Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the
Clerk of any formal errors in order that corrections may be made before the
bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 6, 2004 Decided January 14, 2005
No. 04-1020
DTE ENERGY COMPANY AND
DETROIT EDISON COMPANY,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
DEARBORN INDUSTRIAL GENERATION, LLC AND
INTERNATIONAL TRANSMISSION COMPANY,
INTERVENORS
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Michael C. Griffen argued the cause for petitioners. With
him on the briefs was John D. McGrane.
Beth G. Pacella, Attorney, Federal Energy Regulatory
2
Commission, argued the cause for respondent. On the brief
were Cynthia A. Marlette, General Counsel, Dennis Lane,
Solicitor, and Lona T. Perry, Attorney.
Before: GINSBURG, Chief Judge, and ROGERS and ROBERTS,
Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The DTE Energy Company and the
Detroit Edison Company (“Detroit Edison”) petition for review
of three orders of the Federal Energy Regulatory Commission
ruling that certain distribution and interconnection facilities are
transmission facilities subject to the Commission’s exclusive
jurisdiction. DTE’s petition is not properly before the court
because it failed to seek rehearing or petition for review of its
aggrieving order. See 16 U.S.C. § 825l(b). Detroit Edison’s
petition for review of two orders is properly before the court,
and it contends the Commission acted arbitrarily and
capriciously because the facilities at issue are “dual-use” local
distribution/transmission facilities and should therefore be
subject to the shared jurisdiction of the Commission and the
State of Michigan. Ordinarily, this would occasion our review
of the Commission’s application of its seven-factor
jurisdictional test adopted in Order No. 888,1 which the
1
See Promoting Wholesale Competition Through Open
Access Non-Discriminatory Transmission Services by Public Utilities;
Recovery of Stranded Costs by Public Utilities and Transmitting
Utilities, Order No. 888, 61 Fed. Reg. 21,540 (May 10, 1996), FERC
Stats. & Regs. ¶ 31,036 at 31,783-84 (1996), order on reh'g, Order
No. 888-A, 62 Fed. Reg. 12,274 (March 14, 1997), FERC Stats. &
Regs. ¶ 31,048 at 30,336 (1997), order on reh'g, Order No. 888- B, 81
F.E.R.C. ¶ 61,248 (1997), order on reh'g, Order No. 888-C, 82
F.E.R.C. ¶ 61,046 (1998), aff'd in relevant part sub nom. Transmission
Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000),
aff'd sub nom. New York v. F E R C, 535 U.S. 1 (2002) (“Order No.
3
Commission asserts it applied here. However, because Detroit
Edison failed to argue in its petition for rehearing that the
Commission misapplied the seven-factor test, the court lacks
jurisdiction to consider it now. Instead, Detroit Edison raised on
rehearing, as it does on appeal, a substantial evidence challenge
to the Commission’s factual findings and a collateral attack on
the Commission’s single-jurisdictional approach. Accordingly,
we deny the petition because the Commission’s findings in
support of its jurisdictional conclusion are supported by
substantial evidence in the record and its collateral attack is
precluded.
I.
A.
Section 201 of the Federal Power Act (“FPA”), 16 U.S.C.
§ 824(b)(1), empowers the Commission to regulate both
wholesale sales of electric energy in interstate commerce and
interstate electric energy transmissions, by vesting it with
“jurisdiction over all facilities for such transmission or sale of
electric energy.” It also reserves regulatory authority to the
states over bundled retail transactions, including the intrastate
sale and distribution of electricity through local distribution
facilities. Id. In Transmission Access Policy Study Group v.
FERC, 225 F.3d 667 (D.C. Cir. 2000) (“TAPS”), the court
affirmed Order No. 888 in relevant part, deferring to the
Commission’s interpretation of Section 201 of the FPA to
accommodate new industry practices and conditions. Id. at 694-
95. In Order No. 888, the Commission adopted a seven-factor
jurisdictional test to identify unbundled retail-wheeling facilities
primarily engaged in local distribution; the Commission claimed
exclusive jurisdiction over all other facilities.2 Id. at 691.
