*1 рrocess. And to achieve jury in the selection outcome, panel relies
this remarkable FREEHOLD COGENERATION delay prosecution in the ASSOCIATES, L.P., calculus on possibly could not have appeal that Appellant, Simmons’ him under Batson. prejudiced v. COMMIS- BOARD OF REGULATORY my and write with I words
While measure OF the STATE OF NEW SIONERS restraint, plain in- circumspection and great JERSEY; Jersey Central Power ap- I that I am requires that tegrity Light Company. Judge appeal. of this palled at outcome “perhaps peo- indicates Hutchinson No. 94-5168. Jersey ... fail to understand ple of New Appeals, Court of United States participation of direct person how a convicted Third Circuit. doctor, elderly an murder of in the brutal into the streets the middle Argued who ventured Oct. 1994. emergency, to an night respond Decided 1995. Jan. Op. trial or released.” at [is] afforded a new Rehearing Petition for March Sur statement, as I agree I with that do only myself. it I can add not understand legitimately expresses panel
that while rights constitutional
concern about Simmons’ integrity of his con-
and “the constitutional
finement,” suggests Maj. op.-at it never guilt any question of Simmons’
that there is rejects going it all his contentions
and indeed Maj. op. at 1163 n. I.1 At
to those issues.
bottom, panel orders the release of a imprisonment to life
murderer sentenced years, only
plus 21 to 25 retry can
possibility that somehow the state years murder.
him 18 after the argued
I that not- realize that could made, points I have
withstanding the simply does not merit in banc consider-
case here are unusual.
ation because the facts
Nevertheless, I from the denial of dissent I
rehearing in banc as believe that at a Jersey people
minimum the of New and the
family are еntitled to have this of Dr. Doktor Judge full
ease considered court. joins opinion.
Alito (D.N.J.1992). F.Supp. 781-86
1. The district court set forth the facts of the case Arvonio, opinion. in its See Simmons v. *4 Shapiro (argued), Lynn Robert F. N. Har- gis, Dickey, Parke, David C. Chadbourne & D.C., Washington, Walsh, Charles J. Sills Cummis Ep- Zuekerman Radin Tischman Gross, P.A., Newark, NJ, stein & appel- for lant.
Steven E. (argued), Greenbaum P. John Biedermann, Berlack, Liberman, Israels & City, Jersey New York Cent. Power & Light Co. (ar- Granger,
Theodore C. Public Advocate gued), Dept, of the Public Advocate of New Newark, NJ, Jersey, Poritz, Deborah T. Gen., Atty. Silkowitz, Atty. Andrea M. Asst. Gen., Wallenstein, Deputy Atty. Helene S. Trenton, NJ, (argued), Regu- Gen. for Bd. of latory Com’rs. Sooper, Energy Regulato-
Samuel
Federal
Commission,
ry
DC,
Washington,
for Federal
Energy Regulatory Com’n.
STAPLETON, HUTCHINSON,
Before:
ROSENN,
Judges.
and
Circuit
THE
OPINION OF
COURT
ROSENN,
Judge.
Circuit
genesis Congress’
This case has its
crea-
promote
tive effort to
the use of alternative
energy
sources
state and federal
authorities. To make the nation more ener-
gy independent, Congress sought to encour-
age
power production
small
facilities that use
fuels,
solar, wind,
renewable
such as
biomass
water,
cogeneration
and
and
facilities
efficiently by
use traditional
more
fuels
se-
quentially producing
electricity
both
energy.
steam or other useful thermal
Free-
(“Free-
abundant,
Associates,
domestically produced fuels.
L.P.
Cogeneration
hold
PURPA,
hold”)
Congress
facility
Congress
enacting
directed the
type of
is the
promulgate
rules and
promote.
FERC
wished to
buy
requiring public utilities to
electric ener-
sought a
January
Freehold
On
to,
from,
quali-
gy
and to sell electric
declaratory judgment
in the United States
(“QFs”).
fying cogeneration
Id.
facilities
Jersey
District of New
District Court
regulato-
Congress
directed state
824a-3.2
Regulatory Commissioners
that the Board of
BRC,
authorities,
ry
imple-
such as the
“BRC”)
(the
Jersey
of New
of the State
regulations promulgated
ment the rules
Utility
Federal Public
preempted
by the FERC.
