘s view that the plain language of the statute was controlling and that there existed no room for contrary agency interpretation.“); Dominion Energy Brayton Point, LLC v. Johnson, 443 F.3d 12, 17 (1st Cir.2006) (“The short of it is that the Seacoast court, faced with an opaque statute, settled upon what it sensibly thought was the best construction of the Clean Water Act‘s ‘public hearing’ language.“); Levy v. Sterling Holding Co., LLC, 544 F.3d at 503 (explaining that in the prior case “we struggled to divine their applicability to the instant fact pattern. . . [and] repeatedly noted the lack of clear guidance in the text or elsewhere regarding whether and to what extent reclassifications fell within the Rule‘s scope“); see also Note, Implementing Brand X: What Counts as a Step One Holding?, 119 Harv. L.Rev. 1532, 1538 (2006) (discussing the possible ways to implement Brand X). In contrast to these cases, in Power Resource III we determined that the “plain text” of FERC‘s Regulation allowed the PUC to limit the situations in which Qualifying Facilities can form Legally Enforceable Obligations. Thus, under Brand X, the interpretation put forward by Exelon would not be entitled to deference even if counsel had not conceded this point at oral argument.
Contrary to the dissenting opinion‘s claim, we are not substituting our own reading of the regulation for FERC‘s here. Nor are we deferring “based on nothing more than the state regulatory authority‘s say-so.” Dissent at 401. Instead, we are deferring to the PUC‘s official interpretation of the Regulation in a promulgated state regulation because our precedent requires us to defer to the PUC on this particular issue, and prevents us from deferring to Exelon‘s proffered interpretation. Like FERC, the PUC too has a great deal of expertise. Indeed, Texas is rather unique in that it runs its own electric grid. Even if that were not the case, Congress delegated the authority to make this call to the PUC.
C.
The reading advocated by Exelon would also render PURPA subsection (d)(1) superfluous.17 Subsection (d)(1) of FERC‘s Regulation allows a Qualifying Facility to provide power to the utility only on an as-available basis, and requires the Qualifying Facility to price the power at the moment of delivery.
Under the reading advocated by Exelon and adopted by the district court, every Qualifying Facility must have the option to form a Legally Enforceable Obligation, and thus to select between the two pricing options available under subsection (d)(2). If every Qualifying Facility may take advantage of the choice provided by subsection (d)(2), it is hard to understand why Congress or FERC would also include a separate subsectiоn limiting Qualifying Facilities to one pricing option. Exelon‘s reading is thus at odds with one of the most basic interpretive canons, that a statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S. 303, 314, 129 S.Ct. 1558, 173 L.Ed.2d 443 (2009) (internal quotation marks and brackets omitted). When presented with two plausible readings of a regulatory text, this court common-sensically follows the same principle and prefers the reading that does not render portions of that text superfluous. See Nat‘l Ass‘n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 668, 127 S.Ct. 2518 (2007) (“But this reading would render the regulation entirely superflu-
In contrast, the PUC‘s reading of the provisions gives effect to both subsections: Only if a Qualifying Facility can guarantee a particular quantity of power at a particular time can it take advantage of the additional pricing option under subsection (d)(2). Occidental notes that this reading also supports the congressional intent that rates under
D.
In sum, Exelon has failed to show that
IV.
We VACATE the portion of the judgment regarding Exelon‘s challenge to the PUC Order and direct the district court to dismiss for want of subject matter jurisdiction. As to the remaining claims, we REVERSE and REMAND for proceedings consistent with this decision.
EDWARD C. PRADO, Circuit Judge, concurring in part and dissenting in part:
I concur in the majority‘s carefully reasoned jurisdictional analysis. But I have serious reservations about the majority‘s arguments on the merits, and I must therefore respectfully dissent. The effect of the majority‘s opinion is to undermine an important federal program that promotes renewable energy. The majority rejects the considered view of the federal
This case concerns the distinct roles Congress gave to federal and state regulatory authorities in Section 210 of Title II of the Public Utility Regulatory Policies Act of 1978 (“PURPA“).
These interlocking components of
The majority diverges from the detailed reasoning of the district court, which, like FERC, had found that the PUC had failed to implement the regulation. In doing so, the majority departs from the plain language of the regulation, which mandates that every qualifying facility shall have the option to form legally enforceable obligations. PUC Rule 25.242 deprives qualifying facilities of that option and therefore is inconsistent with the regulation. Even if the regulation did not plainly bar the PUC‘s regulation, the majority also errs by refusing to defer to the FERC‘s expert interpretation of its own regulation.