888").
2
The seven factors, which the Commission stated it “will
evaluate in determining whether particular facilities are transmission
or local distribution in the case of vertically integrated transmission
4
Thereafter, in New York v. FERC, 535 U.S. 1 (2002), the
Supreme Court affirmed. By rejecting New York’s contention
that the dividing line between regulatory authority of the states
and the Commission falls between wholesale and retail markets,
id. at 17, the Court implicitly approved the Commission’s
single-jurisdictional approach over multi-use unbundled retail-
wheeling facilities, see id. at 22-23.
Accordingly, the Commission has applied Order No. 888's
seven-factor test to determine jurisdictional authority over
utilities providing unbundled retail services.3 See TAPS, 225
F.3d at 691. When the Commission recently ignored the seven-
factor test to resolve such jurisdictional questions, the court
rejected, as contrary to the statute and precedent, the
and distribution facilities,” are:
(1) Local distribution facilities are normally in close
proximity to retail customers.
(2) Local distribution facilities are primarily radial in
character.
(3) Power flows into local distribution systems; it rarely, if
even, flows out.
(4) When power enters a local distribution system, it is not
reconsigned or transported on to some other market.
(5) Power entering a local distribution system is consumed in
a comparatively restricted geographical area.
(6) Meters are based at the transmission/local distribution
interface to measure flows in the local distribution system.
(7) Local distribution systems will be of reduced voltage.
Order No. 888 at 31,981.
3
E.g., Am. Serv. Co., 106 F.E.R.C. ¶ 63,001 (2004); Puget
Sound Energy, Inc., 104 F.E.R.C. ¶ 61,272, 61,909 (2003); Akin,
Gump, Strauss, Hauer & Feld, LLP, 95 F.E.R.C. ¶ 61,375, 62,403
(2001); Mansfield Mun. Elec. Dep’t and N. Attleborough Elec. Dep’t,
94 F.E.R.C. ¶ 63,023 (2001).
5
Commission’s attempt to expand its jurisdiction to set rates for
all services occurring over facilities used for both retail and
wholesale distribution, expressing concern that “the orders under
review totally ignore Order No. 888's carefully formulated
seven-factor test for distinguishing between local distribution
facilities and ‘FERC-jurisdictional facilities.’” Detroit Edison
Co. v. FERC, 334 F.3d 48, 54 (D.C. Cir. 2003) (“Detroit
Edison”).
B.
The instant appeal arises in the context of the Commission’s
efforts to establish a regional transmission organization (“RTO”)
to integrate the Midwest wholesale electricity market. In
response to rising energy costs in the Midwest, the Commission
facilitated the development of a Midwest RTO and the
integration of for-profit transmission companies to operate under
the RTO umbrella. See generally Pub. Util. Dist. No. 1 v.
FERC, 272 F.3d 607 (D.C. Cir. 2001). After evaluating
competing proposals, the Commission determined that Midwest
Independent Transmission System Operator, Inc. (“Midwest
ISO”) should serve as the foundation for the Midwest RTO.
Detroit Edison and International Transmission (“IT”) were
both wholly owned subsidiaries of DTE Energy. Detroit Edison
operates as DTE Energy’s public utility, engaged in the
generation, transmission, and distribution of energy in Michigan.
DTE Energy Co., 91 F.E.R.C. ¶ 61,317, 62,909 (2000). DTE
Energy created IT with the purpose of acquiring ownership of
Detroit Edison’s transmission assets as a first effort to divest its
transmission business to an entity qualified to join the Midwest
RTO. See id. Thus, on May 4, 2000, DTE, Detroit Edison, and
IT sought and received the Commission’s authorization to
transfer Detroit Edison’s transmission facilities with voltage
ratings of 120 kV and above to IT. Id. Following the January
1, 2001 transfer, IT’s transmission facilities, interconnected with
those of Michigan Electric Transmission Company, together
6
comprised substantially all of the Michigan Transmission grid.
Int’l Transmission Co., 97 F.E.R.C. ¶ 61,328, 62,534 (2001).
