United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 14, 2007 Decided June 22, 2007
No. 04-1238
COLORADO OFFICE OF CONSUMER COUNSEL, ET AL.,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
AMERICAN GAS ASSOCIATION, ET AL.,
INTERVENORS
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Lynn N. Hargis argued the cause for petitioners. With her
on the briefs was Gerald A. Norlander.
Robert H. Solomon, Solicitor, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on the
brief were John S. Moot, General Counsel, and Michael E.
Kaufmann, Attorney.
Scott H. Angstreich argued the cause for intervenors. With
him on the brief were David C. Frederick, Brendan J. Crimmins,
Paul W. Fox, John D. McGrane, Edward H. Comer, Gary D.
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Bachman, Cheryl Feik Ryan, Howard E. Shapiro, John T.
Stough, Jr., and Kevin M. Downey. Andrea M. Kearney, Erin M.
Murphy, and Charles V. Garcia entered appearances.
Before: ROGERS, TATEL and GRIFFITH, Circuit Judges.
Opinion for the Court filed PER CURIAM.
PER CURIAM: In a proceeding under section 206 of the
Federal Power Act (FPA), the Federal Energy Regulatory
Commission determined that anticompetitive and market
manipulative practices were making market-based electricity
transmission rates unjust and unreasonable. See Investigation of
Terms and Conditions of Public Utility Market-Based Rate
Authorizations, 97 F.E.R.C. ¶ 61,220, at 61,974–75 (2001)
(initiating section 206 proceeding); Investigation of Terms and
Conditions of Public Utility Market-Based Rate Authorizations,
103 F.E.R.C. ¶ 61,349, at 62,373–74 (2003) (asserting that
investigation discovered “fraudulent or otherwise
anticompetitive” energy trading strategies utilized first by the
Enron Corporation and later by “a broad cross-[s]ection of the
industry”); Investigation of Terms and Conditions of Public
Utility Market-Based Rate Authorizations, 105 F.E.R.C.
¶ 61,218, at 62,142 (2003) (determining that “sellers’ existing
tariffs and authorizations” would be unjust and unreasonable
“without clearly-delineated rules of the road to govern market
participant conduct”). As a remedy, the Commission approved
a series of “Market Behavior Rules” that prohibited such
practices and permitted the Commission and the public to
monitor market-based energy transactions more closely. Id. at
62,142–43 (summarizing Rules). The Market Behavior Rules
were not issued in the form of Commission regulations, but
instead conditions imposed upon all existing and future market-
based tariffs approved by the Commission. See 103 F.E.R.C. at
62,373 n.5.
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Colorado Office of Consumer Counsel and others
(hereinafter “Consumer Advocates”) petition for review.
Asserting that the Market Behavior Rules simply regulate
sellers’ behavior, they argue that the Commission, having found
rates unjust and unreasonable, violated FPA section 206 by
failing also to “fix” a new rate. Consumer Advocates go on to
argue that in fixing a new rate, the Commission must reject all
market-based rates. According to petitioners, certain aspects of
FPA section 205, which provides the framework for the filed
rate system, are fundamentally incompatible with market-based
tariffs.
The Commission argues that intervening events have
mooted Consumer Advocates’ claim. Specifically, after the
petition was filed, Congress passed the Energy Policy Act of
2005 (“EPAct”), Pub. L. No. 109-58, 119 Stat. 594 (codified in
relevant part at 16 U.S.C. § 824v), which gave the Commission
explicit authority to prohibit “any manipulative or deceptive
device or contrivance” used in the purchase or sale of electric
energy or transmission services. On our own motion, we held
Consumer Advocates’ petition for review in abeyance, along
with five other petitions for review regarding these proceedings,
while the Commission determined whether it would exercise this
new authority and, in the process, revise or repeal the Market
Behavior Rules. See Cinergy Mktg. & Trading, L.P. v. FERC,
No. 04-1168, 2006 U.S. App. LEXIS 3682 (D.C. Cir. Feb. 15,
2005). The Commission did just that: it rescinded the Market
Behavior Rules, replacing them with Commission regulations,
some of which were issued under its new EPAct authority. See
Investigations of Terms and Conditions of Public Utility Market-
Based Rate Authorizations, 114 F.E.R.C. ¶ 61,165, at 61,528–29
(2006). The rescission of the Market Behavior Rules, however,
does not render Consumer Advocates’ claim moot, for the
Commission never rescinded its determination that market-based
rates had become unjust and unreasonable. Were Consumer
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Advocates’ legal theory correct, they would be entitled to relief.
There is thus still an “actual, ongoing controvers[y],” Honig v.
Doe, 484 U.S. 305, 317 (1988), that the passage of the EPAct
and the Commission’s rescission of the Market Behavior Rules
have failed to quiet.
Proceeding to the merits, we deny Consumer Advocates’
petition for review because FPA Section 206’s plain language
does not require the Commission, having found only one aspect
of the tariffs to be unjust or unreasonable, to revisit all elements
of its market-based rate tariffs. FPA section 206(a) states:
Whenever the Commission, after a hearing had
upon its own motion or upon complaint, shall
find that any rate, charge, or classification . . . or
. . . any rule, regulation, practice, or contract
affecting such rate, charge, or classification is
unjust, unreasonable, unduly discriminatory or
preferential, the Commission shall determine the
just and reasonable rate, charge, classification,
rule, regulation, practice, or contract to be
thereafter observed and in force, and shall fix the
same by order. Any complaint or motion of the
Commission to initiate a proceeding under this
section shall state the change or changes to be
made in the rate, charge, classification, rule,
regulation, practice, or contract then in force, and
the reason for any proposed change or changes
therein. If, after review of any motion or
complaint and answer, the Commission shall
decide to hold a hearing, it shall fix by order the
time and place of such hearing and shall specify
the issues to be adjudicated.
16 U.S.C. § 824e(a). While the statute requires the Commission
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to act upon a finding that rates (or regulations, practices, or
contracts affecting those rates) are unjust or unreasonable, it
nowhere mandates that having made such a finding with respect
to a discrete issue, the Commission must reopen and reevaluate
all other aspects of the filed rate. To the contrary, by requiring
that “[a]ny complaint or motion of the Commission to initiate a
proceeding under this section shall state the change or changes
to be made in the rate, charge, classification, rule, regulation,
practice, or contract” and mandating that the Commission
“specify the issues to be adjudicated” at any section 206 hearing,
id. (emphases added), the FPA makes clear that section 206
proceedings are designed to identify and address such discrete
issues.
This is precisely what the Commission did. Having on its
own motion initiated an investigation into the specific issues of
anticompetitive behavior and market manipulation, the
Commission proposed conditioning all market-based rate tariffs
on new Market Behavior Rules that would prohibit these
practices. See Investigation of Terms and Conditions of Public
Utility Market-Based Rate Authorizations, 103 F.E.R.C.
¶ 61,349, at 62,372 (2003). By enacting the Market Behavior
Rules, the Commission “fixed” the rate with respect to the only
issues it had set forth in its order initiating the section 206
proceeding. See Investigation of Terms and Conditions of
Public Utility Market-Based Rate Authorizations, 107 F.E.R.C.
¶ 61,175, at 61,723 (2004) (responding to Consumer Advocates’
argument that it failed to “fix” a particular rate by noting that
“[t]he ‘filed rate,’ in this case, will be the behavioral standards
voluntarily incorporated into the seller’s tariff as an agreed
[upon] condition relating to its grant of market-based rate
authority”). Finding no error in the Commission’s order, we
deny the petition for review.
So ordered.