United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 16, 2001 Decided April 17, 2001
No. 99-1263
The Power Company of America, L.P.,
Petitioner
v.
Federal Energy Regulatory Commission,
Respondent
PG&E Energy Trading-Power, L.P., et al.,
Intervenors
Consolidated with
No. 99-1333
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Daniel Joseph argued the cause for petitioner. With him
on the briefs were Merrill L. Kramer and Beth L. Hirschfeld-
er.
David H. Coffman, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on
the brief was Dennis Lane, Solicitor. Susan J. Court, Spe-
cial Counsel, entered an appearance.
Earle H. O'Donnell argued the cause for intervenor PG&E
Energy Trading-Power, L.P., et al. With him on the brief
were Donna M. Attanasio, Bruce A. Grabow, David P.
Sharo, Jacob Dweck, Daniel E. Frank, Paul B. Turner, Terry
D. Kernell and David I. Bloom. Joseph R. Hartsoe and
Jeffery D. Watkiss entered appearances.
Before: Edwards, Chief Judge, Ginsburg and Randolph,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge: These are petitions for judicial
review of a Federal Energy Regulatory Commission ruling
that a 60-day notice-of-termination rule does not apply to
power sales contracts terminated by 21 of the counterparties
of the Power Company of America (PCA).
PCA is a power marketer. As such, it buys and sells
wholesale electricity at market-based rates but does not own
generation or transmission facilities. It purchases electricity
from other power marketers and from traditional utilities. In
contrast to power marketers, traditional utilities not only buy
or sell electricity, they also own generation or transmission
facilities. Power marketers and traditional utilities receive
different regulatory treatment, especially in regard to the
transaction documents they are required to file with the
Commission.
During the summer of 1998, several entities terminated
their contracts to sell power to PCA, purportedly because of
PCA's weak financial condition. PCA's creditors then forced
it into involuntary bankruptcy.
The present dispute is about the notice PCA's counterpar-
ties had to give before unilaterally terminating their con-
tracts. Those contracts apparently do not address the matter
of notice, but PCA claims a Commission regulation does. The
regulation requires 60 days notice to the Commission to
terminate "a rate schedule or part thereof required to be on
file with the Commission." 18 C.F.R. s 35.15(a).1 The issue,
then, is whether the terminated contracts were "required to
be on file with the Commission." The canceling parties filed
notices with the Commission as a precautionary measure, but
not sufficiently far in advance to satisfy PCA. The Commis-
sion dismissed the notices as not required: all of the canceled
transactions were "short-term power sales made from time to
time at the discretion of the parties," and, as such, did not
have to be on file under 18 C.F.R. s 35.15(a). See Southern
Co. Energy Marketing, L.P., 84 F.E.R.C. p 61,199, at 61,986-
87 & n.3 (1998).
I. Jurisdictional Issues
A. Standing
PCA concedes that the contracts at issue have been "irre-
vocably cancelled." Final Brief of Petitioner at 34. The
Commission did not cancel the contracts; private parties did,
many of whom are not party to this suit. It is not obvious
that PCA can show an "injury in fact" that is "fairly tracea-
ble" to the Commission's actions and that will likely be
"redressed by a favorable decision," as Article III requires.
Bennett v. Spear, 520 U.S. 154, 162 (1997); see also Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992); Animal
Legal Defense Fund, Inc. v. Glickman, 154 F.3d 426, 431
(D.C. Cir. 1998) (en banc).
PCA's ultimate injury is the termination of its contracts.
Although the Commission did not terminate them, it ac-
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1 The relevant provision states in its entirety: "When a rate
schedule or part thereof required to be on file with the Commission
is proposed to be cancelled or is to terminate by its own terms and
no new rate schedule or part thereof is to be filed in its place, each
party required to file the schedule shall notify the Commission of
the proposed cancellation or termination on the form indicated in
s 131.53 of this chapter at least sixty days but not more than one
hundred-twenty days prior to the date such cancellation or termi-
nation is proposed to take effect." 18 C.F.R. s 35.15(a).
quiesced in their termination by others. If, as PCA claims,
the Commission had a duty to prevent those terminations by
requiring more notice than was given, then PCA's injury is
two-fold--the terminations by others, and the Commission's
failure to prevent this. In these circumstances, the latter
injury is cognizable. The "loss of a valuable contractual
interest in a licensee is an injury sufficient to invoke our
jurisdiction." Telephone and Data Sys., Inc. v. FCC, 19 F.3d
42, 46 (D.C. Cir. 1994). The injury is directly traceable to the
Commission's alleged nonfeasance. See id. at 47; see also
Animal Legal Defense Fund, 154 F.3d at 440-42.