Pursuant to the Commission’s approval of Midwest ISO as
the regional RTO, IT applied for and received by Order of
December 20, 2001, the Commission’s authorization to transfer
to Midwest ISO functional control over IT’s jurisdictional
transmission facilities. When IT thereafter submitted an updated
list of jurisdictional facilities to be transferred to Midwest ISO,
CMS Marketing, Services and Trading Company (“CMS”)
protested, arguing that the list should include Detroit Edison’s
facilities interconnecting Dearborn Industrial Generation, LLC
(“DIG”) with IT—specifically, the 230 kV Navarre-DIG line
(“Navarre line”), the 230 kV Baxter-DIG line (“Baxter line”),
and the Baxter substation (collectively, “DIG
facilities”)—because these are the facilities by which DIG sells
electric energy to wholesale purchasers, and therefore are
Commission jurisdictional transmission facilities. Int’l
Transmission Co., 99 F.E.R.C. ¶ 61,211, 61,888 (“May 22, 2002
Order”).
By Order of May 22, 2002, the Commission found that the
Navarre and Baxter lines appear to perform a jurisdictional
transmission function because they are part of the
interconnection facility connecting DIG to the transmission grid,
and sought additional information from IT to inform the
Commission’s jurisdictional decision. Id. at 61,889. The
Commission found the Baxter substation should be included in
an updated list of IT’s transmission facilities as it had already
been included in the FERC Docket No. EC00-86 list of facilities
that Detroit Edison was transferring to IT, incorporated into the
December 20, 2001 Order. Id.
Detroit Edison moved to intervene and responded on July
16, 2002, conceding that the DIG facilities are, in part,
interconnection facilities used in wholesale sales from the DIG
7
Plant, but contending they nevertheless were part of Detroit
Edison’s local distribution system. Noting that the Baxter and
Navarre lines had been developed and historically used to
provide retail distribution service to electric loads located in or
near the Rouge Industrial Complex in Dearborn pursuant to
retail tariffs and contracts, Detroit Edison maintained the
facilities were “dual-use” and should be subject to the shared
jurisdiction of Michigan and the Commission. Concerned that
classifying the facilities as transmission rather than local
distribution facilities would cause it to incur stranded costs,
Detroit Edison offered alternatively to transfer limited
operational control over the DIG facilities to Midwest ISO to the
extent necessary to effectuate wholesale sales. CMS again
protested, arguing the Navarre line serves as the primary point
of interconnection between DIG and IT from DIG’s inception,
and the Baxter line had been reconfigured to serve as a
secondary point of interconnection with IT; it appended an
analysis of power flows on the two lines.
Then, on October 4, 2002, Detroit Edison submitted an
executed Agency Agreement between it and Midwest ISO that
sought to transfer limited functional control over the DIG
facilities to enable Midwest ISO to ensure the DIG generator
receives non-discriminatory service when using the facilities for
wholesale sales. In responding to a deficiency letter from
Commission staff, Detroit Edison explained that retail-load
customers must obtain retail-delivery service over the Detroit
Edison facilities under the state Retail Access Service Tariff
(“RAST”), and that ceding complete operational control to
Midwest ISO would render Detroit Edison unable to recover its
costs under the RAST, including the costs of the Baxter line.
DIG and CMS protested, arguing that the DIG facilities are an
integral part of the IT system and that points of interconnection
from the DIG facilities form a 230 kV loop rather than being
radial as is most common for local facilities; hence, the DIG
facilities should be subject to the Commission’s exclusive
8
jurisdiction, and the Commission should reject the Agency
Agreement.
By Order of March 13, 2003, the Commission found that
the DIG facilities perform a transmission, not a state-
jurisdictional local distribution function. Detroit Edison Co.,
102 F.E.R.C. ¶ 61,282 (2003) (“March 13, 2003 Order”).
Specifically, the Commission found that the facilities are high-
voltage facilities that together with the DIG ring bus, form a 230
kV loop through which power flows into and out of IT’s
interstate transmission facilities. Id. at 61,906. Noting further
that Michigan has implemented retail access for all customers of
Michigan’s investor-owned utilities, the Commission found that
retail customers are entitled to receive unbundled retail access
pursuant to a Commission-approved tariff. Id. Additionally, the
Commission found that DIG, interconnected by the DIG
facilities to IT, is selling all its output at wholesale. Id. Based
on these factual findings, the Commission concluded that the
DIG facilities primarily function as transmission facilities, and
full operational control should be transferred to Midwest ISO.
