United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 20, 2008 Decided July 22, 2008
No. 05-1401
PACIFIC GAS AND ELECTRIC COMPANY,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
CALIFORNIA ELECTRICITY OVERSIGHT BOARD, ET AL.,
INTERVENORS
Consolidated with
06-1422
On Petitions for Review of Orders of the
Federal Energy Regulatory Commission
Frank R. Lindh argued the cause for petitioner. With him
on the briefs was Keith T. Sampson.
Lona T. Perry, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on the
brief were Cynthia A. Marlette, General Counsel, Robert H.
Solomon, Solicitor, and Beth G. Pacella, Senior Attorney.
2
Wallace LaMar Duncan, Sean M. Neal, and Derek Anthony
Dyson were on the brief for intervenor Modesto Irrigation
District.
Before: TATEL, GARLAND, and GRIFFITH, Circuit Judges.
Opinion for the Court filed by Circuit Judge GARLAND.
GARLAND, Circuit Judge: Pacific Gas & Electric Company
(PG&E) petitions for review of Federal Energy Regulatory
Commission (FERC) orders that require the California
Independent System Operator, rather than Participating
Transmission Owners like PG&E, to conduct interconnection
studies when a new electric generator seeks to interconnect with
the electric transmission grid. PG&E contends that the orders
violate § 206 of the Federal Power Act. But PG&E’s petition,
while cloaked in the guise of a challenge to the orders below, is
in fact an impermissible collateral attack on a series of orders
that FERC issued in 2003 and 2004. We therefore dismiss the
petition for review.
I
In its Order No. 888, FERC laid the foundation for the
development of competitive wholesale power markets by
requiring public utilities to offer nondiscriminatory open access
transmission services. Transmission Access Policy Study Group
v. FERC, 225 F.3d 667, 680-81 (D.C. Cir. 2000), aff’g
Promoting Wholesale Competition Through Open Access
Nondiscriminatory Transmission Services by Public Utilities,
Order No. 888, FERC Stats. & Regs. ¶ 31,036, 61 Fed. Reg.
21,540 (1996). The Order required all transmission-owning
utilities to provide access to their transmission lines to any entity
generating or purchasing electricity in the interstate market on
the same terms as the utilities use their own lines. Id. at 681. To
3
effectuate this reform, “FERC adopted a pro forma Open Access
Transmission Tariff (OATT), containing minimum terms and
conditions for non-discriminatory service, which every
transmission-owning public utility must file with the
Commission and by which it must abide in providing
transmission services to itself and others.” Id. at 727.
As one means of complying with Order No. 888, FERC
encouraged public utilities “to participate in Independent System
Operators (ISOs).” California Indep. Sys. Operator Corp. v.
FERC, 372 F.3d 395, 397 (D.C. Cir. 2004). As we have
explained:
An ISO conducts the transmission services and
ancillary services for all users of such a system,
replacing the conduct of such services by the system
owners -- that is, the integrated electric utilities whose
market power FERC was attempting to control by
encouraging the creation and operation of the ISOs. In
order to accomplish that purpose, FERC deems it
crucial that an ISO be independent of the market
participants so that decisions of policy, operation, and
dispute resolution be free of the discriminatory impetus
inherent in the old system.
Id. (citing Order No. 888, FERC Stats. & Regs. ¶ 31,036, at
31,731). The California electric power industry responded in
part by restructuring its market and establishing the California
Independent System Operator (“California ISO” or “CAISO”).
See Pacific Gas & Elec. Co., 81 F.E.R.C. ¶ 61,122, at 61,435-36
(1997).
In the period immediately after the Commission issued
Order No. 888, FERC monitored one element of open access
transmission service -- interconnection agreements between
4
operators of generators and transmission facilities -- on a case-
by-case basis. National Ass’n of Regulatory Util. Comm’rs v.
FERC (NARUC), 475 F.3d 1277, 1279 (D.C. Cir. 2007). In its
1997 proceedings regarding the establishment and
implementation of the California ISO, for example, the
Commission considered, inter alia, whether “Participating
Transmission Owners [PTOs] should have the exclusive right to
perform Facilities Studies” necessary for interconnection, or
whether the California ISO should “be made the coordinator for
all expansion projects,” including any necessary studies. Pacific
Gas & Elec. Co., 81 F.E.R.C. at 61,487-88. At that time, the
Commission concluded that the PTOs should retain
responsibility for performing such studies. Id. at 61,489.
