United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 26, 2001 Decided April 10, 2001
No. 99-1532
Western Power Trading Forum and
Coalition of New Market Participants,
Petitioners
v.
Federal Energy Regulatory Commission,
Respondent
California Power Exchange Corporation, et al.,
Intervenors
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Ronald N. Carroll argued the cause and filed the briefs for
petitioners.
Laura J. Vallance, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief was Dennis Lane, Solicitor. John H. Conway,
Deputy Solicitor, Lona T. Perry, Attorney, and Susan J.
Court, Special Counsel, entered appearances.
Erik N. Saltmarsh and James H. McGrew were on the
brief for intervenors California Electricity Oversight Board
and California Power Exchange Corporation. Scott D. Ras-
mussen entered an appearance.
Before: Williams, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge: As the world well knows, Califor-
nia restructured its electricity market a few years ago. The
current case arises out of a decision by the Federal Energy
Regulatory Commission approving certain proposals allocat-
ing decisionmaking power in the modified market. In the
fast-moving life of California's energy problems, all but one of
the petitioners' claims have become moot. For the remaining
claim, the petitioners lack standing.
* * *
The case revolves around three novel state entities devised
to play key roles in the new structure: (1) an Independent
System Operator ("ISO"), which received control of certain
power transmission assets from the state's three major inves-
tor-owned utilities and was charged with running a single
statewide transmission grid; (2) a Power Exchange ("PX"),
which was to be responsible for matching electricity buyers
and sellers in the California market; (3) an Oversight Board,
which (so far as is relevant here) was vested with review
power over the composition of the ISO and PX boards and
over decisions of the ISO Board. See Pacific Gas and
Electric Co., 77 FERC p 61,204, at 61,796-98, 61,817 (1996)
("1996 Order"); see also Cal. Pub. Util. Code ss 330-97
(West 2000).
In its 1996 Order the Federal Energy Regulatory Commis-
sion rejected some of the then pending California arrange-
ments. The primary grounds, as relevant to present pur-
poses, were that the duties of the Oversight Board conflicted
with the Commission's responsibilities under the Federal
Power Act ("FPA") and with the "independence principle"
previously adopted by the Commission in its Order No. 888,
requiring that an ISO Board be independent of any market
participant or group of participants. 1996 Order, 77 FERC
at 61,817-18. See also Order No. 888, Promoting Wholesale
Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities; Recovery of
Stranded Costs by Public Utilities and Transmitting Utili-
ties, 61 Fed. Reg. 21,540, 21,596 (1996), reprinted in, FERC
Stats. & Regs. p 31,036, at 31,730-31 (setting forth indepen-
dence principle); Atlantic City Electric Co., 77 FERC
p 61,148, at 61,574 (1996) (affirming independence principle as
"bedrock" policy). Cf. Transmission Access Policy Study
Group v. FERC, 225 F.3d 667, 738 (D.C. Cir. 2000) (upholding
Order No. 888), cert. granted sub nom. New York v. FERC,
2001 WL 178167 (2001).
Three years later the Oversight Board sought the Commis-
sion's advance approval of provisions contained in a bill
pending before the California Senate, SB 96. See Joint
Appendix ("J.A.") at 2. The bill made several changes to the
California restructuring, aimed at least in part at satisfying
the Commission. Various sections of the bill provided that
the composition of the ISO and PX boards would "remain in
effect until an agreement with a participating state is legally
in effect." Id. at 17-18; see also id. at 6. First, whereas
formerly the Oversight Board was authorized to appoint all
members to the ISO and PX stakeholder boards, SB 96 gave
it only a veto power over proposed board members of speci-
fied types: those "representing agricultural end-users, indus-
trial end-users, commercial end-users, residential end-users,
end-users at large, nonmarket participants, and public inter-
est groups." Id. at 16; see also Cal. Pub. Util. Code s 335.
Second, whereas members of the ISO and PX boards were
previously required to be residents of California, SB 96
instead mandated that they be "electricity customers in the
area served by" the ISO or PX. J.A. at 17; see also Cal.
Pub. Util. Code ss 337-38. Third, whereas formerly the
Oversight Board was slated to enjoy very broad appellate
jurisdiction, SB 96 largely confined it to "[m]atters pertaining
to retail electric service or retail sales of electric energy."
J.A. at 18; see also Cal. Pub. Util. Code s 339.
The petitioners here--the Western Power Trading Forum
(an organization of electricity generators and marketers, mu-
nicipal electric companies, power exchanges, and power mar-
keting administrations) and the Coalition of New Market
Participants (an association of participants in the California
electricity markets)--intervened before the Commission,
claiming that the state legislation didn't adequately address
the Commission's concerns about independence and jurisdic-
tion and effectively favored California consumers at the ex-
pense of out-of-state producers. Over their objections the
Commission found that SB 96 properly limited the Oversight
Board's authority to matters within the state's jurisdiction--
"find[ing] that this interim role is acceptable in the unique
circumstances presented by the restructuring of California
electricity markets"--and granted the Oversight Board's pro-
posed declaratory order. California Electricity Oversight
Board, 88 FERC p 61,172, at 61,576 (1999) ("1999 Order").