Id.
(“PURPA”) from
Act
Regulatory Policies
approved
previously
modifying the terms of
early
pursuant
to the then-effec-
(“PPA”)
agreement
between
power purchase
policies
procedures
cogeneration
tive
Jersey Central Power
Freehold and
(the
Jersey
the New
Board of Public Utilities
(“JCP
L”),
Jersey
&
a New
Light Company
BRC,
“BPU”),
predecessor agency to the
sought
order
utility.
also
an
publiс
negotiations with JCP
Freehold commenced
proceedings.
ongoing BRC
enjoining the
concerning
potential power purchase
L&
summary judgment, and
Freehold moved
agreement. During
pendency
of these
to dismiss on
and JCP & moved
the BRC
negotiations,
adopted certain com-
the BPU
*5
court denied
grounds. The district
various
bidding guidelines
replaced
petitive
which
summary judgment
Freehold’s motion
by
negotiation as
method
which utilities
the
to dis-
motion
granted
the defendants’
procure long-term power purchase
were to
miss,
matter
holding that
it lacked
cogeneration
such
agreements with
facilities
matter. Freehold
jurisdiction to hear the
Freehold.
as
timely appeal to this court.1
filed
competitive bidding
After
these
We reverse.
effect,
petitioned
Freehold
guidelines took
I.
exempt, it from
“grandfather,”
to
or
the BPU
Act,
guidelines.
& L
newly adopted
JCP
Power
16 the
Federal
Under
July
petition. By order dated
Energy
opposed the
seq.,
§
the Federal
791a et
U.S.C.
“FERC”)
(the
31, 1989,
agreed
grandfather
to
had
the BPU
Regulatory Commission
negotiations with JCP
“public
Freehold’s
regulate
Freehоld.
to
the exclusive
pre
thereby governed
& L were
power at wholesale
sell electric
utilities” that
824(e).
procedures, which al
existing policies
§
Id. at
commerce.
in interstate
negotiate
L
and JCP & to
Power
lowed Freehold
the Federal
Congress modified
power purchase agreement.
Utility
the terms of a
of the Public
the enactment
Act with
after,
years of
three
Act,
seq.,
§
On March
Id. at
823a et
Regulatory Policies
negotiations, Freehold
JCP &
legislative effort
extensive
comprehensive
part
as
of a
agreement
power purchase
energy
L entered into a
crisis.
a nationwide
to combat
(the “PPA”),
to commence on the date
power genera
to control
is intended
PURPA
approval and to continue thereafter
long-term economic BRC
costs and ensure
tion
twenty years.
ap
period
The BRC
reliance on
by reducing the nation’s
growth
8,1992.3
July
proved
more
the PPA order dated
increasing the use of
gas and
oil and
entity
primarily
facility
an
jurisdiction pursuant
to 28
must be owned
This court has
engaged
generation
of electrical
in the
or sale
appeal
§
from the district
U.S.C.
1291 over this
796(18)(B).
power,
§
is a
U.S.C.
judgment.
court's final
The
II,
QF.
court
discussed in section
district
infra.
challenges the BRC's 1988 order
3.JCP & L
produces
cogeneration facility
which
is one
A
grandfathering
the 1988 rate
Freehold from
energy,
of useful
and steam or forms
electrical
approving
guidelines, and the 1992 BRC order
commercial,
energy
used for industrial
which are
However,
are
both of these orders
the rates.
cooling purposes.
U.S.C.
heating,
or
nonappealable.
now final and
QF,
796(18)(A).
qualify as a
§
In order to
Additionally,
not address the Division of
we will
facility
requirements set forth
meet the
must
("DRA”) argument
292.101,
Ratepayer
FERC,
seq.,
Advocate’s
§
et
18 C.F.R.
PPA,
terms of
L
PPA,
Under the
JCP & is
farther
found that
which refers
pay
disputes
Freehold 100% of JCP & L’s 1989
agreement
under the
to “the BRC
purchase
competent jurisdiction
avoided cost
electrical
or a court of
in the
power. Avoided cost is the cost which
Jersey,”
JCP
State of
supported
New
finding
by purchasing energy
& L avoids
from Free-
jurisdiction.
there was no federal
generating
hold rather than
itself
district court did not
preеmption
address the
purchasing
it from some
argument
other source. 16
opinion.
in its
824a-3(d).