Redressability is another matter. PCA is not asking for
damages or injunctive relief in this court, although it is
seeking such relief elsewhere. PCA stated that the Commis-
sion "has the power to fashion any number of remedies, and
PCA would ask FERC to use that power if this Court holds
that violations of the FPA and FERC regulations have oc-
curred." Final Reply Brief of Petitioner at 4. The Commis-
sion does not dispute that it has remedies for unlawful
contract terminations. In holding that the terminated agree-
ments were not subject to the notice-of-termination rule,
however, the Commission effectively held that the contracts
were legally terminated. As such, no contract remedies will
be forthcoming if the Commission's determination stands. In
these circumstances, a declaratory ruling that the termi-
nations at issue are subject to the notice requirement is a
" 'necessary first step on a path that could ultimately lead to
relief fully redressing the injury'." Telephone and Data Sys.,
19 F.3d at 47; see also Hazardous Waste Treatment Council
v. U.S. EPA, 861 F.2d 270, 273 (D.C. Cir. 1988). PCA is in
the same position as the litigants who had standing in Tele-
phone and Data Systems--they will not necessarily prevail if
we overturn the Commission, but they "cannot prevail unless
we do so." 19 F.3d at 47.2
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2 We disagree with the Commission that New York State Elec. &
Gas Corp. v. FERC [NYSEG], 117 F.3d 1473 (D.C. Cir. 1997),
defeats standing. NYSEG did not even deal with standing. The
jurisdictional defect there was the suit's incompatibility with Con-
B. Failure to Properly Intervene and Obtain Party Status
The Commission treated each contract termination as a
separate proceeding and assigned each its own docket num-
ber, though it disposed of them on a consolidated basis. PCA
sought to become a party to each proceeding by intervention.
The Commission permitted PCA to intervene in most pro-
ceedings but denied intervention in the six proceedings in-
volving Idaho Power Co.; PG&E Energy Trading-Power,
L.P.; South Jersey Energy Co.; Vitol Gas & Electric LLC;
El Paso Energy Marketing Co.3; and Cook Inlet Energy
Supply, L.P. See New York State Elec. & Gas Corp., 85
F.E.R.C. p 61,196 (1998) (denying PCA's motions to intervene
in the Vitol and Cook Inlet proceedings); Southern Co.
Energy Mktg. L.P., 86 F.E.R.C. p 61,131 (1999) (denying
intervention in the Idaho Power and South Jersey Energy
Co. proceedings); PG&E Energy Trading-Power, L.P., 86
F.E.R.C. p 61,303 (1999) (denying intervention in the PG&E
Energy and El Paso proceedings). As a consequence, PCA
was not party to these six proceedings.
We have no jurisdiction over proceedings in which PCA is
not a party because only "part[ies] to a proceeding" may seek
judicial review under the Federal Power Act. See 16 U.S.C.
s 825l(b). The Commission concluded that PCA did not
properly intervene and therefore did not become a party to
these six proceedings. PCA did not file timely motions to
intervene, and the Commission was not obligated to accept
untimely ones.
PCA claims that "FERC had no grounds on which to deny
intervention." Final Brief of Petitioner at 35. Under the
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gress' distribution of functions between the district courts and the
courts of appeal. Entertaining that appeal would have deprived the
district court of its enforcement function under the Public Utility
Regulatory Policies Act. See NYSEG, 117 F.3d at 1476-77. Enter-
taining the present appeal, by contrast, would not frustrate the
enforcement scheme of any statute. See 16 U.S.C. s 825l(b).