I. DISCUSSION
We review a district court‘s interpretation of a federal regulation de novo. The starting point for our court‘s analysis is to apply standard interpretive principles to determine whether FERC (in its rule) or Congress (in
If the regulation is silent or ambiguous—that is, it does not answer the precise question at issue—after using ordinary tools of statutory interpretation, our court then must confront a difficult issue of deference doctrine: where Congress has given important roles to both a federal agency and state regulatory authorities, and those federal and state agencies offer conflicting interpretations of the federal regulation, to which agency, if any, should we defer? We typically defer to a federal agency‘s reasonable interpretation of its own regulation. But the Appellants and the majority assume that the discretion afforded state regulatory authorities in implementing the regulation suggests that they deserve the deference, not FERC.
As I explain below, we ought to give FERC deference because FERC is the author of the regulation at issue and the structure of
II. “STEP ONE”
Each qualifying facility shall have the option either:
(1) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility‘s avoided costs calculated at the time of delivery; or
(2) To provide energy or capacity pursuant to a legally enforceable obligation for the delivery of energy оr capacity over a specified term, in which case the rates for such purchases shall, at the option of the qualifying facility exercised prior to the beginning of the specified term, be based on either:
(i) The avoided costs calculated at the time of delivery; or
(ii) The avoided costs calculated at the time the obligation is incurred.
A. All Qualifying Facilities Are Entitled to Create Legally Enforceable Obligations.
The key phrase in dispute is “Each qualifying facility shall have the option . . . [t]o provide energy . . . pursuant to a legally enforceable obligation.” The majority looks at that phrase and concludes that “the plain text of the FERC regulation fails to mandate that all Qualifying Facilities be allowed to form legally enforceable obligations.” Majority op. at 397 (citation and internal quotation marks omitted). I strongly disagree.
FERC spoke “in terms of the mandatory ‘shall,’ which normally creates an obligation impervious to judicial discretion.” Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35, 118 S.Ct. 956, 140 L.Ed.2d 62 (1998); see, e.g., Nat‘l Ass‘n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 661-62, 127 S.Ct. 2518, 168 L.Ed.2d 467 (2007) (language in the Clean Water Act that EPA “shall approve” an application was mandatory and removed EPA‘s discretion not to approve the applications); Black‘s Law Dictionary 1375 (9th ed.2009) (noting that it is the “mandatory sense [of ‘shall‘] that drafters typically intend and that courts typically uphold“). The majority points to no argument that would alter this presumption of a mandate.
The terms of this mandate require the state regulatory authority to preserve an option belonging to each qualifying facility to form a legally enforceable obligation. The option belongs to each qualifying facility, which means that it belongs to “every” qualifying facility. See Sierra Club v. EPA, 536 F.3d 673, 678 (D.C.Cir.2008) (“‘Each’ means ‘[e]very one of a group considered individually.‘” (quoting American Heritage Dictionary 269 (4th ed.2001))). Every qualifying facility “ha[s]” the option; not the state regulatory authority. Thus, the state regulatory authority may not make the choice for each qualifying facility. See 45 Fed.Reg. 12,214, 12,224 (1980) (“The Commission intends that rates for purchases be based, at the option of the qualifying facility, on either the avoided costs at the time of delivery or the avoided costs calculated at the time the obligation is incurred.” (emphasis added)).
Additionally, the option guarantees the ability to form a legally enforceable obligation. The term “legally enforceable obligation” is scarcely defined, and the ma-