§
U.S.C.
12,1993,
response
April
On
to decreases
II.
obtaining
power,
the cost of
electrical
PURPA,
In enacting
Congress sought
public
notify
BRC directed
utilities to
it of
to overcome traditional electric utilities’ re
any power supply contracts which were no
purchase power
luctance to
from nontradi
longer economically beneficial. The tional
generation
electric
facilities and to re
encourage buy
wished to
outs and other re-
duce the financial burden of state and federal
power
medial measures
reduce
costs.
regulation on nontraditional facilities. FERC
reviewing
Freehold,
After
its contract with
v. Mississippi,
750-51,
JCP & concluded that the PPA should be
2126, 2132-33,
(1982).
S.Ct.
rate term of
PPA in
“[sjtate
sions of the Federal
Act
Power
negotiate
buy
an appropriate
out of the PPA.
regulations respecting
rаtes,
laws and
or
provided
parties
The order further
that if the
respecting
organizational
reg-
financial or
agreement
days
did
reach an
within 30
of
ulation,
§
of electric utilities.” Id. at
824a-
order,
the BRC would commence an evi-
3(e)(1). In
provisions
accordance with these
dentiary hearing to consider various courses
PURPA,
of
promulgated regula-
the FERC
of action.
governing
tions
transactions between utilities
January
this
filed
action on
QFs, including
specific
requirement
1994, seeking
judgment
declaring that the
utility
purchase electricity
that a
must
made
preempted by
BRC’s order is
PURPA
by QFs
up
utility’s
available
at a
rate
enjoining
court order
the enforcement of that
full
§§
avoided cost. 18 C.F.R.
292.303-304
granted
order. The district court
the defen-
(1993).
dismiss,
dants’ motion to
holding that section
210(g) PURPA,
210(e)(1)
§
of
824a-3(g),
16 U.S.C.
Acting pursuant
to section
Act,
PURPA,
§
the Johnson
28 U.S.C.
divested
promulgated regula-
the FERC also
jurisdiction.
it of
matter
exempting QFs
The court
tions
from various federal
approval
(3d
Cuyler,
BRC’s
of a 1989 avoided cost in
Patterson v.
729 F.2d
Cir.
making
1992 was ultra vires because the DRA is
1984).
argument
appeal.
for the first time on
See
by
The district
reg-
final dеcision
the FERC.
requirements. The
regulatory
and state
court reasoned that:
pertinent part:
state
ulations
],
210(g) Congress
[B]y enacting [section
(1)
exempted ...
from
[QF]
be
Any
shall
judicial
specifically provided that
review
respecting:
regulation
law or
State
regulatory authorities
orders
the State
(i)
utilities; and
electric
The rates of
only by
courts or
to be made
the state
(ii)
reg-
organizational
financial and
only
where Con-
FERC. The
instance
utilities.
ulation of electric
jurisdic-
gress provided for federal court
judicial
party
seeks
review
tion is where
292.602(c).
§
18 C.F.R.
Here,
has
FERC.
FERC
of a decision
no
which this Court
made
determination
A.
review,
allege
might
nor does Freehold
the district
Freehold asserts
Thus,
jurisdiction.
un-
as a basis for
jurisdiction over
question
court had federal
PURPA,
does not have
der
this Court
§ 1331 be
to 28 U.S.C.
pursuant
this case
challenge
over Freehold’s
pro
that the BRC
claimed
cause Freehold
the BRC’s order.
federally-established
ceeding violated
however,
210(g)’s language,
shows
Section
support, Freehold relies
rights. As
PURPA
scope
than the
it is more limited
Lines, Inc., 463
Air
U.S.
v. Delta
Shaw
210(g) pro-
district court believed. Section
(1983),
L.Ed.2d 490
vides:
Court stated:
which the
(1)
may
review
be obtained re-
Judicial
dispute that federal courts
beyond
It is
by a
specting
proceeding conducted
enjoin
state
jurisdiction over suits
have
regulatory authority
nonregulated
State
interfering with federal
from
officials
purposes
implement-
electric
injunc-
plaintiff
A
who seeks
rights_
ing any requirement of a rule under sub-
regulation,
state
on the
tive relief from
(a)
require-
...
the same
[under
section
regulation
pre-empted
ground that such
judicial
obtained
ments as
review
which, by virtue of the
by a federal statute
added).