The case-by-case approach, however, produced an
increasing number of interconnection-related disputes, and, in its
Order No. 2003, FERC concluded that this approach was “an
inadequate and inefficient means to address interconnection
issues.” Standardization of Generator Interconnection
Agreements and Procedures, Order No. 2003, 104 F.E.R.C. ¶
61,103, at ¶ 10 (2003). “In the interests of achieving
transparency and preventing transmission facility owners from
favoring affiliated generators over independents in
interconnection,” the Commission decided to “require all
transmission facilities to adopt a standard agreement for
interconnecting with generators larger than 20 megawatts.”
NARUC, 475 F.3d at 1279. FERC’s Order No. 2003 series
required all public utilities that own, control, or operate facilities
used for transmitting electricity in interstate commerce to file
revised open access transmission tariffs that include pro forma
Large Generator Interconnection Procedures and a pro forma
Large Generator Interconnection Agreement, unless the
Commission approved a utility’s request for a regional variance
from the standard terms. Order No. 2003, 104 F.E.R.C. at ¶¶ 2,
26.
5
Among other things, Order No. 2003’s pro forma
procedures address interconnection studies, which are performed
to evaluate a proposed interconnection in detail, identify any
adverse system impacts, and specify any facility modifications
needed to complete the interconnection safely and reliably. Id.
at ¶ 36. The procedures provide that the interconnection studies
will “be performed by, or at the direction of, the Transmission
Provider.” Id. In California, the Transmission Provider is the
California ISO, which exercises operational control over the
facilities owned by the California PTOs, including PG&E,
Southern California Edison Company, and San Diego Gas &
Electric Company. See California Indep. Sys. Operator Corp.,
112 F.E.R.C. ¶ 61,009, at 61,022 (2005) (“First Order on
Review”); PG&E Br. 16, 57. In its orders on rehearing of Order
No. 2003, FERC clarified various aspects of the pro forma
procedures, including the requirement that interconnection
studies be performed by the Transmission Provider. See
generally Order No. 2003-A, 106 F.E.R.C. ¶ 61,220 (2004);
Order No. 2003-B, 109 F.E.R.C. ¶ 61,287 (2004); Order No.
2003-C, 111 F.E.R.C. ¶ 61,401 (2005). This court upheld the
Order No. 2003 series against an unrelated challenge in NARUC,
475 F.3d 1277.
PG&E submitted its initial Order No. 2003 compliance
filing in January 2004, and made an amended filing to comply
with Order Nos. 2003 and 2003-A in January 2005. It submitted
its Order No. 2003-B compliance filing in February 2005. See
First Order on Review, 112 F.E.R.C. at 61,022. Those filings
proposed that, instead of having the Transmission Provider
conduct the interconnection studies, each affected PTO would
continue to conduct the studies in its own service territory. Id.
at 61,028. In its First Order on Review, FERC rejected that
proposal. “With each affected PTO conducting system studies,”
FERC said, “a generator could be required to coordinate and pay
for studies conducted by all three PTOs instead of having one
6
set of studies that would examine the effect of the
interconnection and additional generation on the CAISO grid as
a whole.” Id. FERC was concerned that, if “the interconnecting
PTO continues to conduct the studies, there is a risk that
separate transmission investments will work at cross-purposes
and possibly even hurt reliability.” Id. It also declared that
“allowing the PTOs to conduct the studies undermines the very
independence on which the Commission relies.” Id. FERC
therefore held that “CAISO must adopt a centralized study
process, in which CAISO itself conducts the studies.” Id.
In subsequent orders, the Commission held that the PTOs
may participate in the interconnection studies and retain review
and recommendation rights, but that they generally may not
conduct the studies or retain consent rights over them. See
California Indep. Sys. Operator Corp., 112 F.E.R.C. ¶ 61,231,
at 62,136-37 (2005) (“Second Order on Review”); California
Indep. Sys. Operator Corp., 115 F.E.R.C. ¶ 61,237, at 61,873-74
(2006) (“Third Order on Review”); California Indep. Sys.