B. The PUC Firm-Power Rule Makes Some Qualifying Facilities Ineligible to Form Legally Enforceable Obligations.
As the majority states, “the PUC‘s rule implementing FERC‘s Regulation permits only a Qualifying Facility that generates ‘firm power’ to enter into a Legally Enforceable Obligation.” Majority op. at 385 (citing PUC Rule 25.242). That alone should be enough to conclude that the PUC rule “fail[s] to comply” with the implementation requirements imposed on it by
The majority says that “there is no FERC Regulation or
Finally, our interpretation of the regulation should give effect to the purposes of the statute. Congress identified a problem: electric utilities were monopsonies, lone buyers of energy in a market with many potential producers of energy, and “traditional electric utilities were reluctant to purchase power from . . . nontraditional facilities.” FERC v. Mississippi, 456 U.S. 742, 750, 102 S.Ct. 2126, 72 L.Ed.2d 532 (1982). Congress sketched out a bold solution to that problem—mandatory purchases of energy by electrical utilities from qualifying facilities,
The majority appears to endorse the view that a contrary purpose of the statute should prevail: “the congressional intent that rates under
The idea that the court can read FERC‘s regulation as violating the terms of the statute—but for the saving interpretation that Occidental offers—runs contrary to the Chevron canon. It is inappropriate for the court to assert that “[b]ecause only firm power Qualifying Facilities can provide that kind of [cost] certainty, it makes sense that only they should be able to select between the rate options.” Majority op. at 400. It may “make[] sense” to us lay judges, though I tend to think not. But it makes as much sense to do as FERC has done—namely, to provide every qualifying facility with the option to enter into a legally enforceable obligation and trust that “in the long run, ‘overestimations’ and ‘underestimations’ of avoided costs will balance out.” 45 Fed Reg. 12,224. The point is, though, that it really is not for a court to say. Congress delegated the authority to weigh these considerations to an expert agency. Only by displacing FERC‘s role as Congress‘s delegatee and going beyond the issue in dispute can the court offer its merely plausible reading of statutory language and conclude that FERC is doing it wrong.
III. “STEP ZERO”
Supposing that we could get past the mandatory language of the statute, I would still find that the district court properly adopted FERC‘s view of its own regulation. The majority would have us upset this basic doctrine of agency deference because the PUC enjoys some discretion in implementing FERC regulations. The majority‘s conclusion that the PUC acted within its discretion to answer the supposedly ambiguous question in this case lacks foundation. But it is worth first examining the hard issue of first impression this case actually creates and why, nevertheless, deference to FERC makes sense.
A. The Court Should Defer to FERC‘s Interpretation of Its Own Regulation, Even Under PURPA‘s Cooperative Federalism Scheme.
It is well-established that a federal agency‘s interpretation of its own regulation “becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.”
If a statute entitles two agencies to take administrative actions based on promulgated regulations under the statute and those agencies come to conflicting interpretations of the regulation, we must ask a prior question: To which agency did the statute give “the power to render authoritative interpretations of [the] regulations“? Martin v. Occupational Safety & Health Review Comm‘n, 499 U.S. 144, 152, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). To answer that question, courts must “infer from the structure and history of the statute” which agency should be the primary interpreter of the regulations.3 Id.
In Martin, the court examined the split-enforcement scheme Congress created under the Occupational Safety and Health Act (“OSH Act“). The OSH Act entrusted the Secretary of Labor with “responsibility for setting and enforcing workplace health and safety standards,” but delegated authority the Occupational Safety and Health Review Commission to adjudicate disputes, including employer challenges to the Secretary‘s enforcement actions. See id. at 147-48 (citing
Faced with an appeal in which the Commission and the Secretary offered conflicting interpretations of an OSH Act regulation, the Martin Court held that the Secretary deserved the deference. Id. at 152. The Court placed
Martin‘s statute-specific analysis should guide our analysis of the deference dilemma here. Like the delegation to the Secretary under the OSH Act,
Congress apparently did not just want FERC to provide its views on its regulation through enforcement actions;
This scheme strongly indicates that “the power to render authoritative interpretations of [
The layered design of the enforcement provisions further points to FERC‘s leading interpretive role. Although
What mitigates the effect of this FERC trump for the PUC is the latitude that FERC has granted state agencies “in determining the manner of implementation of [FERC‘s] rules, provided that the manner chosen is reasonably designed to implement the requirements of [
In light of FERC‘s stated position, our court has previously said that “[w]e review the PUC‘s implementation with deference because [a] state has broad authority to implement
This discretion is limited, though, and, in any case, it tells us little about which agency Congress wanted to speak with the force of law. Generally, implementation discretion is limited by the requirement that the chosen means of implementation
B. The Majority‘s Reasons Do Not Support Deferring to the PUC.
I am unconvinced by the majority‘s reasons for deferring to the PUC‘s interpretation of the FERC regulations.
1. No FERC Interpretation
The majority opines that there is no FERC interpretation to interpret in this case. Not so. First, while the majority opinion correctly notes that FERC is not a party and did not take a position before our court, the fact that FERC is not a party makes no difference. In fact, courts regularly grant deference to nonparty amici. Seе, e.g., Decker v. Nw. Envtl. Def. Ctr., — U.S. —, 133 S.Ct. 1326, 1336-37, 185 L.Ed.2d 447 (2013) (giving Auer deference to the EPA‘s interpretation offered in an amicus brief). In any case, the FERC interpretation is “before our court” not only because its Declaratory Order is in the record and has been briefed by the parties, but also because FERC‘s Declaratory Order was the jurisdictional prerequisite for the case even coming to our court.