3 El Paso Power Services Co. is the successor-in-interest to El
Paso Energy Marketing Co. See PG&E Energy Trading-Power,
L.P., 86 F.E.R.C. p 61,303, at 62,055 n.1 (1999).
Commission's rules, however, the burden is on the untimely
movant to show good cause to intervene. See 18 C.F.R.
s 385.214(b)(3). PCA has not demonstrated good cause, cer-
tainly not to a degree sufficient to warrant our upsetting the
Commission's application of its own procedural rule. PCA
also asserts that the Commission arbitrarily considered only
good cause, to the exclusion of four other factors identified in
the rule. Final Brief of Petitioner at 36-38. Failure to
establish good cause is, however, a sufficient condition to
deny intervention, so the Commission was not obligated to
consider any other factor. See 18 C.F.R. s 385.214(b)(3).4
II. The Merits
PCA has four arguments: (1) the Commission erroneously
viewed 17 of the 21 terminations as involving short-term
discretionary sales; (2) the Commission's interpretation of 18
C.F.R. s 35.15(a) violates the Federal Power Act; (3) the
Commission's interpretation violates the regulation itself; and
(4) the Commission should have applied its new interpretation
(assuming its validity) prospectively only.
A. The Nature of the Terminated Transactions
PCA asserts that the Commission misconceived the nature
of the terminated transactions, that 17 of them were umbrella
agreements or their functional equivalents. See Final Brief
of Petitioner at 19-24. We have jurisdiction to consider only
PCA's argument regarding 12 of the transactions because
PCA was not a party to the proceedings involving the other
five.5 See supra section I.B.
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4 The intervenors in this appeal argue that PCA did not properly
intervene in the Enron proceeding. See Joint Brief for Intervenors
at 21 n.8. The Commission to this point has treated PCA as a party
to that proceeding and so will we.
5 The 12 transactions involve the following counterparties: ConA-
gra Energy Services, Inc.; Entergy Power Marketing Corp.; Grif-
fin Energy Marketing, L.L.C.; Midcon Power Services Corp.;
North American Energy Conservation, Inc.; British Columbia Pow-
er Exchange Corp.; Coral Power, L.L.C.; Enron Power Marketing,
One of the 12, Washington Water Power Company
(WWPC), clearly did not terminate an umbrella agreement
with PCA. WWPC's notices of termination stated that it was
terminating transactions under the Western Systems Power
Pool Agreement. See Joint Appendix at 358 & 657. While
the Pool Agreement may constitute an umbrella agreement
"required to be on file," WWPC could not have terminated it
merely by terminating individual transactions under it. The
Pool Agreement has numerous parties in addition to WWPC
and PCA, and as such is not subject to termination by a
single party. As the Commission put it in Western Systems
Power Pool, 55 F.E.R.C. p 61,495, at 62,716 (1991), the
"WSPP is an umbrella arrangement that will continue for at
least ten years while members come and go over time. When
one member leaves, the arrangement does not terminate."
See generally Western Systems Power Pool, 55 F.E.R.C.
p 61,099 (1991).
We will assume arguendo that the remaining 11 cancella-
tions were of umbrella agreements. PCA still must establish
that these umbrella agreements were "required to be on file
with the Commission." 18 C.F.R. s 35.15(a). If they were
not required to be on file, they are not subject to the
Commission's 60-day notice-of-termination requirement.
PCA makes no attempt to prove this essential predicate.
As it turns out, the canceled agreements were not required
to be on file, whether they were umbrella agreements or not.
This is so because these 11 terminating counterparties were
power marketers like PCA rather than traditional utilities.6
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Inc.; New Energy Ventures, L.L.C.; New York State Electric &
Gas Corp./NGE Generation Inc.; Southern Company Energy Mar-
keting, L.P.; and Washington Water Power Company. See Final
Brief of Petitioner at 20-23. The five transactions that we have no
jurisdiction to review involve Cook Inlet Energy Supply, L.P.; El
Paso Energy Marketing Co.; South Jersey Energy Co.; PG&E
Energy Trading-Power, L.P.; and Vitol Gas & Electric LLC.
