TC Ravenswood, LLC v. Federal Energy Regulatory Commission
Opinion of the Court
JUDGMENT
This case was considered on the record from the Federal Energy Regulatory Commission and on the briefs of the parties. See Fed. R.App. R. 34(a)(2); D.C.Cir. Rule 34(j). It is
ORDERED AND ADJUDGED that the petitions for review are denied.
We review orders of the Federal Energy Regulatory Commission under the Administrative Procedure Act’s arbitrary and capricious standard and “must affirm the Commission’s orders as long as it has ‘examine[d] the relevant data and artieu-late[d] a satisfactory explanation for its action including a rational connection between the facts found and the choice made.’ ” Wis. Pub. Power, Inc. v. FERC, 493 F.3d 239, 256 (D.C.Cir. 2007) (alterations in original) (quoting Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). Of particular importance for this case, our “review of whether a particular rate design is just and reasonable is highly deferential.” Id. at 256 (internal quotation marks omitted).
The Commission’s decision to approve amended tariff section 4.1.7a and to defer consideration of the additional change that Ravenswood sought was both reasonable and well-reasoned. In approving section 4.1.7a, the Commission evaluated the specific tariff change that NYISO submitted; found substantial evidence that the existing tariff under-compensated dual-fuel generators who comply with the minimum burn oil rule by requiring margin offsets; and reasonably concluded that the amendment solved that problem by eliminating the offset requirement. N.Y. Indep. Sys. Operator, Inc., 119 F.E.R.C. ¶ 61,130 (2007). The Commission also explained that the NYISO stakeholder process was the appropriate venue for addressing, in the first instance, the necessity and design of a compensation mechanism for the additional infrastructure costs that Ravenswood sought, concluding that such costs were of a different type than those addressed by the proposed amendment. Id. at 61,843. An incremental approach to a problem is certainly within the scope of the Commission’s discretion, see Mobil Oil Exploration & Producing Se. Inc. v. United Distribution Cos., 498 U.S. 211, 231, 111 S.Ct. 615, 112 L.Ed.2d 636 (1991) (“[A]n agency need not solve every problem before it in the same proceeding.”), especially in circumstances like these where it’s unclear that additional aspects of a problem even remain to be solved, see N.Y. Indep. Sys. Operator, Inc. (“Tariff Rehearing Order”), 121 F.E.R.C. ¶ 61,039, at 61,150 (2007) (explaining that “outstanding questions” ex
Ravenswood’s arguments to the contrary are meritless. First, to the extent those arguments depend on the contention that the amendment proposed an initial rate rather than a revision to an existing rate, Ravenswood never made that claim before the Commission and therefore the clam is not properly before this court. See 16 U.S.C. § 8251(b) (court cannot consider objections never urged before the Commission without “reasonable ground” for failure); Entergy Servs., Inc. v. FERC, 319 F.3d 536, 545 (D.C.Cir. 2003) (same). Indeed, Ravenswood took the opposite position in the administrative proceedings. See, e.g., Request for Rehearing of Keyspan-Ravenswood LLC, Docket No. ER07-748-000, at 7-8 (arguing that the tariff amendment fixed one “defect” in the existing rate but not another); id. at 9 (arguing that “NYISO chose to fix only one aspect of the discriminatory existing rate”). Second, Ravenswood’s claim that the Commission strayed from its precedent without explanation by approving a “half-rate” in section 4.1.7a, rather than the “make-whole rate” it has approved for other kinds of reliability services, likewise fails. In reality, the Commission considered and complied with that precedent in addressing the particular rate revision before it and in determining that the amendment set a just and reasonable rate. Finally, the Commission correctly rejected Ravenswood’s reliance on Cities of Batavia v. FERC, 672 F.2d 64 (D.C.Cir. 1982), and its “integral rate” analysis. Batavia is relevant only where the claim is that a changed rate interacts with an existing rate in a way that creates an unjust result, see E. Term. Nat’l Gas Co. v. FERC, 863 F.2d 932, 942-44 (D.C.Cir. 1988) — not where, as here, the claim is that one aspect of an existing rate is unjust regardless of the proposed change to another aspect, see, e.g., Request for Rehearing 7-8 (arguing that two independent “defects” in the tariff exist). Thus, the Commission correctly recognized that if it ordered the revision that Ravens-wood requested, then it would be proposing to alter aspects of the existing rate structure that the utility did not itself propose to change and would therefore have to transform the matter into a proceeding under section 206 of the Federal Power Act, 16 U.S.C. § 824e. See Tariff Rehearing Order, 121 F.E.R.C. at 61,149; see also W. Res., Inc. v. FERC, 9 F.3d 1568, 1578-79 (D.C.Cir. 1993). As a result, the Commission appropriately concluded that “the only rate provisions before it in this proceeding [were] NYISO’s proposal to pay generators ... the variable operating costs” associated with compliance, not the infrastructure costs associated with dual-fuel capacity in the first place. Tariff Rehearing Order, 121 F.E.R.C. at 61,149.
As to the Commission’s denial of Rav-enswood’s section 206 complaint, Ravens-wood claims that the Commission erred in refusing to consider certain of its arguments on the merits when it denied rehearing. The Commission reasoned that it needn’t address those issues because its separate approval of the amended tariff
Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is directed to withhold issuance of the mandate herein until seven days after resolution of any timely petition for rehearing en banc. See Fed. R.App. P. 41(b); D.C. Cir. R. 41.
Reference
- Full Case Name
- TC RAVENSWOOD, LLC v. FEDERAL ENERGY REGULATORY COMMISSION, New York Independent System Operator, Inc., Intervenors
- Cited By
- 1 case
- Status
- Published