Also note that if the court required that the interpretation be argued by a party “before our court,” we would actually lack a PUC interpretation, too. Before our court, the PUC has notably abandoned the interpretation of the FERC regulation that it made in the district court, instead relying entirely on the now-repudiated argument that our court lacks jurisdiction. It would seem a double standard for the majority to rely on this argument to negate FERC‘s interpretation while preserving the PUC‘s.
Second, the majority acknowledges that FERC offered its interpretation in its Declaratory Order, but minimizes the effect of that interpretation by characterizing it as a “single letter”5 sent to Exelon. This misunderstands the situation. FERC made its Declaratory Order pursuant to its regulatory authority. See supra n. 4. FERC published notice of Exelon‘s predecessor‘s filing in the Federal Register, inviting interventions and protests. See JD Wind 1, LLC, et al.; Notice for Petition for Declaratory Order, 74 Fed.Reg. 51147-02 (Oct. 5, 2009). FERC received briefing from the Appellants in that proceeding, and also from a variety of other industry groups, renewable energy developers, and utilities. See JD Wind 1, LLC, 129 FERC ¶ 61,148, at ¶ 61,630-32. Many of these intervenors were under the impression that FERC‘s interpretation was not just a one-off missive intended for a single party, but a wide-ranging policy interpretation.
2. Power Resource III
Power Resource III does not support the majority‘s holding. Two important limitations make that case inapplicable here. First, Power Resource III‘s statement of deference was highly context-specific. This case is different. Second, that case tells us nothing about which agency deserves deference where FERC has spoken and disagrees with a state agency‘s interpretation of FERC‘s regulations.
FERC‘s grant of discretion to the PUC was necessarily tied to the particular issue in the case—conditions on the formation of legally enforceable obligations. Every indication shows that the Power Resource III court was careful not to overstate the scope of the PUC‘s discretion. Its crucial statement of deference, which the majority recites, accords deference only “with respect to the approval of purchase contracts between utilities and QFs.”6 The district court thoroughly discredited reliance on Power Resource III in its opinion below:
In Power Resource [III], the Fifth Circuit considered whether [the PUC]‘s ninety-day rule was a valid implementation of
PURPA . The ninety-day rule simply limits when in time a LEO can be created; no LEO can be established more than ninety days before the QF has power available, or will have power available. After careful analysis, and noting the discretion afforded the States in determine when a LEO is formed, the Fifth Circuit upheld the rule. [422 F.3d] at 240 . . . . Unlike the firm-power rule, any wind QF can comply with the ninety-day rule; it is simply a matter of timing. Although there are no doubt considerable practical expenses and difficulties involved, in theory any QF can comply with the ninety-day rule through careful planning in advance, such as in what sequence to seek financing, obtain permitting, and begin different phases of construction, in relation to when to send LEO paperwork to a utility. . . . By contrast, the firm-power rule is simply insurmountable for an entire class of QFs. No sequence of permitting, financing, and construction will magically transform the vagaries of the wind into the constant, predictable stream of energy demanded by the firm-power rule. As such, this case falls outside the scope of guidance offered by Power Resource [III].. . . .
Put another way, Power Resource [III] reviewed [a] rule [] governing when and how a LEO is formed, whereas the firm-power rule determin[es] whether some types of QF can ever obtain a LEO.
Exelon Wind 1, LLC v. Smitherman, 2012 WL 4465607, at *12 (W.D.Tex.2012) (emphasis added). The difference between that case and this one is one of kind, not degree.
West Penn [Power Co., 71 F.E.R.C. ¶ 61,153, 61,495 (May 8, 1995),] and its progeny Jersey Central Power & Light Co., 73 F.E.R.C. ¶ 61,092, 61,297 (Oct. 17, 1995), and Metropolitan Edison Co., 72 F.E.R.C. ¶ 61,015, 61,050 (July 6, 1995), support the proposition that the FERC regulations grant the states discretion in setting specific parameters for LEOs.
Id. at 238. In other words, “FERC has given each state the authority to decide when a LEO arises in that state.” Id. at 239 (emphasis added). Therefore, Power Resource III does not stand for unalloyed deference to the state regulatory authority in interpreting FERC‘s regulations. At best, it stands for deference to the state regulatory authority when FERC has taken no action and has previously announced that it will leave an ambiguous provision to the state agencies to interpret. FERC has offered a contrary interpretation to the PUC here, and so Power Resource III cannot control.