Id. It noted, however, that Detroit Edison should be able to
collect its RAST through state-approved charges, and that
although “in most cases there will be identifiable local
distribution facilities subject to state jurisdiction, we also believe
that even when there are no identifiable local distribution
facilities, states nevertheless have jurisdiction in all
circumstances over the service of delivering energy to end
users.” Id. In its April 11, 2003 Order, International
Transmission Co., 103 F.E.R.C. ¶ 61,041 (2003) (“April 11,
2003 Order”), the Commission accepted DTE and IT’s
compliance filing with modifications to reflect transfer of the
DIG facilities to Midwest ISO; it also affirmed its findings in its
March 13, 2003 Order.
Finally, by Order of November 17, 2003, the Commission
denied, in relevant part, DTE’s and Detroit Edison’s petitions
9
for rehearing of the March 13, 2003 and April 11, 2003 Orders,
stating that both parties had presented the same arguments as
before without offering any new evidence. Detroit Edison Co.,
105 F.E.R.C. ¶ 61,209, 62,084 (2003) (“November 17, 2003
Rehearing Order”). In seeking rehearing, Detroit Edison
conceded that the DIG facilities are high-voltage facilities that
together with DIG’s ring bus form a 230 kV loop configuration,
and that power can flow into and out of the facilities, but it
argued that the DIG facilities also perform a retail distribution
function, which should be subject to state jurisdiction. Detroit
Edison also moved to reopen the record to include a recent
Michigan Public Service Commission order, which it contended
supports its view that the facilities perform a retail distribution
function. The Commission explained that while local
distribution lines may exist, the record demonstrated the DIG
facilities were not local distribution facilities. This finding, the
Commission observed, “is consistent with the seven-factor test
outlined in Order No. 888 for classifying facilities as
transmission or local distribution.” Id. at 62,084-85. The
Commission denied Detroit Edison’s motion to reopen the
record for failure to show an extraordinary change in
circumstances outweighing the need for finality and going to the
heart of the case. Id. at 62,086. The Commission also noted
that deference to a state commission’s classification was
inappropriate here because the Michigan Public Service
Commission order did not discuss or apply the seven-factor test
or reclassify the DIG facilities. Id.
II.
On appeal, DTE and Detroit Edison challenge the
Commission’s May 22, 2002 and March 13, 2003 Orders and
the November 17, 2003 Rehearing Order. We first address two
jurisdictional issues.
A.
Section 313(a) of the FPA provides that “[a]ny person . . .
aggrieved by an order issued by the Commission . . . may apply
10
for a rehearing . . . ,” but “[n]o proceeding to review any orders
of the Commission shall be brought by any person unless such
a person shall have made application to the Commission for a
rehearing thereon.” 16 U.S.C. § 825l(a). A party may only
obtain judicial review of an aggrieving order, in accordance with
section 313(b), “within sixty days after the order of the
Commission upon the application for rehearing.” Id. § 825l(b).
Neither the court nor the Commission has the discretion to
ignore this “‘express statutory limitation on the jurisdiction of
the court.’” Calif. Dep’t of Water Res. v. FERC, 306 F.3d 1121,
1125 (D.C. Cir. 2002) (quoting Tenn. Gas Pipeline Co. v. FERC,
871 F.2d 1099, 1107 (D.C. Cir. 1989)); Granholm ex rel. Mich.
Dep’t of Natural Res. v. FERC, 180 F.3d 278, 280-82 (D.C. Cir.
1999).
