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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 10, 2009 Decided April 16, 2010
No. 09-1060
FLORIDA MUNICIPAL POWER AGENCY,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
FLORIDA POWER & LIGHT COMPANY,
INTERVENOR
On Petition for Review of Orders
of the Federal Energy Regulatory Commission
Robert A. Jablon argued the cause for petitioner. With him
on the briefs were Daniel I. Davidson, Peter J. Hopkins, and
Rebecca J. Baldwin.
Holly E. Cafer, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on the
2
brief were Cynthia A. Marlette, General Counsel, and Robert H.
Solomon, Solicitor.
Clifford (Mike) Naeve argued the cause for intervenor.
With him on the brief were Kathryn Kavanagh Baran and
Stephen L. Huntoon.
Before: ROGERS and GRIFFITH, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The Florida Municipal Power
Agency (“Florida Municipal”) petitions for review of two orders
of the Federal Energy Regulatory Commission (“FERC”)
regarding the rate base for network transmission service using
the facilities of Florida Power & Light Company (“Florida
Power”). Florida Municipal resists the conclusion that the
comparability principle, under which FERC applies the same
integration standard to Florida Municipal and Florida Power in
determining whether their facilities provide any benefit to
Florida Power’s transmission system, bars the relief Florida
Municipal seeks. In regard to FERC’s approval of Florida
Power’s April 2005 compliance filing, Florida Municipal first
challenges the sufficiency of the evidence supporting the finding
that the test Florida Power used in 2005 on its facilities to
identify “unneeded redundancy” was comparable to the test
Florida Power used in 1994 to evaluate Florida Municipal’s
Vero Beach–to–Fort Pierce facilities. Second, Florida
Municipal contends its facilities were required to be treated no
differently than Florida Power’s local facilities, so that Florida
Power’s rate base must exclude the costs associated with Florida
Power’s local facilities. We deny the petition.
3
I.
The background to these proceedings appears in Florida
Municipal Power Agency v. FERC, 411 F.3d 287, 288–91 (D.C.
Cir. 2005) (“Florida Municipal II”). Florida Municipal obtained
access to Florida Power’s network transmission system but did
not receive pricing credits for using its own transmission
facilities if they were “interconnected” rather than “integrated”
with Florida Power’s transmission system. See Fla. Mun. Power
Agency v. FERC, 315 F.3d 362, 364–68 (D.C. Cir. 2003)
(“Florida Municipal I”).1 In denying credits, FERC explained
that it had “not direct[ed] a merging of the parties’ transmission
systems or the operation of a joint transmission network.” Fla.
Mun. Power Agency v. Fla. Power & Light Co., 74 FERC
¶ 61,006, 61,009 (1996) (“FMPA II”). In affirming that denial,
the court described FERC’s pricing system as allocating the
price of network transmission services based on the ratio of each
network customer’s load to the total load on the transmission
system. Fla. Mun. I, 315 F.3d at 363. In addition, the court
described FERC’s “principle of ‘comparability,’” in which “the
same integration standard that applies to transmission customers
1
See also Promoting Wholesale Competition Through Open
Access Non-Discriminatory Transmission Servs. by Pub. Utils.;
Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils., 61
Fed. Reg. 21,540, 21,630 (May 10, 1996) (“Order No. 888”), on
reh’g, 62 Fed. Reg. 12,274, 12,330 (Mar. 14, 1997) (“Order No.
888-A”), on reh’g, 62 Fed. Reg. 64,688 (Dec. 9, 1997), on reh’g, 82
FERC ¶ 61,046 (Jan. 20, 1998), aff’d, Transmission Access Policy
Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom.
New York v. FERC, 535 U.S. 1 (2002); Fla. Mun. Power Agency v.
Fla. Power & Light Co., 67 FERC ¶ 61,167, at 61,477-78, 61,481
(May 11, 1994) (“FMPA I”), reh’g granted in part, 74 FERC ¶ 61,006
(Jan. 5, 1996) (“FMPA II”), reh’g denied, 96 FERC ¶ 61,130 (July 26,
2001) (“FMPA III”), aff’d sub nom. Fla. Mun. Power Agency v.