Operator Corp., 117 F.E.R.C. ¶ 61,148, at ¶¶ 60-71 (2006)
(“Fourth Order on Review”). The Commission again repeated
its concern that “CAISO must manage its . . . system study
process so that an interconnecting generator is not unduly
burdened by coordinating multiple studies with the PTOs.”
Second Order on Review, 112 F.E.R.C. at 62,136. And it
rejected PG&E’s claim that, in requiring the California ISO
rather than the PTOs to perform the interconnection studies, the
Commission violated Federal Power Act § 206. FERC
concluded that this claim was, among other things, “an
impermissible . . . collateral attack on Order No. 2003.” Third
Order on Review, 115 F.E.R.C. at 61,874; see Fourth Order on
Review, 117 F.E.R.C. at ¶¶ 69-70.
PG&E now seeks review of FERC’s First through Fourth
Orders.
7
II
PG&E contends that the orders below, which require that
the California ISO rather than the PTOs must perform
interconnection studies, violate § 206 of the Federal Power Act
because FERC did not first find that the then-existing practice,
in which PTOs performed the studies, had become “unjust,
unreasonable, unduly discriminatory or preferential.” 16 U.S.C.
§ 824e(a); see Atlantic City Elec. Co. v. FERC, 295 F.3d 1, 10
(D.C. Cir. 2002). FERC responds that the requirement that the
ISO perform the studies was first announced not in the orders
below, but rather in the Order No. 2003 series, which PG&E did
not challenge on that ground. FERC contends that PG&E’s
petition is therefore foreclosed because it is a collateral attack on
the Order No. 2003 series.
Section 313(b) of the Federal Power Act permits a party to
obtain review of a FERC order in this court by filing a petition
within sixty days after the Commission’s denial of rehearing. 16
U.S.C. § 825l(b). We have repeatedly held that the sixty-day
limitations provision is jurisdictional. Williston Basin Interstate
Pipeline Co. v. FERC, 475 F.3d 330, 334 (D.C. Cir. 2006)
(citing Nephi, Utah v. FERC, 147 F.3d 929, 933-34 (D.C. Cir.
1998)); Sacramento Mun. Util. Dist. v. FERC, 428 F.3d 294,
298-99 (D.C. Cir. 2005); cf. Georgia Indus. Group v. FERC, 137
F.3d 1358, 1363-64 (D.C. Cir. 1998) (discussing the Natural Gas
Act’s parallel limitations provision). With few exceptions, a
challenge made outside of the statutory period is a collateral
attack over which we have no jurisdiction. See Sacramento
Mun. Util. Dist., 428 F.3d at 299.1
1
One such exception applies when an order is not final because
it leaves an issue contingent on subsequent compliance proceedings.
See Louisiana Pub. Serv. Comm’n v. FERC, 522 F.3d 378, 398 (D.C.
Cir. 2008). PG&E does not assert that FERC’s decision in the Order
8
In Order No. 2003, FERC ruled that, as part of the pro
forma interconnection procedures, “Interconnection Studies
[are] to be performed by, or at the direction of, the Transmission
Provider.” Order No. 2003, 104 F.E.R.C. at ¶ 36. Order No.
2003-A reiterated this requirement, affirming that, for facilities
under the operational control of an ISO, “Interconnection
Studies and transmission planning remain the providence of the
Transmission Provider.” Order No. 2003-A, 106 F.E.R.C. at ¶
785. And Order No. 2003-B made it clear that the “ISO
conducts all studies . . . and controls all aspects of the
interconnection process.” Order No. 2003-B, 109 F.E.R.C. at ¶
80 n.25. Because the plain language of these orders requires
that interconnection studies be performed by the Transmission
Provider, and because PG&E agrees that the California ISO is
the Transmission Provider in California, see PG&E Br. 16, 57,
we conclude that it was the Order No. 2003 series that
announced the requirement that the ISO is required to perform
the studies.
If PG&E objected to that requirement, it therefore had to
petition for review in this court no later than sixty days after
December 20, 2004 -- the date the Commission issued Order No.