DTE Energy petitions for review of the Commission’s May
22, 2002 Order, for which it did not seek rehearing before the
Commission, but fails to challenge the April 11, 2003 Order, by
which it is aggrieved. Hence, DTE Energy is not a proper party
to these proceedings. In the May 22 Order, the Commission
conditionally accepted the compliance filing by DTE Energy
and IT submitted pursuant to the Commission’s December 20,
2001 Order, but directed DTE Energy to submit further
information in response to CMS’s protest regarding the
exclusion of the Navarre and Baxter lines as transmission
facilities in the filing. It was not until the April 11 Order, in
which Detroit Edison intervened, that the Commission accepted
DTE Energy’s compliance filing with modifications directing
DTE Energy, IT, and Detroit Edison to revise their filings to
include the DIG facilities as jurisdictional transmission facilities
to be transferred to Midwest ISO for operational control. April
11, 2003 Order, 103 F.E.R.C. at 61,666-67.
DTE’s failure to seek rehearing of the May 22, 2002 Order
is fatal to its challenge of that Order in its petition for review.
16 U.S.C. § 825l(a); Cal. Dep’t of Water Res., 306 F.3d at 1125.
11
The mandatory requirement of filing a petition for rehearing is
designed to afford the Commission an opportunity to invoke its
expertise or to correct any errors prior to judicial review, and the
court cannot consider DTE’s challenge to the May 22 Order
anew. See Granholm, 180 F.3d at 281. It is unsurprising,
however, that DTE Energy did not petition for rehearing of the
May 22 Order because it is the April 11 Order, instead, by which
it is aggrieved. As the court has explained, “[a] party is
aggrieved within the meaning of § 313(b) if it can establish both
the constitutional and prudential requirements for standing.”
Pub. Util. Dist. No. 1, 272 F.3d at 613 (citations omitted). DTE
Energy can show no injury-in-fact, see id. (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992)), as a result of
the May 22 Order, because it was conditional, subject to a
further compliance filing, and thus was without binding effect
on DTE Energy. Cf. Cal. Dep’t of Water Res., 306 F.3d at 1126.
It was not until the Order of April 11, 2003, when the
Commission accepted the compliance filing, that DTE Energy
could demonstrate actual injury. See La. Energy & Power Auth.
v. FERC, 141 F.3d 364, 367 (D.C. Cir. 1998). But while DTE
Energy sought rehearing of the April 11 Order, its petition for
review by the court challenges only the November 17, 2003
Rehearing Order. Because DTE Energy failed to identify the
aggrieving order in its petition for review, the court cannot
consider DTE’s challenge to the Commission’s November 17,
2003 Rehearing Order. City of Oncoto Falls v. FERC, 204 F.3d
1154, 1159-60 (D.C. Cir. 2000). Consequently, only Detroit
Edison’s petition for review of the March 13, 2003 Order and
November 17, 2003 Rehearing Order are properly before the
court.
B.
Section 313(b) of the FPA provides that “[n]o objection to
the order of the Commission shall be considered by the court
unless such objection shall have been urged before the
Commission in the application for rehearing unless there is
12
reasonable ground for failure to do so.” 16 U.S.C. § 825l(b).
This well-settled principle is “an unusually strict requirement
that will not be ignored by the courts,” even absent an objection
by the Commission. Wabash Valley Power Ass’n, Inc. v. FERC,
268 F.3d 1105, 1114 (D.C. Cir. 2001); see also High Country
Res. v. FERC, 255 F.3d 741, 745-46 (9th Cir. 2001).
While Detroit Edison sought rehearing of the March 13,
2003 Order, by which it is aggrieved, it did not argue in its
petition for rehearing before the Commission that the
Commission misapplied the seven-factor test. Instead, it raises
the argument for the first time in its reply brief to the court.
Detroit Edison fails to offer any grounds, let alone reasonable
grounds, under section 313(b) of the FPA to excuse its failure to
raise this argument before the Commission on rehearing. See
OMYA, Inc. v. FERC, 111 F.3d 179, 181 (D.C. Cir. 1997).
However, while the Commission argues in its brief on appeal
that it applied the seven-factor test in the analysis of the March
13, 2003 Order, it did not expressly reference the test until the
Rehearing Order. Even then the Commission did not state it was
applying the seven-factor test, commenting only that its factual
conclusions are “consistent with the seven-factor test.”