6 The Commission granted each of these 11 power marketers
authority to sell power at market-based rates and required only the
filing of quarterly reports. See Griffin Energy Mktg., L.L.C., 81
The Commission, in its original order holding that notice of
termination was not necessary, explained that for transactions
"involving power sales by power marketers, there are no
umbrella service agreements on file and likewise the particu-
lar transaction terms were not on file." 84 F.E.R.C. p 61,199,
at 61,986 & n.3. The Commission further explained in its
order on rehearing that "the filings by power marketers
involved specific market-based power sales transactions that
were neither on file with the Commission nor subject to any
filed umbrella agreements, but were made pursuant to an
umbrella tariff on file." 86 F.E.R.C. p 61,131, at 61,455.
Power marketers are not required to file umbrella agree-
ments, so the notice-of-termination regulation in 18 C.F.R.
s 35.15(a) does not apply to umbrella agreements they termi-
nate. Power marketers instead file umbrella tariffs and
quarterly reports summarizing past transactions. See 86
F.E.R.C. p 61,131, at 61,459 & n.36; see also Heartland
Energy Servs., Inc., 68 F.E.R.C. p 61,223, at 62,065-66 (1994)
("the requirement that [power] marketers file quarterly re-
ports detailing the purchase and sale transactions undertaken
in the prior quarter is necessary to ensure that contracts
relating to rates and services are on file, as required by
section 205(c) of the FPA"); supra note 6. Traditional
utilities, by contrast, are required to file umbrella agree-
ments. See Southern Co. Servs., Inc., 75 F.E.R.C. p 61,130,
at 61,439, 61,444-45 (1996) (revising filing requirements for
"short-term market-based rate transactions by non-power
__________
F.E.R.C. p 61,133 (1997); Southern Co. Energy Mktg., L.P., 81
F.E.R.C. p 61,009 (1997); British Columbia Power Exch. Corp., 80
F.E.R.C. p 61,343 (1997); New York State Elec. & Gas Corp., 79
F.E.R.C. p 61,303 (1997); New Energy Ventures, Inc., 76 F.E.R.C.
p 61,239 (1996); Entergy Power Mktg. Corp., 74 F.E.R.C. p 61,137
(1996); In re Coral Power, L.L.C., Letter Order, Docket No.
ER96-25-000 (Dec. 6, 1995); In re ConAgra Energy Servs., Letter
Order, Docket No. ER95-1751-000 (Oct. 23, 1995); In re MidCon
Power Servs. Corp., Letter Order, Docket No. ER94-1329-000
(Aug. 11, 1994); In re North American Energy Conservation, Inc.,
Letter Order, Docket Nos. ER94-152-000 & ER94-9-000 (Feb. 10,
1994); Enron Power Mktg., Inc., 65 F.E.R.C. p 61,305 (1993).
marketer public utilities" and requiring filing of umbrella
agreements and quarterly reports). Because PCA never
established that the contracts at issue are "required to be on
file," it is irrelevant that PCA's power marketer counterpar-
ties might have canceled umbrella agreements or their func-
tional equivalent.
We decline to address PCA's argument in its reply brief
that the umbrella agreements were required to be on file
because they were contained in quarterly reports that are
required to be on file. See Final Reply Brief of Petitioner at
7-8. This argument was not raised in PCA's opening brief
and is therefore waived. See Rollins Environmental Servs.
(NJ) Inc. v. U.S. EPA, 937 F.2d 649, 652 n.2 (D.C. Cir. 1991).
The Commission's motion to strike the portions of PCA's
reply brief that raise this argument is granted. Contrary to
PCA's contention in its opposition to the Commission's motion
to strike, the Commission's orders adequately apprised PCA
of the need to raise in its opening brief the argument that the
canceled transactions, whatever their nature, were required
to be on file. See 84 F.E.R.C. p 61,199, at 61,986 (Commis-
sion order stating that traditional utilities file umbrella agree-
ments but power marketers do not); 86 F.E.R.C. p 61,131, at
61,455 (rehearing order making the same distinction); id. at
61,459 (rehearing order stating that quarterly reports satisfy
Federal Power Act filing requirement but are not rate sched-
ules required to be on file under 18 C.F.R. s 35.15(a)).