(emphasis
2633]
under 16 U.S.C.
Constitution,
Supremacy Clause
Thus,
210(g)(1) applies only
to review
presents
ques-
a federal
prevail, thus
must
regulators or no-
proceedings
jurisdic-
courts have
tion which the federal
nregulated
designed
implement
utilities
§ 1331 to resolve.
tion under 28 U.S.C.
any requirement
promulgated
rules
*7
at
n.
2899
14
Id. at 96 n.
210(a),
pursuant
FERC
to section
16 U.S.C.
omitted).
(citations
Aireo Industrial
Accord
210(a)
824a-3(a).
requires
§
utilities
Section
Gases,
Group, Inc. v. Team
Inc. Div.
purchase energy
of BOC
to
from and sell
Fund,
Pension
850
Health &
sters
qualifying
prices.4
Welfare
facilities at certain
(3d Cir.1988) (district
F.2d
1032-34
parties disagree as to whether Free-
jurisdiction under sec
matter
court
implementa-
challenging
hold is
the BRC’s
cause of action
tion
on whether
1331 turns
210(a)
tion of the FERC’s rules under section
States).
laws of United
arises under
challenging
or whether it is
the BRC’s ac-
210(e)
supporting
tions under section
did not address section
The district court
argues,
and the
regulations.
Freehold
jurisdiction, but rather
read section
1331
amicus,
FERC,
exception
agrees, that Freehold is
carving out an
as
210(g) of PURPA as
validity
challenging
of state action
jurisdiction over all PURPA claims
to federal
by
judicial
implementing
adopted
rules
involving
review of a
except those
(f).
brought
210(g)(2)
applicable
shall be
under the
[Such
to this ac-
action
4. Section
is not
judicial
provides:
requirements
section
same
as
review
tion. That
2633],
§
under 16 U.S.C.
obtained
Secretary) may
Any
(including
person
regulation
a state
This case does not involve
utility,
against any
bring
electric
an action
210(f),
pursuant
promulgated
which
to section
power producer,
qualifying
qualifying
small
electriсity
governs
purchase
be-
the sale and
cogenerator
any requirement estab-
to enforce
QFs,
by
brought
nor was it
a
authority
tween utilities
regulatory
or non-
lished
a State
regulation.
QF
person against
regulated
utility pursuant
to enforce such
to subsection
electric
210(a). Rather,
pursuant
gard
to section
it
FERC
the Board’s Order implementing the
alleges
proceeding
that the BRC
is inconsis- FERC rules.”
210(e)
preempted
tent with and
section
The district court also relied on Greens-
regulations promulgated
and the FERC
ease,
boro. In that
the District Court for the
thereunder,
exempt QFs
which
from state Northern
Georgia
District of
held that sec-
utility regulation.
§
824a-
See
U.S.C.
210(g)
jurisdiction
tion
divested it of
over a
292.602(e).
3(e)(1);
18 C.F.R.
QF’s claim that
nonregulated utility
failed
to adhere to
implementation plan
its own
argue
The defendants
that Freehold’s com-
dealings
QF. Greensboro,
with the
210(a)
plaint
brought
under section
F.Supp. at 1374. The court held that
complaint
PURPA
refers to the
because
requires
PURPA
applied”
that such an “as
implemented
FERC’s rules
under subsection
(sic)
bought
court,
claim “must be
in state
(a).
court,
Before the district
jurisdiction
which has exclusive
‘to enforce
clearly
upon
implement-
relied
FERC’s rules
any requirement’
nonregulated
of a
utility’s
210(a)
arguing
under
ed
section
that the
implementation plan.”
(citing
Id.
16 U.S.C.
preempted.
BRC’s actions were
As noted
Thus,
§ 824a-3(g)(2)).