November 17, 2003 Rehearing Order, 105 F.E.R.C. at 62,084.
This language is hardly consistent with the Commission’s
statement in Order No. 888 that it “will apply” its jurisdictional
test. Order No. 888 at 31,980. Nevertheless, Detroit Edison
acknowledged the applicability of the seven-test in footnote 42
of its petition for rehearing and could have challenged the
Orders on that ground, citing Detroit Edison as support; instead
it argued that, contrary to the Commission’s findings, the
evidence showed the DIG facilities were “dual-use” facilities
and not subject to the Commission’s exclusive jurisdiction.
Detroit Edison’s failure to challenge the seven-factor analysis
earlier is understandable, in part, because, as counsel for the
Commission stated during oral argument, Detroit Edison is not
seeking to have the Commission apply the seven-factor test but
13
to have the Commission classify the facilities as “dual-use”
subject to shared jurisdictional control. But the Commission’s
single-jurisdictional approach, identifying the primary function
of a facility, has been judicially approved as a reasonable means
of resolving regulatory ambiguity under section 201 of the FPA,
see New York v. FERC, 535 U.S. 1; TAPS, 225 F.3d 667, and
Detroit Edison’s attempted collateral attack fails to argue why
TAPS (and other precedents endorsing the jurisdictional test of
Order No. 888) is not controlling. Whatever the reason for the
omission, Detroit Edison has waived any argument that the
Commission failed properly to apply its seven-factor test. See
High Country Res., 255 F.3d at 746-47; OMYA, 111 F.3d at 181.
Accordingly, the only issue within the court’s jurisdiction
is Detroit Edison’s contention that the Commission’s findings in
support of its exclusive jurisdictional determination are
unsupported by the record evidence and that the Commission
therefore acted arbitrarily and capriciously in asserting exclusive
jurisdiction over the facilities.
III.
The court will uphold the Commission’s orders unless they
are arbitrary and capricious, an abuse of discretion, or otherwise
not in accordance with the law. 5 U.S.C. § 706(2)(A); see also
Sithe/Independence Power Partners v. FERC, 165 F.3d 944, 948
(D.C. Cir. 1999); Transcontinental Gas Pipe Line Corp. v.
FERC, 54 F.3d 893, 898 (D.C. Cir. 1995). The Commission’s
findings of fact will be upheld if they are supported by
substantial evidence in the record and the connection between
the factual findings and conclusion drawn is apparent. Jifry v.
FAA, 370 F.3d 1174, 1181 (D.C. Cir. 2004) (citing Burlington
Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962));
Trans Alaska Pipeline Sys., 80 F.E.R.C. ¶ 63,015, 65,232-33
(1997). Substantial evidence includes such relevant evidence as
a reasonable person may accept as proof of a conclusion. Id.
(citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 477
14
(1981) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229
(1938))).
In the March 13, 2003 Order, the Commission found that
“the [f]acilities perform a transmission function and not a state-
jurisdictional local distribution function because: (1) the
[f]acilities are at a high-voltage level; (2) the Navarre-DIG line
and the Baxter-DIG line are both 230 kV lines, and along with
the DIG ring bus, form a 230 kV loop configuration; and (3)
power flows into and out of the loop configuration.” 102
F.E.R.C. at 61,906. The Commission found that the DIG, which
is interconnected by the facilities to IT, is selling all its output
at wholesale. It affirmed these findings on rehearing, explaining
that:
Although local distribution lines may exist within the
Rouge Industrial Complex where Detroit Edison states
that it serves retail customers, the record demonstrates
that the [f]acilities are not local distribution facilities.
. . . Power flows into and out of the [f]acilities, making
them looped transmission facilities, i.e., not radial in
character like those of local distribution facilities.
With the DIG facility interconnected to the grid and
given the network configuration, the [f]acilities have
the capacity to transmit energy to other markets outside
the geographical area.
November 17, 2003 Rehearing Order, 105 F.E.R.C. at 62,084.