Still, Power Resource III is entirely consonant with the Martin analysis laid out above. The Power Resource III court made its deference determination contingent on whether Congress and FERC intended for the state to make an authoritative interpretation and whether the state acted within the scope of that delegation. In particulаr, Power Resource III considered the structure of the statute, see id. at 236 n. 2, and FERC‘s own position that defining the parameters of LEO formation was within the state‘s discretion, id. at 238. Based on those considerations, the court necessarily concluded that the state had been assigned the role of chief implementer and chief interpreter of those particular rules. Adopting the “Step Zero“-like Martin framework merely makes explicit our underlying considerations of Power Resource III, and it explains why this case is different.
3. Brand X
In rejecting Auer deference for FERC‘s Declaratory Order, the majority invokes the Brand X doctrine even though it is inapposite. See Nat‘l Cable & Telecomms. Ass‘n v. Brand X Internet Servs., 545 U.S. 967, 980-86, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). That case held that “[a] court‘s prior construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision held that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.” Id. at 982. The majority then asserts that Power Resource III‘s “prior reading of FERC‘s Regulation unambiguously forecloses the interpretation offered by FERC.” Majority op. at 397. I disagree. As discussed above, Power Resource III answered a different question, so even if that case did offer an unambiguous interpretation of the regulation, that interpretation would not bind us.
In addition, as Power Resource III states in a portion quoted in the majority opinion, “[t]he plain text of the FERC regulation . . . fails to mandate [the] re-
In fact, the majority flips Brand X on its head in concluding that a prior judicial construction, which held that the regulation is ambiguous, can be used as a bar against deferring to a later agency construction. Brand X establishes the opposite holding: it ensures that a later agency construction of an ambiguous statute or regulation is entitled to deference in spite of a prior judicial opinion that interpreted the ambiguous provision a different way. Here, the majority in effect punishes FERC for failing to defend its (purportedly identical) position in a prior case, but аs Brand X said, “[a]gency inconsistency is not a basis for declining to analyze the agency‘s interpretation.” Brand X, 545 U.S. at 981. Ultimately, the majority‘s point boils down to simply saying that a prior opinion of this court deferred to the PUC in implementing an ambiguous regulation.
4. Superfluity Engendered by FERC‘s Interpretation
The next reason the majority gives for its refusal to defer to FERC is that “the reading advocated by [FERC and] Exelon would render
Fundamentally, the opinion conflates the desirability of the (d)(2) option with its necessity. That is, although forming a legally enforceable obligation is desirable, that option is not always practically available, in which case (d)(1) provides a complementary or second-best scheme for qualifying facilities. Thanks in part to rules like the one our court affirmed in Power Resource III, a legally enforceable obligation can be harder to form. Consequently, selling power without a legally enforceable obligation can save those formation costs. In the event that a qualifying facility begins producing energy but is barred for ninety days from forming a legally enforceable obligation, (d)(1) would allow the qualifying facility to begin selling its energy without waiting for the formation of the legally enforceable obligation. So, even admitting my ignorance of the intricacies of electricity markets, I still can confidently say that (d)(1) would not be superfluous merely because (d)(2) is also an available option for qualifying facilities.7
5. Concession by Counsel
Finally, the majority concludes that it should not apply Auer deference to the Declaratory Order beсause Exelon‘s counsel conceded the point at oral argument. Simply put, it is our job, not counsel‘s, to interpret the regulation correctly and to determine whether deference to an agency is appropriate, so counsel‘s concession is of no legal moment.
In sum, the majority does not provide a good reason to refuse to give controlling weight to FERC‘s interpretation of its own regulation. The majority‘s deference analysis rests on five grounds: (1) the absence of a FERC interpretation; (2) an application of Power Resource III; (3) an extension of Brand X analysis; (4) a superfluity argument; and (5) the concession of Exelon‘s counsel.8 As I explain above, these grounds do not give good reason to offset the strong basis our court has for deferring to FERC. Therefore, assuming the regulation is ambiguous on the question at issue here, I believe the better approach would be to defer to FERC‘s reasonable interpretation of its own regulation, as stated in its Declaratory Order.