FERC, 315 F.3d 362 (D.C. Cir. 2003) (“Florida Municipal I”).
4
for the purpose of determining eligibility for pricing credits[,]
also applies to transmission providers for rate determination
purposes.” Id. at 364.
On January 25, 2005, FERC agreed with Florida Power that
to be considered “integrated” into its transmission system, a
facility would need to pass a four-factor test, with one factor
being “a facility that provides only unneeded redundancy is not
eligible for cost recovery.” Fla. Power & Light Co., 110 FERC
¶ 61,058 at P 13 (2005) (“January 2005 Order”). FERC
determined Florida Power had not applied this factor to its
facilities in the same way it applied the factor to Florida
Municipal’s facilities, and Florida Power needed to show that
“each facility included in its transmission rate base was needed
to deliver power to customers in the area where the facility is
located and to other [Florida Power] load centers.” Id.
(emphasis added).
In April 2005, Florida Power submitted a compliance filing
proposing to remove approximately $29 million in costs from its
network transmission service rate. FERC concluded it was
unclear whether Florida Power had failed to test its non-radial
(i.e., looped) facilities in a manner comparable to the way it
tested Florida Municipal’s facilities. See Fla. Power & Light
Co., 113 FERC ¶ 61,263 at P 20 (2005) (“December 2005
Order”). Specifically, Florida Power had not indicated whether
“unserved load” resulting from tests of its facilities referred to
“load that is directly connected to or supplied by” the facility
being tested “and/or load in other [Florida Power] load centers.”
Id. at P 23. So FERC accepted Florida Power’s compliance
filing in part but stated that the test Florida Power had applied
to its facilities should have been whether, even without the
facility being tested, Florida Power is able to deliver power to its
customers in the facility’s area “and to other [Florida Power]
load centers.” Id. at P 21. Florida Power requested rehearing on
5
the ground that through this use of the word “and” FERC had
shifted the comparability standard from that previously used in
evaluating the 1994 tests of Florida Municipal’s facilities’
eligibility for pricing credits. FERC denied the request as
untimely. See Fla. Power & Light Co., 116 FERC ¶ 61,013 at
P 17 (2006) (“July 2006 Order”). Florida Power sought
rehearing and reconsideration.
By order of February 21, 2008, FERC reconsidered its
denial of rehearing. Fla. Power & Light Co., 122 FERC
¶ 61,159 (2008) (“2008 Recons. Order”). FERC acknowledged
that it had “erred” in its interpretation of the 1994 test applied to
Florida Municipal’s Vero Beach–to–Fort Pierce facilities, and
concluded that the test Florida Power applied to its facilities to
determine whether they provide “unneeded redundancies” was
comparable to the 1994 test. Id. at P 9–10. In support of this
change in position, FERC relied on the affidavits of two experts,
Karabet Adjemian and Hector Sanchez, submitted by Florida
Power. FERC accepted Florida Power’s April 2005 compliance
filing. One Commissioner dissented on the ground the majority
had not adequately explained its reversal of previous findings on
comparability and Florida Municipal had raised “serious
concerns” about the speculativeness of the Adjemian and
Sanchez affidavits. 2008 Recons. Order, Dissenting Statement
2–3.
FERC denied Florida Municipal’s request for rehearing,
reiterating that in its January and December 2005 Orders it had
“misinterpreted” Adjemian’s 1994 affidavit and thus misstated
the test for integration. Fla. Power & Light Co., 125 FERC
¶ 61,344 at P 7, P 20 (2008) (“2008 Order Den. Reh’g”). FERC
affirmed its determination that the Florida Municipal facilities
were “unneeded” because they were not necessary to serve
either Florida Power’s local or remote load, and that Florida
Power’s similarly “unneeded” facilities were properly
6
eliminated from its transmission rate base. Id. at P 21.
Weighing the evidence, FERC concluded Sanchez’s affidavit
describing his testing of Florida Power’s facilities in 2005
showed he used models and methodologies consistent with
Adjemian’s 1994 testing of Florida Municipal’s facilities. In
contrast, Florida Municipal’s expert evidence purporting to
recreate the 1994 test was unpersuasive because it failed to
follow the methodology employed in Adjemian’s 1994 test.