PURPA divested the
Freehold, however, such references were
court of
because the
in-
case
necessary
explain
what
the FERC’s
210(f)(1).
arising
volved a claim
under section
provided in
PURPA rules
order to establish
contrast,
this case does not involve a
the BRC’s actions were outside those
arising
210(f),
claim
supra
under section
see
pleadings reasonably
rules. The
read
can be
arising
note
rather a claim
under
.but
proceeding
to assert a claim that the
210(e).
allege
section
Freehold does not
preempted
inconsistent with and
section
unregulated
an
pro-
has failed to
210(e)
regulations
of PURPA and the FERC
vide service to it in violation of the authori-
thereunder,
promulgated
exempt QFs
which
ty’s implementation plan, or otherwise chal-
utility regulation.
from state
See Bristol
lenge
implementation
thе BRC’s
of FERC
Energy Corp.
Hampshire
v. New
Pub. Utils.
Rather,
applied.”
rules “as
Freehold com-
Comm’n,
(1st Cir.1994)
13 F.3d
plains that the BRC has interfered with its
(even though defendant sent out data re-
federally-granted right
exempt
to be
from
quests pursuant
certain
statute which
utility-type
regulation.
certain
See In-
precluded
jurisdiction,
federal
the court
dependent Energy Producers Ass’n v. Cali-
agreed
plaintiffs
with
that the case did not
Comm’n,
Pub. Utils.
No. C-91-2644
fornia
statute,
“arise
impli-
under” that
but rather
MHP,
(N.D.Cal.
the Johnson
Act,
solely on the Federal
jurisdiction be based
enacting
In
the Johnson
jurisdiction.
ed
claim that
Constitution.
Freehold’s
seriously
federal
curtail
Congress intended
rely
preempted
not
sole-
is
does
utility BRC’s order
subject of state
jurisdiction over the
ly
grounds, but also relies
Co.,
on constitutional
Telephone
373
Bell
Zucker v.
rates. See
PURPA,
In a
a federal statute.
similar
on
(E.D.Pa.1974),
748,
aff'd, 510
F.Supp.
750
ease,
Appeals
Eighth
Court of
Circuit
denied,
(3d Cir.),
422
cert.
U.S.
971
F.2d
preclude
not
that the Johnson Act did
(1975). held
2621,
1027,
C. supports finding jurisdiction that it lacks hear this matter.6 The district court further concluded that it subject jurisdiction lacked matter because
the PPA contains a choice
provision
of forum
III.
providing
disputes
that all
arising under the
The
argue
defendants
that
if
PPA
the federal
by
be
would
resolved either
the BRC or
jurisdiction
courts have
abstention is in-
Jersey
a New
state court. The court
applicable, this court should not address the
reasoned:
merits of
preemption
question, but
parties provided
that the PPA “shall
should
remand
consideration to the dis-
governed by
be
construed
accor-
trict court.
JCP
L
argues
& also
that dis-
dance with the laws of the State of New
missal is mandated because Freehold’s claim
Jersey applicable to contracts made and to
is moot and
ripe
adjudica-
otherwise not
State,
be
performed
irrespective
that
of
tion.
JCP & and the
additionally
BRC
application
any
of
conflicts of laws
assert that
disputes
there are
over material
Further,
provisions.”
parties
preclude
facts that
any grant of summary
“agree[d]
disputes arising
that all
under
judgment for Freehold and there are no “ex-
not
parties
[the PPA]
resolved between the
ceptional circumstances” justifying a resolu-
by petition
shall be decided
to the BRC
tion
this court of Freehold’s motion for
competent jurisdiction
court of
in the
summary judgment.
Jersey
of
State New
and [Freehold] here-
submits itself to the
hand,
On the other
Freehold asserts that
or such
purposes.”
court for such
claim
adjudication
its
is ripe for
as a matter
PURPA and its
do not
of law because the BRC has
subjecting
been
prevent
waiving
statutory
Freehold from
it
administrative,
to extensive state
utility-
rights,
292.301(b)(1),
see 18 C.F.R.
type
hearings
rate
require-
and disclosure
may legally
thus Freehold
consent to have ments since
vigorous-
March 1994. Freehold
disputes
PPA
heard in
ly argues
state court. The
that there are no factual issues to
provisions
choice
law and choice of forum
in addressing
considered
legal ques-
quoted by
court, however,
the district
merely
preemption,
tion of
appellees
and that
agreed
demonstrate that Freehold
to submit
have
ample opportunity
had
every
to make
disputes arising under
PPA
argument
they
to either the
that
could in
against
defense
competent jurisdiction
BRC or a court of
of Freehold’s claim that
preempts
PURPA
Jersey,
the State of
gave
New
up
BRC’s order.
only
Freehold notes that the
its right
exempt
to be
from
alleged
state laws and
dispute
factual
the BRC and
regulation.
complaint
Freehold’s
demon
JCP & L have been able to claim before this
strates
this is not an action to resolve a
court
“regulatory
whether
the so-called
appeal,
Muir,
6. On
356,
JCP & L also
(3d
contends that a feder-
Auto. Asso. v.