IV. CONCLUSION
The majority‘s opinion does not persuade me that the regulation is ambiguous or that we should not defer to FERC. Using standard tools of interpretation to uncover thе FERC regulation‘s plain meaning, I conclude that the PUC rule conflicts on its face with the FERC regulation. Even if the regulation were ambiguous, I would conclude that our court should defer to FERC‘s reasonable interpretation of that regulation according to well-established principles of administrative deference. I fear that the majority‘s approach will not only prevent the realization of the goals that Congress identified when it passed
Notes
Drew Thornley, Texas Wind Energy: Past, Present, and Future, 4 Envt‘l. & Energy L. & Pol‘y J. 69, 76-77 (2009) (quoting Gen. Elect. Energy, Analysis of Wind Generation Impact on ERCOT Ancillary Requirements 7 (2008)); see also John Shelton, Who, What, How, & Wind: The Texas Energy Market‘s Future Relationship with Wind Energy and Whether It Will Be Enough to Meet the State‘s Needs, 11 Tex. Tech Admin. L.J. 401, 408-09 (2010) (explaining that “the wind blows intermittently, and therefore the wind delivers energy intermittently as well“); Governor‘s Competitiveness Council, 2008 Texas State Energy Plan 16, 28 (2008) (same); Thornley, supra at 76 (“Largely because of its intermittent nature, wind is not a baseload resource; thus, it cannot meet a large portion of energy demand.“). The Martin test parallels the Supreme Court‘s Chevron “Step Zero” analysis, which asks whether Congress delegated authority to make interpretations carrying the force of law. See United States v. Mead, 533 U.S. 218, 226-27, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001); see also Gluck, supra, at 599 (“An extension of Mead, or something like it, to include state implementers—that is, to take into account the specific ways that Congress utilizes state implementers to determine the level of deference the various concurrent implementers should receive—may not be a radically different approach than the one currently in use.“); Jacob E. Gersen, Overlapping and Underlapping Jurisdiction in Administrative Law, 2006 Sup.Ct. Rev. 201, 219, 223-24 (stating that deference questions in a statute administered by multiple agencies is “best treated as a Step Zero inquiry” and discussing Martin as an illustration of that inquiry). Under that analysis, courts determine where to place a single agency‘s interpretation of a statute along a spectrum of deference. See Mead, 533 U.S. at 236-37. Courts look for that “[d]elegation of [interpretive] authority . . . in a vаriety of ways, as by an agency‘s power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of a comparable congressional intent.” Id. at 227. The analysis, then, is attentive to the structure and text of each specific statute.Wind generation has technical characteristics which inherently differ from those of conventional generation facilities. Conventional generation can be controlled, or ‘dispatched’ to a precise output level. The primary energy source for wind generation, however, is inherently variable and incompletely predictable. Thus, electrical output of wind generation plants cannot be dispatched.
JD Wind 1, LLC, 129 FERC 61,148 (Nov. 19, 2009). The “letter” that FERC sent Exelon is also known as a “Declaratory Order“—the preferred nomenclature. See, e.g., Indus. Cogenerators v. FERC, 47 F.3d 1231 (D.C.Cir.1995).does not contain the words “firm” or “non-firm“.... This is contrary to the language of the regulation which provides that “[e]ach qualifying facility shall have the option either: to choose the section 292.304(d)(1) method of sale, or the section 292.304(d)(2) method of sale;”
In conclusion, we find that the Texas Commission‘s order, limiting the award of a legally enforceable obligation to only those Qualifying Facilities that provide “firm” power, is inconsistent with our regulations implementing PURPA. Under our regulations, [Exelon] Wind has the right to choose to sell pursuant to a legally enforceable obligation, and, in turn, has the right to chоose to have rates calculated at avoided costs calculated at the time that obligation is incurred.
The majority also rejects Auer deference to FERC on the ground that it occasions a “shift in power [that] might raise . . . ‘troublesome’ Tenth Amendment concerns.” Majority op. at 396 n. 13. The majority does not elaborate on what those constitutional concerns might be, so it is impossible for me to respond to the majority‘s statement. In any case, the majority does not rely on this constitutional avoidance argument for its deference holding.CHAIRMAN SMITHERMAN: Well, I think the problem here is that there‘s no definition of “not readily available power.” So that sort of leads us into a confusing state. COMM. NELSON: I think we just want to clarify it so that in the future, if somebody came in and could meet that standard that we‘re not being preclusive.
....
COMM. ANDERSON: Because I could envision in the future wind, for a variety of reasons, could be readily available whether through storage or geographical diversity or mixed with solar.
COMM. NELSON: Right. And it really depends on the area of the state—
COMM. ANDERSON: It really does.
COMM. NELSON:—because, you know, along the coast the pattern is totally different and it blows at peak times.