Ruling that Florida Municipal’s objections to the adequacy of
Adjemian’s 1994 affidavit were brought too late, because FERC
had relied on it in the January 2005 Order, FERC also rejected
Florida Municipal’s suggestion that an adverse inference should
be drawn from Florida Power’s failure to produce a copy of the
1994 test, observing that Florida Power had produced substantial
evidence supporting its position “from a record that stretches
back to 1994.” 2008 Order Den. Reh’g at P 32. One
Commissioner dissented on the ground that the record evidence
did not justify the 2008 Reconsideration Order.
Florida Municipal petitions for review of the 2008
Reconsideration Order and the 2008 Order Denying Rehearing.
The court “review[s] FERC’s orders under the arbitrary and
capricious standard and uphold[s] [FERC]’s factual findings if
supported by substantial evidence” in the record. Fla. Mun. II,
411 F.3d at 291; 5 U.S.C. § 706(2)(A).
II.
Florida Municipal contends the challenged orders are not
supported by substantial evidence and violate the principle of
comparability between transmission provider–owned
transmission and transmission customer–owned transmission.
As to the former, Florida Municipal objects to FERC’s revised
interpretation of Florida Power’s expert evidence on its test of
Florida Municipal’s facilities in 1994. It notes that Adjemian,
7
who conducted the 1994 test, does not remember how the test
was done and produced no documentation of the test, and that
Sanchez, who conducted the 2005 test, was not sure which
testing model and method Adjemian used in 1994. It asserts
Adjemian and Sanchez provided conflicting affidavits on the
comparability of the 1994 and 2005 tests. For instance,
Adjemian’s 1994 affidavit at 54 referred to testing whether
Florida Power could deliver power “even without [Florida
Municipal’s] line,” while Sanchez’s 2005 affidavit at 7 referred
to testing “each [Florida Power] transmission facility” and
described Adjemian as having “removed the Fort Pierce–Vero
Beach line.” Florida Municipal maintains the evidence of the
comparability of the 1994 and 2005 tests is therefore speculative
and conjectural.
“[A]n agency changing its course must supply a reasoned
analysis indicating that prior policies and standards are being
deliberately changed, not casually ignored.” Greater Boston
Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970).
Where FERC “carefully explained its reasoning . . . . [t]he fact
that FERC changed its approach required no additional or special
explanation.” Westar Energy, Inc. v. FERC, 568 F.3d 985, 989
(D.C. Cir. 2009). To provide a reasoned analysis, FERC must
first establish that its finding of testing comparability is
supported by substantial evidence in the record. We conclude it
has.
First, Adjemian’s 1994 affidavit stated that Florida
Municipal’s Vero Beach–to–Fort Pierce electric facilities are
interconnected with the Florida Power system and with each
other but that, other than the Florida Municipal line connecting
Vero Beach and Fort Pierce, the Florida Municipal facilities
internal to each city deliver power to or from Florida Power (and
where applicable from local generation). From Florida Power’s
perspective, he explained, Florida Municipal’s Vero
8
Beach–to–Fort Pierce line does not change the fact that Vero
Beach and Fort Pierce each interconnect directly at Florida Power
delivery points and that internal city facilities do not reduce
Florida Power’s costs in providing transmission service.
Observing that even if one could assume Florida Municipal’s
facilities and Florida Power’s transmission system are part of an
integrated transmission grid, the question would remain whether
Florida Municipal’s facilities in any way benefit Florida Power,
i.e., reduce Florida Power’s costs. To answer this question,
Adjemian stated he applied two tests: (1) whether the Florida
Municipal facilities reduce Florida Power’s costs in providing
transmission to Florida Municipal’s cities, and (2) whether the
cities’ facilities reduce Florida Power’s costs in serving Florida
Power’s other customers. Adjemian concluded “[t]he answer to
both questions is ‘no.’” 1994 Adjemian Aff. 53 (emphasis
added). He further explained that although “a negligible amount
of power can flow over the [Vero Beach–to–Fort Pierce] line,”
this fact is not “determinative of whether the line benefits
[Florida Power]” because “[t]he question is whether [Florida
Power] has sufficient transmission facilities in the area such that,
even without the line, [Florida Power] is able to deliver power to
retail customers in that area and to transmit power to [Florida
Power]’s other load centers in South Florida.” Id. at 54. FERC
had previously focused on this sentence but failed to read it in the
context of Adjemian’s “No” answers to both questions about
whether the Florida Municipal facilities benefit Florida Power.