792 F.2d
360-61
Cir.1986),
denied,
1031,
resolving
al court should abstain from
the merits
479
cert.
U.S.
107 S.Ct.
875,
(1987).
possesses
this case even if it
hold’s
clause dis-
“regulatory-out”,
that the
counters
the
question
no
here about
There can be
factfinding be-
requires
adversity
parties’
no additional
interests.
JCP &
pute
of the
simple
modify
con-
the PPA it entered
only a
contract
to alter or
seeks
cause it involves
26, 1992. The
Freehold on March
the
into with
caрable of
on
resolution
issue
struction
BRC,
contract con-
approved
had
which
is
agree;
the clause
PPA. We
face of the
implementation re-
with PURPA’s
sistent
evi-
requires no extrinsic
unambiguous and
Freehold
subsequently directed
quirements,
for its construction.
dence
renegotiate
purchase
the
& L to
and JCP
are ex-
that there
also contends
alternative,
or,
PPA
in
price
of the
the
terms
that mandate
here
ceptional circumstances
buy
of
PPA. Freehold
negotiate a
out
preemption
court of the
disposition
price
renegotiation
purchase
of the
rejected a
court.
to the district
without remand
issue
buyout by
L.
PPA and a
JCP &
terms of the
project has
cogeneration
It claims that
then,
commenced an ex-
the BRC has
Since
time-consuming
already
delayed
been
evidentiary proceeding to consider
tensive
and
costly proceedings before the BRC
action, including
modi-
of
various courses
immeasurably to the
every day adds
approval of the
or revocation of its
fication
argues that interest
projeсt’s cost. Freehold
appeal,
litigation and on
Free-
PPA.
In this
rising, equipment and construction
rates are
diametrically opposed to
position is
hold’s
legal
Thus,
costs of
increasing, and the
costs are
there is an
the defendants.
that of
controversy
are
“of
im-
action before the BRC
concrete
sufficient
this action and the
actual
reality
the issuance
mediacy and
to warrant
pro-
from the
escalating, while the revenues
Army
declaratory judgment.”
of a
Salvation
constructed,
the life of
ject,
are fixed for
if
Community Affairs, 919
Department
v.
L.
with JCP &
of
the contract
(3d Cir.1990)
183,
(quoting
v.
192
F.2d
Steffel
1209,
452, 460, 94 S.Ct.
210(a) the relevant 210(e)(3) reg- ease, QF applicable plaintiff and the As section FERC. both 292.602(c)(2), expressly ulation, 18 C.F.R. entered into contracts the utilities QFs law that exemptions from limit energy. electric purchase sale 210(e): QFs simply are enjoy section under terms and contained standardized contracts state laws exempt from QFs. paid to be the rates 210(f) and, with to section pursuant enacted program created utilities and CPUC 210(a). it, section utilities to monitor the which authorized implementation Thus, ease concerns if a operating and effi- compliance with federal 210(f), contemplated section procedures they QFs ciency with which standards covered properly the action then If a determined that contracts. had therefore, and, 210(g), operating and effi- QF did not meet federal Here, on the other improper. would standards, to sus- ciency was authorized of FERC’s hand, implementation BRC’s *14 in specified the payment of the rates pend ended with 210(a)-type regulations section a lower alternative and substitute contract PPA. approval of the July 1992 the BRC’s Energy modify Producers chal- Independent the attempt to either rate. present The “utility- approval is contending revoke that the lenged program, or PPA regula- type the of type” regulation exactly authority and the state is exclusive FERC’s — immune under is which Freehold tion from by federal law. The preempted program is 210(e). explanatory note the As section disagreed and held there was court district the states, do not disturb regulations the preemption. no agencies “to regulatory authority of state It appeals reversed. conclud- The court of long so as purchases” review contracts carry out the regulations with the ed that the FERC are “consistent regulations those terms, practices of sections policies and in its exclusive au- statutory reposed scheme imple- [FERC’s] and 201 of PURPA and QF for the thority make determinations the or regulations. If menting compliance QF status or waive revocation of conflict, ... the must in State is exercise they standards, that nowhere QF and with requirements.” Federal yield to the setting for the state “contemplate a role restriction, the legislative QF determining Absent status.” QF or standards prior asserts, of its reconsideration BRC also policy, of held that at 854. For Id. reasons in the au inherent PPA is approval of the maker is