B. The Federal Power Act
PCA asserts that even if the Commission correctly treated
the canceled transactions as short-term discretionary power
sales, its refusal to apply the 60-day notice-of-termination
requirement nonetheless violates the Federal Power Act.
PCA first claims that the Commission's interpretation of its
regulation contravenes the Commission's regulatory obli-
gations. PCA has not identified with any specificity what
regulatory obligations the Commission has shirked. It is not
the court's role to fill in the blanks in counsel's argument.
PCA also seems to argue (the argument is not developed)
that the Act's jurisdictional provision implies that the filing
requirements cover the canceled transactions. The premises
are obscure, but the reasoning apparently is that the Act
covers "sales," and the term "sales" contemplates actual
transactions with agreed-upon prices and quantities, not um-
brella agreements. See Final Brief of Petitioner at 25. Can-
cellation of individual transactions rather than of umbrella
agreements presumably is, under this theory, the critical
event because it implicates the Act's jurisdictional provision.
This syllogism ignores the determinative part of the Act--
the part setting forth the filing requirements. Section 205(c)
of the Act governs filing and states:
Under such rules and regulations as the Commission
may prescribe, every public utility shall file with the
Commission, within such time and in such form as the
Commission may designate, and shall keep open in con-
venient form and place for public inspection schedules
showing all rates and charges for any transmission or
sale subject to the jurisdiction of the Commission, and
the classifications, practices, and regulations affecting
such rates and charges, together with all contracts which
in any manner affect or relate to such rates, charges,
classifications, and services.
16 U.S.C. s 824d(c). The Commission has held that tradi-
tional utilities and power marketers who engage in market-
based rate transactions are required to file quarterly reports
summarizing transactions, and that these reports satisfy the
filing requirements of s 205(c). See 86 F.E.R.C. p 61,131, at
61,459. PCA has not even questioned the Commission's
judgment in this regard so neither will we.
C. The Commission's Interpretation of its Regulation
The Commission interpreted 18 C.F.R. s 35.15(a) as not
applying to the canceled transactions because the agreements
were not required to be on file, which is the predicate for the
60-day notice-of-termination requirement. See 84 F.E.R.C.
p 61,199, at 61,986-87; 86 F.E.R.C. p 61,131, at 61,457. On
rehearing, PCA pointed out that the Commission had previ-
ously applied the notice-of-termination rule to transactions
like the ones at issue. See Portland Gen. Elec. Co., 75
F.E.R.C. p 61,310, at 62,002 (1996) (refusing to waive 60-day
notice requirement in section 35.15 for terminating individual
transactions); Portland Gen. Elec. Co., 77 F.E.R.C. p 61,171,
at 61,639 (1996) ("we believe that the ability to unilaterally
terminate a power sales contract without prior notice should
be limited: (1) to contracts executed on and after July 9,
1996; and (2) to termination at the end of the contract"). In
its Order on Rehearing, the Commission conceded that it
"applied Section 35.15 to short-term power sale transactions
in Portland General" but proceeded to "reverse any contrary
language in Portland General indicating that Section 35.15
might apply to short-term discretionary power sales that are
not themselves on file." 86 F.E.R.C. p 61,131, at 61,457.
PCA claims that the regulation cannot sustain this re-
interpretation. In PCA's view, the overruling of Portland
General wrote the "part thereof" language out of s 35.15(a)
without notice-and-comment rulemaking. In actuality, the
Commission simply altered its view of what is "required to be
on file," holding that the discretionary power transactions at
issue were not in that class. 18 C.F.R. s 35.15(a); 86
F.E.R.C. p 61,131, at 61,457. In doing so, the Commission
merely narrowed the category of "rate schedule[s] or part[s]
thereof" that are "required to be on file" (18 C.F.R.
s 35.15(a)); it left the "part thereof" language undisturbed.
The regulation does not forbid such narrowing.