The Commission later denied rehearing, stressing that it had
not ceded any authority or duties under the FPA. California
Electricity Oversight Board, 89 FERC p 61,134 (1999). Peti-
tioners challenge these two orders.
As a federal court, we can only adjudicate "actual, ongoing
controversies." Honig v. Doe, 484 U.S. 305, 317 (1988).
Most of this case has lost that character, thanks to a Commis-
sion order issued after initial briefing but before oral argu-
ment. Recent California legislation, spurred by the state's
energy crisis, has further mooted all but one of the petition-
ers' claims. Since petitioners do not have standing to bring
this remaining claim, we dismiss.
* * *
Petitioners identify three alleged defects in SB 96. First,
they argue that, because the area served by the ISO and the
PX does not extend beyond the borders of California, the
requirement that ISO and PX board members be electricity
customers in the area served by the ISO or the PX, see Cal.
Pub. Util. Code ss 337-38, is really a "de facto California
residency requirement" of exactly the sort rejected by the
Commission's 1996 Order. Petitioners' Br. at 35. Second,
they challenge as a violation of the independence principle the
Oversight Board's veto power over confirmation of ISO and
PX board members, especially those representing "nonmark-
et participants" and "public interest classes." Petitioners' Br.
at 30-33. Third, they attack the curtailed appellate review
power of the Oversight Board as still encroaching on the
Commission's jurisdiction. Petitioners' Br. at 36-37.
A later order of the Commission, not explicitly claimed by
petitioners to be a response to this litigation, has radically
undermined the premises of these claims. See United States
v. W.T. Grant Co., 345 U.S. 629, 632 (1953) (voluntary cessa-
tion of conduct alone does not moot a case); Clarke v. United
States, 915 F.2d 699, 705-06 (D.C. Cir. 1990) (en banc)
(changes wholly independent of litigative process do not fall
under voluntary cessation doctrine). On November 1, 2000
the Commission proposed that the ISO's current stakeholder
board be replaced with a seven-member non-stakeholder
board and directed parties to file comments by November 22,
2000. San Diego Gas & Electric Co. v. Sellers of Energy and
Ancillary Services into Markets Operated by the California
Independent System Operator and the California Power Ex-
change, 93 FERC p 61,121, at 61,364, 61,373 (2000) ("San
Diego I"). And on December 15, 2000 the Commission
followed through, ordering that "the ISO Governing Board be
replaced with a non-stakeholder Board, and that the members
selected to serve on the new Board be independent of market
participants." San Diego Gas & Electric Co. v. Sellers of
Energy and Ancillary Services into Markets Operated by the
California Independent System Operator and the California
Power Exchange, 93 FERC p 61,294, at 62,013 (2000) ("San
Diego II"). The Commission further held that members of
the current stakeholder ISO Board must "turn over decision-
making power and operating control to the management of
the ISO" by January 29, 2001 (three days after oral argument
of this case), retaining only an advisory role. Id. The
Commission also stated its intention to establish further
procedures "to discuss with state representatives the selec-
tion process for the new ISO Board." Id. The Commission
did not similarly replace the PX's governing board. Instead,
by releasing the investor-owned utilities from the obligation
to use the PX for energy exchange transactions and terminat-
ing the PX's rate schedules effective as of the close of the
April 30, 2001 trading day, it essentially dissolved the PX.
Id. at 61,999-62,000.
The changes wrought by San Diego II moot the two claims
that bear on the composition of the ISO Board--both the
electricity purchase condition for membership and the provi-
sion for veto by the Oversight Board. By limiting the ISO
Board to an advisory role San Diego II pretty much defenes-
trates that board, id. at 62,013, and leaves to the Commis-
sion's own future rulings any decision of how the new-style
board will be selected.
The parallel attacks on the composition of the PX Board
are also mooted, though the case is subtler. By providing for
termination of the PX itself, see id. at 61,999-62,000, San
Diego II puts the PX Board on the road to oblivion. Petition-
ers conceded at oral argument that the "Power Exchange ...
under FERC's most recent orders is in the process of wind-
ing down and will be going out of business in the near
future," but asserted that "unless and until it actually hap-
pens that it's not in business," their claims were not moot.
Oral Argument Tr. at 23. But "[t]o satisfy the Art. III case-
or-controversy requirement, a litigant must have suffered
some actual injury that can be redressed by a favorable
judicial decision." Iron Arrow Honor Society v. Heckler, 464
U.S. 67, 70 (1983). Given the normal delays of this court's
mandate (for purposes of allowing petitions for rehearing),
and conventional agency delay, judicial resolution of the issue
could not have the slightest real-world impact before April 30
of this year, when the PX's rate schedules expire. And the
petitioners have not sought to show that the PX is likely to be
revived. See City of Los Angeles v. Lyons, 461 U.S. 95, 109
(1983).