neces- federal decision a “uniform agencies and not thority all administrative that the public interest and sary” in the unique to rate- necessarily a characteristic by preempted program federal CPUC instance, However, in this making bodies. Id. law. statutory legislation, specific federal is there Cogener in Smith of the issues raised One pri- the PURPA, bars reconsideration Corporation some Inc. v. Management, at least absent of the PPA ation approval setting aside (Okla.1993), law of contracts Comm’n, in the is basis P.2d 1227 even referred to here. PPA. No such basis the A rule of analogous to this case. the more and of PURPA the overall scheme on Based required Corporation Commission Oklahoma 210(e) especially and goal, its stated to include their QFs electrical utilities and promulgated rules implementing the and purchase con cogeneration non-negotiated Congress intended FERC, we hold that the allowing reconsider provision a notice tracts from state qualified cogenerators exempt Corporation ation and modification utility regulations. rate costs after the con of avoided Commission support our conclusion. eases Two recent cogenera upon. The agreed tract had been Producers, 36 F.3d Independent Energy Corporation Commission argued that the tor injunc- sought an Energy Producers directly with PURPA rule conflicted prevent court to in the federal district tion discouraged cogenera regulations, FERC Commission Public Utilities California tion, preempted federal law. Al and was order which (“CPUC”) implementing an from acknowledged that though cogenerator au- defendant-utilities delegated to the implement authority to states have broad and effi- operating thority to enforce federal utility-type reg- PURPA, any it insisted that in PURPA ciency out requirements set directly they cogenerator in than did the Smith. cogeneration contracts ulation over Smith, cogenerator yet did not have with PURPA. conflicted contract; signed pre- Freehold does and the here, eogenerator does As Freehold emption precisely issue is the same. Be- any argued attempt to revisit Smith sides, disregard impact we cannot contract, changed as a result of cogeneration cogeneration financing purchase power if a circumstances, QFs deprives of the benefits agreement is at time in the future sub- rule, that the state unless bargain ject arbitrary reconsideration waived, as a direct obstruction stands body. regulatory financing pro- necessary obtain the Finally, the defendants maintain Corporation and the ject. The Commission preemption inappropriate because contrary. argued to the utilities voluntarily agreed JCP & L and Freehold court, examining after The Oklahoma exempt They the PPA from PURPA. note regulations and preamble to the FERC correctly regulations specifically that FERC PURPA, concluded that reconsideration voluntary agreements contemplate outside of long contracts with established estimat- term PURPA’s umbrella. See 18 C.F.R. imposes utility-type over ed costs 292.301(b); Paper see also American In QFs. regulations seek “PURPA and FERC stitute, Inc. v. Americаn Electric Power Ser contracts. prevent reconsideration such 402, 416, Corp., vice history con- legislative behind PURPA (1983) (stating 76 L.Ed.2d that “a impose Congress did not intend to firms that qualifying facility utility may negotiate and a *15 concepts utility type rate-making traditional a contract” that constitutes “a waiver” of by qualifying facilities to utilities.” on sales PURPA). Freehold, They claim that in a Accordingly, court held Id. at 1240-41. the clause,12 “regulatory-out” agreed to waive its that and FERC PURPA 210(e) 292.602(c)(1) and 18 C.F.R. rule. preempted the State Commission rights regulation from state to be free rate or attempts distinguish case L to this JCP & law. ground that the chal- from Smith on the noted, As we have insofar as the issues in impact financ-