D. Retroactivity
In overruling Portland General, the Commission faced the
choice of applying the new rule of law prospectively or
retrospectively. It chose the latter course, a choice PCA
attacks as arbitrary and capricious.
Administrative agencies have relatively more freedom to
apply retroactively "new applications of law, clarifications,
and additions" than "substitution[s] of new law for old law
that was reasonably clear" because retroactive application of
a wholly new rule may disrupt settled expectations and
implicate fairness concerns. Williams Natural Gas Co. v.
FERC, 3 F.3d 1544, 1554 (D.C. Cir. 1993). Viewing its
retreat from Portland General as substituting new law for
old, the Commission acknowledged that "the August 28 Order
represented a change in interpretation of Section 35.15." 86
F.E.R.C. p 61,131, at 61,457. The Commission proceeded to
analyze PCA's claim for prospective-only application of the
new rule under a three-factor test:
(1) whether the rule is actually a departure from clear
prior policy or instead a new policy for a new situation
(or a clarification of a prior policy); (2) whether retroac-
tive application will be more likely to hinder than to
further the operation of the new rule; and (3) whether
retroactive application would produce substantial inequi-
table results, with particular reference to whether parties
relied on the old standard.
86 F.E.R.C. p 61,131, at 61,457-58. It concluded that all
three factors favored retroactive application, noting that par-
ticipants in this market require flexibility to manage the
terms and conditions of their transactions, that there is no
purpose in the Commission's reviewing the termination of
transactions whose terms and conditions were never required
to be reviewed in the first place, and that PCA suffered no
substantial inequity because "PCA knew that these individual
power sales were not on file with the Commission, but rather
were made pursuant to umbrella tariffs and/or umbrella
service agreements on file." 86 F.E.R.C. p 61,131, at 61,458-
59.
The Commission's three-factor test differs slightly from the
way we would go about deciding whether agency adjudica-
tions may be given retroactive effect.7 The Commission's
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7 We have framed the inquiry as follows: "(1) whether the
particular case is one of first impression, (2) whether the new rule
represents an abrupt departure from well established practice or
merely attempts to fill a void in an unsettled area of the law, (3) the
extent to which the party against whom the new rule is applied
relied on the former rule, (4) the degree of the burden which a
approach (and ours) also differs from Supreme Court retroac-
tivity principles with respect to judicial rulings, under which
court judgments must be applied retroactively with few ex-
ceptions. See, e.g., Harper v. Virginia Dep't of Taxation, 509
U.S. 86, 97 (1993); Reynoldsville Casket Co. v. Hyde, 514 U.S.
749 (1995). We have not decided whether this line of cases
applies to agency adjudications, and we will not make the
decision here. See District Lodge 64, Int'l Ass'n of Machin-
ists & Aerospace Workers, AFL-CIO v. NLRB, 949 F.2d 441,
447 (D.C. Cir. 1991); United Food & Commercial Workers
Int'l Union, AFL-CIO, Local No. 150-A v. NLRB, 1 F.3d 24,
35 (D.C. Cir. 1993); National Fuel Gas Supply Corp. v.
FERC, 59 F.3d 1281, 1289 (D.C. Cir. 1995); see also Laborers'
Int'l Union of North America, AFL-CIO v. Foster Wheeler
Corp., 26 F.3d 375, 386 n.8 (3d Cir. 1994). No matter which
line of authority one follows, the Commission's conclusion that
the equities favor retroactive application cannot be faulted.
The 60-day notice provision would have created a serious
obstacle to competition in view of the fact that parties are
entering into discretionary sales agreements that may last for
only days or hours. The short duration of many sales in this
market also vitiates PCA's reliance interest on a lengthy
notice-of-termination period. To the extent PCA wished to
rely on certain termination provisions, it could have put them
in its contracts.
Petitions denied.
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retroactive order imposes on a party, and (5) the statutory interest
in applying a new rule despite the reliance of a party on the old
standard." Williams, 3 F.3d at 1553-54; see also Cassell v. FCC,
154 F.3d 478, 486 n.6 (D.C. Cir. 1998).