The Commission noted that Detroit Edison had previously
characterized the Baxter 230 kV switch as transmission and that
the Navarre line connects to the IT systems and thus to the
transmission grid, such that it also operates as a looped 230 kV
transmission line. Id. at 62,085.
As on appeal, Detroit Edison argued in its petition for
rehearing that the Commission’s jurisdictional conclusion was
15
wrong in two respects: First, the facilities perform dual
functions, i.e., transmission and retail distribution, and second,
because of this record showing, the facilities should be subject,
at least in part, to shared jurisdiction by Michigan. Pointing to
the “substantial evidence” provided in its pleadings, Detroit
Edison argued that the facilities were constructed at the request
of the DIG and Rouge complex customers to provide them with
local-distribution service and that Detroit Edison continues to
use the DIG facilities to provide retail-access service to end-use
customers. It did not, however, dispute the Commission’s
factual findings that the facilities are high voltage and together
with DIG’s ring bus facilities (and facilities owned by Ford and
Rouge at their plant sites at the Rouge complex) form a 230 kV
loop configuration, such that power can flow into and out of the
facilities. But, as on appeal, Detroit Edison instead argued that
the Commission failed to address the evidence of the facilities’
“dual-use” and that no record evidence contradicts Detroit
Edison’s showing.
In fact, on rehearing the Commission acknowledged that
“local distribution lines may exist within the Rouge Industrial
Complex where Detroit Edison states that it serves retail
customers.” Id. at 62,084. Critical to the Commission was that
“the record,” described in its March 13, 2003 Order, which was
affirmed on rehearing, “demonstrates that the [f]acilities are not
local distribution facilities.” Id. Moreover, “neither Detroit
Edison nor DTE has proffered any additional evidence on
rehearing that shows otherwise,” id.; nor did Detroit Edison
dispute the factual findings on which the Commission relied for
its jurisdictional conclusion. For these reasons, the Commission
explained it disagreed with Detroit Edison’s view that the
facilities are “dual-use,” rather than transmission facilities.
On appeal, Detroit Edison’s reliance on the historical
distribution function performed by the facilities is misplaced
because the historical purpose or alleged intended use of the
16
facilities does not speak to the issue at hand, which is their
present primary function. Detroit Edison’s further contention
that the looped nature of the facilities arises only because of the
configuration of third-party facilities is forfeited because it
failed to raise this argument before the Commission. See supra
Part II B. Although Detroit Edison cites its rehearing request of
the March 13, 2003 Order, its request never argued that the
Commission should have found the DIG facility lines radial
because the facilities were owned by others; rather, its argument
was that if the Commission found the DIG facilities to be
jurisdictional, the Commission should also find the Ford and
Rouge facilities completing the loop jurisdictional as well to
avoid discriminatory impact on Detroit Edison. In any event,
whether Detroit Edison owns all the facilities in the loop is
beside the point as the determinative question is whether the
facilities it does own, as presently configured, perform a
transmission function. Nothing in Detroit Edison, 334 F.3d 48,
on which Detroit Edison now relies in claiming the
Commission’s findings are contrary to its holding, is to the
contrary. That case is factually distinguishable, because the
Commission, without reference to the seven-factor jurisdictional
test of Order No. 888, had asserted jurisdiction over all facilities
except those used exclusively in local distribution. See id. at 54.
Finally, there is no merit to Detroit Edison’s contention that
the Commission erred by failing to reopen the proceedings to
consider the order of the Michigan Public Service Commission.
In accordance with Order No. 888, the Commission defers to a
state commission classification of facilities when such entities
“‘specifically evaluate the seven factor indicators and any other
facts,’” in making their determination. November 17, 2003
Rehearing Order, 105 F.E.R.C. at 62,086 (citing Order No. 888
at 31,784 & n.4). Detroit Edison acknowledges that order did
not purport to apply the seven-factor test of Order No. 888 or to
reclassify the facilities. Hence, the Commission had no
obligation to consider it.
17
Accordingly, we deny the petition for review.
So ordered.