lenged in would on rule Smith concerned, “regula- this are we find the case case, “pre- in BRC’s ing, but that the merely tory-out” unambiguous. It de- clause PPA have no financing review of the will happen scribes would in the event that what illusory. impact.” Such a distinction is such L during 20-year contract term JCP & the preemp- court did not rest its The Oklahoma any right pass lose its to should for reason holding merely impact the of the tion on this clause ratepayers. costs on to its When financing, primarily rule on but Commission clearly agreed upon, parties the did not parties obligation rights on the and of the expect right could be as a result that this lost change contract. in the negotiated under a and executed of BRC action absent some important aspect Here, strongly governing law.13 But the favor Freehold more the facts Seller, (i) parties perti- option “regulatory-out” provides of the the hereto shall clause in 12. The promptly negotiations thereafter commence to part: nent Agreement approximately amend this to re- 20.2(a) recognize parties and acknowl- paid by Company the to be the duce rates agreement edge to be that this and the rates energy capacity and to such hereunder for energy paid and [Freehold] to the Seller for governmental other rates as the BRC or such upon capacity Facility premised are agency exercising jurisdiction shall have au- subject Company's [JCP L] to the & con- and Company through oper- thorized the to recover tinuing ability timely fully recover from charges paid Energy Adjustment ation of its Levelized customers all such costs and its (“LEAC”) timely basis Clause ... on full capacity hereunder for Seller (ii) (30) days upon thirty prior written no- or throughout Consequently, the in term hereof. Company, the terminate tice to the Seller BRC, any the event that the the FERC or party Agreement and neither shall have judicial, legislative, or other administrative liability obligation any or hereunder further governmental agency having jurisdiction over except prior due to the date of for amounts parties, in ... should disallow in whole or termination.... timely part impair or otherwise the full and PPA, recovery Company approving customers of from its BRC’s 1992 order 13. In the any energy capacity payments and its successors to made or the BRC committed itself hereunder, then, flow-through fully and “allow JCP & L to to the Seller at the be made and/or Light Company in present purposes is this clause does Central Power & juris- any purport to confer the BRC having above-entitled case been submitted to par- otherwisе have. diction it would not judges participated who in the decision of ticular, part of it no intent on the reflects this Court and to all the other available any protection of the surrender judges regular circuit the circuit active upon regulation conferred from state rate service, judge and no who concurred in the 210(a). by section having rehearing, decision asked for and a majority judges of the circuit of the circuit V. regular having active service not voted for summary, that the we conclude district banc, rehearing by petitions the court in jurisdiction court had matter to con- rehearing are denied. jurisdic- claims and that the sider Freehold’s 210(g) tional limits of section of PURPA did jurisdiction of this action. We also
not bar
hold that the district court erred conclud- precludes
ing that the Johnson Act
jurisdiction and Freehold’s claim in- solely dispute subject
volves contractual utility regulatory of the state CO., INC.; KIEWIT EASTERN agency under the choice of law and forum Kiewit/Perini, a Joint provisions reject argu- PPA. We Venture, any of the abstention doctrines
ment that et al. any proceedings. apply in manner to these v. Finally, approved hold that once thе BRC we CO., INC.; L R& CONSTRUCTION power purchase agreement between Company ground Freehold and JCP & on the CNA Insurance cost, the rates were consistent with avoided Company, Eastern Kiewit Inc. and or order to reconsider action Kiewit/Perini, Venture, A Joint approval deny passage of those *16 Appellants pur- in No. 94-1434 rates to JCP & L’s consumers under ported preempted by fed- Company, Appellant CNA Insurance eral law. in No. 94-1439 order of the district court will be
The remanded with di- reversed and the ease 94-1434, Nos. 94-1439. summary judgment in favor rection to enter Appeals, United States Court appellant pro- and for such further Third Circuit. ceedings opinion. with this as are consistent against appellees. Costs taxed Argued Sept. SLOVITER, Judge, Chief Before: Decided Jan. BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, NYGAARD, ALITO, ROTH,
COWEN, McKEE, SAROKIN,
LEWIS,
ROSENN, Judges. Circuit
SUR PETITION FOR REHEARING
March petitions rehearing by appel- filed Regulatory lees the Board of Commissioners
n Jersey, of the State of New the Division of Advocate, Ratepayer Jersey and the timely specified readjust [the PPA] recover rates states that the BRC contract will resulting and the costs therefrom....” preclude through. rates or flow July Stipulation A upon by relied and Settlement approving present the BRC in PPA