Second, Adjemian additionally explained that for cities
interconnected to Florida Power’s system at a single point, the
facilities Florida Power needed to transmit power to and from
each city do not depend on each city’s internal facilities. For
cities like Vero Beach and Fort Pierce that are connected by their
own power line (i.e., a loop), he had tested Florida Power’s
system with and without the line and found that the line did not
benefit Florida Power because it did not allow Florida Power to
9
defer or cancel facilities included in its current ten-year
transmission expansion plan. “Indeed,” Adjemian opined,
“Florida Power would have not built this line to provide reliable
service to Vero Beach and/or Fort Pierce.” Id. at 54. Adjemian’s
2005 affidavit was to the same effect, repeating that because
Florida Power could meet all of its service obligations without
Florida Municipal’s Fort Pierce–Vero Beach line, the line
“provided no benefit to the [Florida Power] transmission system.”
2005 Adjemian Aff. 3.
Third, Sanchez’s 2005 affidavit described how his 2005 test
of Florida Power’s facilities applied the same model and
methodology that Adjemian had used to test Florida Municipal’s
facilities in 1994. Reading the January 2005 Order that Florida
Power apply to its facilities “the system modeled by [Florida
Power] to analyze the integration of [Florida Municipal]’s Fort
Pierce–Vero Beach line,” January 2005 Order at P 12, to refer to
Adjemian’s 1994 testing, Sanchez stated he believed Adjemian
had used a load flow model compiled by the Florida Electric
Power Coordinating Group (“FCG”) to analyze whether Florida
Municipal was entitled to credits for the costs of the Fort
Pierce–Vero Beach line. He explained this “load flow model
provides a snapshot of the system at the time of peak load, and
consists of data that includes the Florida companies’ respective
forecasted loads, generation, expansion plans, and long-term firm
wholesale obligations.” 2005 Sanchez Aff. 3. Sanchez gave
three reasons for his “belie[f] Mr. Adjemian used the 1994
vintage FCG load flow model to analyze the Fort Pierce–Vero
Beach line.” Id. First, that model was officially made available
in May or June 1994 and was thus the most recent model
available to Adjemian when he conducted the 1994 test. Second,
Adjemian had explained that the Fort Pierce–Vero Beach line had
been a 69 kV line and was not included in the FCG model until
the line was upgraded to 138 kV. See 1994 Adjemian Aff. 51.
Third, “Florida Power’s records indicate that the 138 kV line was
10
not placed into service until 1994; therefore, a model year of
1994 would need to have been used to test that line.” 2005
Sanchez Aff. 4. Sanchez concluded it was reasonable to use the
1994 FCG model to test the Florida Power system in 2005: The
2005 test was consistent with the methodology Florida Power
used in 1994 to test Florida Municipal’s Fort Pierce–Vero Beach
138kV line because, like Adjemian removing that line from the
model, see Adjemian Aff. 54–55, he (Sanchez) removed from the
model the transmission facility being tested and determined
whether simulating a first contingency (a sudden loss of a
transmission line, transformer, or generator) resulted in a
violation of the model’s reliability criteria, i.e., whether, without
that line or facility, Florida Power would be able to meet its
wholesale transmission and retail obligations.
From this evidence, FERC could reasonably conclude that
Florida Power comparably tested Florida Municipal’s facilities in
1994 and its own in 2005 to determine whether the tested
facilities were necessary for Florida Power to be able to serve
either its remote or local loads, not both. Substantial evidence in
the record “requires more than a scintilla, but can be satisfied by
something less than a preponderance of the evidence.” Fla.