The mootness wrought by San Diego II is, incidentally,
amplified by legislation enacted by California on January 18,
2001, Assembly Bill 5 ("An act to amend Sections 335 and
341.2 of, to add Sections 352 and 352.5 to, and to repeal and
add Section 337 of, the Public Utilities Code, relating to
public utilities, and declaring the urgency thereof, to take
effect immediately") ("AB 5"). This act converted the exist-
ing ISO stakeholder governing board into a five-member non-
stakeholder board, with all members appointed by the Gover-
nor. AB 5, s 3 (2001). Five members, selected by the
Governor and approved by the Oversight Board, took their
posts three days before oral argument in this case. See
Letter from Vickie P. Whitney to Members of the Governing
Board, California Independent System Operator (Jan. 23,
2001)(submitted under Circuit Rule 28(j)). As yet there has
been no Commission evaluation of California's move.
Petitioners' remaining challenge is to the undue breadth, as
they see it, of the Oversight Board's power to review substan-
tive decisions of the ISO. The Commission staunchly argues
that San Diego II's changes also moot this claim, a proposi-
tion we find questionable. Though changes in the criteria for
membership on the ISO Board and the Oversight Board's role
in its selection might be important elements of context, they
seem to leave petitioners' core claim--the risk of Oversight
Board invasion of federal authority--substantially in place.
See Motor & Equipment Manufacturers Ass'n v. Nichols,
142 F.3d 449, 458-459 (D.C. Cir. 1998); Naturist Society, Inc.
v. Fillyaw, 958 F.2d 1515, 1520 (11th Cir. 1992).
Whatever the answer on mootness for this final claim,
another jurisdictional hurdle proves insuperable--the absence
of standing. Only a party that is "aggrieved" by a Commis-
sion's order may obtain judicial review, 16 U.S.C. s 825l, and
this requires a petitioner to meet both the constitutional and
prudential standing requirements. Louisiana Energy and
Power Authority v. FERC, 141 F.3d 364, 366 (D.C. Cir. 1998).
Constitutional standing requires (among other things) an
injury that is "actual or imminent, not conjectural or hypo-
thetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992) (internal quotations omitted). Petitioners' best shot at
showing the imminence of such an injury is their claim that
the Oversight Board is by statute, and has shown itself in
practice, biased in favor of the "people of California," and
motivated "to shift costs and burdens to out-of-state market
participants." Petitioners' Br. at 19-20. O'Shea v. Littleton,
414 U.S. 488 (1974), suggests that under some circumstances
the prospect of facing adverse action by a discriminatory or
biased tribunal might be enough. Petitioners submitted in
support of their standing argument the transcript of an
Oversight Board meeting, see Petitioners' Reply Br. Attach-
ment A at 3; see also Northwest Environmental Defense
Center v. Bonneville Power Administration, 117 F.3d 1520,
1527 (9th Cir. 1997) (allowing affidavits to be submitted on
appeal for the purpose of showing standing), from which one
might perhaps infer such bias. But as in O'Shea v. Littleton
the claimed injury remains highly speculative. The only
prospective illegality claimed is that the Oversight Board
might exercise review authority in a way (1) allowed by the
1999 Order, but (2) unlawful under federal law. At oral
argument petitioners suggested only that the ISO Board
could direct out-of-market purchases (discretionary purchases
outside of set tariffs), and may itself be "bias[ed] to select the
power, for instance, generated by the California municipal
companies." Oral Argument Tr. at 21. Yet petitioners fail to
trace this conduct in any way to the review power of the
Oversight Board, much less to an illegal excess in the scope of
that power deriving from the 1999 Order. Cf. Metcalf v.
National Petroleum Council, 553 F.2d 176, 186-87 (D.C.
1977) (consumers asserting that composition of federal adviso-
ry committee would lead to higher costs for petroleum prod-
ucts lacked standing because the occurrence of the harm was
"speculative and conjectural").
* * *
The California electricity market is in flux. The ISO
stakeholder board, which allegedly threatened the interests of
non-California power producers, no longer exists; San Diego
I & II replace it--as a matter of federal law--with a pro-
posed seven-member non-stakeholder board to be constituted
in an as yet undetermined way (and as a matter of state law
AB 5 replaces it with a five-member non-stakeholder board
appointed by Governor Gray Davis). Petitioners tell us that
the various boards involved in the orders under review have
in fact made decisions that undercut the pollyannish view of
them (as petitioners see it) taken by the Commission. If so,
there may be remedies in the courts or before the Commis-
sion. (The Commission could, for example, seek enforcement
of San Diego II in a United States district court, see 16
U.S.C. s 825m, and there may be Commission proceedings by
which petitioners could try to induce such action.) But no
Commission decision taking or refusing to take such action is
before us; petitioners identify no way in which our review of
the disputed decisions could remedy the alleged ill effects of
California's current institutional arrangements--other than,
perhaps, by "sending a message." But message-sending is
not among our powers under Article III.
The petition is
Dismissed
.