2003-B, which was the last order on rehearing that addressed the
requirement. Cf. Louisiana Pub. Serv. Comm’n v. FERC, 522
F.3d 378, 398 (D.C. Cir. 2008) (holding that non-conditional
FERC orders are ripe for review notwithstanding the expectation
that there will be subsequent compliance proceedings);
Wisconsin Pub. Power Inc. v. FERC, 493 F.3d 239, 266 (D.C.
Cir. 2007) (same). PG&E did not file such a petition. Thus,
PG&E’s effort to challenge the centralized study requirement
through its current petition appears to be a time-barred collateral
attack over which we have no jurisdiction.
No. 2003 series was conditional, and we do not think it was.
9
III
PG&E offers two principal reasons why its challenge to the
requirement that the ISO perform interconnection studies is not
an impermissible collateral attack on the Order No. 2003 series.
We address each argument in turn.
1. PG&E first invokes -- albeit obliquely -- the exception
to the sixty-day limitations provision that permits a late
challenge to a Commission rule if the order that established it
did not give a party “‘sufficient notice’ of the rule to which [it]
now objects.” Southern Co. Servs., Inc. v. FERC, 416 F.3d 39,
44-45 (D.C. Cir. 2005) (quoting, inter alia, Dominion Res., Inc.
v. FERC, 286 F.3d 586, 590 (D.C. Cir. 2002)); see Sacramento
Mun. Util. Dist., 428 F.3d at 299. PG&E argues that, “[a]t most
the various notices and orders in the rulemaking docket
appeared to assume that the ‘Transmission Provider’ would
conduct system studies and construct any needed facilities.”
PG&E Br. 57 (emphasis added). “[S]tatements of this kind,” it
insists, “do not constitute fair notice that in California -- where
the California ISO is the ‘Transmission Provider’ -- the
Commission intended to have the Participating Transmission
Owners relinquish their longstanding responsibility for
interconnection studies.” Id.
As we noted in Part II, Order No. 2003 states that
“Interconnection Studies [are] to be performed by, or at the
direction of, the Transmission Provider.” Order No. 2003, 104
F.E.R.C. at ¶ 36. And Order No. 2003-A repeats the point,
stating that, “while the Transmission Owner is a necessary part
of interconnecting to a facility under the operational control of
an . . . ISO, . . . Interconnection Studies . . . remain the
providence of the Transmission Provider.” Order No. 2003-A,
106 F.E.R.C. at ¶ 785. The suggestion that these statements did
not provide adequate notice of the requirement that
10
interconnection studies must be run by the California ISO rather
than the PTOs is belied by PG&E’s concession that, “[b]y its
literal terms, Order No. 2003 required that the ‘Transmission
Provider’ perform interconnection studies,” PG&E Br. 16,
coupled with its recognition that, “in California[,] . . . the
California ISO is the ‘Transmission Provider,’” id. at 57; see id.
at 16; Joint Compliance Filing at 3 (J.A. 54); Revised Joint
Compliance Filing at 3, 14 (J.A. 84, 95).2
The inadequate notice contention is also belied by the
compliance filings made in the proceedings below. Those
filings conceded that the pro forma procedures require that
interconnection studies be performed by the Transmission
Provider -- i.e., the ISO -- and that PG&E and the other PTOs
would need a variance from those procedures to permit the
PTOs to perform the studies. See Revised Joint Compliance
Filing at 18 (J.A. 99) (noting that the parties had “revised the
FERC pro forma [agreement]” with respect to the roles of the
ISO and the PTOs); Revised CAISO Compliance Filing at 17
(J.A. 123) (“With regard to the ISO Controlled Grid, the ISO is
the Transmission Provider, but not the Transmission Owner.
Thus, the [pro forma interconnection procedures] necessarily
2
Because the Order No. 2003 series defined the term
“Transmission Provider” to “include[] the Transmission Owner as
well,” Order No. 2003, 104 F.E.R.C. at ¶ 75; see Order No. 2003-A,
106 F.E.R.C. at ¶ 84, it might be argued that Order Nos. 2003 and
2003-A permit PTOs, as well as the ISO, to perform interconnection
studies. PG&E did not make this argument before the Commission,
and, in this court, it agrees that the Transmission Provider in
California is CAISO. We therefore do not consider the argument. See
16 U.S.C. § 825l(b) (“No 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 reasonable ground for failure to do so.”); California Dep’t of
Water Res. v. FERC, 306 F.3d 1121, 1125 (D.C. Cir. 2002).