Mun. I, 315 F.3d at 365–66 (quotation marks omitted). It is true
that Adjemian stated in his 1994 affidavit that he had examined
“whether [Florida Power] had sufficient transmission facilities in
the area such that, even without the [Florida Municipal] line,
[Florida Power] is able to deliver power to retail customers in that
area and to transmit power to [Florida Power]’s other load centers
in South Florida.” 2008 Recons. Order at P 12 (quoting
Adjemian 1994 Aff. 54) (emphasis in 2008 Recons. Order). But
he also stated he answered “No” to both of the questions he posed
in his redundancy analysis. Read together, his statements are
consistent with use of an “or” test in 1994. Further, Adjemian’s
and Sanchez’s 2005 affidavits clarified the salient point: could
11
Florida Power serve its customers without relying on Florida
Municipal’s facilities.
FERC explained upon reconsideration that it now recognized
Adjemian’s 1994 affidavit did not “signal that [Florida Power]
had used a two-step threshold for integration,” but rather that
Adjemian “focused on whether [Florida Power]’s facilities could
serve all loads absent [Florida Municipal]’s Vero Beach–to–Fort
Pierce facilities.” 2008 Recons. Order at P 13. That is, the 1994
test examined whether removing facilities during the test “curtails
either local or remote load, not whether it curtails both.” Id.
FERC also relied on Sanchez’s affidavit, finding the tests he and
Adjemian performed “considered the threshold question, whether
a given facility provided any benefit to [Florida Power]’s
system.” Id. at P 14 (citing Sanchez 2005 Aff. 5–7, Adjemian
2005 Aff. 3).
Contrary to Florida Municipal’s contention on appeal, the
record evidence permitted FERC reasonably to conclude that
Florida Power’s evidence was neither speculative nor conjectural.
It is true that Adjemian did not recall precisely which test he had
used in 1994, but as FERC observed, Adjemian conducted the
test and “thus was in the best position to describe the test.” 2008
Order Den. Reh’g at P 29. FERC found his 2005 affidavit
confirming the 1994 test methodology credible because it was
consistent with his 1994 affidavit. Adjemian’s affidavit,
regarding the two cost reduction questions he addressed, that
“[t]he answer to both questions is ‘no,’” 1994 Adjemian Aff. 53
(emphasis added), was properly understood, FERC now
recognized, to mean that Florida Municipal’s facilities were not
necessary for Florida Power to serve any load, either remote or
local. This interpretation of the 1994 test is supported by
Adjemian’s 2005 affidavit, by Sanchez’s 2005 affidavit
describing the 1994 model and why Adjemian logically would
have used it, and by the focus of both the 1994 and 2005 tests on
12
determining any benefit to Florida Power in terms of reducing its
costs, namely whether Florida Power could provide reliable
wholesale and retail service without the tested facility.
Because there was substantial record evidence to support
FERC’s finding that the 1994 and 2005 tests were comparable,
Florida Municipal’s assertion of a conflict between Adjemian’s
and Sanchez’s affidavits misses the mark. Merely pointing to
some contradictory evidence is insufficient because “[t]he
question [the court] must answer . . . is not whether record
evidence supports [Florida Municipal]’s version of events, but
whether it supports FERC’s.” Fla. Mun. I, 315 F.3d at 368. And
where, as here, FERC decides “between ‘disputing expert
witnesses,’” as Florida Municipal presented its own expert, the
court applies a “particularly deferential standard” of review. Id.
(quoting Wis. Valley Improvement Co. v. FERC, 236 F.3d 738,
746 (D.C. Cir. 2001)). The fact that Florida Power did not
produce additional documentation of the 1994 test does not, as
Florida Municipal suggests and FERC rejected on rehearing,
require an adverse inference against Florida Power. See, e.g.,
Ala. Power Co. v. Fed. Power Comm’n, 511 F.2d 383, 391 &
n.14 (D.C. Cir. 1974); Int’l Union, UAW v. NLRB, 459 F.2d 1329,
1339, 1346 (D.C. Cir. 1972). Adjemian explained in his 2005
affidavit that no hard copy or electronic files were available for
the 1994 tests because the results were only blank screens
indicating that the tested Florida Municipal facilities did not
benefit Florida Power. Florida Municipal’s reliance on Shepherd
v. American Broadcasting Cos., 62 F.3d 1469 (D.C. Cir. 1995),
is misplaced, because the court there explained that the inference
applies only when a party “consciously disregarded its
obligation” to preserve documentation, id. at 1481, and Florida
Municipal offers no such evidence.
Florida Municipal maintains that Florida Power’s 2005 test
of its transmission facilities was incapable of measuring whether
13
those facilities were necessary to serve remote, rather than local,
customers. Pointing to an affidavit of Joseph Linxwiler in its
October 2006 protest of Florida Power’s September 2006
compliance filing (responding to the July 2006 Order), Florida
Municipal describes Florida Power’s testing of its lines as a test
of line segments, in which, by definition, adjacent segments
would be necessary to deliver power to each other unless a
segment had an independent power source. But FERC explained
that Linxwiler had incorrectly focused on how Florida Power
should have performed an “and” test on its facilities in 2005 (to
test whether a “facility’s absence curtained both local and remote
loads,” 2008 Order Den. Reh’g at P 23), when FERC had
determined that in 1994 Florida Power had instead performed an
“or” test on Florida Municipal’s facilities (to test whether a
“facility’s absence curtailed either local load or remote load,”
2008 Order Den. Reh’g at P 23). 2008 Order Den. Reh’g at P 35.
In this situation, FERC observed, what is relevant is not whether
segments or lines were tested, but instead that “both Florida
Power’s and Florida Municipal’s facilities were comparably
tested by eliminating loop flow.” Id.
To the extent Florida Municipal maintains FERC has not
justified its change in position to allow transmission that benefits
only a local area to be included in a rate base, FERC explained in
the challenged orders both the nature of its error and the
evidentiary basis for its revised interpretation of Adjemian’s 1994
affidavit. Combined with the fact that the “or” standard was the
standard FERC had been applying in these proceedings, as
Florida Power pointed out in seeking rehearing of the December
2005 Order, FERC’s explanation was sufficient. See Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.
29, 42 (1983).
14
III.
Florida Municipal also contends, even if the 1994 and 2005
tests were comparable, that FERC nonetheless violated the
comparability principle in view of the requirement of the Federal
Power Act that rates or charges for electric energy transmission
or sale be just and reasonable and not unduly preferential or
discriminatory, see 16 U.S.C. §§ 824d–824e. Florida Municipal
objects to paying rates based on costs of Florida Power facilities
that transmit power only to its local customers when Florida
Municipal does not receive rate credits for its facilities that
transmit power only to its local customers. Florida Municipal
views its transmission facilities as “functionally” equivalent to
those of Florida Power and thus deserving of comparable
treatment. Pet’r Br. 42.
Comparability as defined by FERC is not a test of functional
equivalence, but instead a test of whether a facility benefits the
transmission provider’s network transmission system. See Fla.
Mun. I, 315 F.3d at 366–67. As FERC has stated, comparability
requires only that Florida Power exclude from its rate base or
provide credits for those facilities not needed by Florida Power
to provide transmission service to its customers, whether those
customers are served by local load or remote load. 2008 Order
Den. Reh’g at P 24. Florida Municipal’s claim that it must
receive credits or rate base reductions for its local facilities thus
appears to reflect “a fundamental misunderstanding,” Resp’t Br.
35, of the 1994 and 2005 tests and Florida Power’s status as the
network transmission provider.
In Florida Municipal I, 315 F.3d at 364, the court quoted
Order No. 888, 61 Fed. Reg. at 21,603 (emphasis in original):
“The fact that a transmission customer’s facilities may be
interconnected with a transmission provider’s system does not
prove that the two systems comprise an integrated whole such
15
that the transmission provider is able to provide transmission
service to itself or other transmission customers over those
facilities—a key requirement of integration.” FERC has been
applying this integration standard here. See, e.g., FMPA III,
supra note 1, at 61,545. Thus comparability required that “if a
transmission provider includes a facility in its rate base, then its
transmission customers may receive rate credits for any similarly
situated facilities.” Fla. Mun. I, 315 F.3d at 364. Florida
Municipal incorrectly interprets “similarly situated” as
“equivalent” without taking into account whether a facility is
“integrated” into the provider’s transmission network. FERC’s
distinction between network transmission providers and
customers allows Florida Power to include in its rate base its
facilities that are needed to serve its customers, but does not
allow Florida Municipal to receive credit for facilities it needs
(and Florida Power does not need) to serve Florida Municipal’s
customers. Cf. Fla. Mun. I, 315 F.3d at 367–68.