11
must be changed to reflect the respective roles of the ISO and
the PTOs in the provision of Interconnection Service.”); see id.
at 22, 24 (J.A. 128, 130) (proposing a number of modifications
to the pro forma procedures necessary “to adapt them to the
ISO’s circumstances,” including that the PTOs conduct the
studies in the first instance).3
Indeed, by the time this case reached oral argument, PG&E
no longer claimed that the Order No. 2003 series had failed to
put it on notice that ISOs in general would have to conduct the
studies. See Oral Arg. Recording at 12:57-13:58. Rather,
PG&E merely contended that it read Order No. 2003 to contain
an implied exception for the California ISO, since California had
a preexisting, approved practice under which the PTOs
performed the studies. Id. at 14:20-38. But whether or not it
was possible to read Order No. 2003 as containing an “implicit”
exception, that is hardly a warrant for failing to challenge the
Order’s explicit statement that the studies were to be conducted
by the Transmission Provider.
In any event, Order No. 2003-B makes any notice argument
-- and any argument that the study requirement was a mere
“assumption” -- untenable. That order flatly states that the “ISO
conducts all studies . . . and controls all aspects of the
interconnection process.” Order No. 2003-B, 109 F.E.R.C. at ¶
80 n.25; see id. at ¶ 80 (“[T]he Transmission Owner must agree
to transfer to the . . . ISO control over the significant aspects of
the interconnection process[,] . . . including the performance of
3
PG&E does not argue here that FERC’s refusal to grant its
request for a variance -- an option provided for in Order No. 2003, see
104 F.E.R.C. at ¶ 26 -- was arbitrary or capricious.
12
all Interconnection Studies.” (emphasis added)). Given this
clarity, PG&E’s inadequate notice argument must fail.4
2. PG&E also argues that, even if Order No. 2003-B did
clarify the centralized study requirement, it came too late to
provide adequate notice because PG&E had already submitted
its compliance filings for Order Nos. 2003 and 2003-A by the
time Order No. 2003-B issued. This argument is of little
assistance to PG&E because, as we have just explained, Order
Nos. 2003 and 2003-A themselves provided adequate notice.
Nor is it a persuasive argument even with respect to 2003-B.
Although PG&E filed its initial Order No. 2003 compliance
filing before FERC issued Order No. 2003-B on December 20,
2004, it did not submit its revised compliance filing with respect
to Order Nos. 2003 and 2003-A until January 5, 2005 -- some
two weeks after Order No. 2003-B issued -- and it did not file its
Order No. 2003-B compliance filing until more than a month
after that. Moreover, the Commission did not release the first
order at issue in this case until July 1, 2005. See First Order on
Review, 112 F.E.R.C. at 61,022. PG&E has suggested no
reason why, even if it had not been on notice of the centralized
study requirement until FERC issued Order No. 2003-B, a
4
PG&E also raises a separate notice argument under the notice-
and-comment provisions of the Administrative Procedure Act, 5
U.S.C. § 553. It contends that interested parties were not provided
with notice and an opportunity to comment on a proposal that
interconnection studies must be conducted by the Transmission
Provider, “as no such proposal appeared in the various orders leading
up to the adoption of” Order No. 2003. PG&E Br. 36. This is not just
a collateral attack on Order No. 2003; it is a direct attack. And
because the time for such attacks has long since expired, we cannot
hear it. Moreover, PG&E’s failure to raise this objection with FERC
in the proceedings in this case creates a second bar to our
consideration. See 16 U.S.C. § 825l(b); California Dep’t of Water
Res., 306 F.3d at 1125.
13
challenge to that Order would not have been in time to put its
objections before the Commission.
IV
For the foregoing reasons, we conclude that PG&E’s
petition for review of the orders below is an impermissible
collateral attack on the earlier Order No. 2003 series. We
therefore dismiss the petition for lack of jurisdiction.
So ordered.