Florida Municipal’s claim of undue discrimination fails in
view of the substantial record evidence that Florida Power
applied comparable tests to both its facilities in 2005 and Florida
Municipal’s facilities in 1994. The 1994 test examined whether
Florida Municipal’s facilities are useful to Florida Power to serve
Florida Power’s customers (including Florida Municipal), not
whether Florida Municipal’s facilities are useful to Florida
Municipal to serve its customers. The 1994 test of Florida
Municipal’s facilities was comparable to the 2005 test of Florida
Power’s facilities because both were integration tests to
determine whether a facility provided a benefit to the
transmission provider, Florida Power. A reduction to Florida
Power’s rate base would be required only if a Florida Power
facility provides “unneeded redundancy” rather than a benefit to
Florida Power; because Florida Power’s April 2005 compliance
filing met FERC’s criteria by removing from its rate base those
facilities that did not serve either remote or local load for Florida
16
Power, see December 2005 Order at P 6; 2008 Order Den. Reh’g
at P 24, nothing more was required.
To the extent Florida Municipal maintains Florida Power’s
rate, based on the 1994 and 2005 tests, is not just and reasonable
because Florida Power’s facilities that serve its local loads are not
used in providing service to Florida Municipal, Florida Municipal
is collaterally attacking the FERC orders affirmed in Florida
Municipal I, 315 F.3d 362, as well as Order No. 888 affirmed by
this court in Transmission Access Policy Study Group v. FERC,
225 F.3d 667 (D.C. Cir. 2002), and by the Supreme Court in New
York v. FERC, 535 U.S. 1 (2002).
Neither can Florida Municipal show that FERC improperly
rejected evidence that Florida Municipal’s facilities qualify for
pricing credits. Florida Municipal points to evidence that its
expert, Robert Williams, tested its Fort Pierce–Vero Beach
facilities using Florida Power’s 2005 test and determined that
these facilities provide more than “unneeded redundancy” and
thus should qualify for pricing credits denied in Florida
Municipal I, 315 F.3d 362. This proceeding is not an opportunity
for Florida Municipal to relitigate the eligibility of facilities for
pricing credits; that issue was settled by FERC and its denial of
pricing credits was affirmed by this court in Florida Municipal I.
Furthermore, FERC explained why it was unpersuaded
Williams’s test resembled Adjemian’s 1994 test. Adjemian’s
1994 test used a “single contingency” test while Williams’s test
used a “multiple-contingency scenario.” FERC concluded the
latter required an “unreasonable” assumption that Florida Power
would deliver more than the peak load for which it is responsible.
How Florida Municipal’s “single line contingencies” testing was
comparable to the 1994 test was not explained. 2008 Order Den.
Reh’g at P 34. Although Florida Municipal now claims FERC’s
understanding of the Williams test “makes no sense,” Petr.’s Br.
32, Florida Municipal does not dispute the absence of an
17
explanation before FERC of how Williams’s use of “single line
contingencies” was comparable to Florida Power’s tests. Having
found significant deviations between Adjemian’s description of
his 1994 test, see 2008 Recons. Order at n.24, and Williams’s
description of his test, see 2008 Order Den. Reh’g at P 33, FERC
reasonably rejected the Williams test evidence because it applied
a model and method that were “different (and stricter) than the
tests conducted by Florida Power,” id. at P 34. And while Florida
Municipal questions why Florida Power did not retest the Fort
Pierce–Vero Beach line in 2005, Florida Power’s expert stated
he performed the tests of Florida Municipal’s facilities that
Adjemian had performed in 1994 and the tests again showed that
Florida Municipal’s facilities provided only unneeded
redundancy for Florida Power. See 2005 Sanchez Aff. 2–5.
FERC’s reasoned explanation and weighing of the evidence,
particularly between disputing expert witnesses, is entitled to
deference. Fla. Mun. I, 315 F.3d at 368.
Accordingly, we deny the petition.